Unemployment numbers add to Obama's midterm woes
[e-mail this page to a friend]
by L. IAN MacDONALD
The Gazette, Monday, October 11, 2010
If you want to know how much trouble Barack Obama and the Democrats are in three weeks from the November midterm elections, you just have to look at the latest U.S. unemployment numbers.
With an unemployment rate of 9.6 per cent, and another 95,000 jobs lost in September, nearly 15 million Americans are looking for work. Another 2.5 million have given up and left the labour force. By comparison, the Canadian unemployment rate is eight per cent, with 6,600 fewer jobs last month.
There are twice as many unemployed Americans as there were three years ago just as the housing bubble was bursting and before the collapse of the stock market triggered the Great Recession of 2008-09.
The employment numbers aren't all bad in the U.S. The job losses reflect temporary government census workers going off the payroll, while the private sector actually added 64,000 jobs last month.
Obama's $800-billion stimulus package, not to mention the $60-billion bailout of GM and Chrysler, to say nothing of the Bush administration's $700-billion nationalization of WallSt., meansthere'sno room left for further fiscal stimulus.
Consider: The current U.S. deficit of $1.6 trillion is about 10 per cent of GDP. And the federal debt is expected to cross 100 per cent of GDP in 2012. Hand over the keys to the house. Actually, a lot of Americans already have. Mortgage foreclosures are up 25 per cent over last year. And 25 per cent of remaining mortgages are worth more than the homes.
Meanwhile, household debt is still 120 per cent of personal income. Finally, 50 per cent of foreign-owned U.S. debt is held by the Chinese government. These numbers, compiled by economist Jeremy Leonard for Policy Options, are quite eloquent.
Clearly, Obama inherited a bad situation, but his government hasn't done enough to improve it. That's partly a function of the policy choices he made in his first year in the White House. He made health care his priority over economic recovery, when his mantra from the beginning should have been jobs, jobs, jobs. The candidate of hope and change has had trouble delivering on them.
Obama spent a lot of equity on getting health-care reform through Congress, and sparked a lot of opposition. The Tea Party was basically born as a protest against health care, and has morphed into an anti-Washington, anti-incumbent, anti-Obama movement fuelled by rant radio and talk TV.
And the reckoning will come with the November mid-terms. The Democrats have hefty majorities in both the House of Representatives and the Senate, but both are in jeopardy. The Republicans need to pick up 39 seats to achieve a majority of 218 in the House, and at the moment they are on track to gain even more.
In the 100-member Senate, where a third of the seats are up for grabs every two years, the Democrats would need to lose 10 out of their 19 seats in play for the Republicans to gain control. That's considered a stretch, but it's a measure of Obama's difficulties that one of the races considered too close to call is for his own former Senate seat in Illinois. It's not unusual for a sitting president's party to take a major hit in midterms, as Ronald Reagan and Bill Clinton did in 1982 and 1994, and 2010 is shaping up that way.
It's interesting that Obama, who had such perfect pitch as a candidate, has turned tone deaf in the White House. Twice since the spring he has gone on national television to make pointless speeches from the Oval Office.
And instead of hitting the campaign trail and doing what he does best, he gave an astonishing interview to Rolling Stone in which he blamed his own base for their apathy.
"It is inexcusable," he said, "for any Democrat or progressive right now to stand on the sidelines in this midterm election." Democrats "sitting on their hands complaining," he added, "is just irresponsible. People need to shake off this lethargy."
Bringing about change is hard, he went on, "but if people want to take their ball and go home, that tells me folks weren't serious in the first place."
Fired up and ready to go? Not.