President Barack Obama got a little bounce following Osama bin Laden’s killing, and the weak Republican field of challengers has helped give the president an advantage in recent swing-state polls. Public Policy Polling’s latest Iowa survey found Obama leading all the named Republican candidates by at least 9 points, for instance.

However, Obama’s position looks much more tenuous if the 2012 election is about “the economy, stupid.” According to the latest nationwide Washington Post/ABC News poll, disapproval for how Obama has managed the economy is at record-high levels, and the incumbent trails former Massachusetts Governor Mitt Romney among registered voters.

The “great recession” was not Obama’s fault, but no one can credibly claim his administration did the best it could to boost the job market and housing sector. By next November, the U.S. may be in a double-dip recession. Complicating matters for Obama, he has played into the eventual GOP nominee’s strongest arguments against his record on the economy. Follow me after the jump for details on the new national poll and the latest bad economic news.

The Washington Post/ABC News poll surveyed 1,002 adults in the U.S. between June 2 and 5, producing a margin of error of plus or minus 3.5 percent. Not much good news for the president here:

The public opinion boost President Obama received after the killing of Osama bin Laden has dissipated, and Americans’ disapproval of how he is handling the nation’s economy and the deficit has reached new highs, according to a new Washington Post-ABC News poll.

The survey portrays a broadly pessimistic mood in the country this spring as higher gasoline prices, sliding home values and a disappointing employment picture have raised fresh concerns about the pace of the economic recovery.

By 2 to 1, Americans say the country is pretty seriously on the wrong track, and nine in 10 continue to rate the economy in negative terms. Nearly six in 10 say the economy has not started to recover, regardless of what official statistics may say, and most of those who say it has improved rate the recovery as weak. […]

Among all Americans, Obama and Romney are knotted at 47 percent each, and among registered voters, the former governor is numerically ahead, 49 percent to 46 percent.

I consider Romney’s chances of winning the Republican nomination remote, despite his strong fundraising and commanding leads in early New Hampshire polling. It’s hard for me to see an architect of “Romneycare” winning many GOP primaries. But no matter who the eventual nominee is, the Washington Post/ABC News poll indicates that Obama will be vulnerable to a strong critique of his economic record.

Gasoline prices are likely to remain high by historical standards, and weakness in housing and employment will make it difficult for Obama to build the “recovery” narrative he needs to be re-elected. The latest jobs numbers from the Bureau of Labor Statistics were simply awful. Robert Reich noted that the odds of a double-dip recession “are increasing.” The national unemployment rate is about 9.1 percent, and the jobless rate is higher in many states and demographic groups, including young people, minorities, and single mothers. Bringing down unemployment would be the best way to reduce the federal budget deficit, but instead of working out ways to stimulate the economy, Washington politicians are concentrating on cutting spending as an end in itself.

Unfortunately, budget cuts are already hurting the economy, as one would expect:

State and local governments are forecast to shed up to 110,000 jobs in the third quarter, the first time the blood-letting has risen into the triple digits, according to IHS Global Insight.

“We’re on a downward path,” said Greg Daco, principal U.S. economist at IHS. “It’s not looking good.”

State and local government employment has been a drag on the economy all year, averaging a loss of 23,000 jobs a month over the past three months. Meanwhile, the private sector has created an average of 180,000 a month during the same period.

In May, public employment shrunk by 29,000 jobs, mostly at the state and local level, while businesses created 83,000 jobs, the Labor Department reported Friday. All told, the sector has lost 510,000 positions since its peak in August 2008. […]

It’s not uncommon for state and local governments to take longer to emerge from a recession. But usually by then, businesses have ramped up their hiring. This time around, private sector hiring has remained soft, making government cutbacks that much more painful.

During the 2012 campaign, Republicans will cite weak job numbers as proof that government spending to stimulate demand can’t support the economy. Republican magical thinking holds that cutting taxes is all we need to create jobs, despite vast evidence that the Bush tax cuts did not boost economic growth.

Obama is not well-positioned to win this argument, because he has embraced budget austerity for a long time. In early 2010, he talked about freezing some non-security discretionary government spending. Last summer, Obama proudly introduced his new budget director as follows: “At a time when so many families are tightening their belts, he’s going to make sure the government continues to tighten its own.”

Christina Romer, who had “argued strongly […] that the White House needed to spend government money to stimulate the economy,” left as chair of Obama’s Council of Economic Advisers last year. The president replaced her by elevating Austan Goolsbee, who “maintained that the private sector must drive the economy’s growth now that the recession has passed.” How’s that working out, Mr. President?

After the Republican triumph in the 2010 elections, Obama froze wages for many federal workers as a gesture toward conservatives. When Republican leaders in Congress insisted on deep cuts in current-year spending this spring, the president described the final deal approvingly as “the largest annual spending cut in our history.” That was exactly the wrong message to send.

Obama can’t be blamed for the economic problems he inherited, but he should be held accountable for his administration’s inadequate response. The 2009 federal stimulus was valuable, but it was too small and not targeted enough toward the kind of spending that boosts economic activity. As foreclosures mounted, Obama caved on “cramdown,” which would have allowed judges to order mortgage modifications. More confounding, Obama’s worst cabinet appointee has allowed Treasury to sit on funding that could have kept more Americans in their homes. Get a load of this utter incompetence:

Critics of the Obama administration’s approach to preventing foreclosures have pressed for two years to get officials to focus more of their attention on unemployed homeowners, with meager results. As part of the bank bailout, the Treasury Department was given $46 billion to spend on keeping homeowners in their houses; to date, the agency has spent about $1.85 billion.

Morris A. Davis, a former Federal Reserve economist, estimates that as many as a million homeowners slipped into foreclosure because of insufficient help for the unemployed.

“The money was there and they didn’t spend it,” said Mr. Davis, an associate real estate professor at the University of Wisconsin. “I don’t mean to sound outraged, but I am pretty outraged.”

But wait, there’s more:

At the start of 2009, the administration announced its primary foreclosure prevention initiative, the Home Affordable Modification Program. It provides incentives to banks to modify mortgages, reducing monthly payments for eligible homeowners.

The administration said the program would help three million to four million homeowners, but so far, only 670,000 homeowners have received permanent modifications. In addition, the program was primarily meant for homeowners with risky mortgages; jobless owners are often ineligible because some payment, albeit reduced, is required.

Administration officials said the program was helping homeowners whose income had been reduced. Sixty-one percent of homeowners who received permanent modifications listed “curtailment of income” as their reason for applying, though it is not known how many of them are unemployed or simply had their hours or pay reduced.

The Department of Housing and Urban Development received $1 billion as part of the financial regulatory reforms that passed last year to help unemployed homeowners. That money will be used to provide government loans to unemployed homeowners for up to 24 months.

Though the program was announced last fall, so far applications are being accepted in only five states; the others are delayed because of “implementation challenges,” a H.U.D. spokeswoman said.

Obama should never have appointed Treasury Secretary Timothy Geithner, and it doesn’t speak well of the president that he keeps Geithner on board. Obama appears out of touch and misguided about the right economic course. Republicans could save Obama by nominating a very bad candidate, but in this economic environment, I hesitate to write off even their weak presidential hopefuls as unelectable.

Share any relevant thoughts in this thread.

UPDATE: Justin Wolfers thinks “we’re halfway to a lost decade” already.

As Bleeding Heartland user ragbrai08 noted in the comments, Goolsbee announced this week that he is resigning as head of the president’s Council of Economic Advisers to return to his tenured position at the University of Chicago. That’s where I’d rather be as well. Goolsbee will continue to advise Obama’s re-election campaign on economic issues. Speaking of which, don’t worry, the communications team is working on a plan:

[A]s Democratic pollster Stan Greenberg is fond of saying, there are few more difficult tasks for a politician than telling voters the economy has gotten better when they may not personally feel such improvement. But that is essentially the assignment given to the Obama communications team and, by extension, Goolsbee. On Wednesday, Axelrod and former White House Press Secretary Robert Gibbs stopped by the offices of former Obama Communications Director Anita Dunn for, what one person described, as a “strategy session” on such issues with respect to the 2012 race.

What’s complicating the already difficult task, however, is that the White House appears fully opposed to the notion that government spending might make things better. On Tuesday, the Office of Management and Budget put out a statement of administration policy, saying that a “jobs bill” authored by Senate Democrats to expand the reach of the Public Works and Economic Development Administration was too costly.

How deluded can they be? This deluded:

By early last year, Geithner was beginning to gain the upper hand in a rancorous debate over whether to propose a second economic stimulus program to Congress, beyond the $787 billion package lawmakers had approved in 2009.

Lawrence Summers, then the director of the National Economic Council, and Christina Romer, then the chairwoman of the Council of Economic Advisers, argued that Obama should focus on bringing down the stubbornly high unemployment rate. This was not the time to concentrate on deficits, they said.

Peter Orszag, Obama’s budget director, wanted the president to start proposing ways to bring spending in line with tax revenue. […]

The economic team went round and round. Geithner would hold his views close, but occasionally he would get frustrated. Once, as Romer pressed for more stimulus spending, Geithner snapped. Stimulus, he told Romer, was “sugar,” and its effect was fleeting. The administration, he urged, needed to focus on long-term economic growth, and the first step was reining in the debt.

Wrong, Romer snapped back. Stimulus is an “antibiotic” for a sick economy, she told Geithner. “It’s not giving a child a lollipop.”

In the end, Obama signed into law only a relatively modest $13 billion jobs program, much less than what was favored by Romer and many other economists in the administration.

“There was this move to exit fiscal stimulus a lot sooner than we should have, and we’ve been playing catch-up ever since,” Romer said in an interview

That mistake could cost Obama a second term. Even if it doesn’t, a “lost decade” would tarnish his legacy. Meaningful deficit reduction isn’t going to happen with unemployment stuck in the 9 to 10 percent range.