Over the next seven months, the monthly jobs report is likely to become one of the indices by which we are supposed to judge the probable outcome of the fall election. Steady month to month job growth bodes well for the President. He takes credit for progress toward recovery. Numbers less than the previous month buoys the Romney campaign because it launches new negative ads and assertions of failed presidential leadership.
The electorate gets this, but do the candidates understand that we get that this is just election posturing? To the rest of us, the real questions are, “Did I, or a family member, find a job?” “Will I be able to save my home?” “Will I have to deplete my savings?” “Can I afford to get sick?” “Are things headed in the right direction?” And, “Which candidate relates to my concerns, my lifestyle?”
The irony is that the path to success for the Romney campaign is an economic recovery that cannot be sustained, higher levels of unemployment, and just more bad economic news. In other words, we have to endure more pain, collectively, than we currently do. If the GOP sees this as the principal route to success, it is incumbent upon us to demand that they (the GOP and the Romney campaign) tell us what they would do differently than they did under the G.W. Bush Presidency and what policies would distinguish a Romney Administration from those of the Obama Administration. Talk to us about outcomes and the basis for them. Unless we insist upon specifics, we will get the pablum and Romney’s promises to offer the details once he is in the White House. Remember “compassionate conservatism?” The details, or should I say, the reality, came later.
President Obama does not have this luxury. He has to manage in the real world of uncertainty, imponderables and events over which he has no control (e.g., oil prices). In fairness, this reality applies to all White House occupants, not just this president. When Barack Obama campaigned against G.W. Bush, the Bush legacy of mediocrity and failure was established — no thanks to Democrats. Obama’s record is mixed, thanks to Republican intransigence and the President’s inability to persuade Republicans to work with him. So, where are we seven months from the election?
The GOP’s game plan with regard to the economy as a campaign issue is transparent: undermine public confidence in the President’s leadership; talk down any positive economic developments; distort the efficacy of their preferred solutions of tax cuts, “trickle down”, and more austerity for everyone else. Moreover, they will attempt to persuade independents and disaffected Democrats that the economic policies of the G.W. Bush Administration contributed to the 2008 recession, but the policies of the Obama White House only made the economy worse. Romney will of course insist that he could do better. It would appear that the one thing he does not lack is self-confidence. He and the GOP will likely forget measures taken by the current White House, with bipartisan support (to preserve the Bush tax cuts for the wealthy), that helped to steady the economy.
For example, the payroll tax extension through 2012 and how critical it was to our economic recovery and, as the President noted in a recent speech to the White House summit of key advisors and editors of influential online news sites, “the addition of four million jobs over the past few years.”
Republicans publicly insist the Stimulus “did not create a single job but the record reflects numerous requests from members of both parties for Stimulus funds to create jobs in their districts and in their states.
For the past several days, the GOP has trumpeted the slight dip in job creation reported in the March jobs report as though that outcome represented a successful policy outcome. (See my earlier post “Republicans and the Economy: Good News Is Bad News … Unless They Make It.”)
The March jobs report revealed that employers added only 120,000 jobs in March; half February’s tally of 240,000 jobs. The report also noted that the manufacturing sector added 37,000 jobs during the same period. This may appear a bad omen to some, but let’s not forget these numbers are not the whole story. We have had 25 consecutive months of private sector job growth. Part of the rest of the story is that employers did add more than 600,000 jobs in the last three months. And, the unemployment rate slipped to 8.2 percent from 8.3 percent. Some of us feel we are on the cusp of the new norm in unemployment levels: 8 percent. (It was 7.8 percent when Obama assumed the presidency in January 2009.)
Neither political party wants to tell us that, but how likely is it that we will ever see a return to the 5.4 percent unemployment rate when Bush senior took control of the White House, or the 7.5 percent of 1976 under Carter and Reagan in 1980 when they were sworn in as president. The structure of the economy today may not lend itself to those levels of unemployment.
Globalization, tax incentives and outsourcing provided employers with more options than hiring American labor. Yes, it is true that the Obama Administration speaks of offering incentives to bring jobs back to the U.S. However, is it likely that enough jobs will return to lower the jobless rates another 2 percentage points? Has someone made that case lately?
Employers’ reflexes are justifiably conditioned by several factors when considering adding to the payroll: rising gas prices for consumers and uncertainty about health care and pension costs. If consumers have depleted their savings and are worried about making mortgage payments, consumer demand, or the lack thereof, could drop. For some, the price of gas is a major issue because it is a direct hit on the family purse. Health care costs and pension costs for the existing workforce are ongoing.
The Romney campaign characterized the March jobs report as “weak and very troubling.” All right, what does that mean? The absence of light is darkness. We know that as well.
Mitt Romney has proven to be the adept and aggressive attack dog this campaign season while vanquishing his competitors. However, he is light in the trousers when the topic shifts to solutions — other than more tax cuts for his class of wealth and cuts in everything discretionary.
In his worldview, there is the “miracle of the free market” as the solution to every conceivable ill society confronts today. We shall look forward to the general campaign as he offers the specifics he has avoided sharing with us thus far.
What the GOP and Romney seem to fear is the sustainability of the pace of the current recovery — and that should trouble the rest of us. That is the one outcome that questions the viability of Romney’s candidacy.
The President and his team exhort us to temper our expectations due to the unevenness of Europe’s recovery from their debt crisis, political tensions in the Middle East, and speculators’ impact on oil prices. Each of these factors contributes to market volatility. Romney would have us increase our expectations for a more rapid American recovery suggesting new American leadership is the balm to quiet global market uncertainty, create jobs here at home, increase energy independence, rebuild our defense, energize Wall Street, and set this country on the path to an American century.
Romney may be right but he has seven months to make his case. Meanwhile, the rest of us continue to hope that the recovery will gain greater traction — which puts us and the Obama Administration at odds with a GOP whose success lies in economic failure.