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More signs of a troubled US economy

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    How will the numbers impact the election?

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Welcome to The Journal Editorial Report I'm -- -- go well more signs of trouble with news that the US economy.

Grew at an annual rate of just one point 5% in the second quarter.

As Americans cut back sharply on spending.

The slowdown adds to worries that the economy could be stalling.

Three years after the recession and joining the panel this week Wall Street Journal columnist and deputy editor Dan -- Columnist bill -- burned and editorial board member Mary on the stage -- Grade so merry what does this news tell you about where we are right now in terms of eat the company while.

Think the most disturbing thing about it is the trend and in the fourth quarter number was better than 4%.

The first Carter has been revised upward to 2% and our one point 5% and I think the risk there is that you know.

Consumers as you pointed out consumer spending took -- -- And that that.

The economic agents both the employers and the consumers.

Are really losing confidence and that's -- bring us into the stall speed and by the way Paul I think that the administration is gonna wanna blame Europe.

And it's very interesting to note that.

Exports were up five point 3%.

Which suggest that you know it's not really the problem -- coming from the global economy.

It's really domestic.

Growth and demand and incentives.

At a time of that hurting us here again so third -- in a row where we've had it looked like we were coming out with a little bit better growth and then back down again 2010.

2011.

And now 2012 again what does this tell you about how well the policies have been working.

Not very well -- -- at -- some evidence.

You know -- the economy people in the economy respond to incentives and at the moment there haven't been too many incentives then -- One of the things that people focus on.

Now is.

Obama says he inherited a bad economy in 2000 did and he did it.

And he had a veto proof majority in both houses of congress not veto proof with Superman George supermajority.

And he spent 2009 much 2010 doing one thing passing the Affordable Care Act Obama care.

Plus the 800 plus billion dollar stimulus -- right.

But that's pretty much what he did pretty content plus Dodd-Frank.

And there is -- school of thought developing that the president.

Who had all of this political capital did not spend enough time creating incentives in -- an economy that was coming out of a recession.

Almost all recessions grow at greater than four -- This is the worst percent worst recovery in terms of growth since world war two and it's not even a close call all right it's just that much worse than.

Then that that everyone out.

So the bill.

Zero point 1%.

Zero point 1% repeat it zero point 1% growth in real disposable personal income from 2008 to 2011.

Average -- basis.

That's just not enough -- To get average incomes up.

Now it's it's it it's -- I think to further -- point.

One of the points that I think governor Romney needs to make is that we here not because Obama fail but because he succeeded he had his choices he made his choices.

And now he's failing not by our measures at this table by his own measures you know he told us that.

That unemployment would be five point 6% at this point eight point 2%.

Vice President Biden told -- would be creating up to 500000 jobs that -- you know -- this when we're creating 80000 jobs.

Many told a 51 thing that might be ready totals for the economy was improving by the third -- might be one term president so what.

That may be the only thing -- comes true but he said -- look I inherited a bad economy this is the army's -- inherited a bad economy.

But we're coming out of it you know we were coming out of it it's taking longer we thought because it was an unusual recession right it was rooted in financial problems.

Unusual recession these things take.

Time you can make the argument that you know there isn't deleveraging process going on but when the consumer good tonight -- -- Jay Wright added that people had too much -- -- that's right you called bubble and that you know now there's an adjustment period but.

Why during that adjustment period with the government take on more Internet I mean that's that's sort of at counteracting the effects of deleveraging.

If you had gone through that process in the early stages.

Then you would be coming out of the recession I am afraid that it because they heaped on all this access of government debt.

That's just making it harder to fly the plane.

So the word of what -- its path has and what impact does this have on the election it's not a recession.

It's so it's not a slam dunk for Romney to just say look this is so bad you need to turn to me like what this is in 2008.

So we.

Where does how does this play out.

-- know Paul I guess I would say it plays out in and in sort.

A raw political calculation.

Either candidate to win needs good turnout from.

Either Democrats or Republicans and we had this really astonishing Gallup report this week that said.

Only 39% of Democrats are enthusiastic about voting down from 61%.

When Obama was elected.

Now Democrats live in the same -- Economy that the rest of us do.

And black unemployment is around 20% youth unemployment is about 60% to groups that he really needed.

-- I think these numbers just -- suppress.

The instinctive Democrats to turn out and vote for him.

They'll vote but I don't think as many are going to turn out as he needs it in but I.

But I'll tell you -- it's it's it's a close enough.

That I think Mitt Romney has to make the argument PS debate because it -- if you Obama's gonna say look we're heading out of it it's better we're don't go back to.

2008.

But Romney has to make the case.

Honey we can't hear what policies -- why are we at one point 5% growth and why my policies are gonna get better he has to make the sale.

That's going to be the -- we election.

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