President Obama's appearance as a guest on the morning talk-show "The View" is a desperate move by an embattled U.S. administration to reconnect as that nation's fall mid-term elections approach.
Many of the critical issues facing the American government: the wars (Iraq / Afghanistan); the environment; plus the debt and the economy have reached a point where they transcend political parties. But, partisan political games continue to be played at a fever pitch, though we're clearly well beyond the time when governments in North America can any longer afford to play them.
In high level financial circles expectations are that Mr. Obama's government will back away from shutting-off the stimulus taps in the face of lagging job growth and an alarming retreat in consumer confidence. In the past 60 days, the U.S. Consumer Confidence Index has dropped just short of 15% to 50.4%. Economists watch those numbers closely because they determine consumer spending which is now edging towards the start of the back-to-school shopping season. A reading above 90% would indicate a solid economy. Then, who better for President Obama to bring his "charm offensive" to than the mothers of school aged children who watch "The View?"
Across North America economic threats are still lurking. Though Canada's healthy banking industry has been credited with our relatively soft landing from the recession of the last couple of years; we still haven't stepped completely away from the material danger of a so-called double-dip recession. The Canadian government will be forced by the next Federal budget to shut-off our own $60-Billion economic stimulus program and account to Canadian voters for putting our spending back into serious deficit territory in a series of ill-conceived tax cuts followed by the subsequent downturn. Though it was ignored for political expediency by all parties; that downturn was looming at the time of the last Canadian Federal election in October 2008. Reigning-in the deficit through a series of unpopular cuts with the electorate is fueling speculation of another Canadian national election early this fall before the "shoe-drops" on these expected tough Government measures. Which brings us back to playing political partisan games.
South of the border just last week, the American Federal Deposit Insurance Corporation chalked-up another Half-Billion dollar hit when it was forced (once again) to seize the assets of seven failing banks. What's even more notable is that so far in the first seven months of 2010, a total of 103 U.S. Banks have failed because they have not been able to recover from their portfolios of bad loans mostly tied to real-estate mortgages. In Florida for example, 81% of all mortgages exceed the current value of the home they secure. (In fact running at an average 138% of value). Wait! There's more: Last year's rate of bank failures down in the United-States was slower than in 2010. Not a proud accomplishment: But, it took until October of 2009 (not July) before the number of bankrupt banks surpassed 100. The FDIC estimates that the cost of bank failures looking ahead from 2010 to 2014 will be more than $60 Billion.
With mid-term Congressional elections in the U.S. looming, and the very real potential of a second Canadian Federal Election in two years; knocking-down the economic turmoil and the subsequent elephant-sized debts and deficits hiding behind the closet doors will require Herculean political will and control. What both countries will need are people and leaders running for office for the purpose that they can "serve" far more than to merely get elected. I sure hope the politicians and we voters are up to the task.
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