Commentary Magazine


Topic: economy

The Latest Jobs Report

The April jobs report, which showed 223,000 net new jobs, was a distinct improvement on the dismal March report (which was revised further downward to a mere 85,000 jobs created that month). The unemployment rate dipped a notch to 5.4 percent, getting, slowly, closer to the Federal Reserve target of 5 percent.

Read More

The April jobs report, which showed 223,000 net new jobs, was a distinct improvement on the dismal March report (which was revised further downward to a mere 85,000 jobs created that month). The unemployment rate dipped a notch to 5.4 percent, getting, slowly, closer to the Federal Reserve target of 5 percent.

The participation rate, the measure of people who have or are looking for work, edged up to 62.8 percent, but that’s lower than it was in January, and only .2 percent higher than it was a year ago.

Wages picked up a bit and are about 2.2 percent higher than a year ago, above the recent average of 2 percent.

In all, the employment picture continues the slow improvement of the Obama recovery. No one could call it robust, but at least it is moving in the right direction.

Read Less

Clintonian Gibberish: The New Language of American Politics

If I asked you to which economic class you believe you belong, statistics tell me you’re probably going to say “middle class.” If I asked you, say, what kind of American you are, logic tells me you will back away slowly. What you almost certainly won’t do is say: “everyday American.” And this contradiction tells us much about Hillary Clinton’s latest effort to erase the meaning from every word she can get her hands on, sparing none. And a New York Times story accepting her framing today confirms it: the new language of American politics is gibberish.

Read More

If I asked you to which economic class you believe you belong, statistics tell me you’re probably going to say “middle class.” If I asked you, say, what kind of American you are, logic tells me you will back away slowly. What you almost certainly won’t do is say: “everyday American.” And this contradiction tells us much about Hillary Clinton’s latest effort to erase the meaning from every word she can get her hands on, sparing none. And a New York Times story accepting her framing today confirms it: the new language of American politics is gibberish.

Of course Hillary won’t be abandoning talk of the “middle class.” That will still be part of her campaign rhetoric. But deliberately putting “everyday Americans” up as the rhetorical centerpiece of her campaign is designed to do something specific. Hillary, who is nothing like you and could not possibly understand your daily struggles, is just like you because she understands your daily struggles, she swears. Also–and this is important–she’s really not an oddball. Scout’s honor.

Don’t take my word for it. You can read that in the Democrats’ newspaper of record, the New York Times. Here’s the lede of today’s piece on the contrasting image challenges of Clinton and the Republicans: “On one side is a crowd of Republicans trying to look presidential. On the other side is a lone Democrat trying to look normal.”

Considering that Hillary’s opening campaign gambit is jumping out at unsuspecting strangers from a van, I’m not quite sure her definition of “normal” lines up with how “everyday Americans” might define the word. Nonetheless, there is her greatest obstacle: she is a train wreck when forced to interact with people who aren’t paying her two hundred grand to speak at their corporate retreat.

Allow me to be Captain Obvious for a moment: you can’t fake authenticity. But one way Hillary will attempt to do so is by diluting the English language until there are no more words, just empty sounds, hand gestures, and facial expressions.

The truth is that while “middle class” has been stretched to its limits as a descriptive term, it still actually means something. It’s not just about annual take-home pay, either. Politicians and economists talk about the middle class because a strong middle class means certain types of jobs are still being created, economic mobility is more than a pipe dream, and a balance of voters’ economic interests keeps something of a level playing field.

And it’s even helpful, in its own way, that the phrase “middle class” is adopted by so many Americans who probably aren’t middle class. It tells you something about the aspirations and self-perceptions of so many voters. And it’s important ideologically to both sides. Many conservatives hope the middle class can act as a bulwark against both the relentless expansion of the welfare state and crony capitalism at the top, while liberals hope the middle class will join their campaign of economic piracy around which they base their pitchforks-and-torches politics.

Candidates don’t generally overtly go for the “rich vote,” but neither do they pretend the poor represent a strong donor base that can fund their campaigns or a tax base that can fund their initiatives. It’s all about the middle class, even if just rhetorically. So as vague as “middle class” can be when it comes to self-identification, the phrase “everyday Americans” is vaguer still.

And that’s the point. Merriam-Webster defines “gibberish” as “unintelligible or meaningless language” and “pretentious or needlessly obscure language.” The Hillary Clinton campaign’s communications strategy is the dictionary definition of gibberish. Bill Clinton may have deployed this strategy from time to time, but gibberish is all Hillary speaks.

And that’s because Hillary has no rationale for being president outside wanting to be president and believing it’s owed to her. (How’s that for “everyday American?”) So her supporters, who are going to vote for her anyway, want more details from her, and she can’t imagine why she would oblige. From Politico:

“I can’t believe I missed ‘Game of Thrones’ for this,” said one Democrat who sat through the call for former Clinton staffers at 9:30 p.m. EDT Sunday. …

The feeling of an information vacuum extends to Clinton’s campaign website, which still does not list her policies or issue stances, and her schedule remains empty except for a handful of small events in Iowa. On her road trip — during which she is likely making many calls to major donors, said one veteran Clinton ally — she has no pre-planned stops.

The Game of Thrones quote captures the dynamic nicely. Her loyal foot soldiers report for duty, and they simply want enough information to head out into battle. But when it comes to information, especially policy details, Hillary’s response is essentially: Make me.

Why would Hillary have to divulge more information? What are you, Joe Democrat, going to do to about being taken for granted by the Clinton campaign? There’s no serious challenger to Hillary on the horizon, and she’s trying to keep together a broad coalition of interest groups. She has no reason to speak English when she can skate to the nomination speaking gibberish. The most the rest of us can do is not follow her descent into total incoherence.

Read Less

The Jobs Report

The unemployment picture darkened unexpectedly last month, with a mere 126,000 jobs created, the smallest job gain since December 2013. Economists had been expecting about 250,000. January and February jobs figures were revised downwards. January went from 239,000 to 201,000 and February’s from 295,000 to 264,000. The average for the last three months is 197,000, way down from the average of 324,000 in the last three months of 2014.

Read More

The unemployment picture darkened unexpectedly last month, with a mere 126,000 jobs created, the smallest job gain since December 2013. Economists had been expecting about 250,000. January and February jobs figures were revised downwards. January went from 239,000 to 201,000 and February’s from 295,000 to 264,000. The average for the last three months is 197,000, way down from the average of 324,000 in the last three months of 2014.

The unemployment rate held steady at 5.5 percent while wages ticked up .3 percent and the participation rate declined slightly to 62.7 percent.

The brutal winter experienced by much of the country didn’t help, nor did the slide in oil prices that has caused the oil rig count to decline. Mining jobs have declined by 30,000 this year. Of course, bad news for oil companies is good news for consumers who are benefiting from lower gas prices and thus have more disposable income.

As a result of the March jobs report, the Federal Reserve is likely to remain cautious about raising interest rates for a while.

Read Less

The Jobs Report

The American economy created 295,000 jobs in February, well above the 230,000 predicted. The unemployment rate dropped from 5.7 percent to 5.5 percent. January’s jobs number was revised downward from 257,000 to 239,000. The participation rate dropped a bit to 62.8 percent, just one-tenth of a percent above where it was a year ago.

Read More

The American economy created 295,000 jobs in February, well above the 230,000 predicted. The unemployment rate dropped from 5.7 percent to 5.5 percent. January’s jobs number was revised downward from 257,000 to 239,000. The participation rate dropped a bit to 62.8 percent, just one-tenth of a percent above where it was a year ago.

The long-term unemployed, out of work for six months or more, is at 2,709,000, 31.7 percent of the total unemployed. That’s down from 3,886,000 and 35.7 percent a year ago. So it’s trending in the right direction, but doing so slowly.

Wages remain sticky. Non-farm private payrolls went up only three cents, to $24.78. Over the last year wages are up only about two percent.

As the labor market slowly tightens, we should see wages increasing at a faster pace. But increases in the participation rate could negate that as more workers enter the labor market, confident they can now find a job. The Fed is unlikely to begin to tighten as long as wage growth is so slow.

The American economy has now created more than 200,000 new jobs a month for a year, and the slow-but-steady recovery remains on track.

Read Less

The Jobs Report

The monthly jobs report came in stronger than expected this morning, with 257,000 new jobs in January, above the estimate of 237,000. In addition, the jobs numbers for November and December were revised upwards by a combined 147,000 jobs. November’s new jobs total, 423,000 is the highest since 1997.

Read More

The monthly jobs report came in stronger than expected this morning, with 257,000 new jobs in January, above the estimate of 237,000. In addition, the jobs numbers for November and December were revised upwards by a combined 147,000 jobs. November’s new jobs total, 423,000 is the highest since 1997.

The unemployment rate, however, ticked up a notch to 5.7 percent. That, counter-intuitively, is good news, as more people are entering the jobs market because they are more confident that they can now find work. The participation rate went up from 62.7 percent to 62.9 percent. A year ago, the rate was 62.5 percent.

Long-term unemployed, those without a job for at least the last 27 weeks, number 2.8 million, up slightly from last month but way down from last January, when the number was 3.69 million. The under employed, those working part time who would like full-time work, also went up slightly from last month, to 6.8 million, but is also down substantially from last January, when the number stood at 7.8 million.

All in all, this is a good report and if the trend continues, the Fed is increasingly likely to begin tightening a bit by mid-year. That would be a powerful signal that the economy is finally back on track.

Read Less

Free Bobby Jindal!

In the last couple of days, two quotes from Louisiana Governor Bobby Jindal made the rounds. Neither quote was particularly noteworthy in itself, but the juxtaposition shows why Jindal, who is testing the waters for a presidential campaign, seems to be plagued by false starts. There are two Bobby Jindals, and they are getting in each other’s way.

Read More

In the last couple of days, two quotes from Louisiana Governor Bobby Jindal made the rounds. Neither quote was particularly noteworthy in itself, but the juxtaposition shows why Jindal, who is testing the waters for a presidential campaign, seems to be plagued by false starts. There are two Bobby Jindals, and they are getting in each other’s way.

On Monday, Reason’s Nick Gillespie called attention to a curious statement from Jindal as the governor was courting religious leaders in Iowa: “The reality is I’m here today because I genuinely, sincerely, passionately believe that America’s in desperate need of a spiritual revival.” Jindal added: “We have tried everything and now it is time to turn back to God.”

Gillespie countered that “What ails the government is not a deficit of religiosity but a nearly complete failure to deal with practical issues of spending versus revenue, creating a simple and fair tax system, reforming entitlements, and getting real about the limits of America’s ability to control every corner of the globe.”

I’d add that when we think about the character of the citizenry, it isn’t just about what government policies force people to do (or not to do), nor do we need the president to be the country’s spiritual leader. Politicians who instinctively lean on government action as a way to regulate behavior often forget the ennobling role of freedom in America. Religious freedom has strengthened spiritual practice here in comparison to most other Western nations, and the American ethic of personal responsibility does more to cultivate moral seriousness than presidential speeches about spiritual malaise.

But of course Jindal doesn’t need to be told this. He knows it, and even nods to it in other speeches. Over at the Weekly Standard, Daniel Halper posts a preview of a forthcoming speech on foreign policy that Jindal will deliver in London. Jindal will criticize Hillary Clinton’s “mindless naiveté” in her call for American leaders to “empathize” with our enemies. And the speech challenges Muslim leaders to defend their faith (and their reputations) from the extremists among them. But he will also say this:

In my country, Christianity is the largest religion. And we require exactly no one to conform to it. And we do not discriminate against anyone who does not conform to it. It’s called freedom.

Now, to be fair, Jindal’s two comments are not mutually exclusive. He can believe we need to turn back to God and also that we’re all free to decline to do so. But the spirit of his remarks really calls attention to his great weakness as a candidate: inauthenticity.

Jindal is a wonk–not in the American leftist mold, but actually smart. And he’s a good governor. I suspect this is part of Gillespie’s frustration with Jindal, though I wouldn’t put words in his mouth. Gillespie opens his post with a rundown of Jindal’s accomplishments and conservative bona fides. Here is how Gillespie’s post begins:

Gov. Bobby Jindal (R-La.) has proven to be one of the most effective and incorruptible legislators that the Bayou State has had. Unlike a long line of pols from Louisiana, he is neither a demagogue, a racist, nor simply a criminal willing to take bribes and cut shady deals for his pals. A few years back, he pissed off Republicans by rightly insisting that the GOP stop being “the stupid party” when it came to policy debates.

He’s worked hard to help reform school finance in a way that accelerates not just choice for students and parents but better results too; he’s privatized and contracted-out many states services at great savings; and he’s pushed for common-sense policies such as making birth control available without a prescription.

Jindal has also presided over a period of strong economic growth. Last year, when challenged by an MSNBC commentator over his economic record, Jindal said: “In Louisiana, we now have more people working, highest incomes in our state’s history. Larger population than ever before. And the president can’t say all those things about the country. Our economy has grown 50 percent faster than the national GDP, even since the national recession.”

Salivating at the prospect of catching Jindal in a lie, the “fack-checker” site PolitiFact looked into Jindal’s claim and found that “Jindal actually understated the comparison.” Jindal was more right than even he knew. Jindal’s position on domestic energy production is admirable as well.

So Jindal has a fluent grasp of the issues and is fully comfortable discussing them at length. He also has a record to run on. But when Jindal takes his campaign national, he lapses into a particularly striking habit of pandering, perhaps because pandering on identity politics doesn’t come so naturally to him.

Conservatives and libertarians who appreciate what Jindal brings to the table on policy want the campaign to let Jindal be Jindal. Not Mike Huckabee at home and John Bolton abroad. Other prospective candidates fill those roles (such as, well, Huckabee and Bolton).

Jindal isn’t wrong in his critique of Hillary Clinton’s foreign policy. And he obviously shouldn’t leave any issue completely to his rivals; if he wants to be president, he needs to display a well-rounded political philosophy. But he also needs to be himself. He’s a terrible panderer, and that is one of his finest virtues: he doesn’t know how to pretend to be something he’s not. And so he should stop trying.

Read Less

The Jobs Report

The American economy added 252,000 jobs in December, slightly above economists’ estimate of 242,000 jobs. The number of jobs created in October was revised upward to 261,000 from 242,000, while the November jobs number was revised upward to 353,000 from 321,000. Meanwhile the unemployment number dropped two notches to 5.6 percent from 5.8. That’s the lowest unemployment figure since June 2008, just as the recession was gathering steam and three months before the financial crisis hit.

Read More

The American economy added 252,000 jobs in December, slightly above economists’ estimate of 242,000 jobs. The number of jobs created in October was revised upward to 261,000 from 242,000, while the November jobs number was revised upward to 353,000 from 321,000. Meanwhile the unemployment number dropped two notches to 5.6 percent from 5.8. That’s the lowest unemployment figure since June 2008, just as the recession was gathering steam and three months before the financial crisis hit.

Manufacturing jobs, mostly in durable goods, added 17,000 jobs in December. For 2014, manufacturing job growth averaged 16,000 a month, as compared to 2013 when the economy added an average of 7,000 jobs a month. American manufacturing, for various reasons, such as lower fuel costs, is on an upswing.

This is all good news. But it is not unalloyed by any means. In December, average hourly wages for private, non-farm payrolls decreased by five cents to $24.57. In all of 2014, wages grew by only a dismal 1.7 percent. And while unemployment decreased by two-tenths of a percent, the number of long-term unemployed was nearly unchanged at 2.8 million, accounting for 31.9 percent of total unemployment. Ditto for those working part-time because they can’t find full-time employment (6.8 percent). And 2.3 million are “marginally attached to the labor force.” They want work, but have not looked for a job in the last four weeks, because they do not think jobs are out there.

Additionally, the unemployment rate went down two-tenths of a percent partially because the participation rate went down two-tenths of a percent as well. Had the participation rate in December been as high was it was in June 2008, (66.1 percent), total unemployment would be much higher today.

Counterintuitively, a sign that the economy is, finally, in full recovery mode, will be when the number of jobs being created continues to go up, but so does the unemployment rate. That will be because the participation rate is going up, not down. That means that people are moving back into the labor force because they think that jobs are out there for them to find.

Read Less

Good News on the GDP

The country got an early Christmas present today from the Commerce Department, when it revised its estimate of GDP growth in the third quarter upwards to a robust 5 percent, the best quarterly performance since the third quarter of 2003. Second quarter growth this year was 4.6 percent. It dropped 2.9 percent in the first quarter, thanks to a brutal winter in most of the country. The Federal Reserve is predicting 2.3-2.4 percent growth for the whole of 2014.

Read More

The country got an early Christmas present today from the Commerce Department, when it revised its estimate of GDP growth in the third quarter upwards to a robust 5 percent, the best quarterly performance since the third quarter of 2003. Second quarter growth this year was 4.6 percent. It dropped 2.9 percent in the first quarter, thanks to a brutal winter in most of the country. The Federal Reserve is predicting 2.3-2.4 percent growth for the whole of 2014.

The stock market reacted by crossing the 18,000 mark for the first time, at least intraday. It took only 119 days for the market to go from 17,000 to 18,000. (That’s not a record: in the great bull market of the late 1990s, it went from 10,000 to 11,000 in only 24 days). The Commerce Department also said that corporate profits are up 5.1 percent from a year earlier, always a bullish sign for Wall Street. Since hitting bottom in February 2009, at 7,062.93, the Dow-Jones Industrial Average is up more than 150 percent.

American economic growth this year is in marked contrast to much of the rest of the world where economies are slowing or even going into recession, such as Japan. Some of the explanation is undoubtedly the falling price of gasoline, which puts more disposable income into people’s pockets, making them feel richer.

We are not yet in a boom economy, but the Great Recession seems, finally, to be receding.

Read Less

The GOP’s Resurging Public Image

The Washington Post’s Dan Balz and Scott Clement write about a new Washington Post-ABC News poll:

Read More

The Washington Post’s Dan Balz and Scott Clement write about a new Washington Post-ABC News poll:

Republican victories in the midterm elections have translated into an immediate boost in the party’s image, putting the GOP at its highest point in eight years, according to a new Washington Post-ABC News poll.

The spike in the party’s standing comes after Republicans picked up nine seats to take control of the Senate, raised their numbers in the House to the highest level in more than half a century and added new governorships to its already clear majority.

In the new poll, 47 percent say they have a favorable impression of the Republican Party, compared with 33 percent in the month before the midterm elections. An equal percentage have an unfavorable view, which marks the first time in six years that fewer than half of Americans said they saw Republicans negatively.

This news is welcome news for the GOP. What it means, I think, is that the American people are giving the Republican Party a careful second look in the aftermath of the multiplying failures of the Obama presidency. (Not only do 50 percent of those surveyed have an unfavorable impression of the Democratic Party; a majority of Americans disapprove of the president’s handling of the presidency, the economy, immigration, and international affairs, while a plurality disapprove of how he’s handling the threat of terrorism.) It’s quite striking that those surveyed give Republicans in Congress a nine-point advantage over Obama when it comes to handling both the economy and immigration.

At the same time, this boost in the GOP’s image is at least in part a temporary development, one you’d expect in the wake of a very successful midterm election. To their credit, the congressional leadership of the Republican Party has been smart enough to avoid taking steps that might have led to a government shutdown, which would have more than washed away the progress the party has made without achieving anything useful.

The task of the GOP during the next two years is to act in ways that are responsible and adult-like, that shift perceptions of it from being the Party of No to being the party of prosperity and the middle class. There are limits to what the Republican Party can do without a presidential nominee. But between now and when it chooses one, the GOP can avoid traps set for it by the president, present itself as a principled and constructive force in American politics, and hand off to the eventual nominee a party that is better positioned than it has been in a decade.

That may not be everything–but it wouldn’t be nothing, either.

Read Less

The Jobs Report

The American economy showed definite signs of life last month. While the unemployment rate stayed steady at 5.8 percent, the country added 320,000 jobs in November, well above the consensus estimate of 230,000 jobs. That’s the most jobs added in a month since January 2012. Both September and October had their jobs numbers revised upwards as well.

Read More

The American economy showed definite signs of life last month. While the unemployment rate stayed steady at 5.8 percent, the country added 320,000 jobs in November, well above the consensus estimate of 230,000 jobs. That’s the most jobs added in a month since January 2012. Both September and October had their jobs numbers revised upwards as well.

Looking at year-over-year figures, the unemployment rate has dropped from 7 percent in November 2013 to 5.8 percent last month. The number of unemployed has dropped from 10.8 million to 9.1 million. The participation rate, however, was 63 percent a year ago and is 62.8 now, well below the prerecession level.

What has not improved is wages, which are barely keeping pace with inflation. But if the pool of unemployed and underemployed continues to shrink, that will put upward pressure on wages. That, of course, could be negated if the participation rate begins to move back up to prerecession levels.

Having contracted in the first quarter, during a terrible winter, the economy rebounded sharply in the second quarter, growing at a 4.6 percent annual rate. It grew at 3.9 percent in the third quarter. Economists expect growth in the fourth quarter in the 2-2.5 percent range.

So while the American economy is nowhere near showing signs of irrational exuberance, it is doing better than the economies of Japan and most of the eurozone economies. And the fall in oil prices, from about $100 a barrel in January to $66 yesterday, has substantially increased the average American family’s purchasing power.

Read Less

The Jobs Report

The economy added 214,000 jobs last months, slightly below expectations, but August and September were revised upwards by a total of 31,000. Over the last six months new jobs have averaged 235,000 a month, which is better than it’s been in some time.

Read More

The economy added 214,000 jobs last months, slightly below expectations, but August and September were revised upwards by a total of 31,000. Over the last six months new jobs have averaged 235,000 a month, which is better than it’s been in some time.

The unemployment rate dropped a notch, to 5.8 percent, the best since 2008, and, for once, the participation rate went up a notch as well, to 62.8 percent. In other words, more people joined the labor force last month than left it. But we have a long way to go to get back to normal. The rate was 66 percent before the financial crisis of 2008.

Wages remain sticky. The average private-sector wage in October was up three cents to $24.57. That’s 2 percent higher than the average wage a year ago. But inflation was 1.7 percent in that time.

So the economy continues it slow recovery. There is not the slightest hint of “irrational exuberance,” except, perhaps, in the stock market, whose rise has been driven not by a good economy, but by recovering profits and very low interest rates. The latter makes bonds and CD’s unattractive alternatives to equities.

Read Less

The Canadian Way of Saving

Everyone complains that the U.S. savings rate is too low. To be sure, the way it is calculated is very flawed. It’s basically income minus outgo. But that doesn’t take into account such things as the growth of capital assets such as stocks, bonds, and real estate. Nor does it count as savings the portion of a monthly mortgage payment that is building equity rather than paying interest. Toward the end of a mortgage, most of the payment is building equity. As Forbes reported last month, American household wealth is a whopping $81.5 trillion.

Read More

Everyone complains that the U.S. savings rate is too low. To be sure, the way it is calculated is very flawed. It’s basically income minus outgo. But that doesn’t take into account such things as the growth of capital assets such as stocks, bonds, and real estate. Nor does it count as savings the portion of a monthly mortgage payment that is building equity rather than paying interest. Toward the end of a mortgage, most of the payment is building equity. As Forbes reported last month, American household wealth is a whopping $81.5 trillion.

But if the federal government would like to see a big increase in conventional savings, it should adopt a Canadian idea that has been a huge success there. The Cato Institute reports on a savings account in Canada known as a TFSA (for Tax Free Savings Account). Canadians can put up to $5,500 a year into these accounts, out of after-tax income. And, if they put in less one year, they can put in more next year. Say in 2014 you put in only $2,000. Then next year you could put in $9,000 ($3,500 plus $5,500). The account earns tax-free interest and can be tapped at any time, with no taxes due on withdrawal.

Only available since 2009, as of June 2014, there were 13.1 million TFSAs in existence, with deposits amounting to $131.5 billion. There are about 27.7 million adult Canadians, so that means that fully 47 percent of them have a TFSA account. The United States has a population ten times that of Canada. So, presumably, if we were to adopt a similar program, in five years 130 million Americans could have $1.3 trillion on deposit.

One reason for their popularity is their liquidity and flexibility. There are no complicated rules about penalties for withdrawals or paying taxes on the interest, as there are with the various IRA’s and 401(k)s.

This is a very good idea. But, alas, Washington these days is where good ideas go to die.

Read Less

America’s Anxious Mood and What it Means for Republicans

Every political and presidential election takes place within a context and environment. And while it’s impossible to know what things will look like two Novembers from now, the overall mood of the nation then is bound to have some similarities to the mood of the nation now.

Read More

Every political and presidential election takes place within a context and environment. And while it’s impossible to know what things will look like two Novembers from now, the overall mood of the nation then is bound to have some similarities to the mood of the nation now.

So what is the mood at this moment? The predominant feeling of Americans, according to polling data, is deeply unsettled and anxious, the product in large part of the multiplying failures of the Obama administration.

Think of the list from just the last year, from the disastrous rollout of healthcare.gov to the VA scandal, the flood of immigrants (many of them children) crossing the southern border, the Russian invasion of Crimea and its destabilization of Ukraine, Islamist advances in Libya, the colossal misjudgment about ISIS and the half-hearted air campaign the president is waging against it, and now the string of mistakes by the CDC in dealing with the Ebola virus.

Beyond this is the sluggishness of the economy, which has lasted the entire Obama presidency. Despite some encouraging recent jobs reports, overall the situation remains quite problematic: a drop in median household income even after the recession officially ended, the unusually low workforce participation rate (the lowest in 36 years), the broader failures of the Affordable Care Act, the rise in income inequality (nearing its highest levels of the last 100 years) and poverty (the poverty rate has stood at 15 percent for three consecutive years, the first time that has happened since the mid-1960s), the record number of people on food stamps and the fact that this year China overtook the United States as the world’s largest economy, the first time America has been in second place since 1872. It’s little wonder, then, that only around a quarter of Americans believe the country is on the right track.

In addition to all this, there are longer-term trends, such as middle-class Americans working longer hours than they did since 1979 while median net worth is lower, adjusted for inflation, than it was in 1989. Trust in government is at all-time lows. Disdain for the political class (especially Congress and the media) is sky-high. Americans are less trusting of our public institutions and of one another. More and more of us are living in “ideological silos”. Two-thirds of Americans think it is harder to reach the American Dream today than it was for their parents, and three quarters believe it will be harder for their children and grandchildren to succeed. Americans are pessimistic, feeling unusually vulnerable and polarized. (Political polarization is “the defining feature of early 21st century American politics,” according to the Pew Research Center.)

Given all of this, and assuming that in two years the political environment and psychological state of Americans is roughly what it is now, it’s interesting to contemplate some of the qualities they may be looking for in a GOP nominee.

My guess: A conservative who radiates competence, steadiness, and reassurance; who is perceived as principled, reform-minded, and reality-based; and who’s comfortably associated with a middle-class governing agenda. “Our main task is not to see that people of great wealth add to it but that those without much money have a greater chance to earn some,” is how former Indiana Governor Mitch Daniels put it in 2011, and his critique still holds. This can be done while also focusing needed attention on those living in the shadows of society.

In the aftermath of the Obama era, Americans will be a good deal more skeptical of empty, extravagant rhetoric. The public can also do without political figures comparing themselves to Michael Jordan, LeBron James, and Jesus (all of whom Obama or his closest aides have compared Mr. Obama to). A modesty about what government can accomplish would be most welcomed; so would distrust of those who cling to ideology even when facts argue the contrary.

Voters are likely to trust individuals who have demonstrated a mastery of governing and can identify with, and have something to say about, the challenges facing many Americans. (One example is soaring higher education costs, a subject very few Republicans talk about and even fewer Republicans have solutions for.) The Republican Party’s standard-bearer certainly needs to be perceived as modern, future-oriented, and understanding the ways the world is changing.

A GOP nominee will also have to speak more to people’s aspirations than to their fears. A campaign that could be symbolized by an angry, clenched fist won’t work. Demonstrating touches of grace and winsomeness probably will. And because Republicans are on a long-term losing streak at the presidential level, including having lost the popular vote in five of the last six elections, they’ll need to find someone who is able to do more than rally the faithful. They’ll have to win over a significant number of people who are not now voting Republican but are persuadable. Which means Republicans might want to look to someone characterized by intellectual depth and calm purpose rather than stridency. In a recent speech, Tony Blair said, “In the end parties can please themselves or please the people.” He contrasted those who have the character of a governing party with those who seem like the shriekers at the gates outside. That’s a distinction worth bearing in mind.

To be sure, no single individual will embody all these qualities, and someone may well come along who personifies other characteristics in a way that is highly appealing. In addition, of course, politics is never static. But my guess is that given the mood and attitudes of Americans right now, some combination of the traits I’ve sketched out will be needed if Republicans hope to win.

While I fully expect Republicans to do quite well in the mid-term elections 15 days from now, it’s worth recalling that Republicans did historically well in 2010 (adding 63 seats in the House and six seats in the Senate) yet lost the presidency and House and Senate seats in 2012. And like it or not, we’re in a period when the Republican Party’s image has reached a historic low; when a majority of Americans said last year that the GOP is out of touch (62 percent), not open to change (56 percent), and too extreme (52 percent); and when, at the presidential level at least, the GOP faces an uphill climb.

President Obama’s cascading failures will make things easier for Republicans in 2016, but it still won’t be easy.

Read Less

What’s Wrong with the American Economy?

Growth in the American economy since the year 2000 has averaged 1.7 percent per annum. That’s about half of what it averaged in the Reagan, Bush I, and Clinton years. Unemployment, especially in the broader measures, remains stubbornly high five years after the recession of 2007-2009 ended. What’s going on?

Read More

Growth in the American economy since the year 2000 has averaged 1.7 percent per annum. That’s about half of what it averaged in the Reagan, Bush I, and Clinton years. Unemployment, especially in the broader measures, remains stubbornly high five years after the recession of 2007-2009 ended. What’s going on?

According to Peter Morici, an economics professor at the University of Maryland (and the bow-tied star of TV commercials for Kyocera office equipment) the problems lie in five key areas. 1) Poorly enforced trade agreements that allow China to manipulate its currency and export more goods to the United States, costing U.S. jobs. 2) Counterproductive energy policies that reduce domestic production, and therefore jobs, and cause more oil to be imported. 3) Burdensome regulations and taxation, such as restrictive licensing requirements and the highest corporate tax in the developed world. 4) Crony capitalism that reduces competition in the private sector in exchange for political contributions. 5) Disincentives to work, such as ever-expanding entitlements.

The good news is that, unlike the economic problems faced by many countries, all of these problems are amenable to reform. The bad news is that reforming the status quo, which always has determined defenders, requires strong presidential leadership and a Congress capable of acting in the national interest, not just in its members’ interests.

Right now, of course, we have neither. Even Democrats are beginning to notice that the Obama presidency is notably lacking in leadership. And Congress is more dysfunctional than it has been in a very long time. The latter problem can be at least partially ameliorated in a month. The former will have to wait until 2017.

Read Less

The Jobs Report

This month’s jobs report is a distinct improvement over last month’s mediocre results. The economy created 248,000 jobs, somewhat above the recent average of about 228,000. Unemployment fell two-tenths of a percent to 5.9 percent, the lowest since July 2008, as the financial crisis was rapidly building. Previous months’ estimates were raised as well. The August estimate had originally been 148,000 jobs. That was raised to 180,000.

Read More

This month’s jobs report is a distinct improvement over last month’s mediocre results. The economy created 248,000 jobs, somewhat above the recent average of about 228,000. Unemployment fell two-tenths of a percent to 5.9 percent, the lowest since July 2008, as the financial crisis was rapidly building. Previous months’ estimates were raised as well. The August estimate had originally been 148,000 jobs. That was raised to 180,000.

There are still 9.3 million unemployed. That is down 329,000 from the previous month. But notice that that number is well above the 248,000 new jobs created. So the unemployment rate is going down, at least in part, because of people dropping out of the work force, not because they found work. The labor force participation rate fell .1 percent to 62.7 percent. Before the recession, it was at about 66 percent. There are 7.1 million working part-time when they would prefer to be in full-time jobs.

Yesterday President Obama was at Northwestern University touting his administration’s economic performance. George Will, on last night’s Special Report with Bret Baier, was less than impressed:

The president went to the state of Illinois to brag about the economy. Illinois has 300,000 fewer jobs than it had in 2008. For the last four years in the state of Illinois, the number of new food stamp recipients has increased twice as fast as the number of new job recipients. He was speaking in Illinois on a college campus. He did not mention that 40 percent of recent college graduates are either unemployed or underemployed — that is, in jobs that don’t require college degrees — and one in three recent college graduates is living at home with their parents.

No wonder that 58 percent of the country thinks that we’re still in recession when the recession, technically, ended over five years ago, in June 2009.

Read Less

The Jobs Report

Job growth stumbled in August. While economists had been expecting 225,000 new jobs, there were only 142,000, the first time the jobs number was below 200,000 since January, in the middle of a terrible winter. The unemployment rate dropped a notch to 6.1 percent, but so did the participation rate, to 62.8 percent, tying its lowest rate since the 1970s. In August 2013, the unemployment rate was 7.2 percent and the participation rate was 63.2 percent. In other words, much of the improvement in the unemployment rate comes not from more jobs but from fewer workers.

Read More

Job growth stumbled in August. While economists had been expecting 225,000 new jobs, there were only 142,000, the first time the jobs number was below 200,000 since January, in the middle of a terrible winter. The unemployment rate dropped a notch to 6.1 percent, but so did the participation rate, to 62.8 percent, tying its lowest rate since the 1970s. In August 2013, the unemployment rate was 7.2 percent and the participation rate was 63.2 percent. In other words, much of the improvement in the unemployment rate comes not from more jobs but from fewer workers.

Those unemployed for more than 27 weeks dipped by 192,000, but is still very high at 2,963,000, 31.2 percent of all unemployed. Those working part time when they would prefer full time dropped by 234,000 to 7,277,000. If the under-employed are added to the unemployed, the broader unemployment rate is 12 percent, down from 12.2 percent last month.

So the Obama recovery continues at its dawdling pace, like a reluctant child on his way to school, still showing no signs whatsoever of Alan Greenspan’s dreaded “irrational exuberance.”

Read Less

The Jobs Report

The July jobs report came in this morning a little below expectations. That’s a good thing for Wall Street. It tumbled 318 points yesterday because of the rebound in GDP to 4 percent for the second quarter reported on Wednesday. The stock market has been doing so well lately (it has more than doubled since its recession low in March 2009) because the Federal Reserve has been keeping interest rates near zero to bolster the economy. With bonds paying so little, equities have been the only game in town. But with a stronger economy, the Fed will begin to raise rates and money would begin shifting out of stocks and into other investments. So right now, good news is bad news on Wall Street.

Read More

The July jobs report came in this morning a little below expectations. That’s a good thing for Wall Street. It tumbled 318 points yesterday because of the rebound in GDP to 4 percent for the second quarter reported on Wednesday. The stock market has been doing so well lately (it has more than doubled since its recession low in March 2009) because the Federal Reserve has been keeping interest rates near zero to bolster the economy. With bonds paying so little, equities have been the only game in town. But with a stronger economy, the Fed will begin to raise rates and money would begin shifting out of stocks and into other investments. So right now, good news is bad news on Wall Street.

The economy added 209,000 jobs last month, down from June’s 298,000 (revised upwards in the latest report). Unemployment ticked up to 6.2 percent from 6.1 last month. Job growth has been above 200,000 a month for the last six months, the first time that has happened since 1997. The participation rate went up, but only a single notch, from 62.8 percent to 62.9.

But black unemployment rose from 10.7 percent to 11.4, while black youth unemployment went from 33.4 percent to 34.9. Both these numbers tend to be volatile, but they are still dismal. The number of people working part time for lack of full-time jobs was unchanged at 7.5 million; 3.2 million people have been unemployed for six months or longer, almost one-third of all unemployed.

In all, another so-so jobs report, typical of the Obama recovery.

Read Less

The Jobs Report

The employment picture brightened somewhat in June, with 288,000 new jobs (up from a revised 224,000 in May) and a decline in the unemployment rate to 6.1 percent from 6.3. That’s the lowest unemployment rate since August 2008, on the eve of the financial crisis. We have now had job growth above 200,000 for the last five months, the first time that has happened since the very prosperous years of the late 1990s. The number of long-term unemployed (over 27 weeks) declined by 293,000. Unemployment among African-Americans fell from 11.5 percent to 10.7.

Read More

The employment picture brightened somewhat in June, with 288,000 new jobs (up from a revised 224,000 in May) and a decline in the unemployment rate to 6.1 percent from 6.3. That’s the lowest unemployment rate since August 2008, on the eve of the financial crisis. We have now had job growth above 200,000 for the last five months, the first time that has happened since the very prosperous years of the late 1990s. The number of long-term unemployed (over 27 weeks) declined by 293,000. Unemployment among African-Americans fell from 11.5 percent to 10.7.

But the picture was not all bright. The number of involuntary part-time workers increased by 275,000. Teenage unemployment increased to 21 percent. Among black teenagers it was a horrendous 33.4 percent, up from 31.1 percent in May. One in three black teenagers in the labor force are unemployed. The participation rate stayed steady at 62.8 percent for the third month in a row. But that is down from a year ago, when it was 64 percent and way down from before the recession. So much of the drop in unemployment came from people dropping out of the labor force, not finding jobs.

And many of the new jobs were at the low end of the pay scale. While retail jobs increased by 40,000 and leisure and hospitality 39,000, higher-paying jobs in manufacturing (16,000) and construction (6,000) were far fewer.

So while the news is good, it is not unalloyed good. We’ll know we are finally in a full-fledged recovery when the participation rate begins to climb steadily as discouraged workers see more opportunity and begin looking for jobs. That might send the unemployment rate up at first, but that, paradoxically, would actually be good news.

Read Less

Obama’s Climate Laughs No Substitute for Sound Economics

President Obama had a good time mocking congressional Republicans yesterday for being skeptics about climate change. But even he seems to know that selling his radical proposals that will cause serious economic pain will not be as easy a sell as jokes about Flat Earth Republicans.

Read More

President Obama had a good time mocking congressional Republicans yesterday for being skeptics about climate change. But even he seems to know that selling his radical proposals that will cause serious economic pain will not be as easy a sell as jokes about Flat Earth Republicans.

As Politico noted, Obama’s speech to the League of Conservation Voters was notable mainly for the president’s comedy routine aimed at depicting those who haven’t bought into every aspect of the radical environmentalist agenda as extremists with a screw loose. The reason for this strategy is easy to understand.

If Obama’s talking about regulations, he’s losing. If he’s talking about carbon caps for power plants or energy emissions for air conditioners, no one cares. But if he’s talking about crazy Republicans who don’t make any sense—and by the way, are putting children at risk, he charges—well, that’s an argument he can wrap his arms around.

Given the stranglehold that the global warming crowd has on the mainstream media and, even more importantly, in popular culture, the president’s confidence that a majority of Americans may agree with him on climate issues is well founded. But the gap between a general belief that the earth may be warming and a suspicion that human activity may be causing it and support for some of the administration’s prescriptions to address these issues is considerable.

As even the president acknowledged in his speech, his attempt to get rid of coal-fired power plants and force car manufacturers to alter their plans will have economic consequences. But the disconnect here isn’t merely a matter of marketing and better communication, as the White House seems to think.

As I noted back in March, polls have consistently shown that while the American people may believe the climate is changing, they don’t consider this to be a priority when it comes to government action. Liberals tend to think the reason for this is that the public is not yet sufficiently alarmed by the prospect of global warming. But instead of attempting to make a reasonable case for changes that will send electricity and gas prices skyrocketing and the refusal to undertake projects, like the Keystone XL Pipeline, that would increase America’s available resources, they engage in scare tactics that, generally, backfire.

That’s because what the public wants is not so much mockery of skeptics or hysterical and wildly exaggerated predictions of a warming apocalypse but a measured analysis of the cost/benefit ratio of climate legislation. And that is exactly what is lacking in the president’s comedy routine. Even if the courts have given the president the power to enact far-reaching changes without benefit of congressional approval, that doesn’t translate into widespread approval for carbon regulations that will damage the economy and cause genuine economic hardship. Nor will that problem be solved be reports filled with alarmist predictions funded by wealthy activists like Tom Steyer and Michael Bloomberg that liberals cite to justify the suffering that will be imposed on the public. Though most Americans may think the climate is changing, they don’t think the apocalypse is at hand and aren’t interested in lowering their standard of living merely to gratify extremist ideology.

Merely branding his opponents as crazy won’t resolve this problem. Nor will the usual amorphous rhetoric about the power of green jobs that never seem to materialize and new technologies that will leapfrog over current difficulties that may take decades before they can take the place of fossil fuels, if, in fact, they ever do. In the meantime, they are left facing the prospect of Obama’s proposals creating economic havoc. As some Democrats in energy-producing states are learning, Obama may be getting laughs from coastal elites but his backing for environmentalist extremism may cost his party some Senate seats to the same Republicans he’s been mocking. While he may be thinking in terms of his 2008 boast about turning back the oceans, that seems a poor exchange for unpopular policies even if most Americans don’t agree with the skeptics.

Read Less

First Quarter GDP Is Down 2.9 Percent

The Commerce Department announced this morning that American GDP in the first quarter of 2014 declined a stunning 2.9 percent. That’s the first decline in GDP since the first quarter of 2011 and the biggest decline since the first quarter of 2009, while the economy was still in the throes of the Great Recession.

Read More

The Commerce Department announced this morning that American GDP in the first quarter of 2014 declined a stunning 2.9 percent. That’s the first decline in GDP since the first quarter of 2011 and the biggest decline since the first quarter of 2009, while the economy was still in the throes of the Great Recession.

When the Commerce Department first announced first quarter GDP, in April, it measured it at being up .1 percent. In May it revised the figure to down 1 percent, and now it’s down 2.9 percent. Early GDP figures are often substantially revised, but this beat the estimate of economists surveyed by the Wall Street Journal, which was a 2 percent decline.

To be sure, the awful winter much of the country suffered had caused shoppers to stay home and many construction projects to be halted. But manufacturers drew down inventory and exports were down by a substantial 8.9 percent as other economies, especially in Europe, remain subpar.

The economy is expected to rebound in the second quarter, which ends on Monday, and no one is expecting a further decline in GDP. (Two consecutive quarters of declining GDP is the standard definition of a recession, by the way.) But even if the second quarter lives up to expectations of 3.6 percent growth, the growth for the first half of 2014 will be well below the 2 percent average since the economy began to expand in June 2009. American GDP growth over the long term has been a little over 3 percent.

So the American economy in the Obama recovery continues to sputter and wheeze.

Read Less




Pin It on Pinterest

Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor to our site, you are allowed 8 free articles this month.
This is your first of 8 free articles.

If you are already a digital subscriber, log in here »

Print subscriber? For free access to the website and iPad, register here »

To subscribe, click here to see our subscription offers »

Please note this is an advertisement skip this ad
Clearly, you have a passion for ideas.
Subscribe today for unlimited digital access to the publication that shapes the minds of the people who shape our world.
Get for just
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
YOU HAVE READ OF 8 FREE ARTICLES THIS MONTH.
FOR JUST
Welcome to Commentary Magazine.
We hope you enjoy your visit.
As a visitor, you are allowed 8 free articles.
This is your first article.
You have read of 8 free articles this month.
YOU HAVE READ 8 OF 8
FREE ARTICLES THIS MONTH.
for full access to
CommentaryMagazine.com
INCLUDES FULL ACCESS TO:
Digital subscriber?
Print subscriber? Get free access »
Call to subscribe: 1-800-829-6270
You can also subscribe
on your computer at
CommentaryMagazine.com.
LOG IN WITH YOUR
COMMENTARY MAGAZINE ID
Don't have a CommentaryMagazine.com log in?
CREATE A COMMENTARY
LOG IN ID
Enter you email address and password below. A confirmation email will be sent to the email address that you provide.