Moreover, it remains unlikely that a consumer-driven economy will rebound so long as so many consumers are out of work. As the Wall Street Journal reported:
“Jobs are usually a lagging indicator, but this time they’re almost a leading indicator in this scenario,” said Doug Roberts, chief investment strategist for Channel Capital Research. “Right now, if the consumer at these levels feels there’s a prospect of him being unemployed, he’s going to pull back. This is a consumer-led recession, and despite the government’s best efforts, they can’t get them to spend.”
The jobs problem creates a number of political problems for the White House.
First, it bolsters the “no” party which inveighed against the stimulus and predicted, quite correctly, it would do nothing to put people to work. Republicans who voted against the stimulus and opposed it as a giant waste of taxpayers’ money look rather smart.
Second, the skyrocketing unemployment figure creates further doubts about the viability of the cap-and-trade plan. Those 44 Democrats and all but eight Republicans who voted against the bill, in large part because imposing a huge energy tax and new regulatory regime on American businesses is a “job killer,” may now find many in the Senate who agree. Moreover, with the addition of a convoluted scheme of “offsets” that allows a company, for example, to buy a rain forest in Brazil to make up for its own emissions, it will be increasingly difficult to argue that any of those “green jobs” are being created here in the U.S. What is being created is a giant tax, anti-trade, and government intervention regime. And the “jobs, jobs, jobs, jobs”? They are actually predicted to go down.
Third, once again the public and the president’s critics will begin to ask why the president is engaged in a non-stop effort to pass a government takeover of the health care industry rather than focusing on creating jobs and fostering an economic recovery.
The White House is nothing if not dogged in its determination to use the “opportunity” which an economic crisis presents to remake the American economy. But for now, the opportunity is proving to be the undoing of the president’s credibility on the economy and reason for Democrats on the ballot in the next year or so to panic.
What are they going to say when Republicans ask: “Where are the jobs, jobs, jobs, jobs?”