The president has received a vote of no confidence from business leaders who, after having supported him for president, now describe him as anti-business. Obama was not happy with that charge, so he's been all over the country lately defending this policies, particularly his stimulus bill, insisting that it kept the economy from falling off a cliff. In fact, he's gone so far as to say the economy is on the rebound.
Oh, really? Then why is the Fed saying the opposite?
The euro rocketed to a two-month high of $1.29 and sterling jumped two cents to almost $1.54 after the Fed confessed that the US economy may not recover for five or six years. Far from winding down emergency stimulus, the bank may need a fresh blast of bond purchases or quantitative easing.
Usually the dollar serves as a safe haven whenever the world takes fright, and there was plenty of sobering news from China and other quarters on Thursday. Not this time. The US itself has become the problem...
The Fed minutes warned of "significant downside risks" and a possible slide into deflation, an admission that zero interest rates, $1.75 trillion of QE, and a fiscal deficit above 10pc of GDP have so far failed to lift the economy out of a structural slump.
"The Committee would need to consider whether further policy stimulus might become appropriate if the outlook were to worsen appreciably," it said. The economy might not regain its "longer-run path" until 2016.
"The Fed is throwing in the towel," said Gabriel Stein, of Lombard Street Research. "They are preparing to start QE again. This was predictable because the M3 broad money supply has been contracting for months."
The Fed minutes amount to a policy thunderbolt, evidence of how quickly the recovery has lost steam. Just weeks ago the Fed was mapping out withdrawal of stimulus.
The Obama economic agenda is responsible for extending this recession, just as Franklin Roosevelt's agenda was responsible for extending the Great Depression. Obama's massive new programs will create so many new bureaucracies that they will require hundreds of additional taxes to pay for them, hence, the massive tax increases that kick in on January 1, 2011. The American people's consumption drives the economy, and when you pull money out of the pockets of taxpayers, you cripple the economy.