“If the unemployment numbers keep rising into 2010, the Republicans are primed to pick up dozens of seats in the House, crippling the Obama administration’s capacity to recoup in the second half of the president’s first term,” liberal pundit Robert Kuttner writes at www.huffingtonpost.com.
“Obama would lose his very tenuous working majority and would confront a situation very much like the one Bill Clinton faced after the Republican gains of 1994, when he worked even more closely with Republicans in order to save his own skin. If you liked triangulation Clinton-style, wait for Rahm Emanuel’s version of it,” Mr. Kuttner said.
“The most recent employment numbers were bad enough on their face — 263,000 job losses in September, and a measured increase in payroll employment to 9.8 percent. But the real numbers are much worse. The nominal rate conceals the fact that the labor force is 615,000 workers smaller than it was a year ago, even though the working-age population continues to grow.
“People who can’t find jobs and quit looking are no longer counted as part of the labor force. If normal labor-force growth had continued, the unemployment rate would be close to 12 percent. See the analysis of the numbers by the good people at the Economic Policy Institute and the estimable Dean Baker [of the Center for Economic and Policy Research]. The administration’s people know this reality, and they are aware of the political risks. So what are they doing? Precious little.
“I had a conversation with a senior administration economic official last week, and I asked him to suspend disbelief and consider a large increase in public spending to create more jobs. What would he spend the money on? We discussed the pros and cons of emergency fiscal aid to the states versus a tax credit for job creation in the private sector, subsidized job-sharing, and direct public works employment. But it was clear that the administration considers a Stimulus II a non-starter. The view is shared by Fed Chairman Ben Bernanke, who testified last week that there was not much we could do about rising unemployment except wait it out.
“This is economically deplorable and politically selfdefeating.”
Greg Pierce can be reached at 202/636-3285 or email@example.com.