While the general consensus is that the recession has ended and the economy is picking up, high unemployment in the US has sparked fears of a jobless recovery and engendered complaints that the government bailed out Wall Street at the expense of Main Street. Democrats worry that continued high unemployment, coupled with a looming deficit, could spell disaster for them in next November?s mid-term elections. President Obama, realising that significant Democratic losses in 2010 could put an end to his ambitious domestic agenda, has put his boxing gloves on to win this round on unemployment.
Obama has a tough fight ahead of him. American unemployment now stands at 10%, a slight improvement over October?s 26-year high of 10.2% but still well above the 8% cap Obama had predicted would result from stimulus spending. Worse, the 10% figure doesn?t take into account underemployment, nor unemployed workers who have given up their job search. Obama?s approval rating?under 50%, his all-time low?reflects a brooding pessimism in the country.
While the situation is alarming, Obama doesn?t have much room for manoeuvre. After TARP and the stimulus, and with healthcare legislation pending and a major troop deployment planned, Americans are weary and wary of big government spending. The $12 trillion deficit increases their discomfort. Given this context, Obama must address the jobs crisis?or at least appear to do so?with as little money as possible, knowing that every dollar he spends will hurt him and his party next November.
To quell the unrest, over the past few weeks Obama has hosted a series of brainstorming events that were more political than substantial. He began with a White House jobs forum with the private sector, followed by a ?White House to Main Street? jobs tour. Last week, he announced his jobs creation proposals during a speech at the Brookings Institution, calling for more support for small businesses and additional infrastructure investments. He continued his jobs offensive the following day at a meeting with congressional leaders from both parties. And just Monday he told bank executives they needed to play a larger role in helping Main Street.
Enter the opponent. Despite Obama?s calls for bipartisanship, Republicans have demonstrated a visceral opposition to nearly all of the President?s proposals over the past year, excepting the announced surge in Afghanistan. February?s stimulus Bill is a notable example: only three Republican senators?and no House Republican?supported it, despite Obama?s efforts to reach across the aisle. Republicans aren?t any more cooperative on Obama?s jobs proposals. Already, they have tried to stigmatise the plan by baptising it ?Stimulus II?.
Obama finds himself boxed into a corner?expected to produce a miracle, yet vilified for every dollar he spends?and he has started throwing punches. Some of his statements on job creation have had a you?re-either-with-us-or-you?re-against-us undertone, and he?s identified Republicans as the opponent, a surprising departure from his normal sermon on bipartisanship. During his Brookings address, Obama blamed the Bush administration for leaving behind a mess and depicted his own administration as a sort of superhero that saved the day. He accused the ?opposition party? of having ?presided over the decision-making that led to the crisis? and then ?hand[ing] it over to others to solve?. The next day, this tone continued in the meeting with congressional leaders as Obama accused Republicans of ?almost rooting against recovery? and scaring the American people for political gain.
Obama?s change in tone reflects his realisation that Republicans are resolved to make him lose the public opinion battle on unemployment so that they can reap the benefits in the upcoming mid-term elections. Determined not to get sucker-punched, Obama is fighting back. He knows that the elections are not all that?s at stake: if he loses this battle, he may need to downsize his ambitions for domestic reform.