The Jobs Doldrums and Obama's Future

By Robert Reich
July 6, 2012

http://robertreich.org/post/26630289099

Bad news for the U.S. economy and for Barack
Obama. We're 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.

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.

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.

In Ohio yesterday, Obama reiterated that he had
inherited the worst economy since the Great
Depression. That's true. But the excuse is wearing
thin. It's his economy now, and most voters don't
care what he inherited.

In fact, a good case can be made that the economy
is out of Obama's hands - 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.

It's also out of the Fed's hands. No matter how low
the Fed keeps interest rates, it doesn't matter
between now and Election Day. Companies won't
borrow to expand if they don't see enough
consumers out there demanding their products.
Consumers won't spend if they're worried about
their jobs and paychecks. And consumers won't
borrow (or be able to borrow) if they don't have the
means.

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.

The real political test comes after Labor Day. Before
Labor Day, Americans aren't really focused on the
upcoming election. After Labor Day, they focus like a
laser. If the economy is moving in the right direction
then - if unemployment is dropping and jobs are
increasing - Obama has a good chance of being
reelected. If the jobs doldrums continue - or worse
- he won't be.

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