At this time last year we were breathlessly awaiting the debut of Recovery Summer I, with expectations of sustained economic growth and signs of a strong recovery in the job market.
The Obama Administration rolled out a big marketing plan and opened in cities nationwide.
But by July, it was clear that Recovery Summer I was a bust: even aided by the hiring of hundreds of thousands of Census workers, job creation again lagged, and economic growth was tepid.
The government responded by putting in place a new round of monetary stimulus in QE2 (from Ben Bernanke, director of QE1); gave the House of Representatives a new cast (in a gender twist, John Boehner replacing Nancy Pelosi in the leading role); and rewrote the tax policy screenplay for Lame Duck I, thereby juicing the gate with a couple of hundred billion dollars in additional tax cuts.
Today, fresh off the advance screening of a strong April jobs report, anticipation is building for Recovery Summer 2, but the same questions that dogged RSI will still impact RS2:
- Are employers still too uncertain about tax and regulatory policies to hire?
- Will housing ever bottom and recover?
- Have consumers fixed their household balance sheets, and can they provide strong final demand?
- Can growth be sustained if fiscal and monetary stimulus are expected to recede?
Answers to these questions will tell us if Recovery Summer 2 is a blockbuster, or whether it goes straight to DVD. And remember, it will also face stiff competition from Oil Spike 2011 (still in theaters) and the summer opening of Debt Ceiling Diaries.
If RS2 flops, expect to see more changes at the studio next year.
Tony Fratto, is a Managing Partner at Hamilton Place Strategies, former Assistant Secretary at the U.S. Treasury Department, and a former White House official. He is also an on-air contributor for CNBC and founder of the policy discussion website rooseveltroom.net You can follow him on Twitter at http://twitter.com/TonyFratto.