Obama's Big Test for the Economy

Today is September 16 and there has been quite of bit of  political activity regarding the economy. The Federal Reserve's Federal Open Market Committee is meeting to decide whether or not to lift bank rates from near zero, where they have been for some time, owing to deflationary pressures. (My bet is that we see a token rise tomorrow.) The GOP's second debate is tonight and the slow growth of the economy is one topic certain to be discussed,. And you may have missed this, but this morning President Obama addressed a host of CEOs in town for a meeting of the Business Roundtable.
  The President's remarks to the CEOs are available on the White House web site at https://www.whitehouse.gov/the-press-office/2015/09/16/remarks-president-business-roundtable
  I zeroed in on O's discussion of free-trade agreements, because a treaty in the Pacific would be a big shot in the arm for the economy and a counter-weight to China's attempt to  extend its influence in the region.  Obama is nervous  about the prospects of  congress passing a treaty, underscoring his weak, strained relationship with that body. It underlines his failure to continually engage the congress on important economic matters  and secure dependable allies.
  The President, mostly because of Republican support,  in June was granted so-called "fast-track" authority to negotiate a trade deal with 11 Pacific Rim nations.  The treaty would  be a major accomplishment-one for the history books.  What Fast Track means is that the president can negotiate a deal that will not be subject to congressional tampering.  Congress will either vote for or against  the treaty negotiated by the President's team. Congress may not amend it.  Obama believes there will be a deal with the 11 nations before the end of the year.  This is hugely  positive. But he warned of a major obstacle in Congress- his fellow Democrats.   
Said the President, "We should not assume, though, that because the authority was done, that we automatically are going to be able to get TPP done. And I’ll be honest with you, the reason is that the politics around trade are tough.  And I said this even in the run-up to getting TPA authority.  A lot of Americans, when they think of trade, think of plants in their hometown or nearby shutting down and moving to Mexico or China, and American manufacturing and good-paying jobs being lost.  That’s the image of trade. "

  If Obama cannot enlist the support of his own party on this significant deal, his economic legacy will be one of failure.  The recovery primarily was driven by the fracking revolution even has Obama was waging war on the oil industry in the name of saving the planet from global warming.  The increase in manufacturing jobs between 2008 and the start of the year largely was in the carbon energy sector. Obama fought oil tooth and claw. Witness the Keystone pipeline stall.Now that the oil industry is in decline due to a glut of global supply created by a global economic slowdown, a trade treaty could spur growth in other sectors, offsetting the negative impact in the energy fields. A trade treaty could help avert a recession.  If Democrats kill the treaty, they will leave themselves blameworthy for any economic contraction, which is especially harmful for the prospects of their candidates going into 2016.
   Enjoy the debate. Watch the Fed. Do not forget what President Obama said!