Free Markets, Free People
Not only the real numbers, but the real reason:
Labor-force participation, the share of Americans who are working or looking for jobs, has fallen to its lowest percentage since the mid-1980s. That’s partly because people have grown discouraged about their ability to find jobs and have given up looking. With those workers on the sidelines, the unemployment rate has been lower than it otherwise would be.
The official unemployment rate hit 9.1% in May. Including all of those who had part-time jobs but wanted to work full-time as well as those who want to work but had given up searching, the rate was 15.8%.
Of course Dale has been saying that for some time with his own calculations. Discouraged workers, however, may also have taken another option – retirement – since it is the age of Baby Boomer retirement. So it’s not clear yet how many of those who were workers and lost their jobs are “discouraged” workers or retired workers. Bottom line, though – a lot of people have seen their lives drastically changed.
Here’s the inherent problem in long-term unemployment:
[T]he odds of finding a job steadily decreased the longer someone was out of work. Some 30% of Americans who had been out of work for less than five weeks found new jobs last year.
Those odds deteriorated for the long-term unemployed. Of those who had been unemployed for more than six months, slightly more than 10% found new jobs. Nearly 19% dropped out of the workforce.
The problem endures this year: As of May, 6.2 million had been out of work for more than six months and more than 4 million haven’t work in more than a year.
And the outlook, at least at the moment, doesn’t look like it will change anytime soon.
This is Obama’s political Achilles heel. This is what gets incumbent presidents an early retirement. I’m not hoping that this persists through the 2012 election, I’m suggesting that there is nothing to indicate it won’t.
That is Obama’s challenge. And it is also the GOP’s attack line. This is Obama’s record – something he has to run on for the very first time. Time to begin pointing it out now.
You have to love the implicit threat included with the quote. Here’s the full quote from Obama “friend”, Richard Trumka, head of the AFL-CIO:
“It will be more challenging this time than it was last time to motivate our members,” Trumka, 61, said in an interview today at Bloomberg’s offices in Washington.
Why will it be more “challenging”? Well, because Mr. Obama hasn’t come through on all the pro-union, anti-free trade stuff he promised.
Obama’s support for free-trade agreements with South Korea, Colombia and Panama has disappointed his union supporters, Trumka said.
“During the campaign, he made significant promises to do an inventory of the trade agreements” to be certain they protected worker rights, Trumka said. “He’s obviously forgotten that promise.”
The results announced last week from Obama’s review of regulations throughout the government that burden business produced little of substance, Trumka said.
So … Trumka is implying that unless he sees some improvement on the “pro-union” side of the ledger, the unions just may not be quite as enthusiastic as they were in 2008 when it comes to Mr. Obama’s re-election. They might no be able to put as much money into the campaign, participate as heavily in GOTV or provide rent-a-mobs, er, crowds for campaign events.
In fact, the unions plan on really tightening the screws on the politicians they put in office, er, helped elect during the last presidential campaign:
Trumka said the AFL-CIO will spend this summer “holding candidates on both sides accountable.” Candidates who have wavered — those he called “acquaintances” — won’t receive support, he said, declining to name such politicians.
“Those Democrats that are friends are going to get more” aid than in the past, he said.
Of course at the moment, Obama is still considered a “friend”. The treat is just being put out there for their “friend” to consider I suppose.
Trumka also had some other policy ideas like, “more government spending to create jobs would revive the economy and lead to a reduction in the deficit.”
Ye gods. You have to wonder how someone with that much influence in the White House could be so apparently blind to history, economics and current conditions. Oh, wait:
Trumka said he’d like to see the U.S. become more like a European nation that provides pensions and health care for all its citizens. He said he is accustomed to criticism and doesn’t mind if conservatives call that socialism.
“Being called a socialist is a step up for me,” he said.
In this podcast, Bruce and Dale discuss the president’s middle east speech, Obamacare waivers, and fiscal policy.
The direct link to the podcast can be found here.
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Osama bin Laden is dead and President Obama has received a bump in the polls for the successful operation that took him out. That’s both deserved and expected. But what’s unknown is how long that bump will last or whether or not the bump is really that important.
I’d say it won’t last long and that while it isn’t unimportant, it isn’t enough to carry him through 2012 and the election. The most important issue Obama will have to overcome for re-election is the economy. And right now, the economy sucks. As a result, so do his poll numbers on the issue:
Just a third of Americans believe the country is headed in the right direction; less than four in 10 approve of Obama’s handling of the U.S. economy; and nearly 70 percent think the economy will get worse or stay the same in the next year.
As we all know, the economy is a complex issue and opinions of how good it is often come down to how an individual is faring or how his friends and acquaintances are. It comes down to basic pocket-book issues such as costs, wages, jobs. If the unemployment rate still hovers around 9%, given the promise that they’d keep it under 8% with the stimulus, then the administration is going to have some hard questions to answer.
It’s still very early to make predictions about the presidential race, especially with the dearth of worthwhile candidates on the GOP side, but history has not been kind to incumbent presidents in office when there has been an economic downturn of any magnitude and length. This particular one is one of the worst, and the “I inherited it” mantra has no traction anymore.
But as a baseline from which to compare where the numbers go in the future, the poll is useful:
Looking ahead to next year’s presidential election, 45 percent said they would probably vote for Obama (a two-point rise from April), versus 30 percent who would probably vote for the eventual Republican nominee (an eight-point decrease).
The GOP’s decrease is well-deserved given the emerging field. It’s a signal guys – heed it. As for Obama, the most he can muster, post Osama, is a 45% plurality, which would tell anyone he’s vulnerable. But the GOP numbers say he’s only going to be vulnerable to a worthwhile candidate and so far voters aren’t seeing one.
The obvious issue for next year – well, are you better off today than you were four years ago?
Only 37 percent approve of the president’s handling of the economy, while 58 percent disapprove.
Also, just 31 percent believe the economy will improve in the next 12 months, compared with 43 percent who think it will stay the same and another 25 percent who say it will get worse.
These economic numbers, GOP pollster McInturff says, underscore the “tremendous anchor the economy is to the president’s job standing.”
It’s not an “anchor” its an albatross. While good marks on foreign policy, even if temporary, help Obama, the economy is the key. And the GOP has all the ammunition in the world to keep that albatross around Obama’s neck. But bottom line, or so it appears, no viable candidate, no presidency and so far the voters don’t at all seem impressed with the same old names that are joining the battle on the Republican side.
We’ve all been wondering how it would shake out. Jamie Dupree (if you’re not following him in Twitter, you should) just tweeted:
BOTTOM LINE – New York & Ohio lose 2 seats; IA, IL, LA, MA, MI, MO, NJ and PA lose one House seat.
Interesting stuff. Those are the losers. Who picks them up?
GA picks up one as does SC, AZ, UT, NV and WA. FL picks up 2 and TX picks up 4.
So … the south picks up 7 seats (-1 in LA, remember?), the west 4 and the northeast and midwest lose 11.
Suddenly we’ve got a little different ballgame in 2012. Why?
Don’t forget, the change in House seats also changes Electoral Votes for President in 2012.
I‘m always cynically amused by lead sentences like this from the supposedly unbiased media.
Unemployment is set to remain higher for longer than previously thought, according to new projections from the Federal Reserve that would mean more than 10 million Americans remain jobless through the 2012 elections – even as a separate report shows corporate profits reaching their highest levels ever.
Of course one has zippity do dah to do with the other. The reason corporate profits are reaching their highest levels ever is because corporations that have survived the recession have done so paring down to a "lean and mean" status by dropping headcount, closing unneeded facilities and cutting spending. Those workers that are still employed are what are necessary to carry the corporation forward in the financial situation and business climate we find ourselves in now. As the economy slowly picks up steam and additional headcount can be justified by additional business, it will be added. But, as we all know, employment is a lagging indicator – i.e. profits and such are going to go up before headcount goes up.
But there’s going to have to be a definite, traceable, unmistakable upward trend with a demonstrable increase in business before corporations add headcount again in the present business climate. And given what this administration and the 111th Congress have done – make war on American business – few are inclined to do that.
So? So it stands to reason that employment is down and will probably stay down until corporations and businesses see a much friendlier and stable business climate than they’re seeing now.
We haven’t been writing about the hostile climate here for our health or amusement. But as can be witnessed here, the subtle yet telling attempt to shift the blame is found in the first sentence. If only greedy corporations would simply start hiring instead of amassing profit, why everything would be peachy keen and our man in the White House wouldn’t be looking at the probability of high unemployment in 2012.
So prepare yourself to see these sorts of exercises in blame shifting at regular intervals over the next couple of years.
Even as conditions are likely to remain miserable for job seekers for years to come, an extraordinary bounce-back is underway in the nation’s corporate sector, with profits rebounding 28 percent over the past year to an all-time high in the third quarter.
Without this narrative, which the entire left and a good portion of the middle will swallow whole, the administration and Democrats haven’t an identified enemy with which to wage political war – and that, of course, is part of our problem now.
I think Toby Harnden of the UK Telegraph best captures what is going to happen with Obama and the Democrats as we go forward. A couple of quotes say it best. However, first Harnden addresses the Obama press conference following a stinging rejection of Democrats and the fact that Obama seemed clueless about the cause of the defeat – or, if not clueless, at least not prepared to accept the real reason for the defeat:
The one thing Obama was not prepared to admit was that his policies, which have led to a massive expansion of government power and the national debt, could in any way be at fault. The problem with health care reform, he said, was that the process used to achieve it was "an ugly mess" – no mention that it was hugely unpopular and pushed through on a partisan vote without a single Republican legislator’s support.
The reason that is important is what it portends for the future under Obama. Harnden recalls Clinton’s reaction to the losses he suffered and how he decided, almost instinctively, to move to the center and “counterpunch” from there.
Obama is not about to move to the centre. Whereas Clinton was an instinctive "Third Way" centrist from the South who had wandered too far Left, Obama is a standard-issue liberal of the type found in Ivy League commons rooms. Nothing in his career indicates he is ready to cut deals with political opponents. He is sure what he believes is right; if you don’t agree with him, he pities you for being so slow to understand.
It is his innate arrogance that will be his undoing. He is going to try, as did Truman, to blame a Republican Congress for lack of progress. Truman actually had a Republican Congress and so the strategy worked. As I’ve said in the past, not gaining the Senate is almost a blessing in disguise for the GOP because the same sort of strategy will not work for Obama.
Harnden also makes a great point about the Tea Party and how establishment liberals are ready (and happy) to dismiss them because they “failed” to elect all their candidates.
The defeat of candidates like Christine O’Donnell of Delaware and Sharron Angle of Nevada has helped fuel a complacent Washington consensus that the Tea Party failed. Never mind that his grassroots anti-tax, small-government "constitutional conservatism" movement provided the energy and momentum behind the biggest congressional election victory in 62 years.
The true nature of the Tea Party is much better represented by the likes of newly-minted senators Marco Rubio, Mike Lee and Rand Paul than the frankly wacky O’Donnell and Angle. It was hardly surprising that a spontaneous, chaotic movement managed to throw up some oddball candidates. The Tea Party is likely to readjust accordingly next time.
What the Tea Parties are likely to do now is begin the hunt for suitable candidates that reflect their principles and don’t carry the baggage of the insurgent candidates they were stuck with in various races. The left has wanted to dismiss this movement from its inception and is ready to do so again right now. Big mistake.
But again, the main point Harnden makes is one I agree with – Obama doesn’t accept the reasons for defeat and is unlikely to change in any substantial way to address the new reality:
Obama believes he can get by on Being Barack Obama. Last Tuesday was a setback like nothing else he had experienced in life and it appears to have left his enormous sense of self-assurance undiminished.
A majority of Americans voted against Obama’s agenda that day and Republicans dearly want to make him history. It is far too soon to write off Obama’s chances of re-election but his rhetoric of bipartisanship and forging consensus has been shown to be a sham, leaving his Left-wing core exposed.
But the first step to keeping him in the hole he has dug for himself is a counter-intuitive one. Republicans intend to capitalise on Obama’s vanity and highlight his default ideology and determination to push "progress".
He is about to become the Relevant Progressive President.
Exactly. The GOP must pound on and point out the “progressive” ideologue that is the president. They must keep him relevant in that way so they can run against his liberal ideology in 2012. Obama gives every indication, at least at this point, that he’ll cooperate. And such cooperation, given the results of this election, indicate a one-term presidency.
And that’s a good thing.
An incredible election night by any measure. The obvious question that pundits will be concentrating on is “what does it mean”?
Well I think there is consensus on both sides that it doesn’t mean that the voters love Republicans. Even establishment Republicans are acknowledging that fact. And Marco Rubio made that clear in his acceptance speech where he called this a “second chance” not an embrace of the GOP.
So that leaves us with a number of other options to consider. What needs to be kept in mind is this is the third consecutive wave election and in each case the party holding the White House suffered losses. That’s unprecedented. And this particular midterm is the largest shift of seats since 1936 (update: House numbers now have a projected 242 seats on the GOP side, a net of +64 – historic or as one Democrat strategist said, a defeat for Democrats of “biblical proportion”). So one meme that isn’t going to fly is this election is “no big deal”. Democrats got spanked and got spanked hard. They have a lot of work to do to win back voters.
Another thing that seems to be a developing narrative is that this is a repudiation of the Obama agenda. I think that’s true to an extent. The biggest driver of the dissatisfaction with Democrats is the health care law as indicated by polls. And they are certainly mad about the deficit spending. But as Charles Krauthammer said last night, “this isn’t a failure of communication by the Democrats, this is a failure of policy”. So it would seem that at least part of the vote was a repudiation of the president despite claims by some on the left that its only about the economy.
That said, part of it is also about the economy. Historically the party in power doesn’t do well in a down economy. So that too must be factored in to the formula. While much of that is beyond government’s control, that which it could impact was perceived as poorly done. Very poorly done. That exacerbated the loss. And, with the focus on health care reform, most Americans thought that the legislative priorities were wrong as well. Voters have historically turned to the GOP to handle economic matters. But this is still no mandate for the GOP.
Finally voter anger hasn’t gone anywhere, it’s just taking a breather. Again, watch the direction of the country polls over the coming two years. It’s an interesting set up in DC now. Democrats actually would have been better off if the Senate had gone to the Republicans. They still control it and the Presidency and that leaves the onus on them as we head toward 2012. It also gives the GOP a free hand to pass whatever it wants in the House, regardless of where it goes, if anywhere, and make the case that they tried to reform what the people wanted reformed and Democrats (in the Senate and the President) stood in their way (reverse the “obstructionists” claim).
I think, after last night, that 2012 is definitely in play. It will be interesting to see how both parties react. I’m eagerly awaiting the Obama presser at 1 pm today when we’ll hear the first reaction from the President. But as always with him, judge him by his actions, not his words. His words have become empty rhetoric that many times doesn’t support what he ends up doing.