The Economy Continues to Deteriorate While Obama Thinks About Rearranging His Org Chart

We got another negative data point today, the August Empire State Manufacturing Index came in below expectations, showing a 3rd straight month of contraction in current business conditions. Alarmingly, the index for future business conditions had the 3rd lowest reading in the last 10 years (the only lower datapoints were for September 2001 because of what happend on 9/11, and February 2009). Besides the actual reading, the rate of change is rather disturbing. Over the last six months, future expectations have deteriorated at the fastest rate of the last 10 years. As you can see from the chart below, the trend is not our friend:

No wonder Obama has 49% disapproval (and 45% approval) in New York, historically one of the bluest states around that voted for Obama 63%-36% over McCain in 2008.

And based on this article from the NY Times on Saturday, he and his team are as clueless as ever. There were two passages that are very telling, here is the first one:

Administration officials, frustrated by the intransigence of House Republicans, have increasingly concluded that the best thing Mr. Obama can do for the economy may be winning a second term, with a mandate to advance his ideas on deficit reduction, entitlement changes, housing policy and other issues.

And how exactly are they going to argue that he will improve the economy with a second term when he did nothing to improve it in the first? The worst part is that none of those ideas listed will actually do anything to stimulate the economy. And given his position to raise taxes starting January 1, 2013, which is probably the most recessionary thing a President can do, re-electing Obama will likely make things far worse. While a Republican will only take office on January 20, 2013, they can always rescind any tax increases once in office so that the negative impact will be minimal.

Now if you didn't think they were completely out to lunch already, check out this passage:

The administration may also merge the Department of Commerce, the Office of the United States Trade Representative and some economic divisions at the State Department into a new agency, administration officials said. Possible names include the Department of Jobs or the Department of Competitiveness.

And how will changing the logo on people's business cards help any? It's the actual policies that the bureaucrats are implementing that are the problem, not how they are organized. I also like the fact that the Department of Labor will not be merged into this so you would have a Department of Labor and a Department of Jobs. That reminds me of an old Soviet joke. You see there were two main papers in the Soviet Union, one called Pravda (truth) and the other, Izvestia (news). So the saying went, there is no news in Pravda and no truth in Izvestia. So in this case, I guess you will have a Department of Labor without jobs and a Department of Jobs without labor (i.e. actual employment).