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Brad Knickerbocker,

Washington (CNN) — Republicans wasted no time Thursday in calling out President Obama and Democrats for their handling of the economy, warning the country should not follow the Democratic Party down the road to ruin.

“It is time this administration and its Capitol Hill ally stop this job-killing agenda,” Sen. Orrin Hatch, R-Utah, said at a press conference with other Republican senators.

Obama is simply “out of touch with the American people and out of touch with the economic realities of our country in the summer of 2010,” said Sen. John Barasso, R-Wyoming.

The Obama administration is fighting back, touting Wednesday’s economic stimulus report, which says the government paid out the largest chunk of stimulus funds so far in the second quarter of 2010 — $116.3 billion — which includes both spending on projects and tax cuts to businesses.

The administration said the the $787 billion stimulus is working and has already saved or created about 3 million jobs. Obama is now calling this the “Summer of Recovery.”

Republicans, meanwhile, argue that the 9.5 percent unemployment rate is evidence that the country is not seeing a “Summer of Recovery.”

The top GOP leader in the House is also targeting the Wall Street Reform Bill, which is expected to be passed by the Senate Thursday.

Video: ‘I think we’ll retain House,’ Gibbs says

Video: Battle for the house

House Minority Leader John Boehner said he liked some things about the bill.

“There are common sense things that you should do to plug the holes in the regulatory system that were there, and to bring more transparency to financial transactions, because transparency is like sunlight. Sunlight is the best disinfectant.”

But Boehner still thinks the bill should be repealed because it is “ill-conceived” and will “make credit harder for the American people to get, clearly harder for businesses to get and … punish every banker in America for the sins of the few on Wall Street.”

Pelosi’s spokesman Nadeam Elshami immediately slammed Boehner’s comments in a statement, saying “This comes as no surprise coming from the Republican House leader who called the financial crisis that caused 8 million Americans to lose their jobs an ‘ant.’ “

In addition to the economy, Republicans are smelling blood in the wake of recent comments made by White House Press Secretary Robert Gibbs on the midterm election.

Gibbs said on Sunday that he thinks there is “no doubt there are enough seats in play — that could cause Republicans to gain control.”

The comments were blasted by top Democrats, including House Speaker Nancy Pelosi and Majority Leader Steny Hoyer — and seized on by Boehner.

“The panic that’s building amongst Democrats erupted into a full scale civil war this week when the president’s spokesman suggested that his party could lose the House this fall,” Boehner said Thursday. “I understand that the House Democrats are angry because they see the White House throwing them under the bus.”

“With all the trouble the House Democrats are in right now, [it] was really only a matter of time before the gloves came off. I just didn’t know that the targets would be each other,” he said.

Pelosi and others expressed frustration over Gibbs’ comments which were seen by some as helpful to Republicans, according to senior Democratic officials.

It’s one thing for a pundit to state the obvious about the state of play in the election and quite another for a top White House official to offer an assessment that may depress the party’s base just as officials hope to start revving liberals up, the officials said.

Many lawmakers also said that after expressing their frustration, they now want to turn the page and did not plan to rail against the president himself, a senior administration official told CNN.

The White House is also feeling the heat from liberal Democrats who say Obama has not been aggressive enough in pursuing their agenda.

Obama senior adviser David Axelrod responded to those critics Sunday on CNN’s State of the Union. “My admonition would be: Don’t make the perfect the enemy of the good,” he said.

“We’ve achieved more in these two years — in terms of advancing a solid progressive agenda for this country that will help working families and make this a better, more balanced economy — than anyone has done … in our generation.”

He pointed to comprehensive health care reform, the administration’s move to boost fuel efficiency standards and the president’s desire to repeal the “don’t ask, don’t tell” policy on gays and lesbians serving in the U.S. military, as part of that agenda.

But those legislative items are also providing fodder for Republicans.

Senate Minority Leader Mitch McConnell, speaking on Thursday to a group of young Republicans, said the midterm election will be a referendum on those policies.

“You’re here at a time of the explosion of government,” McConnell said. “The people who think what’s wrong with America is that we just haven’t gotten a big enough government … we’re going to have an opportunity to see how the American people feel about that in a few months, because they’ll get their report card.”

CNN’s Martina Stewart and Deirdre Walsh, along with CNNMoney.com’s Annalyn Censky, contributed to this report.

Republicans blast Obama amid Democratic Party tension

(CNN) — When signs of a severe economic downfall emerged more than two years ago, then-candidate Barack Obama was quick to point a finger at the man he hoped to replace.

Seventeen months into his administration, the message is often the same, and Republicans say it’s time for him to drop the Bush bashing and take ownership of the problem.

“Nothing makes a president look weaker than pointing the finger at past administrations,” said Republican strategist Ron Bonjean. “By blaming somebody, it looks like you are playing politics and people just want jobs. They don’t care about whose fault it is. Playing the blame game only boomerangs on yourself.”

Obama repeated that message this week when talking about the still-sputtering economy, twice reminding those at a town-hall meeting in Wisconsin that he “inherited” the economic mess.

It’s a familiar message from his days on the campaign trail when criticisms of President Bush were as common as policy proposals.

“History will not judge President Bush kindly for his failure to act in a way that could have prevented or alleviated this economic crisis,” Obama said in March 2008 shortly after Bear Sterns’ collapse, slamming Bush for failing to instill confidence in the American people.

Video: Obama addresses jobs numbers

Recent surveys suggest Obama isn’t the only one holding the Bush administration and Republicans culpable.

Though the Democrats controlled Congress in the last two years of the Bush administration and have controlled both the White House and Congress for a year and a half — 41 percent of people surveyed in a recent CNN/Opinion Research Corp. poll said Republicans are responsible for the current economic problems. Twenty-eight percent blamed Democrats, and 26 percent said both parties share responsibility.

According to a Washington Post/ABC poll conducted in April, 59 percent blamed Bush for the economy, compared with 25 percent who said Obama is at fault.

Job numbers released Friday got mixed reviews. The Labor Department reported the U.S. economy lost jobs for the first time this year, as modest hiring by businesses only partly offset the end of temporary Census Bureau jobs.

The unemployment rate fell to 9.5 percent from 9.7 percent in May. Economists had forecast it would climb to 9.8 percent, but the improvement was due mostly to discouraged job seekers not bothering to look for work and no longer being counted in the labor force.

Obama on Friday vowed to do everything in his power to create jobs, but the problem, according to economist Barry Bosworth, is there’s not much more he can do.

“What can he do on the jobs other than sit around and wring his hands in agony?” he asked. “What could he do? That’s the fundamental problem that we now face because it’s a global problem.”

Coming out of the Group of 20 conference, it was clear Obama’s plans to continue stimulus spending weren’t in step with other nations’.

“The whole world is going to turn toward fiscal restraint now, and he can either join it or he’ll be an outlier,” said Bosworth, a senior fellow at the Brookings Institution and a former adviser to President Carter.

After the numbers came out, Obama said the country is headed in the right direction but added, “The recession dug us a hole of about 8 million jobs deep.”

House Speaker Nancy Pelosi, D-California, echoed the positive indicators, noting that they followed “nearly a decade of failed Republican policies.”

But Bosworth said it’s not fair to put all of the blame on the past administration.

“They didn’t cause that crisis. Lots of people contributed to it. I really do not think that you can blame administrative authorities for what happened. You can blame a lot of economists because we didn’t see it coming in the exact way it did, but there were many dimensions,” he said, pointing out that in retrospect it’s easy to recognize there was an unbalanced economy.

Bosworth said Obama now needs to move away from blaming Bush because the worst of what happened wasn’t Bush’s fault.

“I don’t see that we are looking at a crisis that was caused by the Bush administration, and I don’t think we are looking at a crisis where the Obama administration has a fundamentally different response to the crisis,” Bosworth added, noting that the Troubled Assets Relief Program was passed under the Bush administration.

Economic recovery has been slow, but there are signs of improvement. The stock market, while wobbly, has risen since the lows reached shortly after Obama took office, and the economy is growing again.

Democratic strategist Julian Epstein said Obama needs to make the argument that the economy is on the climb and the stimulus has worked.

“The message has got to be optimistic and positive. It can’t simply be, ‘I inherited a mess and I’m doing the best I can.’ It’s got to be, ‘I inherited a mess, but we’ve turned the corner and things are getting a lot better,’ ” he said.

The White House needs to go on a confidence campaign and perhaps take a page from President Reagan’s playbook, Epstein said.

“He really needs to spell out how we are coming back and it’s morning in America again,” he said.

Blame game could ‘boomerang’ on Obama, strategist says

by Sarah Lacy on June 14, 2009

KIGALI, RWANDA– As I’ve mentioned before I like my entrepreneurs risk-taking and a little crazy. Earlier this week on TechTicker, we ran an interview with a guy who fits that bill: Shai Agassi.

In some ways, Agassi is even more ambitious than Elon Musk—you know, the guy who builds rockets and $100,000 electric sports cars. Agassi wants to re-engineer the entire auto and oil infrastructure with electric cars, charging stations, battery replacement stations (staring robots who actually change the battery for you) and sophisticated software to keep it all running—one country at a time. His company is called Better Place, and while some have accused Agassi of being an egomaniac, I give him huge props for walking away from one of the most powerful jobs in the tech world to start a new company that was this hard to pull off.

I last interviewed Agassi several years ago on stage when he was at SAP, and I was covering the oh-so-sexy enterprise software beat for BusinessWeek. If memory serves, we were good-naturedly sparring about whether Oracle’s acquisition strategy would work. (I’d argue I was right.) But I have to say, I like this Shai better. He made his name as an intense and gifted entrepreneur who wasn’t afraid to take risk and sometimes people like that are wasted inside big organizations, even if they have the top job. Agassi seemed inspired and unleashed compared to his SAP days. There’s more about Better Place itself and Agassi’s plan here.

But at the end of the third segment (embedded below), Agassi said something that’s been sticking in my head ever since: America has to start making things or the economy won’t work. He argues you don’t have a country with just a service economy to support it. I’m starting to fear that he’s right, especially spending time last month in China and this week in central Africa, both places where manufacturing and consumer goods industries are being built fresh and in incredibly innovative ways. It’s a bit like what you kept hearing after the dot com bust: When things turn south it’s good to have hard assets to fall back on.

Trust me, as I sit on a terrace in a landlocked African nation that has to import almost everything to great expense, America doesn’t want to get in the pure-consumer, non-producer game. And while some argue the intellectual work—ala thinking up the idea or doing the hard core engineering—is higher margin, it’s absurd and arrogant to think we’ve got a lock on the people who can do that kind of thinking.

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This is clearly the biggest concern in the rust belt where thousands of manufacturing job are at risk. But if Agassi is right, Silicon Valley is in trouble too, because we hardly make anything anymore. Look at the semiconductor business: Most start-ups for the last ten years have been so-called “fabless” chip companies. And how many gadgets are made here? The great age of networking and telecom rollouts are over—instead monopolies are upping revenues by “metering” our broadband not rolling out a newer, faster infrastructure. Even outsourcing low-level software development to Balkan states contributes to this. It’s a win-win for now, but long-term emerging markets benefit more than we do.

Tech got in this situation for two reasons: technology advanced quickly enough we could outsource all the assembly and VCs liked it that way because it’s cheap. But there’s more than enough cash flowing around this Valley to fund a few risky, expensive manufacturing plays. Here’s what I’d like to see America start making again. Leave your ideas in the comments.

1. Better consumer devices. For decades VCs have shied away from consumer devices given the manufacturing and consumer marketing costs. Sure there are loads of duds out there to support that point. But whether they’re entirely made in the US or not, haven’t the iPhone, the Flip, the Kindle, the Jawbone and others proven a good device that does something well still has a future coming out of the Valley? Increasingly, people will pay up for brilliant device execution even if it only does one thing well, even if it’s not necessarily a new category.

2. Cars. Yep, we’re doing it already but it largely hasn’t been funded by the Valley. Musk invested $70 million of his own money and Agassi’s cash mostly came from Israelis. Props to Kleiner Perkins Caufield & Byers for funding Tesla competitor Fisker. But now that these pioneers have proven there’s a viable market here, the US establishment whether it’s the Valley top brass, DC lawmakers or Detroit need to get behind it in action, not words. Although President Barack Obama has been careful to say the government won’t dictate strategy for the car companies we now own, Agassi thinks America should take the opportunity to push on electric manufacturing hard. After all, we do own them. Why not get something out of it? (More on that in the video below too.)

3. Medicine. What ever happened to the biotech boom? The promise from decoding the genome? The rhetoric that the Valley was going to give birth to dozens of Genentechs? I’ll tell you what: VCs got into the habit of selling promising pre-clinical research to big pharma early and often. There’s no more company building in biotech, and that’s a shame. I get that drug discovery is hard and expensive, but we need the innovation, real science and jobs if you ask me. There’s also the side benefit of screwing with the big pharma oligopolies. And saving lives is generally a good thing for the country.

4. Electric planes that go really fast. Ok, it sounds even crazier than rockets or electric cars, but every time I board a creaky old Boeing jet for a 10-hour-plus international flight, I can’t stop thinking about Musk’s idea for an electric plane that’s supersonic and lands vertically. I don’t even know if that’s feasible, but I’m ready to retire my much-beloved noise-reduction headset if it is. If anyone would like to build a teleportation device I’ll sign up for a beta tester on that one too. I don’t care if there’s a risk that my organs will arrive on the outside of my body, I’m so over 20-to-30 hour flights on planes older than I am.