The news keeps getting worse for the president. Don’t be fooled

My guess is today, June 1, will be remembered as the day that gave the president a chance to pull out this election. Why, you ask?

It’s simple. A slow general decline in the economy and rise in unemployment over the next few months would leave the president and his liege Ben Bernanke in a difficult spot. That kind of malaise would be the worst thing that could happen to his reelection chances. Without a stark moment of bad news there would be little to clearly justify the next round of quantitative easing and dollar printing.

However, with the horrible jobs report out this morning and follow on bad news about manufacturing, Obama and Bernanke finally have a specific point in time to which they can point that “requires government action.” Really this is all it’s about. Justification for government action which expands both government power and Americans’ belief that it’s the government’s job to save us from hardship.

So what happens next? A little QE3 later this month (or even better for the president, in August). A rally in stocks. Some improved consumer sentiment. Maybe a brief halt to the decline in employment and home prices. And just enough momentum to carry the president to a tight reelection in November which he will declare to be an overwhelming mandate for his agenda.

That’s his gameplan.

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