Republicans would love to blame Obama for the unemployment rate but this would also contradict their belief that the government cannot do much to affect the economy. Libertarian Megan McArdle is honest about this in defending Obama against an op-ed by Charles Blow which does blame him:
The president has very little control over employment in the economy. The stimulus undoubtedly kept the economy from losing even more jobs than he did. But the economy is undergoing a hell of a deep structural adjustment: from debtors to savers, from housing-and-finance led growth to . . . well, if we knew that, the recession would already be over. Those adjustments need to happen, because the previous situation was totally unsustainable. But they definitionally imply higher unemployment and less consumer demand in the short run.
A third stimulus might lower the unemployment rate a little, at least from where it would otherwise be. But it would not put us back at 5% unemployment, and it would have a lot of other costs, including further risking our AAA bond rating. Stimulus is at best an incredibly blunt instrument. And it is made blunter by all of the procedural checks we’ve accumulated over decades of government growth, not to mention very powerful public sector unions. FDR could tell his government to go out and hire people to paint hallways or build dams. The current president needs Environmental Impact Statements, public review periods, and the okay of ACFSME.
The fact is, most of the time, the best the president can do is avoid making things much worse. And though I have many disagreements with the specifics of Obama’s policies, I’d say that largely, he’s kept from making stuff worse, and eased the worst of the damage on hurting families. We could be doing more with more generous unemployment benefits or other income assistance, less with atrocious auto bailouts. But the economics of recession is truly a dismal science, and demanding that the president cure the recession is about as effective as expecting him to cure Hep C.
Blow is certainly right that Obama and Democrats will pay a price in 2010 and 2012 if the employment picture doesn’t dramatically improve. Life is unfair that way. But op-ed columnists should not pile on with fruitless demands for radically lower unemployment.
Unfortunately jobless recoveries have become the norm following the last few recessions. Unemployment remains high after last year’s economic turn down since many companies went under and are not around to hire even in an economy. Companies which have survived changed how they do business so that they do not require as many employees.
The ‘jobless recovery’ is one of the ugliest economic phenomena related to capitalism.
The same thing happened in the old British Empire. As more and more industry was outsourced to the colonies or reduced through trade with other countries, the British economy itself contracted. They becme a financial/service based economy and stopped being an industrial/commercial economy. This increased the rich and poor divide, guaranteed more of the jobs available were of less economic value and greater disposability, and made the British economy dependent on its trade partners and colonies. When WWII broke out, the British were badly handicapped in fighting it because once their access to their colonies was severed their industrial base was crippled.
After the war, it was necessary for the British to reinvest in industry (with mixed success) and to vastly expand the welfare state to support the new economy. This has had mixed economic results. It’s one of the reasons for the
‘special relationship’ between the US and the UK post-WWII, for many years during and after the war the UK was dependent on the US for both nearly all resources and many finished goods.
We, as it stands now, are on track for our own ‘special relationship’ with China if we don’t do something about it. That will require government action, because the corporate world is getting fat off the status quo.
» Obama and Unemployment Liberal Values http://tinyurl.com/ybuowku
» Obama and Unemployment Liberal Values http://tinyurl.com/ybuowku