March 30, 2010
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Few presidents get a second honeymoon of their own making. (George W. got one when terrorists attacked the United States.) Barack Obama’s victory on health care reform has breathed new life into his administration, recharged the Democratic base, and given the rest of America a sense of someone who fights for average working people.
The question now is: What does he do with his second honeymoon?
Some say it should be used to enact financial reform. Most Americans despise Wall Street and want to be assured there’s no repeat of the grotesque sequence of river-boat gambling with the economy followed by a taxpayer bailout followed by seven-and eight-figure bonuses. Democratic strategists would love to let Republicans hoist themselves on their own petard by defending Wall Street.
Financial reform surely needs bucking up. The bill passed by the House last year was riddled with loopholes, delays, and cop-outs for the Street. The one that’s emerging from the Senate Banking Committee is only slightly better. It still allows a world of unregulated derivative trading and hands the ball over to the same regulators that punted last time. It doesn’t even include Paul Volcker’s watered-down remake of the Glass-Steagall Act. And the Senate bill is likely to get even worse as Harry Reid and Chris Dodd troll for Republican support. In an election year when Wall Street money is flowing freely to both parties, watch your wallets.
Notwithstanding all this, the biggest Next Big Thing ought to be jobs.
Including all those who have entered the job market since the bottom fell out, the nation is about 11 million jobs short. The President ought to use his second honeymoon to get a jobs bill that will make a difference.
Although the official rate of unemployment for the third of Americans with college degrees – the kind of people who inhabit executive suites, the media, and Washington – is now down to 5 percent, most Americas inhabit a different job planet. The unemployment rate is 15.6 percent among Americans with less than a high school diploma and 10.5 percent for those with only a high school degree.
Even these rates understate the problem. Add in people working part time who’d rather it be full time, those too discouraged even to look for work, those working in a full-time job at fewer hours, and those who lost their jobs and have settled on new ones paying far less, and more than one in four of those without high school degrees are unemployed or underemployed; 22 percent of people with only high school degrees.
Considering that most households now rely on two wage earners (and most people tend to marry or cohabit with people who have roughly the same level of education they do) the situation is dire. A growing number of households have now sold off all their assets and exhausted their capacity to borrow from friends and relatives. That’s why the bad loans are still mounting: Households can’t meet their mortgage payments, can’t pay the rent, can’t meet payments on their credit cards and cars.
It doesn’t have to be this way. It’s this way because companies and consumers aren’t able or willing to buy nearly enough to get people back to work, and government hasn’t yet filled the shortfall. The stimulus was too small to begin with and its peak level of spending is now over.
In recent weeks, Congress and the Administration have been working on a bunch of proposals called "jobs bills," but they’re so small relative to the size of the problem they should be called "almost jobs bills."