DAN­GER AHEAD

The Washington Times Weekly - - Politics -

“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 gpierce@wash­ing­ton­times.com.

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