For the past several years, House Budget Committee chairman Paul Ryan [1] has complained that the US economy has been growing at too slow a rate.
Now, as unemployment rates drop and job creation seems finally to be accelerating, Ryan is suddenly fretting [2] about the prospect that the economy might grow too quickly.
Why?
The answer has nothing to do with economics and everything to do with politics.
Despite the steady—make that unrelenting—opposition of Ryan and other leaders of the Republican-controlled US House, the Obama administration can now point to a pattern of monthly decreases in the unemployment rate [3]. While the administration’s response to the unemployment crisis of the past three years was less than it should have been, a combination of stimulus policies and investments, as well as the determination of the Federal Reserve to keep interest rates low, appears to be working. For the fifth straight month, unemployment has fallen. The rate now stands at 8.3 percent [4]—down from 10 percent in October 2009.
The official unemployment rate is now at the lowest point since the first months of Barack Obama’s presidency.
But it is the pattern of decrease that matters politically.
Consider this historical detail. At the start of 1984, after several years of brutal hard times, unemployment had fallen to 8.3 percent [5]. The economy was still unsteady, especially in the manufacturing towns of the Great Lakes region and much of the South, but there was little question that the unemployment rate was falling. As more people got jobs during 1984, the rate continued to decline. It was this pattern that Ronald Reagan’s re-election campaign pointed to in television advertising that celebrated “morning in America.” The sense that the country was on the right track—even if it had not arrived—contributed mightily to Reagan’s landslide re-election win that fall.
Could Barack Obama be headed for the same sort of improvement in his political fortunes? In 1983, Reagan’s approval rating [6] in Wall Street Journal polling had dipped below 40 percent, and at the start of 1984, it was hovering in the low mid-40s. Obama’s approval rating [7] never went as low as Reagan’s, and it now is 48 percent in the WSJ/NBC News polling.
If unemployment continues to decline, Obama would seem to be well positioned to run his own “morning in America” campaign [8] this fall.
That’s good news for Obama, and perhaps for the Democrats aligned with him. That’s not such good news for the Republican opposition.
Washington Republicans, who have blocked the president’s economic initiatives over the past year (even going so far as to threaten extensions of unemployment benefits), had been planning to run against Obama and the Democrats with a 2012 campaign claiming that current policies are not working.
But what if they are working?
Perhaps this explains Paul Ryan’s sudden objection [2] to maintaining the current policies of the Federal Reserve.
Over the past year, Ryan has been an increasingly bitter critic of administration economic policies, painting the president and his aides as inept—or worse—and arguing aggressively that they must be removed from power in order to spur growth
Now, Ryan is changing his tune.
Instead of worrying about slow growth, Ryan is suddenly fretting that things might start going a little too well.
Complaining about the threat—at least in his head—of inflation, Ryan’s urging the Federal Reserve to stop implementing policies that are designed to decrease unemployment.
The Federal Reserve has, as part of its historic charge from Congress, a responsibility to address and fight unemployment. Too frequently over the years, the Fed has disregarded tha charge, and erred overwhelmingly on the side of Wall Street bankers and speculators rather than working Americans.
The Fed remains a troubling player.
But, to his credit, Fed chair Ben Bernanke has been more respectful than his predecessors of that charge and fiscal common sense. He has done so by working reasonably closely with the Obama administration to hold interest rates down. The hope has been that, by doing so, the Fed could encourage economic growth in a country where many regions continue to experience a recession and where some major cities suffer with unemployment rates that have edged toward Depression-era levels.
The strategy appears to be having some success.
And that seems to have upset Paul Ryan. When Bernanke appeared Thursday the Ryan’s House Budget Committee [9], the Republican congressman from Wisconsin announced that he feared that the Fed was loosening its standards on keeping inflation low as part of its push to bring down unemployment.
This, Ryan warned, was unacceptable.
The Budget Committee’s stance is remarkable. A House Budget Committee chair is pressuring the Federal Reserve to let interest rates rise at a time when many states are still struggling to create a sufficient number of new jobs.
At the same time, other Republicans on Ryan’s committee are attacking the Fed for trying to address the mortgage crisis.
In other words, after more than a year of obstruction by a Republican-controlled US House [3] that has refused to act to address unemployment and underemployment, and that has rejected sound proposals for addressing the mortgage crisis, Ryan and his allies are attacking the Obama administration, Bernanke and the Fed for trying to do something.
That’s bizarre enough.
But even more bizarre is the fact that the attacks have come as fresh jobs figures confirm a pattern of improvement under policies put in place by the administration and the Fed.
Ryan’s new tack of attack may excite those Republicans who would sacrifice job growth and economic improvement for their own political gain. But it’s a stunning stance for the representative of a Congressional district that has been battered by factory closings in its major cities and some of the highest patterns of unemployment in his state. Unemployment rates for cities in Ryan’s 1st Congressional district remain among the highest in Wisconsin, as cities such as Kenosha and Janesville struggle to fill the void created by the closures of auto plants in recent years.
To be sure, Ryan is a rigid partisan. No one seriously expects him to cheer news that goes against the interests of his party and his own political ambitions.
But it is unsettling, indeed, that the representative of an industrial district that took a brutal hit with the collapse of the economic house of cards constructed by the George W. Bush administration and Congressional Republicans such as Ryan would conjure up a new attack just as things appeared to be taking a turn for the better.
The sad fact, confirmed again and again, is that Paul Ryan is more interested in playing politics than he is in improving the fortunes of working Americans—even the working Americans he is supposed to represent.