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Robert Reich
NationofChange / Op-Ed
Published: Saturday 7 July 2012
“If the economy is moving in the right direction then - if unemployment is dropping and jobs are increasing - Obama has a good chance of being reelected. If the jobs doldrums continue - or worse - he won’t be.”

The Jobs Doldrums and Obama’s Future

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Bad news for the U.S. economy and for Barack Obama. We’re in the jobs doldrums. Unemployment for June is stuck at 8.2 percent, the same as in May. And only 80,000 new jobs were added. 

Remember, 125,000 news jobs are needed just to keep up with the increase in the population of Americans who need jobs. That means the jobs situation continues to worsen. 

The average of 75,000 new jobs created in April, May and June contrasts sharply with the 226,000 new jobs created in January, February and March. 

In Ohio yesterday, Obama reiterated that he had inherited the worst economy since the Great Depression. That’s true. But the excuse is wearing thin. It’s his economy now, and most voters don’t care what he inherited. 

In fact, a good case can be made that the economy is out of Obama’s hands — that the European debt crisis and the slowdown in China will have far more impact on the U.S. economy over the next four months than anything Obama could come up with, even if he had the votes. 

It’s also out of the Fed’s hands. No matter how low the Fed keeps interest rates, it doesn’t matter between now and Election Day. Companies won’t borrow to expand if they don’t see enough consumers out there demanding their products. Consumers won’t spend if they’re worried about their jobs and paychecks. And consumers won’t borrow (or be able to borrow) if they don’t have the means. 

Yet Obama must show he understands the depth and breadth of this crisis, and is prepared to do large and bold things to turn the economy around in his second term if and when he does have the votes in Congress. So far, his proposals are policy miniatures relative to the size of the problem.  

The real political test comes after Labor Day. Before Labor Day, Americans aren’t really focused on the upcoming election. After Labor Day, they focus like a laser. If the economy is moving in the right direction then — if unemployment is dropping and jobs are increasing — Obama has a good chance of being reelected. If the jobs doldrums continue — or worse — he won’t be. 

This article was originally posted on Robert Reich's blog.



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ABOUT Robert Reich

 

ROBERT B. REICH, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org.

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11 comments on "The Jobs Doldrums and Obama’s Future"

Ted-Zee-Man

July 09, 2012 1:34pm

“If it were not for congressional Republicans’ repeated obstruction or dilution of virtually every significant job-creation proposal sent to Congress since 2009, unemployment today would likely be under 7 percent instead of stubbornly persisting at around 8 percent.”

So if you want to create jobs in the United states of America, I suggest that you vote for every possible Democrat and Independent that you can. That you REFUSE to support any Conservative, Republican or Tea-Party member running for any elected Office.

cindy53

July 09, 2012 9:09am

Although the Republicans have obstructed virtually all of President Obama's jobs legislation over the past 2 years, and the European situation is most certainly something the President cannot control, still the President deserves some of the blame for the lackluster recovery.
The President had a golden opportunity 3 years ago (when Democrats controlled both Houses of Congress) to pass a much bigger stimulus bill, and to institute a bold, FDR type "works progress administration" that could have employed blue collar workers to rebuild the country's infrastructure, but he punted on both. Yes, President Obama got an infrastructure jobs bill recently passed, but will it be enough in the short amount of time between now and November to make a difference? And listening to Larry Summers and Timothy Geithner's economic advice was another mistake the President made (along with trying to play nice with the RepubliCONS). Had the President gone with bold, progressive, FDR style legislation 3 years ago, I have no doubt unemployment would be lower, the recovery would not be so anemic, and the Democrats might have kept control of the House in the midterm elections in 2010.
Despite all this, I will still vote for the President in November, as he is the lesser of two evils. However, even if President Obama wins, nothing will change if Republicans keep control of the House and/or get control of the Senate. In order to see positive changes in the economy, Democrats also need to win back control of Congress, or else we will just see 4 more years of gridlock and obstructionism.

carlsperr

July 08, 2012 6:24pm

If you are concerned about jobs why would you elect Romney when he has a long, well-known history of exporting jobs out of the country as governor of Mass.? He laid off many people during his time as governor. Obviously, he will not do better than Obama, in fact I think worse.

GreenInCA

July 09, 2012 7:55am

What is obvious to thee and me won't be obvious to the huge numbers of voters in this country who deny the reality of climate change, believe evolution is "just a theory" despite DNA evidence to the contrary, and have been brainwashed by most of the media (not just Fox "News") into thinking that bloodletting is the best cure for anemia, economically speaking. It's not just Romney: Republican governors and state legislatures all across the country have been laying off government workers in droves and counting on the multiplier effect to cause even more layoffs (due, as Prof. Reich points out, to falling demand for goods and services) in the private sector, thereby making it more likely (as Prof. Reich again points out) that Obama will be a one-term president. What rots my socks is that the right-wingers have the gall to call this "job creation"! George Orwell had a word for that: "doublespeak".

Counselor1

July 08, 2012 7:14am

Failure of leadership all around . Gridlock is phony. Congress can create $trillions in United States Notes without increasing our debt. These “Legal Tender Notes” could be spent into the economy to jump start it. Very low interest, long term loans could be made to Americans “underwater;” part being sent directly to pay off mortgage arrears and, if breadwinner is unemployed, a few months future payments. $1.4 trillion U.S. Notes could produce 19 million jobs, provided we get over the idea that this money has to be used in maximally “productive” ways. American’s simplistic moralism (“jobless means undeserving”) and general welfare require millions of jobs to replace jobs killed by automation, outsourcing, etc. The jobless can’t all operate earth movers or computers. But millions can engage in paid, high value, low – tool use child, senior and disability care, education, homemaking, pick and shovel burial of the electric grid, building retrofitting, using hammers, paint brushes, trash spears, and other simple tools.
Would this be inflationary? Yes! The Panic of 2008 started severe DEFLATION. Only massive targeted re-flation can counteract it. Lack of it turned the Panic of 1929 into the Great Depression of ’29 – ‘39. Mega-banks hate the idea of U.S. Notes. They lose “earned” interest because they aren’t lending Notes to us. They’ll send a thousand “Liars for Lucre” economists, etc. to argue against it. They’ll withdraw advertising to media that favor it. They’ll withdraw support from politicians who advocate it and support vocal opponents.
So look into U.S. Notes for yourself, then push the idea until they can’t ignore it any more!

belleville

July 07, 2012 5:30pm

You Know what would help the job situation? "Tax the Rich like 1938". You know what would pay down the National Debt? "Tax the Rich like 1938". Know what would help growing Income Inequality? "Tax the Rich like 1938". Know what would help build needed Infrastructure? "Tax the Rich like 1938" Know what would Fix 90% of country's problems? "Tax the Rich Like 1938". Know what would stabilize Social Security? Quit stealing from their funds. Know what would stabilize Medicare & Medicaid? "Tax the Rich Like 1938".
Do you know what the Tax rates were in 1938? We had 33 Tax Brackets from 4% for all income up to $64,000. (which would cover over 1/2 of today's population) all the way up through 32 more brackets to a top marginal rate of 79% for income over $79,Million. Now that is "Fair & Balanced". Do you know how to get all of these things accomplished? "Tax Em Like 1938".

eaveltri
Shenzhen, China and West Palm Beach, Florida, Florida and Guangdong
July 07, 2012 12:08pm

I've no idea if what Luckylongshot says is accurate or not but I do believe that hte number of unemployed stated by the government is an understatement. For one they did not couunt me and I am only doing some part time work and can't find a full time job.
I am somewhat heartened by what Larronm says and hope he is accurate. If so then at least the California government gets it.
With regard to Reich's comments about the economic situation possibly being out of Obama's hands, all I can say is that if it is then that is partly Obama's own fault for having Larry Summers as an economic advisor for the first two years, for having Geither as a treasury secretary, and for following an appeaseemnt policy with regard to the obstructionist Republicans and those Blue dogs of his own party. The pity is that he gives the Dems a bad name with regard to restoring the economy and it may get turned ocver to the Republicans and Shnit Romney to give the Republicans back some cred for saving the economy. Of course they will only save it just enough to get some undeserved credit from the right wing MSM while keeping unemployment too high and continuing to stick it to the working class.

luckylongshot

July 07, 2012 10:05am

Using the methodology the US government used to calculate the unemployment rate in 1990, Shadowstats reports the current US unemployment rate is around 23%. Obama's chances don't look so good using these figures. While developing a method of calculating unemployment that makes it seem healthy is a good PR tactic the real numbers of unemployed people show a disaster has occurred. Denial may not be the best approach to get Obama reelected.

larronm

July 07, 2012 10:05am

It seem to me that we ought to start looking at these economic reports with a bit more reality. Dr. Reich knows, as do most investors, that the BLS jobs report is no where near a true reflection of the situation. They will amend it in Aug. and again in Sept. It is based on a survey, not on statistics. However, there is a report which is published each month and far more accuratly reflects the job market. That is the report by ADP, the payroll firm. For July their report shows 176,000 new jobs. In all likelyhood the BLS report, once amended twice, will come in pretty close to that number. But by then, no one will notice.

Then there is the matter of the infrastructure bill that the President signed yesterday. It is likely to have a significant effect on the job market in fairly short order. That is because it will put tax dollars to work building and repairing our infrastructure. If we are to make a real dent in the employment problem, we will need to put government money to work. The AJA is another way to accomplish that but I see no way to get this Congress to pass that bill. The solution is to work to elect Democrats to Congress. The President could help there. He could start asking voters to send Democrats to Congress along with his re-election. End the gridlock. Put a stop to the obstructionism. That's how we get it done.

Here in California we have just taken a giant step in that direction by passing the legislation needed to begin construction of a high speed rail system linking the major cities of our state. This $68 billion project will put a great many people to work for a long time accomplishing something that will have long term benefits for all Californians. Oh, did I mention that the Feds are contributing $3.2 billion to the first phase? It is time for elected officials to start putting the country ahead of their own ambitions.

hmea1998@aol.com

July 08, 2012 9:42am

Mr/Ms Larronm seems to gloat over $3.2 billion coming to Calif from the "FEDS". Who are the "FEDS" except every taxpayer in America? Why should the FEDS pay for any part of a high speed rail system that serves an "intrastate" (within Calif.) purpose?? It is my understanding that this high speed rail project will never, never pay for itself as indicated by an alleged feasibility study. This appears to be another show and glow project that will perpetuate and grow California's bankrupt condition. To the extent of $3.2 billion, it also perpetuates and grows the Country's bankrupt condition and addiction for more and more indebtedness.

GreenInCA

July 09, 2012 8:03am

One of the main reasons for California's "bankrupt condition" is that the Feds take more tax dollars out of CA than they spend here. If you look at most of the red states, the opposite is true: the Feds spend more there than they extract in tax dollars. So in effect CA is subsidizing them!

BTW, I'm not a big fan of HSR, but without it, we wouldn't have gotten the desperately needed electrification of CalTrain (the commuter rail service up the SF peninsula from San Jose to San Francisco). We face Hobson's choice here: the Democrats offer us a boondoggle with at least a few real benefits but an exorbitant cost. The Republicans offer us nothing but third-world status. We need a third party.