Obama’s Poor Economic Cloud Has A Silver Lining

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WASHINGTON (AP) — Finally, a flicker of economic hope for President Barack Obama and his fellow Democrats, even if it’s a faint one.

November’s sharp drop in the unemployment rate shows that jobs are finally moving in the right direction and suggests the economy is on firmer footing as the country heads into a presidential election year.

The Labor Department reported the jobless rate fell to 8.6 percent in November from 9 percent the month before, a 2 1/2 year low.

That’s still high unemployment by historical standards. And lots of problems still lurk – from Europe’s debt crisis to congressional gridlock to the tens of millions of Americans still out of work or otherwise feeling economic distress. Furthermore, part of the improvement came because 300,000 people stopped their job searches and were no longer counted as unemployed.

But Friday’s report, combined with other recent economic data showing advances in manufacturing and consumer spending, could give Obama momentum for the re-election campaign.

The White House and congressional Democrats were quiet in showing any enthusiasm they might have felt, instead using the new figures to step up criticism of anti-tax Republicans for blocking measures they said could help create even more jobs. Those include an extension of an expiring Social Security payroll tax cut that largely benefits the middle class.

“The unemployment rate went down,” Obama said. “And despite some strong headwinds this year, the American economy has now created in the private sector jobs for the past 21 months in a row. That’s nearly 3 million new jobs in all, and more than half a million over the last four months.”

Said House Democratic Caucus Chairman John Larson of Connecticut: “Today’s unemployment numbers, while encouraging, simply underscore the urgency for Congress to address the top issue facing American families- jobs.”

Republicans were publicly unimpressed with the jobs report, insisting Obama hadn’t done enough and emphasizing that the jobless rate was still higher than when he took office in January 2009, when it stood at 7.7 percent.

“Any job creation is welcome news, but the jobless rate in this country is still unacceptable. Today marks the 34th consecutive month of unemployment above 8 percent,” said House Speaker John Boehner, R-Ohio.

That view was echoed on the campaign trail.

Former Massachusetts Gov. Mitt Romney, in a Fox News interview, acknowledged that the report was good news but said it wouldn’t help Obama politically. “This is the slowest recovery we’ve seen since (President Herbert) Hoover,” Romney said. “He’s going to have a hard time putting perfume on this pig.” Hoover held office from 1929 to early 1933, at the outset of the Great Depression.

Despite stimulus measures by the Obama administration, Congress and the Federal Reserve, unemployment has remained high, peaking at 10.1 percent in October 2009 and staying around 9 percent for most of 2011.

Former House Speaker Newt Gingrich, another Republican seeking Obama’s job, noted that a major part of the sharp drop in the unemployment rate was “not because entrepreneurs were creating new jobs” but because some 300,000 Americans “have simply given up looking for work.”

“The Obama model of class warfare, government takeovers in the economy and creating fear and uncertainty for job-creators have failed,” Gingrich asserted.

Rep. Michele Bachmann, R-Minn., made a similar point about discouraged jobless workers and said, “My heart breaks as we approach the holidays for American families who have been abandoned by this president so that he can implement his radical agenda.”

The president didn’t try to take credit for the lower figures.

Asked about Obama’s measured response, White House press secretary Jay Carney said: “We don’t make much out of one month’s numbers. We look for trends, and we know we have an enormous amount of work to do. 8.6 percent unemployment is way too high.”

Still, “there’s a glimmer of light at the end of the tunnel” for gloomy Democrats, said Ross Baker, a political scientist at Rutgers University. “It’s good news, but it’s the kind of thing you have to rejoice about quietly. You don’t want to hear the champagne corks popping. There’s still so many people unemployed.”

But Baker said that if Obama can demonstrate a “reasonable decline over time” in the jobless rate, people might give him the benefit of the doubt. “It doesn’t have to get to historical lows to convince people that you’re on the right track.”

No president since Franklin D. Roosevelt has been re-elected with a jobless rate higher than 8 percent. Roosevelt won re-election in 1936 with a rate of 16.6 percent, and again in 1940 with a rate of 14.6 percent – but joblessness was on the way down from a peak of around 25 percent.

The jobless rate peaked at 10.6 percent during the brutal 16-month 1981-82 recession while Ronald Reagan was president. But on Election Day 1984 it had fallen to 7.2 percent.

Obama used a joint appearance with former President Bill Clinton on Friday to renew his call to a fractured Congress to extend and expand the cut in the payroll tax cut that finances Social Security and Medicare. The tax cut, due to expire at the end of the year, affects more than 160 million Americans.

Republicans favor extending the tax cut, but have blocked Democratic attempts to do so by paying for it with a new tax on households with more than $1 million in annual taxable income.

With polls showing most Americans favor higher taxes on the wealthy to help bring down soaring budget deficits, Obama and congressional Democrats are portraying Republicans as defenders of the wealthy at the expense of the middle class – a political theme they’re sure to carry into the election year.

The jobs report comes during a week that saw solid stock market gains, including a near-500-point Dow Jones industrials rise on Wednesday, all potential good news for Obama.

“Let’s say the stock market goes up another 500 or 600 points, and unemployment goes down below 8 percent by Election Day. That could allow for a big Obama surge,” said Thomas Cronin, a presidential historian at Colorado College in Colorado Springs, Colo.

But that “if” is a big one.

The prospects of significantly bringing down the jobless rate to pre-recession levels anytime soon “remain slim,” suggests University of Maryland business economist Peter Morici. “The economy must add 13.1 million jobs over the next three years-364,000 each month-to bring unemployment down to 6 percent.”

 

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