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It's still 'the economy, stupid'

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Sunday, June 30, 2013, 9:00 p.m.
 

Directing campaign workers in Bill Clinton's 1992 presidential bid to keep their eyes on the ball, campaign manager James Carville coined the phrase “It's the economy, stupid.”

Carville was right. As is precisely the case today, the centrality of economic issues was paramount in 1992.

Under incumbent Republican President George H.W. Bush, the U.S. unemployment rate had increased from 5.6 percent in 1990 to 6.8 percent in 1991 and 7.5 percent in 1992.

Today, it's still “the economy, stupid” with the federal debt at $17 trillion, up from $4 trillion in 1992, and the economy stuck in a record-breaking slow recovery with an official unemployment rate of 7.6 percent in May, up from 7.5 percent in April.

Moreover, the jobless rate doesn't include the roughly 800,000 unemployed people officially labeled as “discouraged workers,” or the million-plus jobless workers classified as “marginally attached” to the labor force, or the 8 million partially jobless workers who are working only part-time but looking for full-time jobs.

Add these “discouraged workers,” the involuntary part-timers and the “marginally attached” to the official unemployment rate, and the true jobless rate in the U.S. is between 14 percent and 15 percent of the labor force — one in seven workers.

Not surprisingly, “huge majorities” of the public ranked “jobs and the economy” as their highest policy priorities in a Pew Research survey in January as President Obama was beginning his second term, reports New York Times op-ed columnist Ross Douthat.

“Down at the bottom of the list” of the public's policy priorities in January were “gun control, immigration and climate change,” and yet just six months later, writes Douthat, “the public's non-priorities look like the entirety of the White House's second-term agenda.”

Outside liberal-elite circles, contends Douthat, Obama's second-term agenda “looks at best peculiar, at worst perverse”: Gun control became a priority “with firearm homicides at a 30 year low,” while major new carbon regulations are being drawn up “when actual existing global warming has been well below projections for 15 years and counting.”

Significantly, on “the issues that Americans actually prioritize — jobs, wages and the economy,” advises Douthat, Obama's agenda on immigration and greenhouse gases “will make the picture somewhat worse.”

This fundamental “disconnect” between the public's priorities and Obama's agenda, Douthat contends, “is the most serious threat to current liberal ascendance.”

Douthat doesn't comment on the negative impact of ObamaCare on economic growth and jobs. In a new Gallup poll, 41 percent of small-business owners say ObamaCare has caused them to freeze hiring, 19 percent say they've cut their number of employees, and 18 percent have reduced their employees' hours to part-time.

There are also more than 4,000 new regulations in the federal pipeline, including the EPA's new ozone rule, which will hit American manufacturers with an estimated $100 billion per year in new costs.

Bottom line, asserts Douthat, “we're left with the peculiar spectacle of a political class responding to a period of destructive long-term unemployment with an agenda that threatens to help extend the crisis toward 2020 and beyond.”

Ralph R. Reiland is an associate professor of economics at Robert Morris University and a local restaurateur (rrreiland@aol.com).

 

 
 


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