August 3, 2012

Longest stretch of unemployment above 8%, EVER.

The U6 president, unlike his Nobel Peace Prize, now has an accomplishment he has truly earned.  He has presided over the longest stretch of unemployment above 8% in the history of unemployment in the United States (reported by HuffPo - emphasis added);
Stronger job creation could help President Barack Obama's re-election hopes. Still, the unemployment rate has been above 8 percent since his first month in office – the longest stretch on record. No president since World War II has faced re-election with unemployment over 8 percent.
This will be hard for the presidential apologists to spin.  About the only out they have, given that U3 - the common measure of unemployment actually ticked up 1/10th of a percent instead of down, they really only have two plays they can run for political gain at this point.

What they can't do is admit their stimulus didn't work and that they need to try a new approach.  As truthful as that would be, and as post-partisan it would be to strike a deal with Republicans that addressed the real issues, it would be a repudiation of their own approach to the economic malaise the country is facing.  While that might actually gain the president some support from the center, the likely fear is that it would erode core support from the far left.  That is something the president is clearly not prepared to risk.

What they might do is spin this as a need for the Fed to act with some more quantitative easing - QE3.  That's not an appetizing solution economically, but politically it would do is provide the president some cover in the manner he typically seeks cover - it shifts the blame.  The president got a free pass for a year and a half with his blame Bush mantra, but for most people that excuse has outlived its shelf life.  By pointing to the Fed and saying that they have done everything they can with fiscal policy (given the circumstances) and the Fed is not holding up their part of the bargain, the president can again shift the blame elsewhere.  This isn't the most likely course because most voters pay scant attention to the impact of the Federal Reserve Board on the economy.  Because of that inattentiveness, the impact of shifting blame to the Fed would likely be minimal and/or met with a lot of skepticism by the voting public.

What they will probably do is blame Congress.  The first two years of the Obama administration, with a compliant Congress and Senate, were unsuccessful because of the Bush era.  The latest two years have been a problem because of the current Republican Congress.  In that temporal disconnect (no where in the 4 year period is there a time when Obama could operate freely and effect the economic change he envisioned?), the president has sought to remain blameless.  Ergo, he has been helpless - not something you want in a president is it?  The argument they put forward will be erroneous for that reason and others, but it won't stop them from putting it forward.  The simplistic deflection of blame is (1) the only plan of action they have and (2) the most likely path to a successful argument for them, even though the chances of success grow slimmer with each month the president's economy remains over 8% unemployment.

It's no wonder they want to trot out Bill Clinton (at the Democratic convention) who succeeded on the efforts of a Republican Congress and their economic agenda, not his.  The nostalgia for Clinton isn't going to save Obama.  It will serve as a reminder that Clinton was successful at working with the GOP where Obama wasn't.  I can't see Clinton willing to risk his own (less than fully deserved) narrative as economic hero by tying Obama's failed economy to his own performance by saying Obama is continuing what he, Bill Clinton 'started'.  The plan to have Clinton front and center is bound to backfire on Obama, and Romney would do well to play off the difference post-Democratic-convention.

The fact of the matter is that Obama's record on the economy has been abysmal.  The unemployment rate continues to bear that out.  Hopefully enough of those swing voters, in swing states recognize a lemon when they see it.
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