Government Ready to Admit Economy at Standstill

WASHINGTON -- The government is about to confirm what many people have felt for some time: The economy barely has a pulse.

The Commerce Department on Friday will revise its estimate for economic growth in the April-to-June period and Wall Street

economists forecast it will be cut almost in half, to a 1.4 percent annual rate from 2.4 percent.

That's a sharp slowdown from the first quarter, when the economy grew at a 3.7 percent annual rate, and economists say it's a taste of the weakness to come. The current quarter isn't expected to be much better, with many economists forecasting growth of only 1.7 percent.

Such slow growth won't feel much like an economic recovery and won't lead to much hiring. The unemployment rate, now at 9.5 percent, could even rise by the end of the year.

"The economy is going to limp along for the next few months," said Gus Faucher, an economist at Moody's Analytics. There's even a one in three chance it could slip back into recession, he said.

Many temporary factors that boosted the economy earlier this year are fading. Companies built up their inventories after cutting them sharply in the recession to match slower sales. The increase provided a boost to manufacturers, but now many companies' stockpiles are in line with sales and don't need to grow as much.

In addition, the impact of the government's $862 billion fiscal stimulus program is lessening. - FOX News Story

Obama Fights Press Again - This time AP

In another public relations battle with the AP, the White House says the wire service left out “the full facts” in an examination of stimulus claims that the AP called “a collection of rosy projections that ignore many of the challenges, pitfalls and economic realities.”

On the White House blog, Liz Oxhorn, the White House’s Recovery Act communications director, disputed six of the AP’s conclusions — most of which say the White House is too optimistic about the Recovery Act.

On doubling renewable energy manufacturing capacity, for example, Oxhorn wrote: “Here, the AP does not doubt that we will make our goal, but instead denigrates the significance of it. Nevertheless, we believe that compared to the last decade in which we’ve fallen severely behind, more renewable energy manufacturing in America is a good thing.”

Similarly, she wrote about cutting the cost of solar power, “While the AP’s expert says ‘there was too much uncertainty in the world to make such a prediction,’ this doesn’t fundamentally change the ability for our goal to be achieved.” She also addressed genetic mapping, high-speed rail, health information technology and electric vehicles.

“No doubt, there may be varying opinions as we transform the American economy,” Oxhorn concluded. “That’s what innovation is all about — a wealth of good ideas. But based on the facts we’ve laid out above and in the report, there’s no reason to believe that with dedication and resources America can’t achieve these ambitious goals we’ve set.”

Jack Stokes, an AP spokesman, responded in a statement to POLITICO: "Our story provides context that is severely lacking in an administration report that takes the rosiest possible view of its own stimulus program." - Politico Story

Obama Administration has Concern if Repubs Win in November

If President Barack Obama needed any more incentive to go all out for Democrats this fall, here it is: Republicans are planning a wave of committee investigations targeting the White House and Democratic allies if they win back the majority.

Everything from the microscopic – the New Black Panther party – to the massive –- think bailouts – is on the GOP to-do list, according to a half-dozen Republican aides interviewed by POLITICO.

Republican staffers say there won’t be any self-destructive witch hunts – but they are clearly relishing the prospect of extracting information from an administration that touts transparency.

And a handful of aggressive would-be committee chairmen – led by Reps. Darrell Issa (R-Calif.) and Lamar Smith (R-Tex.) – are quietly gearing up for a possible season of subpoenas not seen since the Clinton wars of the late 1990s.

Issa would like Obama’s cooperation, says Kurt Bardella, spokesman for the ranking Republican on the House Oversight and Government Reform Committee. But it’s not essential.

“How acrimonious things get really depend on how willing the administration is in accepting our findings [and] responding to our questions,” adds Bardella, who refers to his boss as “Questioner-in-Chief.’

That’s feeding anxieties within the West Wing – even if administration officials won’t admit it publicly. - Politico Story

Democrats Find Real Trouble Going into Election

Top Democrats are growing markedly more pessimistic about holding the House, privately conceding that the summertime economic and political recovery they were banking on will not likely materialize by Election Day.

In conversations with more than two dozen party insiders, most of whom requested anonymity to speak candidly about the state of play, Democrats in and out of Washington say they are increasingly alarmed about the economic and polling data they have seen in recent weeks.

They no longer believe the jobs and housing markets will recover — or that anything resembling the White House’s promise of a “recovery summer” is under way. They are even more concerned by indications that House Democrats once considered safe — such as Rep. Betty Sutton, who occupies an Ohio seat that President Barack Obama won with 57 percent of the vote in 2008 — are in real trouble.

In two close races, endangered Democrats are even running ads touting how they oppose their leadership.

“Democrats kept thinking: ‘We’re going to get better. We’re going to get well before the election,’” said one of Washington’s best-connected Democrats. “But as of this week, you now have people saying that Republicans are going to win the House. And now it’s starting to look like the Senate is going to be a lot closer than people thought.”

A Democratic pollster working on several key races said, “The reality is that [the House majority] is probably gone.” His data show the Democrats’ problems are only getting worse. “It’s spreading,” the pollster said. - Politico Story

Deadliest Month in Iraq - Has America Left Irag too Soon?

(CBS/AP) Insurgents in Iraq are testing the country's security forces and asserting their might in a wave of violence that comes as the U.S. has begun pulling out combat troops.

Coordinated attacks Wednesday killed at least 56 people and injured hundreds, the worst day of violence in more than two years. And the violence is continuing Thursday, two days after the U.S. troop level fell below 50,000 for the first time since the war began in 2003.

Insurgents killed six members of a government-allied Sunni militia in an ambush northeast of Baghdad on Thursday, police said, offering no respite to a nation reeling from Wednesday's violence.

Diyala police spokesman Maj. Ghalib al-Karkhi said the government-allied fighters, known as Sahwa or Awakening Councils, were driving near the town of Muqdadiyah around 1:30 a.m. when their car hit a roadside bomb.

The explosion killed four of the guards immediately, al-Karkhi said. Gunmen then attacked the two survivors, killing them, he said.

Muqdadiyah is about 60 miles north of Baghdad.

The Sahwa are a government-backed Sunni militia that joined forces with U.S. troops against al Qaeda in 2006 and helped turn the tide of the war. Since then, the Sahwa fighters have become frequent targets of insurgent attacks.

The early morning ambush comes on the heels of a string of attacks a day earlier that struck at least 13 Iraqi cities. Fifty-six people were killed - including at least 31 policemen and soldiers - in a series of bombings and shootings across the country.

The attacks made August the deadliest month for Iraqi security forces in two years. But insurgents have been stepping up their attacks for months.

"It's about the terrorists trying to make a point about the lack of a government, trying to challenge the security forces, put doubts into people's minds about whether they are ready or not," said Gen. Ray Odierno, the commander of U.S. forces in Iraq.

In fact, in many cases the Iraqis are not ready, as some admit. - CBS News Story

Fire Obama's Economic Team - They have Failed!

President Obama should ask for and accept the resignations of Treasury Secretary Tim Geithner, National Economics Council chief Larry Summers and the rest of his economics team, House Minority Leader John Boehner said Tuesday.

In a speech to businessmen in Cleveland, Boehner, the man poised to replace Nancy Pelosi as House speaker if Republicans win back the House majority in November, offered a scathing assessment of the president's stewardship of the U.S. economy, which he said includes massive increases in spending combined with higher taxes and more rules and regulations.

Already budget director Peter Orszag and chief economist Christina Romer have announced their return to their private lives. Boehner, R-Ohio, said Obama should clear the decks of the rest of his advisers.

"We've tried 19 months of government-as-community organizer. It hasn't worked. Our fresh start needs to begin now," he said.

"We have been told that the president's economic team is 'exhausted' ... The worse things get, the more they circle the wagons and defend the indefensible," he said.

Boehner claimed that the failure to see a revival of the economy is due to a "lack of real-world, hands-on experience" among the staff.

Obama spokesman Bill Burton said it was ironic that the minority leader wants to get rid of the officials who drug the country out of the recession that began during the Bush administration. - FOX News Story

Burton needs to pull his head out. If he or this administration think that they have turned around the economy, they are delusional. Have they taken a look at the numbers and listened to the people?