|President Barack Obama holds Arianna Holmes, 3, before taking a departure photo with members of her family in the Oval Office, Feb. 01, 2012. In the background is President Lincoln, the Great Emancipator.|
Dr Peter Morici: Democrats rejoiced that unemployment fell to 8.3% and 247,000
new jobs were added in January, confirming to them President Obama will take
them to victory in November.
Whoa! Prospects for more improvement are not great, and President Obama was
smart to greet the jobs report with caution. He inherited a mess. Unemployment
jumped from 6.8 to 10% from his election day to October 2009. Since, most of the
progress has been statistical, not real.
Jobs creation has barely kept up with population growth—the same percentage
of adults is employed today as when unemployment peaked. Three-quarters of the
reduction in joblessness is attributable to fewer adults employed or seeking
work. The most effective Obama jobs program has been to convince more Americans
they don’t want a job—without that, the unemployment rate would still be at
Many of the jobs created in recent months don’t pay well, and too many well
educated Americans are relegated to low skilled and part-time work for lack of
opportunities. Gains are concentrated in areas such as restaurants, health care
and education, and business services categories—lots of waiters, and more
nurse’s aids than nurses, record keepers than teachers, and clerical workers
than architects and lawyers.
Manufacturing, a bright spot, historically pays quite well; however, many of the
new jobs created don’t pay terribly high wages.
These last several months, stronger jobs reflected stronger fourth quarter GDP
growth. Economists see that as a spike rather than a trend. Recent reports
indicate slower consumer spending, and gasoline prices rising to levels that
will choke off any rebound. Existing home prices continue to plummet, and
alarming numbers of home purchase contracts have been canceled.
An economy growing at 2% a year, as economists expect, simply won’t generate
enough jobs to pull down unemployment any further, and arrest downward pressure
Mr. Obama has two advantages over recent incumbents. His predecessor is widely
acknowledged to have failed in his stewardship of the economy. Mr. Obama, unlike
Jimmy Carter and George H. W. Bush, who lost reelection bids, won’t be running
against a premier communicator like Ronald Reagan or Bill Clinton.
Mr. Obama has convinced too many Americans to accept slow growth and stagnant
incomes are the best they can expect if they wish to avoid financial instability
and another crisis.
For the record, as Ronald Reagan campaigned for reelection, his revamped, post
Carter-malaise economy had rocked along at 7.5% for six quarters—not the tepid
2% that Democrats preach is the new normal. Old Dutch believed in American
Exceptionalism—not leading from the rear.
Mitt Romney, the presumptive Republican nominee, has much of the problem scoped—leveling
the playing field for US businesses and workers competing with China, producing
more and importing less oil, addressing dysfunctions on Wall Street, and curbing
skyrocketing health care costs. All issues Mr. Obama admits but either has not
addressed or made worse.
Yet, primary voters gravitate to Mr. Romney, not because they are persuaded he
can beat Mr. Obama, but rather because he is a more plausible candidate than his
baggage laden and eccentric rivals.
He spends too much time trying to convince voters of the inconceivable—pink
slipping workers at Bain Capital makes him an experienced jobs creator and he
cares about the poor when he says he worries not about them; responding to
critics that say he is not conservative enough; and slinging mud of his own.
Mr. Romney’s overwhelming victories in Florida and Nevada offer him a period of
grace before the next significant cluster of primaries and caucuses that bind
delegates--—from February 28 to March 6, twelve states will so vote.
He should use this period to explain to Americans why creating enough decent
paying jobs requires fixing trade with China, revving up domestic oil
production, and fixing problems in financial regulation and health care—how he’s
going to get those things done.
Merely offering tax cuts and less regulation—like Republicans of yore—won’t cut
it. George W. Bush nearly wrecked the country for good ignoring the very same
issues Mr. Obama is now mismanaging.
Mr. Romney must offer Americans something more, or they won’t make a change.
Professor, Robert H. Smith School of Business, University of Maryland,
College Park, MD 20742-1815,
703 549 4338 Phone
703 618 4338 Cell Phone
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