Obama’s upbeat economy message a shift from last year’s tone

WASHINGTON (AP) – A year ago, in a high-profile address, President Barack Obama offered a somber assessment of what ailed the middle class. The economy was not working for everyone, he said, and many Americans had a nagging sense that the deck was stacked against them.

These days, Obama has a bullish new message that in essence challenges the bleak picture he painted back then.

“American resurgence is real,” he says. “Don’t let anybody tell you otherwise.”

Despite multiple signs the recovery is indeed taking hold, some are saying otherwise, from conservatives to liberals in the president’s own Democratic Party who point to stagnant wages and a yawning rich-poor income gap. The clashing messages reflect Obama’s need to boost his economic credentials and establish a post-recession legacy, and the desire by lawmakers to push their divergent economic policies.

Obama is unfurling his retooled message ahead of his Jan. 20 State of the Union address. It comes as the public warms toward the economy and as economic confidence moves into positive territory for the first time since 2007.

For Obama, the idea of changing his tone on the economy gelled after the November midterm election, aides say. So in the two weeks in December before leaving for a Hawaii vacation, he huddled with his economic team to outline themes for the State of the Union address and recast his rhetoric.

In a way, his audience is the same public that a year ago he said was discouraged by what he called a “dangerous and growing inequality and lack of upward mobility.”

“They need to understand that there are reasons to be optimistic, that there is true, tangible, solid growth and that we believe it’s going to portend good things,” White House communications director Jennifer Palmieri said in an interview.

But the economic ailments Obama described in his December 2013 speech are deep seated and have not disappeared. Some White House allies say there is a risk Obama’s new message won’t resonate, or may even backfire, if he doesn’t acknowledge many Americans are still struggling.

“I understand why they want to tout the good news and especially when other people are only wanting to tout the negative,” said Lawrence Mishel, an economist and president of the liberal-leaning Economic Policy Institute. “But I think he’s got to paint a picture of why there are continued problems and what can be done about it.”

And others, like Jared Bernstein, a fellow at the Center on Budget and Policy Priorities who served in the White House as chief economist for Vice President Joe Biden, caution economic growth on its own won’t boost stubbornly stagnant wages which rose only 1.7 percent in 2014, hardly above the 1.3 percent inflation rate.

“He’s well within his rights to claim some credit for the momentum in the cyclical recovery, without denying that long-term structural problems still exist,” Bernstein said.

No doubt, the economic environment has changed for the better. December’s  5.6 unemployment was the lowest since 2008, and employers added 252,000 jobs in December, a healthy gain that contributed to 2014 being the best year for hiring in 15 years. The average price of gas in the United States is $2.20 per gallon, the lowest since May 2009. While the stock market has fizzled some in the past few days because of slumping oil prices, the Dow Jones industrial average set a record high by closing at 18,053 the day after Christmas.

How much of the credit Obama deserves is a matter of debate. Economies rise and fall because of numerous factors, not all driven by government policies. Obama has been touting his administration’s 2009 stimulus plan, the bailout of the auto industry, his health care law and new financial regulations as key factors in the comeback. Unmentioned is the independent Federal Reserve Bank, which played a more robust role by keeping its benchmark interest rate near zero for six years and by buying up trillions of dollars in government and private sector bonds.

Still, weaknesses remain. Nearly 7 million people are working part-time but would prefer full-time work. Participation in the labor force dropped to a low of 62.7 percent. While some of that reflects the retirement of baby boomers, it also shows how many out-of-work Americans have given up looking for jobs.

Republican House Speaker John Boehner on Thursday said the economy is improving “a bit, but most Americans aren’t seeing it.”

On that point, he doesn’t get much of an argument from liberal Democratic Sen. Elizabeth Warren of Massachusetts.

“For tens of millions of working families who are the backbone of this country, this economy isn’t working,” she told the AFL-CIO last week. “These families are working harder than ever, but they can’t get ahead. Opportunity is slipping away.”