Stock market up? Time to blame Obama for rising unemployment

The jobs report is as bad as everyone expected. Must be the president's fault.


Andrew Leonard
April 3, 2009 6:22PM (UTC)

I don't know why I read the Wall Street Journal's "Mean Street" columnist Evan Newmark. Maybe I've decided a couple of cups of coffee isn't enough to get me going in the morning, so I need my blood boiling in rage as well. Certainly, I badly miscalculated if I thought there was any insight to be gained about the unemployment picture from today's offering: "The Coming Obama Jobs Disaster."

(The only good news about Friday's jobs report? It wasn't worse than expected, coming in almost exactly in line with consensus predictions. Non-farm payrolls fell by 663,000, and the unemployment rate jumped from 8.1 to 8.5 percent. It's bad, but not as bad as some feared.)

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Newmark, you may recall, blasted Obama in late February for the stock market's performance. Somehow, the greatest economic disaster since the Great Depression wasn't enough to explain sagging share prices -- it had to be the governance of an administration that had only been in power for one month. Today, after a month in which the stock market did pretty well, all things considering, Newmark has to find something else to complain about. So he works himself up into a lather about the fact that "Of Obama's 22 Cabinet level bigwigs, including the biggest wig himself, none has had a sustained private sector career" and then goes off on a long, puerile rant about how the private sector is different than the government, because the private sector has to turn a profit.

I'm a little confused. The last administration was loaded with refugees from the private sector, including the biggest wig, who had done such a bang up job losing money in the Texas oil business. But they sure didn't seem to me to have a good grip on the basic concept of balancing revenue with spending. Bush's last Treasury Secretary, Hank Paulson, came from one of the private sector's most prestigious perches, the CEO position at Goldman-Sachs. We saw how well that worked out. And do we need to dwell on the private sector's acuity in making loans to people who couldn't pay them back, or judging the risk inherent in complex securities? Sorry Mr. Newmark, but the private sector's credibility is shot. It's just possible that we could use some different perspectives in government.

But perhaps even more maddening is the lack of any substantive policy proposal. Yes, it's true, Obama's advisers may be understating how bad the unemployment picture will get. (Although I think Newmark is being unfair here too. He says that Obama's advisers "forecast unemployment topping out at around 9 percent" -- but the "adverse" scenario in the banking stress tests predicts possible 10.3 percent unemployment in 2010). But the obvious conclusion to draw from the likelihood that the economy will contract even further is that more aggressive government action needs to be taken.

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Newmark is never able to bring himself to say what he likely believes, which is that the government should give businesses, and presumably people like him, a big tax cut. Maybe he can't say that out loud because he realizes that to further boost government deficits without attempting to stimulate demand in a contracting economy would be a recipe for further disaster. If Newmark is right, and unemployment will "easily" top 10 percent by the end of this year, then Obama needs to be even more interventionist.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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