The economy vs. the president

September 7, 2012

(Jonathan Newton | The Washington Post)

President Obama's speech Thursday night took place in a world where the jobs crisis didn't exist. It's not that he didn't talk about jobs. But there was no particular urgency in his diagnosis, much less in his prescription. The mentions of the unusual severity of the situation were glancing and the proposals mostly unresponsive. The speech would have been as appropriate for an economy at 6.5 percent unemployment as 8.1 percent unemployment.

The president receives the monthly jobs report a little bit early. So Obama, unlike everyone else in Charlotte, knew that today's jobs report was going to reveal a country where the jobs crisis very much still exists. Today's report showed that the labor market didn't keep up with population growth in August, that we added almost 40,000 fewer jobs in June and July than we thought, and that hundreds of thousands of Americans have simply given up on finding work. (See the August jobs report broken down in graphs here).

Into this ocean of grim news, the president flung a handful of policy prescriptions that wouldn't do anything much anytime soon. Plans to boost natural gas production, to recruit new math and science teachers, to make college more affordable, and to boost exports might help us create jobs in the coming years, but they won't ease the pain for the unemployed in the coming months.

But then, those policy prescriptions weren't meant to solve the jobs crisis. Before the speech last night, an Obama campaign official told me, "There is a big project in a second term. That project is the stagnation of the middle class." The policy proposals in Obama's speech last night are responsive to that goal; they're about upgrading the skills of American workers and fostering new, high-paying industries. The problem -- as the official admitted -- is that the project of the first term is not over. Our ongoing jobs crisis has not yet ended.

The administration is not without answers. The American Jobs Act is a serious, real policy proposal that would boost the labor market right now. Private forecasters estimate that it would add around 2 million new jobs over the next two years. In stark contrast to the policies outlined last night, which would be as appropriate in 2005 or 1995 as they are today, the American Jobs Act is actually designed for jobs crisis we're in, and wouldn't make much sense in more normal times.

And yet, insofar as the president mentioned it, it was only a glancing, opaque reference. Now, the administration certainly has not forgotten that it has developed this policy. And White House officials know full well that the labor market is weak. So they've made a decision, presumably because they think it's better politics, to refrain from reminding voters how bad things are and to resist using the campaign as an opportunity to continue pushing emergency measures that congressional Republicans implacably oppose. But even if those aren't the measures that sell, they are the measures that are needed.

In their absence, the short-term problems will persist, and the long-term problems will get worse. The longer people are out of work and out of the labor force, the more their skills and professional connections deteriorate. There is no fix we have proposed for our long-term problems that will counteract the damage we're doing by not fixing our short-term problems. Obama might want a return to normalcy. But the fact is that the emergency continues.

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Dylan Matthews · September 7, 2012