Obama’s economic message is currently premised on the denial of a crisis. But last month — three years into an anemic recovery — more American workers went on Social Security disability (85,000) than got jobs (80,000). Hispanic unemployment is at nearly 11 percent; African American unemployment at about 14 percent. In any other political circumstance, the Democratic Party would be seized with urgency. A McCain administration would be seeing preparations for a union-sponsored Labor Day march on Washington demanding jobs, jobs, jobs. The Obama administration, in contrast, gets some muted criticism from Robert Reich, who argues for “large and bold things to turn the economy around.”
But it is not clear what such things might be. Given the federal budget crisis, prospects are poor for major new stimulus spending or backfilling state and local budgets. While the jobs number for June was bad, it was probably not bad enough to result in another round of quantitative easing when the Federal Reserve meets late this month. So Obama is left with a series of recycled State of the Union proposals — maintaining existing middle-class tax breaks, spending on infrastructure, funding some jobs for teachers — that no self-respecting Keynesian economist would judge sufficient.