Obama’s urgent challenge: jobs now

08 November 2009 |permalink | email article

The President inherited several messes from George Bush, not the least of which has been the war in Afghanistan and, closer to home, what he termed in October 2008 during a Toledo campaign speech ”an immediate economic crisis.”

While Obama’s rhetoric has been compelling on both subjects he’s developed an unfortunate reputation, at least in terms of the economy, as being too cautious, or what his Republican critics call trying to do too much.

Democratic gubernatorial defeats in New Jersey and Virginia pale in terms of Obama’s major problem now, with pressure to fix the economy as grim new figures indicate the official unemployment rate has risen to 10.2%. That’s up more than 50%, as New York Times columnist Charles M. Blow noted, from the time when the candidate gave his Toledo speech. In paraphrasing the jobs issue, he said it had to be resolved not five years from now, not next year, but right now.

Earlier this year, Nobel Prize winner and Times columnist Paul Krugman compared the situation that FDR faced in the Great Depression in 1934 with that now confronting Obama. Millions of government jobs were created from 1934 to 1937 by putting people back to work. But FDR became so cautious about the mounting deficit that he retreated from the stimulus and continued high unemployment was not checked until the end of World War II.

In terms of predictions that the economy’s growth will slow over the next year Krugman wrote Friday that conventional Washington wisdom is that budget deficits preclude any further stimulus – “a view that’s all wrong on economics.”

He opined the president had a mandate for bold economic action, did not learn from FDR’s mistakes and failed to exploit his early opportunities in part because of a soft-touch approach to Wall Street. “In truth Obama put his agenda at risk by doing too little. The fateful decision, early this year, to go for economic half-measures may haunt Democrats for years to come.” Is a dramatic correction “right now” still possible? 

 

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