Obama takes ownership of economy

President Obama on Tuesday took full ownership of the struggling U.S. economy even as he warned that unemployment numbers will likely continue “to tick up for several months.”

In Michigan on Tuesday afternoon — hours after he said he expects unemployment numbers to rise — Obama assumed sole responsibility for the economy while also taking a swipe at his political opponents.

ADVERTISEMENT
“I love those folks who helped get us in this mess and now say, ‘This is Obama’s economy,’ ” Obama said.

“That’s fine. Give it to me ... So I welcome the job. My job is to solve problems. Not to stand on the sidelines and carp and gripe.”

The president has repeatedly responded to his Republican critics by saying that “we didn’t get into this mess overnight,” laying blame on Bush and the Republican-controlled Congresses he worked with.

The president recently said he expects the national unemployment rate to reach 10 percent, which hasn’t happened since 1982.

Asked in the Oval Office on Tuesday morning how high he thinks unemployment rates will increase in hard-hit states like Michigan, Obama responded, “Obviously, I don’t have a crystal ball. We have looked at a lot of the economic data that’s coming out right now. And, as I’ve said repeatedly, we have seen some stabilization in the financial markets.”

Obama’s comments come two months after a member of his Cabinet predicted that the economic stimulus package would cause unemployment rates to drop.

Michigan’s unemployment rate is now 14.1 percent, and on Tuesday afternoon, the president warned that some jobs in the state are never coming back.

“Since this recession began 20 months ago, 6.5 million Americans have lost their jobs, and I don’t have to tell you Michigan in particular has been hard-hit,” Obama said at Macomb Community College in Warren, Mich. “The statistics are daunting.”

Obama indicated earlier in the day he is optimistic that the economy will improve, but did not make any bold predictions on when that will occur: “What we have also seen is that historically, even after you start moving into a recovery, positive growth, hiring typically lags for some time after that. That’s been the historic norm.

“Now, this has been a more severe recession than we’ve seen since the Great Depression. So how employment numbers are going to respond is not yet clear.”

The president defended the stimulus, which his administration earlier this year suggested would keep the unemployment rate to around 8 percent. The nation’s unemployment rate is 9.5 percent. And Obama anticipates that the trend will continue over the short term.

ADVERTISEMENT
He said, “My expectation is that we will probably continue to see unemployment tick up for several months.”

White House press secretary Robert Gibbs told reporters aboard Air Force One that the stimulus plan is “ahead of pace,” both “in Michigan and throughout the country.”

Michigan, Obama said, “is a state that has just been battered, not only during this recession but in the years leading up to this recession. We’re pleased to see that GM now and Chrysler have gotten out of bankruptcy. … Had it not been for the steps that we took with respect to GM and Chrysler, the situation in Michigan, I think it’s fair to say, would be far worse.”

Likewise, the president said, the stimulus prevented further damage to the economy: “We’ve made investments that early on have allowed a state like Michigan to lay off fewer teachers, fewer cops, fewer firefighters. Those are all jobs that would have been lost in the absence of the recovery package. But it’s still not enough.”

Seeing cracks in the Democrats’ armor, House Republicans are going after the stimulus aggressively.

Rep. Dave Camp (R-Mich.), the ranking member on the House Ways and Means Committee, said Tuesday that “the stimulus bill hasn’t worked.”

ADVERTISEMENT
Talking to reporters on a conference call hosted by the Republican National Committee (RNC), Camp said the White House changed the format of the event in Michigan from a town hall to a speech “because there are a lot of hard questions that we would all like to ask.”

Congressional Democrats and the Obama administration have shifted their talking points on the stimulus in the wake of dismal job data.

Sen. Charles Schumer (D-N.Y.) said on Monday that the economic stimulus accomplished its first goal of preventing a great depression. Schumer then cautioned against rush judgments about whether the $787 billion package is a significant job-creator.

But in May, Secretary of Transportation Ray LaHood predicted the stimulus would lead to lower unemployment rates.

During a speech at the National Press Club, LaHood said, “I do think you will see unemployment rates begin to come down as the transportation sector really up-ramps its opportunities with the dollars that we will be providing.”

At the time of LaHood’s speech, the nation’s unemployment rate was 8.9 percent.

A day before LaHood’s prediction, the White House projected that the stimulus would save or create 1.5 million jobs by the end of 2009.

The Federal Reserve is supposed to release minutes of its June policymaking meeting on Wednesday. The minutes will give the Fed’s sense of where the economy is headed for the rest of the year.

A number of large companies this week have unveiled their earnings in the second quarter, including Citigroup, Bank of America and GE.

Goldman Sachs Group Inc. reported better-than-expected earnings for the second quarter, but the company also said it has set aside $11.4 billion for benefits and compensation.

Gibbs said Tuesday that he was unaware of whether the president “has seen the information,” but Gibbs said he is “hesitant to comment on individual earnings.”


Michael M. Gleeson and Ian Swanson contributed to this article.