We’re in the Jobs Doldrums

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.

About Robert Reich 547 Articles

Robert Reich is the nation's 22nd Secretary of Labor and a professor at the University of California at Berkeley.

He has served as labor secretary in the Clinton administration, as an assistant to the solicitor general in the Ford administration and as head of the Federal Trade Commission's policy planning staff during the Carter administration.

He has written eleven books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet, and his most recent book, Supercapitalism. His articles have appeared in the New Yorker, Atlantic Monthly, New York Times, Washington Post, and Wall Street Journal. Mr. Reich is co-founding editor of The American Prospect magazine. His weekly commentaries on public radio’s "Marketplace" are heard by nearly five million people.

In 2003, Mr. Reich was awarded the prestigious Vaclev Havel Foundation Prize, by the former Czech president, for his pioneering work in economic and social thought. In 2005, his play, Public Exposure, broke box office records at its world premiere on Cape Cod.

Mr. Reich has been a member of the faculties of Harvard’s John F. Kennedy School of Government and of Brandeis University. He received his B.A. from Dartmouth College, his M.A. from Oxford University, where he was a Rhodes Scholar, and his J.D. from Yale Law School.

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