There are ongoing discussions in Democratic circles since the Republican electoral victories about how the president can get re-elected in 2012. The few I've attended ignore the most salient and disturbing fact of them all: the unemployment rate come election day will almost certainly be well above 8 percent, and perhaps hovering near 9 percent. Can a sitting president win with even an 8 percent unemployment rate, the best that can be hoped for? It would be setting a post-World War II precedent, by far.
The current unemployment rate is 9.6 percent. In February 2010, the president's annual budget forecast that the average unemployment rate in 2012 would fall to 8.2 percent. But it almost certainly won't drop that far, because the rate of real GDP growth is already slower than the president's budget staff forecast for the remainder of 2010. And they were counting on GDP growth rising to an annual rate of well above 4 percent in both 2011 and 2012. Highly improbable.
This will be quite a mountain to climb. The unemployment rate has never been above 8 percent in November of a presidential election year. It has been above 7 percent only four times. In three such cases, the incumbents lost -- Gerald Ford, Jimmy Carter and George H.W. Bush. Ronald Reagan won reelection with an unemployment rate of 7.2 percent, but it had fallen more than three and a half percentage points from its high two years earlier at the worst moment of the steep Reagan recession.
Looking back farther, when unemployment rates were tamer, the well-known vice president Richard Nixon lost to the upstart Catholic John Kennedy in 1960 when the unemployment rate rose to 6.1 percent from 5.1 percent half a year earlier. Nixon was famously furious that his boss, President Dwight Eisenhower, wouldn't step on the fiscal gas to help him win after he had asked him to.
Obama has to step on the gas again. But he won't. He has bought into the budget deficit alarms.
And the Republicans won't let him step on the gas, anyway. They showed themselves to be deficit enthusiasts a few years ago as President Bush piled them up. But now they are born again -- or born again and again -- and decry deficits. They say they are fiscal moralists, but they also know that raising the alarms will stymie any quick return to growth and more jobs. They seem to have all the cards.
Obama had better wake up to this reality. The Republicans are bad enough, but he has been his own worst enemy. He appointed the fiscal commission to cut the deficit, playing into short-term fears, and now they will report on December 1. Will he accept proposals to cut spending too soon? It is his commission, after all. The president of course has to fight for major stimulus programs and fight even harder to stop any spending reductions now. Even in 2012, spending cuts would dangerously damage the economy.
My bet is Obama will grasp at straws -- a mildly stronger GDP report, like the one today, and maybe a pick-up in the rate of job creation in 2011 and 2012. His advisers will tell him that he has momentum on his side. Let me repeat the harsh facts, however. Even if the economy's growth rate starts climbing and momentum is on his side, it is highly unlikely he will get the unemployment rate down by November 2012 to a winnable level.
He had better start preparing far bolder action than he now contemplates. Place the onus for high unemployment on his political opponents. Talk up the need to invest in the economy, including an infrastructure bank. Establish more aggressive jobs programs. And so on.
Some think he just has to talk back to Republicans. Confront them. Don't give in on lower tax rates for the high-end earner. That will help. But this is a mountain he faces, not a hill. Obama may not know that, but it seems most Democratic analysts don't know it, either.
Cross-posted from New Deal 2.0.
 |
 |
|
| Obama | Romney | |
|---|---|---|
| Electoral Votes (270 to win) |
332 | 206 |
| Obama | Romney | |
|---|---|---|
| Total | 65,899,660 | 60,932,152 |
| Percent | 51.1% | 47.2% |
| Democrats* | Republicans | |
|---|---|---|
| Current Senate | 53 | 47 |
| Seats gained or lost | +2 | -2 |
| New Total | 55 | 45 |
| Democrats | Republicans | |
|---|---|---|
| Seats won | 201 | 234 |
The organization is called, Organizing for America.com or BarackObama.com
Hope this helps.
In fact, they will do EVERYTHING IN THEIR POWER to crash the economy so that they can blame it on Obama.
And if a Republican wins 2012, forget it. America is finished. THAT'S why it should scare liberals.
Frankly, I don't care one lick what Republicans fear. They have no souls.
This president is no Democrat or he would not have let this happen period. This is his base and he gave up on helping them just stay even.
Good bye Obama, it's been good to know you???
Absent the Boskin changes, SS payments would be 30% more than they are currently. there's more about this adjustment on Chris Martenson's Crash Course series on Youtube--I think it's chapter 17.
But it isn't just the Boskin changes (which also included price weighing and Hedonics). in the 1970's, Nixon stripped food and energy prices out of 'core' inflation rate. It saved the Feds a lot of money on COLA agreements--and it also was applied to union guys whose contracts specified COLA adjustments.
Those on SS received substantial raises when the economy was rising. Many that are not old enough for social security also worked for as much as 40 years, and we're taking a 50% to 80% pay cut, if they are even able to find a job. There are children going to bed hungry, so lets not just make it about the elderly please.
Dems are not hesitating to tax the top 2 %, they just know the repubs will block it.
The President needs to start toughening his stance on sane policies that are related to the economy, not to the deficit. And he needs to work hard on 'framing the debate' to the American people.
The Dems at one time were intouch with what the American people wanted but Power corrupts and absolute power corrupts absolutely.
Obama and Dems will loose big time if they don't wake up and stop defendeng "Government". People HATE government and Obama and Dems are identified as the Government.
It seems almost biological, like a virus. Dems perpetually afraid to raise their voices.
What's so absurd about it is that it's politics 101. If you don't CHALLENGE your opponents, they will walk all over you.
Add to this the Republican penchant for outright lies (Kerry's Swiftboating for example) it would seem to me that the lessons of keeping your mouth shut would have been learned.
Plus, running away from bullies only encourages them to hit you harder.
Pre-Recession Unemployment Rates May Not be Reached for a Decade | Press Releases
"WASHINGTON, DC- As recent calls for additional stimulus and the extension of unemployment benefits meet with stiff opposition, Congress appears to have underestimated the profound effect of the current recession on the labor market. A new report from the Center for Economic and Policy Research (CEPR) shows that with a job growth path comparable to the last recovery, the economy will not recover all of the jobs lost in the recession until March 2014. Assuming the trend rate of growth in the labor force, the unemployment rate will not fall back to the pre-recession level until April 2021.
"The economy desperately needs action on job creation," says John Schmitt, a senior economist at CEPR and a co-author of the report. "At current and projected job creation rates, we will still be suffering from the effects of the downturn well into the next presidential term."
The study, “The Urgent Need for Job Creation,” compares various job growth scenarios with the job loss seen in the recession and projects when the lost jobs will be regained and when the unemployment rate will return to pre-recession levels in each case..."
There's already talk of skill atrophy of the unemployed.
We know that that's false. It's the GOP who is blocking the second stimulus the House already passed at the end of 2009 in the Senate, and who will continue to block it.
The only way to pass it in the Senate would have been to have elected 61 instead of 57 Dem Senators during the midterms. But the "professional left" has been cultivating the idea that it's Obama who opposes more job creation bills for months now. So of course, part of the American people (= those who believe pundits) did NOT vote for more Dems.
As a result, we won't have any stimulus during the next two years, and if pundits continue to blame Obama instead of the GOP, we will maybe have Sarah Palin or Romney as president in 2012, and then it will certainly take at least a decade before the unemployment rate is back at 5% again ... .
Where has Jeff Madrick been during the last two years?
Obama passed the BIGGEST stimulus in history. Result? Ten consecutive months of private sector job growth instead of losing 800,000 jobs a month (= when Bush left the Oval Office).
His advisers already asked for a second stimulus at the end of 2009, so that after stabilizing the unemployment rate (= bringing back pre-recession monthly job creation numbers), job growth could increase still more, which is necessary if we want to bring the unemployment rate down.
The House immediately passed this second big stimulus. The Dems in the Senate have done everything they could to pass it too. The GOP has blocked it, and will certainly NOT pass a stimulus during the next two years.
Conclusion: pundits on the left urgently need a wake-up call ... because there will be NO MORE STIMULUS. If we wanted the second stimulus to pass, we should have kept a Dem majority in the House and replaced 2-3 GOP Senators by Dems during the midterm elections. "We the people" did exactly the opposite (by voting for the GOP, voting third party, or staying home). Elections have consequences. If the "professional left" will continue to deny the fact that Obama has, already after one year in office, created a situation where we have one MILLION more jobs a month than when Bush left, and if pundits on the left will continue to tell the American people that Obama should "start concentrating on jobs", things will only get worse ... .