Coming on the heels of yesterday’s dramatic stock market plunge, today’s job numbers report may help steady the nation’s nerves for a while. The Department of Labor reported a better than expected total of new jobs created with the unemployment rate dropping just a bit to 9.1 percent in July. But reassurance for markets, businesses and consumers may be in short supply in the coming months. All the signs seem to be pointing toward the nation slipping into a double dip recession, which means we may well look back on this month as the calm before the storm hit with worse to follow. There’s little doubt the much-ballyhooed Obama recovery from the collapse of 2008 is officially over. The Obama recession is upon us.
Where this leaves the president and a divided Congress in the coming weeks is something of a puzzle. Obama responded to the last recession with mammoth expenditures in a failed billion-dollar stimulus and a vast expansion of entitlement spending via his health care bill and would probably like to try more of the same. The Democrats’ crushing defeat in the 2010 election ensured this experiment wouldn’t be repeated, leaving the president with no options but to spend the next 15 months ranting about the need for more taxes and blaming the Republican Congress for all that has gone wrong. Obama can’t evade his ownership for the economy, and unless there is a miraculous recovery in the next year, this will doom his re-election hopes. But he isn’t the only one with problems.
Focused as they are on defeating the president, Republicans have done their best to ignore the fact Congress’ own popularity ratings are at a record low. House Speaker John Boehner deserves praise for his steady leadership during the debt ceiling crisis. But we can expect Democrats to try to shift the blame for the latest economic meltdown on the GOP’s decision to make a stand on cutting spending before agreeing to raise the debt ceiling. That means 2012 could turn out to be very different from 2010 when the Tea Party revolt against the governmental spending binge during Obama’s first two years in office created a disaster for Democrats. Next year, virtually all incumbents may be at risk, making the final result harder to predict than anyone thought.
Though Obama and the Democrats are clueless as to how to fix the broken economy, the Republicans will have to come up with a more coherent critique of the administration than the attack on big government that worked last year. In 2012, the Republicans will need to be led by someone with a firm grasp of economics and a clear alternative to the president’s liberal patent nostrums. That will require a response that is more than merely a lecture about cutting spending and not raising taxes even if those are worthy ideas. As much as Obama may be in trouble, Republicans will also need to respond to the double dip crisis with something more than stale ideology.