You don’t have to be an economist to know our economy is in bad shape

The message from Washington is that we’ve turned the corner on the recession and any day now, our lives will improve. No one is buying it however, except maybe a few folks that just don’t want to admit that what’s being done for the vast majority living in America has been close to nothing. A new AP Poll shows that people don’t think the economy is on the mend. Not a good omen for the fall elections.

Eleven weeks before the Nov. 2 balloting, just 41 percent of those surveyed approve of the president’s performance on the economy, down from 44 percent in April, while 56 percent disapprove. And 61 percent say the economy has gotten worse or stayed the same on Obama’s watch.

Still, three-quarters also say it’s unrealistic to expect noticeable economic improvements in the first 18 months of the president’s term. And Obama’s overall approval rating was unaffected; it remained at 49 percent, in part because most Americans still like him personally.

Americans’ dim view of the economy grew even more pessimistic this summer as the nation’s unemployment rate stubbornly hovered near 10 percent. That’s been a drag on both Obama and Democrats, who control Congress.

Meanwhile, one of the obvious results of the bad employment situation and consumer demand accompanied by low tax revenues to states and municipalities is that nearly every municipality is laying off teachers. School districts aren’t acting to rehire any despite a recent stimulus program aimed to bring some back into the classroom.

As schools handed out pink slips to teachers this spring, states made a beeline to Washington to plead for money for their ravaged education budgets. But now that the federal government has come through with $10 billion, some of the nation’s biggest school districts are balking at using their share of the money to hire teachers right away.

With the economic outlook weakening, they argue that big deficits are looming for the next academic year and that they need to preserve the funds to prevent future layoffs. Los Angeles, for example, is projecting a $280 million budget shortfall next year that could threaten more jobs.

“You’ve got this herculean task to deal with next year’s deficit,” said Lydia L. Ramos, a spokeswoman for the Los Angeles Unified School District, the nation’s second-largest after New York City.

“So if there’s a way that you can lessen the blow for next year,” she said, “we feel like it would be responsible to try to do that.”

Two bright spots sit on the horizon in policy but the President needs to be firm to ensure they happen. Lobbyist-in-training Chris Dodd says that Elizabeth Warren is unconfirmable but Congressman Barney Frank is lobbying the president for her. Warren has been a strong advocate for consumers.

Frank, the Massachusetts Democrat who leads the House Financial Services Committee, joined 41 other lawmakers in urging “no further delay” on nominating Warren, 61, as the bureau’s first leader in a letter to Obama dated yesterday.

“You have an opportunity to appoint to head this body a true visionary — not the usual Washington practice of a careerist,” the House Democrats wrote in the letter released today by New York Representative Carolyn Maloney.

Dodd says he will support her if the President decides to appoint her and says he won’t derail her nomination.

So far, the Obama administration hasn’t made a nomination, but there has been a groundswell of support for Warren from consumer advocates, labor unions, academics and a broad cross-section of Democratic lawmakers.

Endorsements have come from The New York Times and MoveOn.org, the political action group. This week, the campaign crossed over into a rap music video by Main Street Brigade, a group that pushes a consumer agenda, posted on YouTube.

“Sheriff Warren Wrap” (http://bit.ly/bzRz9l) has a western theme, mentioning Oklahoma, where Warren grew up. Comedian Ryan Anthony Lumas builds up Warren as a person who will protect consumers against the big banks.

“Elizabeth Warren, we’ve got your back,” Lumas sings. “Wall Street, you’d better watch out.”

The Bureau of Consumer Financial Protection is a key component of the financial services reform bill, signed into law by the president last month. Dodd was a key proponent of the reform and the consumer protection agency, in particular.

The idea for the bureau came primarily from Warren herself. The new director will be the first new banking regulator in decades and the first focused solely on consumers.

The President is pushing a plan to make it easier for small businesses to get loans. That would be heaven-sent down here in the Gulf Coast because many are hurting from the oil spill and the recession. Small businesses are usually a good source of stimulus because they don’t ship their jobs abroad and many buy and source locally. I’m hoping President Milquetoast develops some fight on this one. It’s been difficult to bet banks to lend to anyone despite all the TARP and public funding to them.

The legislation Obama is promoting would ease the terms for loans guaranteed by the Small Business Administration, providing $12 billion in tax breaks and issuing grants to states to provide business loans.

It would also provide $30 billion to banks with less than $10 billion in assets to encourage lending to small businesses. The cost of paying back those capital infusions would decline based on the level of small-business lending by the bank. The aid would spur $300 billion in lending, according to the administration.