Charlie Cook’s Obituary of the Obama Agenda: It Was the Economy, Stupid
Charlie Cook, writing in the National Journal has an opinion piece scheduled for tomorrow that basically writes the obituary for the Obama agenda, and the Democrat majorities in the House and the Senate. Cook title the piece, “Colossal Miscalculation on Health Care” and says some very interesting things about where Obama, Pelosi and Reid went wrong. He talks about how little can be done by Democrats to correct their mistakes now.
The latest unemployment and housing numbers underscore the folly of their decision to pay so much attention to health care and climate change instead of focusing on the economy “like a laser beam,” as President Clinton pledged to do during his 1992 campaign….
Last week’s disappointing December unemployment report was the final blow in what was already a bad week for Democrats. One of the most sobering findings in the report was that if 661,000 Americans had not given up even looking for work that month, the unemployment rate would have moved up rather than holding steady at a horrific 10 percent.
Yes. It would have gone to 10.4% to be precise.
It’s the economy, stupid. Remember the mantra of the Clinton campaign? Well, Barry, Nancy and Harry sure haven’t remembered it. And it is going to spell disaster for Democratic Party politicians up for election in 2010–and according to Cook, probably in 2012 as well. More below.
Some 6.1 million Americans, the highest number in the post-World War II era, have been unemployed for 27 weeks or more. The “U-6″ rate of unemployment, which adds in people who are working part-time while seeking full-time work and those who have stopped looking, stands at 17.3 percent, the highest level in the 15 years that the Labor Department has calculated it.
Charlie has the right idea, but his figures are wrong. Add those 6 million people out of work he talks about to the “official” number of unemployed (15 million) and you only get 21 million people. But if you take the U6 rate Cook quotes–17.3%–and do the math, that represents just slightly under 26 million people.
There aren’t 6 million people who have been unemployed for 26 weeks or more. There are actually about 11 million people not being counted. There have never been this many Americans unemployed in this country at any time since the Great Depression. And while those 11 million additional unemployed people are invisible and “off the books” as far as the Obama administration is concerned…they still have the right to vote.
They, and a lot of other people are fed up with what is happening in Washington to pile up higher and higher deficits. And they are fed up with what they can see happening in their local cities and towns.
People across the nation are seeing shops and small businesses go out of business leaving empty storefronts on mainstreet and in the shopping malls. Even if they still have a job, they know people who have lost jobs and can’t find a new one. These people have family members, relatives, and friends who are out of work. And they worry that they will be next. There are no jobs available, and Congress and the President haven’t done anything at all last year to help that has made a bit of difference. The misery isn’t getting better. It is spreading, month by month.
Another piece of bad news was the distressing late-December report that the housing sector’s slow improvement had stalled, raising the specter of a second dip. As Wellesley College economist Karl Case, one of the developers of the definitive Standard & Poor’s/Case-Shiller home price index, told The New York Times recently, “I’m worried. Everyone’s worried.” He added, “If prices sink 15 percent from here, which is a possibility, and the 2008 and 2009 loans go bad, then we’re back where we were before — in a nightmare.” Faster action in Congress to renew (or even increase) the tax credit for first-time homebuyers might have boosted housing prices, which in turn would have improved mortgage lenders’ balance sheets.
Everyone in the real estate community, and the banking, investment and financial communities, are waiting for the other shoe to drop. Everyone knows that we aren’t really out of the woods yet. Everyone is waiting for the second and deeper dip of the double-dip recession. The problem is–the first dip took us down to levels not seen since the Great Depression. Where is that second dip going to take us–especially since all of the money that could have been used to bail us out when the second dip comes has already been spent?
And Cook’s sources aren’t even mentioning the coming collapse in the commercial real estate market that is expected to hit this spring and summer.
The first “stimulus” didn’t create new jobs. It created signs talking about new jobs posted along the highways that have become a late-night joke. It created more cynicism and more distrust of the government. And all the while, as people struggle with fewer jobs, less money and an ongoing feeling that nothing has gotten better and nobody in power cares…it has created anger.
Last year was a record year for foreclosures. Retail sales for December were down. They dropped 0.3% when they were expected to be up 0.5% over the anemic sales of December 2008. Remember all that talk of Christmas sales being up? It was just talk.
Retail sales for the entire year of 2009 were down in the biggest drop since retail sales figures have been recorded. 2009 retail sales dropped 12 times more than the sales drop in 2008–which was the only year since 1992 that annual retail sales dropped at all.
And things are going to get worse before they get better. Even the best case scenario painted by Charlie Cook admits that.
…Analysts estimate that Labor’s household employment survey would have to show a net increase of 150,000 jobs a month for 48 straight months for the unemployment rate to drop to just 9 percent….
Even before December’s negative jobs report, economist Robert Reich, who was Labor secretary in the Clinton administration, wrote on talkingpointsmemo.com that “the chances of unemployment being 10 percent next November are overwhelmingly high.” The number of newly created jobs will be offset by discouraged workers beginning to once again seek employment, Reich predicted, resulting in little change in the overall unemployment rate. Could joblessness still be above 9 percent when the 2012 presidential election year begins?
That is the lowest, U3 unemployment rate Cook is talking about in that paragraph. The U6 rate will continue to push up as more people become discouraged and some of the long-term discouraged re-enter the job market looking for something, anything to help pay their bills. The gap between those two rates has been continuing to grow all through 2009, and in 2010 the real unemployment rate is going to top 20% before mid-year. And that is assuming we don’t have another real estate collapse.
If…when…real estate collapses again, all bets are off. And nothing is going to cause President Obama’s popularity and job approval ratings to go up again. That isn’t my opinion. That again comes from Charlie Cook:
…No other president in the past half-century has seen his Gallup job-approval rating drop as far as Obama’s has in his first year (down 21 points), and no president in that same half-century has seen his approval rating go up, even as much as 1 point, between the end of his first year and the eve of his first midterm election.
The ultimate proof of how unpopular Obama, Pelosi and Reid and their priorities are is not whether Scott Brown wins the Senate election in Massachusetts. The ultimate proof is that now, just four days before the special election, Democrats and the President are scrambling in panic to try to prevent Brown from winning. Who would have though, one year ago, that 17% of the registered Democrats in true-blue Massachusetts would say that they were considering voting for a Republican for Senate?
Very hard decisions are going to have to be made by Congress in the next several years. Pet programs and concerns on both sides of the aisle are going to fall by the wayside as the nation (and probably the world) is forced to concentrate on a back-to-the-basics approach to government. This is a very important time for conservatives to focus on getting involved at the precinct level of the GOP to make sure that the candidates who make those tough decisions are sane, sensible, sober people.
Conservatives are now the largest ideological block of American voters. Expect that number to grow even larger in 2010. Let’s make sure that the House and the Senate are filled with people who reflect the concerns, beliefs and priorities of most Americans.