Published for The Roosevelt Room, August 30th, 2010:

The last week of August 2010 has been targeted on the White House calendar for a long time as the moment President Obama could focus on foreign policy — commemorating the removal of combat troops from the war in Iraq, and refocusing the country on the ongoing military operations in Afghanistan.

It wasn’t supposed to be this way.

This was not supposed to be the week the President would take to the podium in the Rose Garden to discuss weakness in the U.S. economy.  If anything, at the end of what was supposed to be “Recovery Summer”, the White House would only have expected to take a victory lap this week.  Earlier this year the President’s economic team was proclaiming the end of the recession and predicting strong, sustained job creation.  Whether the recession is technically over remains an open question to economists (if not to the American people), and strong, sustained job creation hasn’t yet materialized.

So, at the risk of distracting from his carefully-crafted foreign policy message, President Obama scrambled to squeeze in a statement today explaining why the U.S. economy has come to a sudden stop this summer — despite trillions of dollars in fiscal and monetary stimulus to date.  The White House understands it doesn’t have the luxury to talk about foreign policy when the overwhelming concern of American voters heading into November’s mid-term elections is domestic policy: government spending, jobs, housing and the overall economy.

Lacking a positive economic story to tell, President Obama said his Administration is focused and hard at work.  And then he took the opportunity to make a partisan attack on Republicans in Congress.  That’s not going to cut it for voters this fall. They’re looking for answers, not finger-pointing.

The President avoided repeating the Administration’s rosier economic predictions, not even repeating Fed Chairman Bernanke’s prediction that growth will pick up next year.  And while advocating for legislation promising some marginal benefits for small businesses, the President failed to address the two biggest issues small businesses themselves cite as reasons for not hiring: the prospect of income tax hikes (in fact, the President repeated his intent to raise marginal income taxes on the top income categories); and questions about regulatory reform — in particular health care reform and new financial rules.

It was a somber message from the President, and his speech presents a troubling bookend for the White House week: it comes following last week’s report revising GDP down to an anemic 1.6% for the second quarter; and ahead of this Friday’s payroll report, expected to bring more evidence of a weak labor market.

What is clear from the President’s statement is that the economy as we see it today is the economy we’re going to have for awhile.  That won’t bring comfort to financial markets, to Americans, and to members of Congress campaigning for election this fall.