Another bad week on Wall Street:

After dropping 527 points, the Dow Jones industrial average closed down 391 points, the second consecutive rout in the stock market since the Federal Reserve announced a change in strategy for fighting the economic slowdown. One financial indicator after another showed that investors are quickly losing hope that the economy can keep growing.

It appears the Dow is set for its worst week since the 2008 meltdown.

When you look around at the state of the country, it’s kind of remarkable that President Obama is considered anything other than toast in the 2012 election.

  • There was a time in America when 500-point drops in a day were considered shocking. The sixth, ninth, and eleventh-largest single-day point drops in Dow history occurred in August. Had the markets not recovered in the final hour, today would have ranked ninth. The casual investor may not check his 401(k)s regularly, but when he does, he gets hit with bad news that he hoped he had left behind in 2008.
  • The spike in gas prices has subsided only marginally; the national average is $3.56 per gallon. The spike has lasted longer than the spike in the summer of 2008, which, it may be argued, was the first real ominous indicator of the economic troubles to come. Of course, the 2008 spike occurred when the economy was not in recession.
  • The unemployment rate climbed above 9 percent in May 2009 and is projected to more or less stay there through 2012.
  • The housing market is, in most places, still waiting for any signs of recovery: “In the housing market inhabited by most Americans, prices have fallen 30 percent or more since the peak in 2007. That’s a steeper decline than during the Depression. Some people have had their homes on the market for a year without a single offer. Almost a quarter of American homeowners owe more on their house than it’s worth. Another quarter have less than 20 percent equity.”

Yet the Obama team still feels confident that they’ll win once their message and agenda is contrasted with that of their Republican rival. If that sounds familiar, it’s because that’s precisely what they were saying about the 2010 midterms, as late as August of that year:

US President Barack Obama is “confident” his Democratic Party will keep control of both houses of Congress in November’s mid-term elections, the White House said Tuesday.
“The president thinks that this election is a choice between the policies that move our country forward or the policies that got us to the crisis that we’re in right now,” White House deputy spokesman Bill Burton said.
“But he?s confident that given that choice in the voting booths in November that Democrats will be successful and he does think that we will hold on to both the House and the Senate,” he told reporters on the presidential jet.
Obama was on a busy campaign swing ahead of the start of his summer vacation on Thursday. He was headed to Washington state, Wisconsin and California before dropping in on Ohio on Tuesday and Florida on Wednesday.

You’ll recall that Obama’s candidates lost in Wisconsin, Ohio, and Florida.

Tonight, a slew of Republicans will take the stage, and all of them will tear apart the easy target of the economy’s performance under Obama. But the harder task will be persuading those watching at home that he (or she) is the one uniquely qualified to lead a country enduring an economic crisis.