On the eve of a Labor Day that will mark the unofficial launching place of his 2012 re-election campaign, on the eve of an address to Congress that could be the most important of his presidency, there is no good economic news for Barack Obama.
The US economy has stalled,
A net total of zero jobs were added in the month of August, for which economic data was released Friday morning.
In addition, Friday’s report revealed, the number of hours worked by the average American has begun to decline.
And hourly earnings have dropped.
So even if Americans are employed, they are working less and making less.
“These numbers, with no net job creation at all—and 14 million people officially unemployed—show that the economy is dead in the water.” says Roger Hickey of the Campaign for America’s Future.
But that’s not the scariest part of the story.
While the official unemployment rate held steady at 9.1 percent—almost twice the level that former US Senator Hubert Humphrey and former US Congressman Gus Hawkins identified as a unacceptable when they were pushing their Humphrey-Hawkins full-employment bill in the 1970s—the real rate continues to grow worse.
The broad measure of unemployment—the Department of Labor’s U-6 figure, which includes the long-term unemployed and under-employed—rose to 16.2 percent (from 16.1 percent in July). That’s the highest level this year.
The 16.2 percent figure is, by any honest measure, the real unemployment rate. And it is ticking upward.
How big a failure are we talking about?
Consider these facts:
The number of employed Americans in the summer of 2011 was 139,296,000.
The number of employed Americans in summer of 2004 was 139,556,000.
So there are 260,000 fewer people working today than when George Bush was in his first term as president. Yet, the US population grew during the period from 2004 to 2011 by almost 20 million—from 292,892,000 in July 2004 to 312,150,000 today.
Tens of millions of Americans who have stopped looking for work, who never had work or who are severely underemployed live in the shadows—unreflected in the official figures. “Long-term unemployment remains at record levels, and 25 million Americans who want work can’t get full-time jobs,” says National Employment Law Project director Christine Owens. “Midlife job losers fear they’ll never work again, while young people yearn for any start. Economic growth has barely dented the yawning jobs deficit, and those jobs we are adding are largely low-wage. Earnings are stagnant for most workers and have fallen for the lowest-paid.”
As job growth literately grinds to a halt, the crisis becomes all the more evident. And Owens states the obvious yet critical point: “This distressing news sets the stage for President Obama’s address to Congress next week on jobs and the economy.”
President Obama is starting to recognize this reality.
He’s going to give that “major” address to Congress on Thursday.
And he’s going to talk about some kind of jobs program.
But Obama has yet to display the sense of urgency that is required.
He wasted the summer on a ridiculous debt-ceiling debate that—with the establishment of the Congressional “super committee” on debt and deficit reduction—“ended” with a commitment to continue the wrangling.
Now, even as he has focused on the jobs crisis, Obama continues to send weak signals.
The worst of those weak signals took the form of the wrestling this week over when to schedule his speech before Congress.
With America teetering on the brink of potentially severe recession, a president who is in charge does not worry about scheduling conflicts with a partisan debate involving his potential opponents—as Obama did—or a football game. He says that some issues are more important than politics or football.
Obama did not do that. It was a mistake.
There is much talk about how the president has to “go big” with his jobs speech. There’s no question that this is true. But there are many ways to “go big.” For Obama to succeed next week—and he must succeed if he hopes to right the course not just of his presidency but of the economy—he must hit all the bases.
1. His speech must inspire confidence that he has a plan for job creation, that the plan can he measured in real time and that there is an end goal. Obama cannot talk vaguely about creating jobs or improving the economy. He ought not peddle false hope or fantasy, He should come on strong with specific plans, specific goals and specific timelines,
2. To inspire that confidence, he must be willing to say that his plan is essential and cannot be compromised or dialed down. Obama’s failure to do this with the original stimulus plan of 2009 robbed that initiative of the resources needed to provide a sufficient jump-start to the economy.
3. Obama’s plan must provide incentives for the private sector to create jobs in the United States—not overseas. If he includes a major free-trade component his initiative will—according to studies by government and non-government analysts—lead to increased unemployment.
4. Obama’s plan must recognize that the most severe layoffs right now are taking place at the state and local government and school district levels—550,000 jobs lost since the fall of 2008. State and local government layoffs are triply damaging to the economy, as they create greater unemployment, reduce buying power for teachers and others who tend to spend a lot on Main Street for supplies, and cut services that are more needed in a time of recession. The president needs to include federal funding to keep local government functioning and even, where possible, to expand services. CAF’s Hickey is right when he says: “The policy of our government is systematically undermining the recovery. Public sector layoffs are undermining consumer buying power, crippling the ability of the private sector to sell products and services. Clearly, President Obama must reverse this downward spiral by creating jobs directly, putting money in consumer’s pockets, and helping small and large companies to find buyers and invest in growth.”
5. Obama has to talk about how to fund his program, so that he does not get bogged down in the usual DC debate about spending. If the debate about renewing the economy becomes a spending fight, Republicans in the House will prevent anything meaningful from happening. There has to be a revenue component and Obama should be talking about taxing Wall Street and financial speculation. Even if he does not get everything he asks for, it will shift the focus of the debate away from the spending fight to a real dialogue about whether billionaires ought to aid a recovery—or continue to stream money out of the real economy and into the paper economy of the speculators.
The president should take a cue from Progressive Democrats of America national director Tim Carpenter, who says, “America’s working families have lost their homes, jobs, and healthcare. Young people can’t afford the price of college, can’t find jobs, and older folks can’t retire because of an economy destroyed by greedy Wall Street corporations. It is only fair that Wall Street pay for the destruction they have wrought.”