THE GOOD NEWS is that the private sector created 231,000 jobs in April. The bad news is that unemployment rose from 9.7 to 9.9 percent because more people are seeking work over 800,000 entered the labor force in April, dwarfing the increase in jobs. The true unemployment rate is over 17 percent if you count part-time workers who want full-time jobs plus those who have given up because the job search has become pointless, with more than five applicants for every job opening.
The economy needs a half million new jobs every month for the next four years, just to return to the prerecession unemployment rate of 2006. And that economy was nothing to brag about, with average wage growth lagging behind inflation since 2001.
Perversely, austerity has become the cure du jour. Top administration officials say there will be no new jobs initiative, because deficit reduction is needed to reassure the bond market. President Obama’s new fiscal commission is expected to recommend cutting services and raising taxes.
You have to wonder if the Obama economic team is talking to the political team. If the Democrats suffer a blowout in the November midterm elections and Obama risks being a one-term president, the biggest reason will be persistently high unemployment.
The issue of jobs has simply dropped off the radar screen. Obama tackled health care, and now he is focused on banking reform, immigration, and nuclear proliferation, which are all necessary causes but he will live or die politically based on whether he can get more jobs and more good jobs created, with some measurable gains by November.
Robert Kuttner ( A Presidency in Peril: The Inside Story of Obama’s Promise, Wall Street’s Power, and the Struggle to Control our Economic Future ) believes that cutting services and raising taxesthe Obama administration’s seemingly preferred method of dealing with the economic crisisis the wrong way to go. A commitment to higher growth, public renewal, and good jobs are what we need to stimulate the economy.
From the Boston Globe :
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