For the past several years, House Budget Committee chairman Paul Ryan 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 about the prospect that the economy might grow too quickly.
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. 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—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. 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 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 never went as low as Reagan’s, and it now is 48 percent in the WSJ/NBC News polling.