Politics
‘Brinksmanship’ Stalls Economy Work: Obama
President Barack Obama sharpened his attacks on Congress, blaming them for gridlock in Washington that has held up work to bolster the economy, as he sought to regain control of the political narrative with lawmakers on August recess.
On a visit to a battery manufacturing plant yesterday in Holland, Michigan, days before he embarks on a bus tour of Midwestern states, Obama said the downgrade of U.S. credit by Standard & Poor’s was a “self-inflicted wound” resulting from “partisan brinksmanship.”
“There’s nothing wrong with our country, there is something wrong with our politics,” Obama said at a Johnson Controls Inc. (JCI) factory that makes lithium-ion batteries for hybrid and electric vehicles. Some members of Congress “would rather see their opponents lose than see America win.”
With polls showing voters increasingly dissatisfied over how the government works, Obama is seeking to return attention to employment growth after a months-long struggle with congressional Republicans over the debt ceiling and cutting the nation’s debt. The factory visit was originally intended to highlight growth in alternative energy technology as a way to revive manufacturing. Instead Obama focused largely on the gridlock in Washington.
“You voted for divided government,” he told the Johnson Controls employees. “But you didn’t vote for dysfunctional government.”
Public Dissatisfaction
An Aug. 9 Washington Post poll found that 71 percent of Americans said the federal government is mostly focused on the wrong things and 78 percent said they were dissatisfied with the way the country’s political system is working. The poll has a margin of error of plus or minus 4.5 percentage points.
House Speaker John Boehner called Obama’s speech “political grandstanding.”
“If the president wants to do something productive, he can start by delivering on his promise to outline his own recommendations to rein in the massive deficits and debt that are undermining job creation in our country,” the Ohio Republican said in an e-mailed statement.
Obama said the anxiety caused by the government’s inability to find common ground on solutions to the nation’s challenges is “playing out in our stock market, wild swings up and down.”
The Standard & Poor’s (S&P) 500 Index rose 4.6 percent to 1,172.64 at 4 p.m. in New York. The S&P 500 rebounded after plunging 18 percent from July 22 through yesterday amid concern about Europe’s debt crisis and the political battle over raising the debt ceiling.
Investor Confidence
At a fundraiser in New York later, Obama said investors demonstrated confidence in the U.S. by buying Treasuries, the benchmark for the $34 trillion U.S. debt market that is more than twice the value of American equities.
“I don’t know if you noticed, but when the stock market went down what did everybody buy? After the downgrade? U.S. Treasuries,” he said at a dinner with donors. “The market voted with its feet.”
Treasuries sank yesterday as an unexpected drop in jobless claims and higher-than-estimated earnings tempered concern the economy is slowing. Yield on the 10-year note was up 22 basis points to 2.32 percent. Current 30-year bond yield increased 25 basis points, or 0.25 percentage point, to 3.77 percent at 5:01 p.m. in New York, according to Bloomberg Bond Trader prices.
