SCRAPING THE BOTTOM
The slow start for the economy in 2012 — an annual rate of 2.2 percent in the first three months of the year — is evidence that the recovery is too weak to push joblessness much lower than its current 8.2 percent, and too fragile to withstand the kinds of budget cuts Congressional Republicans are proposing.
First-quarter growth was not far off the recent average pace and conditions are certainly worse elsewhere, with many European nations in recession. But that’s false comfort. To make up the damage the Great Recession did to jobs, income, wealth and confidence, the economy needs consistent above-average growth. Europe’s problems will only exacerbate America’s own, by shaving growth from exports or, in a worst case, by destabilizing banks that are linked to the European financial system.
So there is no getting around that slower growth means bigger challenges for ordinary Americans, for policy makers and, not least, for President Obama and Mitt Romney. Unfortunately, with election-year partisanship only intensifying Washington’s gridlock, concerted action to support the economy will have to wait until after the election, and no one knows which direction policy will take.
There are bright spots: consumer spending and housing construction were both up in the latest growth figures. For now, the default policy is to slog on until the end of the year.
