The state of the economy is by far the most important thing determining the election prospects of the Democrats in 2014 and 2016. Of course Republicans are to blame for obstructing everything Dems propose, including job-creation policies, but even in top Democratic Party circles discussions the budget deficit is given more weight than the grotesque rolling disaster that is unemployment. Even from a perspective of naked electoral self-interest, this is nuts.
Remember: In 2010 we were about at the nadir of the recession, and the Democrats got absolutely hammered for it. In a twisted irony, the ones most desperately wringing their handkerchiefs over the deficit — the Blue Dogs in marginal districts — were the ones that lost their seats en masse. If that hasn’t taught the party to pay attention to the jobs situation, I honestly don’t know what would.
But it is still the case that Democrats are in power, and they might at least propose something on jobs in these budget negotiations, rather than cobbling together another deficit reduction package that the next Republican president will fritter away in the form of tax cuts for the rich as soon as he gets a chance. (Janet Yellen will have no direct partisan motivation if she is confirmed as Fed chair, but she would have more power than anyone else over the economy, so let us pray she keeps her eye on the ball.)
At this rate, full employment may not be achieved again for 20-30 years, if ever. (Japan has been stuck in the same pit we’re in now for twenty years.) If we just extrapolate from our current position and job growth rate (try it yourself), we’ll hit full employment sometime after 2020. Postwar economic expansions have lasted for 59 months, on average; this one has gone on for 52 months so far by my count. Just getting to January 2020 would be 126 months, longer than any expansion in American history.
Since the early 90s recessions have generally been caused by asset bubbles collapsing (as opposed to the Fed tightening money to stave off inflation), and God only knows what is festering in the heart of Wall Street as we speak. So there’s a decent chance that, unless something changes, the American people are going to be cudgeled by another recession before they’ve even clawed their way up out of the maw of the last one. Maybe somebody should do something.