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Editor's note: This report contains accounts of rape, violence and other disturbing events.

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Obama's Economic View: A Glass Half-Full And Half-Empty

Jun 1, 2013
Originally published on June 1, 2013 6:39 am

It has been a good week for economic news. Here's a quick rundown of the positive signs: Home prices showed their best gains in seven years. Consumer confidence hit a five-year high. The stock market set a new record. All just this week.

"We're seeing progress," President Obama said in the White House Rose Garden on Friday morning, "and the economy is starting to pick up steam. The gears are starting to turn again, and we're getting some traction."

You could tell from the tone of his voice that he was leading up to a "but."

"But the thing is, the way we measure our progress as a country is not just where the stock market is," the president added.

He went on to say that too many people in the middle class are still struggling. And that pivot — from glass half-full to glass half-empty — captures the tricky dance a president must do at a time like this.

"I think the American people very much can understand that things are improving," says Gene Sperling, who directs the White House's National Economic Council. "But they also understand they're not good enough. So I don't think there's many people out there who think that the United States Congress should be declaring 'mission accomplished' right now."

That reference to Congress is important. The White House has a long list of economic boosters it wants Congress to deploy — from building new infrastructure to rolling back the budget cuts known as the sequester. The administration's problem is that the better the economic news gets, the less pressure Congress feels to act.

"I think that the odds of the sequester being undone have gone to pretty much zero," says Kevin Hassett, an economist at the conservative American Enterprise Institute. He acknowledges that a growing economy takes away one key weapon that Republicans have used against this White House.

Then again, Hassett says, "I don't think that the accusation that the president mishandled the economy ever played that well with voters. I think if it had, then Mitt Romney would be president right now. And, full disclosure, I was on the Romney team."

Even though the White House is not shouting "recovery" from the rooftops, Republicans have shifted away from their refrain of "Where are the jobs?" Instead, their main message now is that the administration is corrupt and full of scandals.

Any of this could change in a heartbeat, though. Everyone at the White House appreciates that the U.S. economy is just one Japanese tsunami or one Greek financial crisis away from another dip.

"If things turn out worse than you expect, you really look pretty bad," says Jared Bernstein of the Center on Budget and Policy Priorities. He was Vice President Joe Biden's economic adviser in the first term.

Bernstein remembers "Recovery Summer" three years ago. That's what the White House called a national tour to promote the steps it was taking to help the economy. But by the end of "Recovery Summer," unemployment was at 9.6 percent.

"I think one of the lessons that one learns from that is that there's actually a lot more downside to economic optimism than is widely recognized," he says.

Even today, there are good reasons for economic pessimism. Unemployment is still at 7.5 percent. Wages have barely grown at all when you adjust for inflation. And Josh Bivens of the Economic Policy Institute says that, with 2.5 percent economic growth, the country is not exactly rocketing out of its hole.

"We have not seen really rapid job creation," he says. "We've been averaging roughly 175,000 jobs per month. At that pace of growth, you're looking at sort of a full employment economy not till somewhere around 2020."

Still, the rise in home prices means around 2 million people are no longer underwater. Only about half of Americans own stocks, but those who do can feel a bit happier looking at their 401(k)s.

The U.S. economy may not be back. But at least it's been a good week.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

SCOTT SIMON, HOST:

Stormy weather notwithstanding, it's been a relative sunny week in certain parts of the U.S. economy. A wide range of fresh indicators show that in a few key areas, at least, things are looking up for the American economy. NPR's Ari Shapiro looks at what the political implications of this improvement might be.

ARI SHAPIRO, BYLINE: Here's a quick rundown on the positive signs. Home prices showed their best gains in seven years; consumer confidence hit a five-year high; the stock markets set a new record; and more all just this week. President Obama spoke in the White House Rose Garden yesterday morning.

PRESIDENT BARACK OBAMA: So, we're seeing progress and the economy's starting to pick up steam. The gears are starting to turn again and we're getting some traction.

SHAPIRO: You can tell from the tone of his voice that he was leading up to a but....

OBAMA: But the thing is, the way we measure our progress as a country is not just where the stock market is.

SHAPIRO: He went on to say too many people in the middle class are still struggling. And that pivot, from glass half-full to glass half-empty, captures the tricky dance a president must do at a time like this. Gene Sperling directs the White House's National Economic Council.

GENE SPERLING: I think the American people very much can understand that things are improving, they're getting better, but they also understand they're not good enough. So I don't think there's many people out there who think that the United States Congress should be declaring mission accomplished right now.

SHAPIRO: That reference to Congress is important. The White House has a long list of economic boosters it wants Congress to deploy, from building new infrastructure to rolling back the budget cuts known as the sequester. The administration's problem is that the better the economic news gets, the less pressure Congress feels to act.

KEVIN HASSETT: I think that the odds of the sequester being undone have gone to pretty much zero.

SHAPIRO: Kevin Hassett is an economist at the conservative American Enterprise Institute. He acknowledges that a growing economy takes away one key weapon that Republicans have used against this White House. Then again, Hassett says...

HASSETT: I don't think that the accusation that the President mishandled the economy ever played that well with voters. I think if it had then Mitt Romney would be president right now, you know, full disclosure, I was on the Romney team.

SHAPIRO: Even though the White House is not shouting recovery from the rooftops, Republicans have shifted away from their refrain of: Where are the jobs? Instead, their main message now is the administration is corrupt and full of scandals. Any of this could change in a heartbeat though. Everyone at the White House appreciates that the economy is just one Japanese tsunami or one Greek financial crisis away from another dip.

JARED BERNSTEIN: If things turn out worse than you expect, you really look pretty bad.

SHAPIRO: Jared Bernstein of the Center on Budget and Policy Priorities was Vice President Biden's economic advisor in the first term. He remembers Recovery Summer three years ago. That's what the White House called a national tour to promote the steps it was taking to help the economy. But by the end of Recovery Summer, unemployment was at 9.6 percent.

BERNSTEIN: I was there then and I think one of the lessons that one learns from that is that there's actually a lot more downside to economic optimism than is widely recognized.

SHAPIRO: Even today, there are good reason for economic pessimism. Unemployment is still at 7.5 percent. Wages have barely grown at all when you adjust for inflation. And Josh Bivens, of the Economic Policy Institute, says with 2.5 percent economic growth, the country is not exactly rocketing out of its hole.

JOSH BIVENS: We have not seen really rapid job creation. We've been averaging roughly 175,000 jobs per month. You know, at that pace of growth, you're looking at sort of a full employment economy not until somewhere around 2020.

SHAPIRO: Still, the rise in home prices means around two million people are no longer underwater. Only about half of Americans own stocks, but those that do can feel a bit happier looking at their 401(k)s. The U.S. economy may not be back, but at least it's been a good week. Ari Shapiro, NPR News, the White House. Transcript provided by NPR, Copyright NPR.