The June job numbers were bad, really bad. Not end of the world bad, but the Republicans are working on that. We need a 150,000 new jobs every month just to keep up with population growth and projections were for 100,000 but only 18,000 net new jobs were created. This was partly from housing construction sharply cutting jobs (in the middle of the construction season) and this offset other new jobs.
The Federal Reserve had already thrown in the towel on job creation last month and now the Obama re-election campaign is trying to spin it that the 2012 election won’t be about jobs. The Republicans continue to chant “where are the jobs?” and “we need to slash government jobs and spending”.
As usual they are out to lunch, the trend for the past year has been for a steady reduction in Federal jobs and spending. The states (especially Republican ones) have taken a meat axe to their budgets. The Republicans want much more of the same and to savage so called pass through payments to everyone (except the rich). Things like unemployment benefits, Medicare, Social Security and the like.
The largely unnoticed bad news in the jobs report was an unsettling drop in hourly wages. Even with inflation pressures from high gas prices wages still fell in a period of so called “recovery” when wages should be trending upward. But this is not unexpected as I’ve said repeatedly the high weekly unemployment claims that happen even as we have new jobs created reflect a deliberate practice by large companies to drive down wages by firing workers and then hiring at lower wages many of the same workers after sufficient fear has been instilled.
So Obama is increasingly touting the Republican talking point of growth through austerity and the need to build the confidence of business so that they will hire. In fact we’ve already had a year of ever increasing austerity and big business isn’t “afraid” to hire. They are hiring lots of people, just at ever lower wages. Indeed they don’t need to expand output as they are only operating at 80% capacity currently. Small business has been largely frozen out of expansion by big business and big finance as well as suffering from the same lack of demand for their goods from the falling of wages and shrinking government.
Obama is trying and perhaps succeeding to beat Republicans at their own game over the debt ceiling. Offering ever larger cuts to the long term budget and demanding the elimination of tax breaks Republicans can’t defend to their base Obama increasingly looks good to the majority of voters who believe the Republican talking points about growth through austerity.
Secretary Geithner has raised the 14th Amendment’s requirement that Federal debts must be paid as justification for Obama to ignore the debt ceiling if Congress won’t act. Obama has continued to throw the question back to Congress as their obligation to fix the problem and not committing himself on the Constitutionality of the debt ceiling law. Restricting borrowing or refusing to pay the debt isn‘t a power granted to Congress in the Constitution, indeed the opposite is true.
Tea bag Congressmen are incensed about the idea that Obama might uphold the Constitution and promise impeachment if he were to continue paying the Federal Governments obligations authorized by law and as sighted in Section 4 of the 14th Amendment as an absolute requirement which “is not to be questioned”.
The thing about Obama giving spending concessions to avert the crisis is that these cuts can be reversed in the appropriations bills of any subsequent Congress. If the Republicans are successful in creating a real crisis and ride that into control of the government in 2012 then they can force structural changes we can’t undo. We know they don’t want democracy and could promise an economic recovery if we simply gave that up (democracy in any meaningful sense). We don’t really have it now but the potential is still there and that’s what they really want to kill.
You have to keep in mind that things really aren’t that bad with the economy. It would be easy enough to produce a dramatic “recovery” once the corporatists were entrenched in power once and for all and any opposition would be marginalized and over time eliminated permanently. This is exactly what Mussolini did in the 1920s and he was hailed as and economic genius after he replaced the Italian Parliament with a conference of corporate leaders. The word he coined for this merging of the corporations with the state was Fascism. I’m sure the Republicans have a word of their own, something referring to patriotism, democracy and freedom without allowing any of it.
They do have a working title for American Fascism, the Republicans call it "Privatization".