The Obama administration is lowering expectations and getting tangled up in its own spin. On one hand, the Obama economic team needs to prepare the public for a period of high unemployment:
The economy is growing again, but at a pace unlikely to quickly replace the 8.4 million jobs erased in the recession that began in late 2007. More than 11 million people are drawing unemployment insurance benefits.
“We’ve got a long way to go,” said Lawrence Summers, director of the National Economic Council. “We’ve inherited a terrible situation, the most pressing economic problems since the Great Depression in our country.” [In case you thought the Obama team was ever going to stop blaming George W. Bush, think again.]
Christina Romer, head of the White House Council of Economic Advisers, said consumers still face “a lot of head winds” from the financial crisis. For example, debt and credit difficulties are hampering stronger job growth.
They were echoing the words of Treasury Secretary Timothy Geithner, who said last week the administration was “very worried” about returning to a more normal jobless rate of around 5 percent.
Summers said Obama was preoccupied with creating jobs. “The trend has turned, but to get back to the surface, we’ve got a long way to go,” Summers said.
Preoccupied? Well, that can certainly be said of health-care reform, but what, precisely, has Obama been doing to promote job growth? Certainly raising billions and billions in new taxes in the guise of health-care “reform” and allowing the Bush tax cuts to expire aren’t helping job creation. Nor will cap-and-trade, if the Obama team has its way.
And the job picture is likely to get worse, not better, as more workers return to the job market, as this report explains:
Some economists assert that the unemployment rate, which held steady at 9.7 percent in March, is likely to be driven higher as many more such people are lured into looking for work by hopeful signs of recovery.
The number of people looking for jobs rose by more than 200,000 in March compared with February, according to the Economic Policy Institute — and that’s a good sign, economists say. It means that Americans are seeing more jobs being created, and that they’re optimistic about their prospects.
But the supply of new jobs — 162,000 in March, the biggest monthly increase in three years — will accommodate only a fraction of the unemployed. Some economists say the jobless rate will not recede to pre-recession levels near 5 percent for four more years.
Meanwhile, the buckle-your-seat-belts-it’s-going-to-be-a-bumpy-ride warning runs headlong into the Obama team’s persistent defense of the original stimulus bill, which was supposed to keep unemployment at 8 percent. Christina Romer proclaimed, “I think it has done exactly what we would say it would do.” Uh… not really. Needless to say, Republicans are pouncing on the insistence that everything is going exactly according to plan. “Romer’s comments are likely to raise the ire of Republicans in Congress. On Friday, the office of Senate Minority Leader Mitch McConnell (R-Ky.) released a memo showing that the stimulus has failed to keep unemployment under 8 percent as the administration said it would do.”
In sum, job growth is anemic, and the Obama administration cannot identify a single effective policy it has advanced to promote job creation. Instead, it has run up a mound of debt and pursued policies that are likely to hamper rather than to facilitate job growth. The administration’s spinners can’t quite decide — brag about their expertly designed stimulus or lower expectations for any relief in the near term from sky-high unemployment? Frankly, the Obama team can spin all it likes; the voters can see for themselves that Obama administration and Democratic Congress have failed in their own stated goal to keep unemployment below 8 percent and promote robust private-sector job growth.
