Political prognisticators inside the Beltway like to talk about all the reasons Obama's approval ratings are dropping, and what the results of the Massachusetts Senate race and other recent campaigns might mean. Is Obama communicating well enough about the key issues? Did Martha Coakley run a good campaign? Is Obama For America failing? Will David Plouffe's coming back shake things up? Was health care reform sold properly? Will Obama's budget freeze help him politically (even though it's truly terrible policy)?
You know, they are all interesting questions, and those of us who write and talk about politics for a living love to talk about them. But at the end of the day, nothing drives voters' opinion about politicians like jobs and the economy. As long as we are stuck with high unemployment and wages stuck in neutral or worse, voters are going to be angry at incumbent politicians. And the truth is that this economy has been far harder on working people than most of the inside the Beltway pundits even realize, so that anger is far bigger than the DC establishment realizes.
My friend Leo Hindery, a businessman in NYC, has taken it upon himself to look closely at the unemployment numbers, and has done some important analysis as to the actual level of misery in the jobs sector. Leo has started looking at the unemployment reports each time they come out, and factoring in things like people too discouraged to look for work, people working part time when they want and need full time jobs, and people in the shortest term jobs with no security or attachment to their place of work. The way Leo figures it, if you look at all the available data to come up with the real rate of unemployment and underemployment, it's currently 19.1% instead of 10.0%. Given that at the height of the Great Depression in 1933, unemployment was 25.3%, that 19.1 number is pretty damn scary. And that's with a "stronger than expected recovery," as one newspaper article said yesterday.
As important as health care reform is, as interesting to us political junkies as the latest communications tactics or staff shake-ups are by the White House, it is this crushing level of unemployment that is driving the president's approval numbers and the entire Democratic Party's political fortunes down. This level of misery is unprecedented in the years since the Great Depression, and until we begin to make serious progress, all else we do politically won't matter much.
That's why this latest move by the president, this freeze on domestic discretionary spending, is a fool's errand. The White House is saying they will exempt jobs programs and health care spending, which I am relieved to hear, but getting a short term political boost for sounding tough on the deficit in the State of the Union doesn't do much for your long term political fortunes while almost 20% of Americans are looking for work. Policy-wise, it is still a terrible idea even if you exempt jobs and health care because it is domestic discretionary spending in all kinds of areas that would help create more new jobs. The thing that is so frustrating about this proposal is that there are plenty of things that could be done to both cut the deficit and produce new jobs, and this proposal goes the wrong direction in both regards. To cut the deficit, there are literally scores of corporate tax loopholes that you could close, scores of specific cuts in wasteful defense spending, big cuts in agribusiness subsidies benefiting only the richest corporate farms, and programs to recover money from wealthy tax cheats that could all raise more than the budget savings you are going to get from this freeze in it's first year. The other way to lower the budget deficit over the next ten years is to actually create new jobs, so that instead of being on welfare and unemployment benefits, those people are working and paying taxes. And you can create jobs in a variety of ways, not just by new spending. For example, America could enact the same kinds of buying-in-country programs that every other industrialized nation in the world has, and you can award big new contracts to American firms rather than foreign ones.
Let me go on a slight detour here, and talk about one related jobs issue that I should do full disclosure on. This policy debate has even driven a progressive like me into the arms of a big business, Boeing. Over the last few months, I began reading about the controversy over whether the Department of Defense should award a new contract to build tankers to a European company, Airbus, or to Boeing, which would design and manufacture everything here in the US (Airbus says they would create some jobs in Alabama if they get the contract, but most of the work would be done in Europe). I got so mad about the idea that our government might award Airbus this contract that I actually got in touch with old friends who work at Boeing, and now I've taken a consulting contract with them, the first time in 14 years I have taken on a corporate client. I probably disagree with Boeing on much of what they lobby the government for, but they have 45,000 members of my old union (the Machinists), and personally, I'd like them to have more. To have Airbus get this contract when 19.1% of Americans are looking for work would be an outrage, so on this one, I'm actually working with a big business (and yes, it's an odd feeling.) But here's the bottom line, and it couldn't be more basic: the simplest way to create more jobs in America is for the American government to award contracts to American firms.
The jobs issue trumps everything for our party and our country over the next few years. If we don't start producing jobs ASAP, any chances of cutting the deficit will go up in smoke, along with any chance of Democrats winning elections in 2010 and 2012. Instead of doing phony and counterproductive things like this freeze on domestic spending, Obama ought to be focused like a laser beam on actually creating American jobs.