What the lousy jobs picture means for Obama's future
-
Robert Reich Guest blogger
Bad news for the U.S. economy and for Barack Obama. We鈥檙e 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.聽
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.聽
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.聽
In Ohio yesterday, Obama reiterated that he had inherited the worst economy since the Great Depression. That鈥檚 true. But the excuse is wearing thin. It鈥檚 his economy now, and most voters don鈥檛 care what he inherited.聽
In fact, a good case can be made that the economy is out of Obama鈥檚 hands 鈥� 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.聽
It鈥檚 also out of the Fed鈥檚 hands. No matter how low the Fed keeps interest rates, it doesn鈥檛 matter between now and Election Day. Companies won鈥檛 borrow to expand if they don鈥檛 see enough consumers out there demanding their products. Consumers won鈥檛 spend if they鈥檙e worried about their jobs and paychecks. And consumers won鈥檛 borrow (or be able to borrow) if they don鈥檛 have the means.聽
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. 聽
The real political test comes after Labor Day. Before Labor Day, Americans aren鈥檛 really focused on the upcoming election. After Labor Day, they focus like a laser. If the economy is moving in the right direction then 鈥� if unemployment is dropping and jobs are increasing 鈥� Obama has a good chance of being reelected. If the jobs doldrums continue 鈥� or worse 鈥� he won鈥檛 be.
