This cannot be just another mud-slinging Presidential contest. Our economy- the world economy- is looking at a steep drop off a tall cliff if leaders do not step forward and if we keep on with politics-as-usual.
The Washington Post’s Dan Balz has a terrific analysis piece that makes all the right points. He juxtaposes the horrible jobless numbers released Friday with what was a week of campaign hijinks from both sides. The American electorate needs and deserves this election to be a battle of ideas about how to keep the economy from falling into a second recession. Both the President and his Republican opponent need to give us details on their vision for the next four years instead of relying on attack strategies that usually work well in typical election years.
There is nothing typical about where we are today. The continuing debt meltdown in Europe coupled with suddenly slowing economies in China and Brazil have combined to paint a dire situation for the world economy. The challenges are as formidable as anything we’ve seen since the Great Depression of the 1930’s.
This has to be about more than “we’re not doing as badly as everyone else.” Nor do we have the luxury of wasting our precious time discussing television celebrities and birth certificates.
This desperately needs to be a referendum in November on ideas and policy. If the campaign devolves into the usual non-stop partisan warfare that has helped get us into this mess to begin with and skirts around the hard truths we need to address in terms of both economic growth and debt reduction- then our elected President will have neither a philosophical mandate or the public support for the actions he needs to take to protect us from economic calamity.
This is a time for adults not adolescent spit-ball battles and clever pot-shots.
History has shown us that it is not a wise thing to bet against America. It’s a pretty resilient country. And though millions are still without work, the housing crisis continues and Europe may yet be unable to contain its debt crisis, Friday’s unemployment report has significantly surpassed most economist’s expectations and offers more than a glimmer of hope that a recovery is actually taking hold.
The job gains were impressive and across all sectors of the American economy. There have now been five consecutive monthly drops in the national jobless rate and the 8.3% figure represents a three-year low in the unemployment number. Wall Street seems impressed and the Dow Jones is now flirting with the 13,000 mark.
The political implications are huge. It’s estimated that if the current monthly gains of over 200,000 new jobs continues until election day, the jobless rate in November may well come in at just under 8%. It’s a significant number. No incumbent President has ever been re-elected with a jobless rate over 8%.
For Republicans seeking the presidential nomination and centering their campaigns on a cratering American economy, there are still enough weak points and looming threats to the nation’s finances to make a case but there’s also a political danger. It is not an advantageous position to appear to be rooting for the continuing demise of the American economy. It is not a “morning in America” message and it threatens to make President Obama the optimist and Republicans the party of gloom-and-doom.
There is an obvious pivot that can be made to other issues and they are also important ones to be settled in a campaign. The debate over the size of government. The arguments of over-regulation versus government protection of consumers and the environment, for example. There’s the continuing danger of massive budget deficits.
But there’s a ritual that occurs on the morning of the first Friday of every month. The current leader of the Republican party, House Speaker John Boehner, releases a public statement on the latest jobless report. For five straight months now, he’s had to say, in essence, we’re glad things are looking up but the situation is still dire. How long that message continues to resonate if the string of positive economic news continues, could well end up determining who gets to live in the White House for the next four years.
Even the lawmakers who say they “get it” don’t really “get it.” For them it’s an abstraction. They think they know what those poor middle-class people care about.
They are advised by their aides and consultants that the failure to extend something like the payroll tax cut would hurt the finances of the regular people. But they don’t really know because, by any standard- our lawmakers are very wealthy people who live in a world far different than most of their constituents.
Here are the figures. There are 535 members of Congress; 100 Senators and 435 members of the House. Between them, there are 261 millionaires. Last year, the Center for Responsive Politics found that the median wealth of a House member was $765,000. The median wealth of a U.S. Senator was $2.38 million. And during the worst of the Great Recession, lawmaker’s median wealth increased 16% between 2008 and 2009.
For a $50,000 a year income, repealing the payroll tax cut costs that worker $160 monthly or $40 a week.
So what‘s $40 to somebody worth a million or ten million or a hundred million? Not even couch change. It’s nothing.
– Half a tank of gas for an SUV? They wouldn’t know. They don’t drive cars, they have drivers.
– A little extra money to buy prescription drugs? They wouldn’t know. Congress has the best health care coverage in America. They’ve never had to use an HMO and they certainly don’t have to worry about paying out of pocket for medications.
-Eight roasted chickens at Costco? They wouldn’t know. Forty bucks barely covers the tip for a couple of steak dinners and several cocktails at Morton’s.
-Nine gallons of milk/ Ten 20-ounce loaves of bread? Actually, they do know these figures because they get briefed on them by aides so they won’t get embarrassed if some wise-ass reporter asks them.
– Half the price of a one-way ticket on Amtrak’s Northeast Regional for the holiday visit to grandma’s in New Jersey? They wouldn’t know. They take the Acela. 1st Class.
– A really cheap pair of shoes? They wouldn’t know. A pair of Ferragamo men’s shoes goes for about $600. The low end of Manolo Blahnik’s for women go for about $700.
Don’t get me wrong. I wouldn’t mind being rich myself. But when they fight for us regular people, it’s usually because doing so helps ensure they remain on the pathway to power and wealth. After all, it’s the little people who elect them. I’m not saying they don’t care. It’s just that when they consider the tough times most people are going through, they have to imagine that world. They certainly don’t inhabit it.
Some would accuse me of waging class warfare. I would respond that it’s not war when one side has all the weapons. But it is class cluelessness.
Some of these cards are fairly amusing.
“Don’t think of it as losing your job….think of it as a time-out between stupid bosses.”
Or: “I just dare somebody to steal my identity now.”
There are somber ones too, though I think the humorous ones would have been nice to get while I was in my own state of panicked limbo just a couple of years ago. This does open a fairly large potential arena for other cards that address all the possible nuances of economic distress people are feeling these days.
There’s also rampant underemployment:
“So sorry about your new job as a Wal-Mart greeter!”
“Now you can have fries to go along with that new, tiny little paycheck!”
There’s the long-term unemployed:
“Don’t worry! Congress is working on the off-setting cuts to pay for your extended unemployment benefits…in between fundraisers and golf outings with lobbyists!”
There’s the couple hundred thousand folks who were ripped off by Bernie Madoff:
“Oooh. Heard about that whole Madoff thing…join the club! Price Club!”
There’s losing your job to outsourcing:
“Sorry your job went overseas! Have you considered moving to suburban Shanghai???”
And two all-purpose recession-oriented sympathy cards dripping with irony:
“Imagine someone trying to make a profit from your unemployment! If you’re reading this- we just did!”
“Look on the bright side, you could be writing Hallmark Greeting cards!”
S&P may have questionable moral authority in downgrading the U.S. from its AAA rating but they have pointed out that if Republicans don’t back down from their anti-tax fervor and Democrats continue to maintain entitlement programs without significant reform- the gridlock will continue to kill us.
There are two other ratings agencies who still give the U.S. a AAA rating, Moody’s and Fitch. Both warn that may change but have also said they put less weight than S&P does on the politics of gridlock. But ironically, the political reaction to the S&P downgrade may change their minds on that. Instead of taking the downgrade as a warning shot across the bow, both sides have come out swinging against one another in response, making the very point S&P highlighted that these intractable political positions make us a riskier investment.
There are indications that the “Super” congressional committee of a dozen lawmakers representing the House and Senate will be every bit as deadlocked as the larger bodies were just last week. Standard and Poor’s and their fellow ratings agencies may have played a significant hand in our current crisis by handing out completely undeserved sterling ratings to the instigators of the subprime lending catastrophe four years ago, but they’re right to express serious concern about the state of our “take no prisoners” political climate.
But a downgrade may be taking it all a step too far. The U.S. economy, anemic as it is, is still way better off than it was, say in 2008 in the midst of the banking crisis and we didn’t get downgraded then. Downgrading the U.S. now carries the risk that interest rates will rise and make paying off debt an even more expensive task, not to mention the ripple effect on an already struggling economy as rates potentially rise for everything from small business lending to auto, credit card, and student loans.
It happened, though, and here we are. If the Congressional “Super” committee finds a spine and a sudden spirit of compromise, we’ll be alright. Given the toxic political environment of the moment, I wouldn’t exactly give that likelihood a sterling, risk-free AAA rating
I took a few days off and unplugged from the world a bit. As I read back in to our political and cultural discourse today, I see 7 out of 10 news stories are about Congressman Weiner’s sexting and Sarah Palin’s version of Paul Revere’s midnight ride.
I understand the spectator appeal of both stories; we’ll call it the car crash syndrome- not pleasant to look at but impossible to resist. But really, Washington Post- five different Weiner angles? “Weiner’s District Debates His Future,” “Wives Increasingly Skip Public Confessions,” “Weiner Takes Mortification 101,” “Anthony Weiner’s Apology-Fest,” “Breitbart Inserts Himself in Weiner Drama.” Daily Beast/Newsweek is similarly obsessed with 4 of its top 10 stories concentrating on some iteration of All Things Weiner.
The Post also weighs in mightily with the continued brou-ha-ha over Sarah Palin’s historical boo-boo she insists was not a mistake about Paul Revere
blowing whistles firing shots and ringing bells to warn the British not to take away our guns or something. We have “Don’t Know Much About History,” “Fight Brews on Paul Revere Wikipedia Page,” “Palin Once Again Disregards the Facts,” and “Sarah Palin Gallops Toward 2012.”
You know, in about two months this nation faces the very real possibility that it will default on its debts for the first time in its history. What’s that- a 1000-point stock market crash? We have a stalled recovery and a public frightened at the potential consequences of continuing job losses. Folks are paying up to $200 a month more to gas up their cars. The housing crisis continues unabated.
I understand the last question asked at Anthony Weiner’s news conference was, “were you fully erect?”
Beyond being disgusted, I thoroughly do not care. My 401K? Job security for my friends and family? Can I ever afford to buy a house again? Can I get my kid through four years of college? That’s the kind of stuff I care about. Call me Weinered out. Can we please get serious about things that actually matter?
The Bureau of Labor statistics reports unemployment dropped to 8.9% while nearly 200,000 jobs were added last month. It’s better than a sharp stick in the eye, but counting “discouraged workers,” the real unemployment rate is still a stubbornly high 15.9%.
Since December of 2007, 7.7 million jobs have been lost. At the rate of 200,000 jobs a month, it would take three years to get back to those levels. The New York Times explains all in this piece that pretty accurately forecast today’s figures.
What’s disconcerting is the disturbing trend over the past couple of years that with every sign of an improving economy, oil prices go up as speculators anticipate increased demand. Throw in the unrest in the Middle East and Northern Africa and dramatically higher gas prices over the spring and summer could threaten this modest recovery that appears to be underway. Just can’t buy as many goodies when it’s costing you $70 every time you gas up and consumer spending is a huge factor in our economy.
High gas prices also make everything more expensive because of increased transportation costs getting goods to market, so that raises the specter of inflation. Only way to combat that is to raise interest rates.
But it’s not all bad news. The real jobless rate of 15.9% reflects a drop from 16.1%. And a quarter of a million of us found jobs in February while 190,000 fewer people described themselves as wanting a job but unable to find one.
All the nice economic numbers in the world mean nothing, of course, if you find yourself on the unemployment line. But it is possible to take heart that chances seem to be improving for finding work out there. The job gains are in many different sectors including manufacturing, professional and business services and health care. The situation is still not bright in retail and very bad in the public sector- government jobs.
It is truly sobering how hard we have been hit over the past three years and how much longer it will take before we get back to anything resembling normalcy.