An economic slowdown is now here â€“ one we repeatedly cautioned would come â€“ so even the Federal Reserve is downgrading its forecast.Â Â Alas, the United States isnâ€™t alone. Â The prospects for Europe look even worse, especially with their largest banks so heavily invested in the bonds of EU member countries still skirting the edge of sovereign debt defaults.Â And now China faces the cross pressures of trying to boost their weakening exports while letting some of the air out of their own housing and financial bubbles.Â That will spell serious problems for Chinaâ€™s four state megabanks, whose loans keep much of Chinese industry afloat.Â Â Weâ€™ll be lucky to come out of this dismal environment with just another year of slow growth and high unemployment.
So, with the midterm elections coming on, most Americans have one question for their elected officials and those hoping to replace them: Â What decisive steps are they prepared to take to rescue this economy?Â Â Remarkably, the answer from much of the GOP opposition seems to be, repeal part of the 14th Amendment and stop Muslims from building a mosque in downtown Manhattan.Â Â Â Of course, thereâ€™s also lots of finger-pointing about the economy, including the audacious claim that the fault for the high unemployment lies in the Administrationâ€™s economic policies, especially the stimulus.
Since that claim has some popular traction, and even support from a handful of muddled conservative economists, letâ€™s test it with the hard data from the Bureau of Labor Statistics.
From December 2007 to July 2009 â€“ the last year of the Bush second term and the first six months of the Obama presidency, before his policies could affect the economy â€“ Â private sector employment crashed from 115,574,000 jobs to 107,778,000 jobs.Â Employment continued to fall, however, for the next six months, reaching a low of 107,107,000 jobs in December of 2009.Â So, out of 8,467,000 private sector jobs lost in this dismal cycle, 7,796,000 of those jobs or 92 percent were lost on the Republicansâ€™ watch or under the sway of their policies.Â Some 671,000 additional jobs were lost as the stimulus and other moves by the administration kicked in, but 630,000 jobs then came back in the following six months.Â The tally, to date:Â Mr. Obama can be held accountable for the net loss of 41,000 jobs Â (671,000 â€“ 630,000), while the Republicans should be held responsible for the net losses of 7,796,000 jobs.
So, when some of those GOP candidates change the subject from unemployment to treacherous immigrants, they actually may know precisely what theyâ€™re doing.
Some Democrats may take satisfaction from these data; but that wonâ€™t be enough for most voters, not while Democrats still control the White House and Congress.Â Â The opposition may get away with silence about what they would do to bring down unemployment â€“ apart, of course, from the traditional GOP catechism of tax cuts.Â But Democrats will have to lay out a more serious program if they hope to convince America to keep them in power.
So, hereâ€™s a four-part program for Democrats to take to the voters.Â First, create jobs by expanding an Administration initiative already in place:Â Deep cuts in the payroll tax for employers who expand their workforce. Â Â Second, shore-up the weak housing market and stabilize falling home prices with a long-overdue, new initiative:Â A loan program for homeowners with mortgages in trouble, modeled on federal student loans, to bring down foreclosure rates.Â Third, prepare tens of millions of Americans for the jobs the economy will begin to create once itâ€™s back on track:Â Provide grants to community colleges to fund free computer training for any American adult who walks in and asks for it.Â And fourth, put in place some long-term deficit reduction to head off higher interest rates when the economy does begin to expand again.Â Rolling back the Bush tax cuts for higher-income folks is a beginning, but it should be paired up with serious spending restraints.Â The best place to start is health care:Â Slow down Medicare and Medicaid cost increases with much stricter and more comprehensive versions of the cost-containment measures already enacted in the Presidentâ€™s health care reforms.
That would be a real program that the parties could debate in the fall campaigns â€“ and if the Democrats prevail, they could run on its results in 2012.