The Obama administration got good news and bad news on the economy Thursday.

The bad news: The Commerce Department revised the economic growth rate downward, to just 1.3 percent in the second quarter of 2012, down from an earlier estimate of 1.7 percent. That’s close to stall speed, not nearly enough to generate enough jobs or income growth. To add to the administration’s bad day, durable-goods orders dropped 13.2 percent in August.

By all accounts, this was the Republicans’ election to win: an economy stuck at a level insufficient to generate enough jobs or income gains; a somewhat disillusioned Democratic base; and a stunted generation of young adults who supported Barack Obama last time by a margin of 71-29 and are unlikely to do it again.

Yet Obama’s lead keeps widening. It’s worth unpacking why.

The most obvious reason, of course, is the sheer clumsiness of Mitt Romney, God’s gift to the Democrats. If a computer had been asked to generate a candidate guaranteed to alienate independents and divide his own base, it could not have done better.

Lots of Republican conservatives, Paul Ryan and Bill O’Reilly among them, have taken the position that even if Mitt Romney’s rhetoric was clumsy, his point was basically right. Some Americans pay taxes; others collect benefits.

But his basic claim was total baloney. When you count income taxes, payroll taxes, excise taxes, and highly regressive state and local taxes, the typical lower income working American pays about one-fifth of his or her income in taxes—more than Mitt Romney!

According to a study by Citizens for Tax Justice, the bottom fifth of the income distribution paid 17.4 percent of their income in state and local taxes. The second-poorest fifth paid 21.2 percent.

Ben Bernanke’s announcement Thursday that the Fed would keep easing money sent the stock market soaring, but more important was his declaration that there is only so much the Federal Reserve can do.

The Fed’s latest move, approved by the policy-setting Open Market Committee, will buy a total of $85 billion in bonds every month, including $40 billion per month of mortgage-backed securities. This pumps vast sums into the economy. It is the equivalent of printing money.  Bernanke’s hope is to drive down interest rates generally, especially on home mortgages.

The August jobs report of the Labor Department is not great news either for the U.S. economy or for the Obama campaign. The headline drop on the measured unemployment rate, from 8.3 to 8.1 percent, conceals deeper weaknesses.

The economy generated only 96,000 jobs in August, far lower than the monthly average of around 200,000 in the spring. The nominal unemployment rate declined only because more people have given up looking for work. The ratio of employment to population declined by 0.2 percent. 

The Labor Department also revised the July and August monthly jobs numbers downward by about 20,000 each, leaving the 2012 job-creation performance below that of 2011.

The pragmatic Republican establishment (despite the Tea Party, there still is one) is frantic to jettison Representative Todd Akin’s toxic comments on conception and rape, and to quarantine the scientifically-challenged congressman.

Much of the commentary has been about how Akin’s clumsiness connects to Republican vulnerability on other issues important to women. But this raises a larger question: Why is the Republican lunatic position politically toxic only on this particular issue?

All the bland platitudes coming out of the Group of 20 Meeting in Mexico can’t disguise the absence of progress on the European crisis. German Chancellor Angela Merkel is totally dug in on the proposition that Greece, Portugal, and Spain need to stick to the austerity medicine that will only deepen the collapse and embolden more speculative attacks on government bonds.