Monday, January 25, 2010

Obama and the job market

As usual, Paul Krugman puts it all in perspective -- in the form of a question that people ought to be asking themselves before slamming Obama:

It has not been a good year for Obama, or for the progressive agenda. But why? Ignore all the pontificating about how Obama needed to focus differently, seek bipartisanship with people who have no interest in making a deal, etc. The primary factor in Obama's troubles is, simply, the continuing weakness of the job market.

Which then raises the question, could anything have been done to improve the job picture?

I think that's exactly right. There are a number of other factors, but the primary one is relatively high unemployment, along with the deep economic uncertainty that continues to plague the country -- maybe not the media and political establishments in Washington, which continue to bask in the glow of enormous wealth, power, and prestige, but the struggling, ever-more-squeezed middle and lower classes, not to mention those below that.

And what could Obama have done? It's not like he could have hired people himself, or required companies to increase employment, or resurrected America's sagging industrial and manufacturing sectors, or turned Detroit into the center of a domestic automotive boom. The stimulus package was something, if not nearly enough, but it was no new New Deal. Obama simply couldn't have gotten away with that, not with members of his own party balking at the cost of recovery, not with the Republican propaganda against "Big Government."

But what has he done? He has rescued the domestic auto industry from disaster, saving jobs, pumped money into Wall Street, saving jobs, and pulled the economy back from the brink of catastrophe.

Could he have done more? Perhaps, but what exactly? (Okay, Republican will say he could have cut taxes, but they always say that, and trickle-down economics doesn't exactly have the greatest history of success.) Krugman correctly notes that he "pursued meliorative policies" rather than more aggressive initiatives, but it's not clear that Obama ever could have succeeded pushing for a "really big fiscal stimulus" and "massive recapitalization of the banks" given the political and institutional forces aligned against him. I'm hardly going out on a limb when I say that he never would have.

All things considered -- the mess Bush created, unified Republican obstructionism and opposition, feckless Democratic majorities in Congress, shifting public opinion based on inadequate knowledge -- it seems to me that Obama, in this area, has been a resounding success, or at least as much of a success as he ever could have been. He certainly needs to refocus on the economy, as he will, but at least he will be able to build on a relatively solid foundation, or at least on one that is not nearly as bad as it could have been.

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