There was a bit of a fly in the ointment for the birthday bash for Obama in Chicago on Saturday, as any of his advisors who read the New York Times were able to plainly see.
The editorial noted that job growth in July wasn’t enough to lower the unemployment rate and said that since the market lacks forward momentum, that the government could and should provide. “What’s needed is direct intervention in the form of more federal spending on education, infrastructure, clean energy, basic research and job training. Until then, we’re stuck.”
However, there’s also an article quoting Paul Ashworth, chief North American economist at Capital Economics on the pace of hiring: “I think this is about as good as it’s going to get.”
In a statement this week, Fed officials acknowledged that the recovery was slowing and said they stood armed and ready on the sidelines. The most likely actions include making another round of asset purchases and extending its public predictions on interest rate policy.
…Even if the Fed does act, more monetary stimulus may not be all that effective, given that the central bank has pumped so much money into the economy already.
“There isn’t any fantastically strong monetary policy tool left out there,” Mr. Ashworth said. “They’ve already fired the heavy artillery.”
The only heavy artillery left to the White House was the Jobs Act, which would have meant a new massive investment in infrastructure as well as giving aid to local governments cutting public service workers like teachers and police from their payrolls. The Republicans have blocked that bill thoroughly, either in a blatant electoral gambit or in an attempt, by their own logic, to “burn the village down in order to save it”. However voters still see the buck stopping at the President’s desk. Even if by some miracle Obama could get some of the bill’s provisions into effect by presidential fiat, it’d now be seen as an electoral gambit itself. The situation should correct itself over the next couple of years naturally as the economy slowly grows, but too late for campaigning purposes.
That’s Obama’s re-election conundrum. The Obama campaign is severely hurt by the high unemployment rate. The buck for sideways jobs growth stops with him, no matter how often he says it’s the GOP’s fault really or how poor Romney’s plan for jobs growth really is. He can’t do much about it and what little he can do is going to be painted as more government spending, more government meddling, by his opposition. Damned if he does, damned if he doesn’t.
A lot like Romney’s tax return rock and hard place, really. He can not release them and try to survive accusations he didn’t pay taxes at all for several years or he can release the records that presumably show he paid somewhere between a good bit and a lot less on his multi-millions than Joe Sixpack did on his own meager earnings. Romney’s problem isn’t anywhere on the same scale in the scheme of things outside the campaign bubbles, but inside those bubbles it’s a simpler and perhaps stronger narrative. If Obama can fight Romney to a draw on the economy, then simpler counts. Still, if Obama’s looking over his shoulder at his birthday party, it’s because of his jobs conundrum.
(This article first appeared on The Agonist)