As Economic Concerns Mount, President Obama Says, ‘The Private Sector Is Doing Fine’

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UPDATED

President Obama attempted Friday to improve his chops as an international leader working hard to protect American workers and save Europe from its political dysfunction. But his morning appearance in the White House briefing room is likely to be remembered, instead, for a single sound bite he surely wishes he could take back: “The private sector is doing fine,” he said.Instantly, Republican strategists via Twitter jumped on the remark, which will no doubt soon be inserted into speeches by Obama’s Republican rival Mitt Romney, along with anti-Obama television and Internet advertising. Republicans were already making the case that the President is out of touch with the American people and the workings of the private sector. Obama just made it that much easier.

In context, Obama’s description of the state of private-sector growth did address a real feature of the current U.S. economic condition. As he noted, the U.S. private sector has created 4.3 million jobs over the past 27 months, a pace that compares favorably with some past recoveries. The real drag in the past year has been a steady decline in public-sector payrolls, which Obama has proposed to ameliorate with new short-term spending — something Republicans in Congress oppose.

But political campaigns do not turn on context. In 2008, the Obama campaign hammered Republican John McCain mercilessly for months because he said, “The fundamentals of the economy are strong,” on the day that Lehman Brothers announced its intention to file for bankruptcy. The full McCain quote was, of course, far less damning:

You know there’s been tremendous turmoil in our financial markets and Wall Street and it is — people are frightened by these events. Our economy, I think, still, the fundamentals of our economy are strong. But these are very, very difficult times. And I promise you, we will never put America in this position again. We will clean up Wall Street. We will reform government.

But the Obama campaign gleefully used those seven words to paint McCain as disconnected from the real fear and misery then gripping the country. That day, the campaign released a statement that would be paraphrased hundreds of times over the next few weeks in campaign speeches and television ads:

Today, of all days, John McCain’s stubborn insistence that the “fundamentals of the economy are strong” shows that he is disturbingly out of touch with what’s going in the lives of ordinary Americans. Even as his own ads try to convince him that the economy is in crisis, apparently his 26 years in Washington have left him incapable of understanding that the policies he supports have created an historic economic crisis.

After two weeks of bad economic news, and amid growing concern in Europe, the President took questions from reporters on Friday in hopes of re-establishing his economic leadership. White House aides want to cast the President as someone who plays a key role in trying to solve the European dilemmas. Obama spoke at length about his conversations with European leaders and laid out a prescription for solving the continent’s problems. “The challenges they face are solvable,” he said. He also called on Republicans to pass a set of short-term job-creation initiatives that they long ago rejected.

One cherry-picked quote from a presidential press conference is not going to swing the outcome of an election. If gaffes mattered that much, Obama’s mistake-prone rival Romney would never have made it through the GOP nomination process. But such mistakes do allow his opponents to build a damaging narrative, and with events in the U.S. economy and around the world conspiring against the President, six words spoken on a hot summer day in Washington may leave a mark.

UPDATE: As expected, the quote has blown up. Romney inserted some lines into his speech in Iowa:

For the President of the United States to stand up and say the private sector is doing fine is going to go down in history. It’s an extraordinary miscalculation and misunderstanding by a President who is out of touch, and we’re going to take back this country and get America working again.

The RNC released this rapid response video:

It echoed a video that the Obama campaign released against McCain in 2008:

Then Friday afternoon, Obama took a question in the Oval Office, a rarity for him, so that he could walk back his initial remarks.

The back and forth is sure to continue over the coming days.

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