Capitol Showdown: Is the unemployment rate a major determining factor in this year’s election?
In a crucial election that is centered on the economy of the nation, the unemployment rate is indeed a major factor. Unemployment higher than Natural Unemployment (five percent) is always a concern. Since the start of the 21st century, unemployment has ranged from 3.8 percent in April 2000 to 10 percent in October 2009. Since the passing of the American Recovery and Reinvestment Act of 2009, the unemployment rate has maxed out at 10 percent of the population. Three years later, the current unemployment rate has dropped to 7.8 percent of the population. President Obama touts this bill as the reason the recession slowed down and the unemployment rate did not skyrocket to levels of the Great Depression.
The President’s plan to combat unemployment includes giving small businesses tax breaks to encourage the hiring of new employees, strengthening worker compensation laws and increasing access to unemployment benefits and wage insurance. The President realizes that private sector needs to be more confident to hire new workers, so he has lowered payroll taxes on employees, in hopes that they spend that extra money. Consumer spending is the real engine of the economy. To have the unemployment rate go down, the middle class needs to spend more money on goods and services. This in turn will prompt businesses to hire more employees.
President Obama’s unemployment reduction plan is working.
Although sluggish, the unemployment rate has gone down every quarter since the American Recovery and Reinvestment Act of 2009 was passed. The economy has grown and created new jobs in the private sector for the past 31 months under Obama’s leadership.
As of this month, there is an increase of 600,000 more jobs than when Obama took office in 2009.
Having four years to fix an economy that has completely crashed is an unparalleled achievement. The job is not done however. We are still 2.8 percent above the Natural Unemployment level, which is when the economy can produce at maximum effectiveness. The President has sent multiple job bills into the gridlocked Congress. The majority of bills have been blocked by the Republican-controlled House of Representatives. Job growth has been slowed due to the lack of many of these job creation bills being shot down.
The voting is completely partisan as well. So as Election Day draws closer, Mitt Romney cannot say that the President does not do enough for job creation, when in reality, one party really does not want the President to succeed.
President Obama is hands down more capable of handling unemployment than his challenger due to his record, his vision and willingness to get the job done, even in the face of the Republican obstruction.
Nick Aaron, College Democrats of Towson
Unfortunately for President Barack Obama, the unemployment rate will be a major factor in this year’s election. Perhaps if there were fewer people unemployed then maybe it wouldn’t matter too much, but you can be sure that those who are unemployed will be voting for change this November.
After the release of the September jobs report, which showed that unemployment went down, the only reason that it did go down is because more people are now not looking for work therefore are not receiving unemployment checks from Uncle Sam. These people who are out of work can surely be counted as likely voters this November.
I am merely stating that the people who are included in the unemployment percentage will likely be a force to reckoned with, however the percentage itself will also play a major role in how the election turns out. For example, the state of an economy has a lot to do with consumer confidence.
Needless to say, consumer confidence in our economy is not high. A drop in the unemployment rate will restore more consumer confidence in the economy and then boost President Obama’s appeal.
On the other hand, if the unemployment rate gets worse or stays the same, people will still have many doubts in the President’s policies.
Also in an election that is so centered around creating jobs and with a challenger who has made a career of making jobs, any sort of negative movement in unemployment will cause the trust in President Obama to go down.
The unemployment rate would not matter as much if Mitt Romney was not known for being a successful business man an being able to create jobs.
In the end if people trust Governor Mitt Romney over Barack Obama to create jobs, Romney has a good chance of winning the election.
One of the main reasons our economy is still doing so badly is because the unemployment rate is still so high. If more people were working, people would be spending more money and if people are spending more money, the economy gets better. plain and simple.
The economic crisis is the focus of this election, if it were not the unemployment rate would not be a major factor, unfortunately for President Obama it is.
Daniel Blakeney, Towson College Republicans
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Daniel is wrong on several comments, but right on a very important one.
1) In fact, in September the employment population ratio increased to 58.7% from 58.3% and the civilian labor force increased by 418,000 individuals. This increase was different from the trend over the last 2 months where those numbers decreased and that maybe the source of your confusion.
2) As Romney has said repeatedly over the years Bain capital was not about increasing jobs, but rather making money. While the two are not mutually exclusive (Staples for example) there were many of Bain’s investments that failed in fact in one study done of Bains deals while Romney was in charge 17 out of 77 business invested in went bankrupt, for those of you keeping score thats 22%. Now Romney made a point during the debate that Obama invested $90 billion in green technology and also that government is less efficient than the private sector. However, of the companies invested in with that 90 billion less than 2% have gone bankrupt making Romney 11x LESS efficient than government. So Romney while clearly an excellent business man cant really claim to be a great job creator and certainly not better than Obama’s ARRA (American Recovery and Reinvestment Act).
3) The presidents policies did have positive effects on the unemployment. We went from losing 700,000 jobs before the ARRA to 519,000 created in one month a year later. To be fair I cherry picked the best number from that year, but over the course of 2010 over 1 million jobs were created. Now Obama continued to push jobs bills, but after his super majority in the senate ended (Ted Kennedy died in August 2009) the senate Republicans gave up on allowing the president to do virtually anything (even a bill to help 9-11 first responders).
This brings us to the important thing that Daniel gets right:
If people are out of work demand is down. This is at the heart of Keynesian economics (which almost all Nobel laureates in economics believe in), namely that because demand is down companies will not hire people because there are not enough people to buy their products. So if the private sector is basically frozen the only people that can step in are the government. The reason that the ARRA did not completely fix the economy is that it simply was not big enough. When Obama took office the rate the GDP was decreasing was 10% in an economy of 15-16 trillion that amounts to 1.5-1.6 trillion dollar decrease in demand. The ARRA was only 0.787 trillion dollars or less than half the deficit in demand. Now there are things like Keynesian multipliers which would increase the effect of .787 trillion dollars but still no where near the hole we were in. The other reason the recovery is slow is that this was a financial meltdown unlike other reason depressions. This means that there is less money for companies to borrow in order to reinvest to hire new workers build new plants etc. So yes people being out of work will slow down the recovery, but waiting for the private sector to do something about that will take a very long time which is why government needs to step in to increase demand which will increase hiring rates. The only way that will happen is if the Republicans start passing jobs bills.
Since the Towerlight isn’t interested enough in any perspective but that of the two major parties, and refused to include my input in this week’s Capitol Showdown, I’ll just have to post it here:
If the question of the week is: Is the unemployment rate a major determining factor in this year’s election?, my question is: Is that even a question? Of course it is a factor, or at least it needs to be. The Bureau of Labor Statistics reports that unemployment has been above eight percent for over two and a half years. And that number doesn’t even count those who have been out of work for over a year. Real unemployment is estimated to be as high as twenty-three percent. Imagine that—almost an entire quarter of the population out of work. But more important than the question is the answer.
President Obama’s solution is one right out of Lord Keynes’s playbook—more taxes, more spending, more bailouts, more inflation. There seems to be this fallacious concept that if the government spends more money, that’s more money put into the economy, thus we have growth and employment. But as Henry Hazlitt pointed out in his Economics in One Lesson, the money that the government spends is not added to the economy, because had they not spent it, the taxpayers would be left with that much more money to spend on things they actually want, creating growth and jobs. This is what Frédéric Bastiat famously referred to as “That which is seen, and that which is unseen.”
Mitt Romney, on the other hand, claims that the solution is to tear into government spending, and he has selected “fiscal hawk” Paul Ryan as VP to help him do it. Now, Romney has been terribly nonspecific about his plan, but has said that he likes the Ryan Plan, so let’s take a look at it. The Ryan Plan does not cut spending and it does not balance the budget. Instead, in cuts the rate of increase of spending (slightly) and may balance the budget by 2050. If the Romney were a beer, he would be a cool Keynesian Lite.
Perhaps, then, it is time to look at a third party candidate. Maybe Gary Johnson, who as governor of New Mexico created more than 20,000 new jobs and left the state with a $1 billion surplus, would be a good choice. He plans for a balanced budget in 2013, not a few decades down the road. He’s also the only candidate to have climbed Mt. Everest and crowd-surfed at a campaign event. If we want a real solution to the unemployment problem, we should see past the false dilemma of the two-party system and find a difference in not just style, but in substance.
Ugh. I dont even know where to start with this article. It basically just spews back what is on Obamas website. The true unemployment figures are much higher then what was posted. Furthermore, even with the newest unemployment figure at 7.8%(Which again is inaccurate) they have already released a report from the govt. which states that California underreported thousands of jobless claimis, which if were reported would have kept the unemployment rate well over 8.0%(again, the real rate is much higher). Its always been said that a sitting president has never been re-eleccted with an unemployment rate over 8.0%, so its no surprise that the last jobs report before the election released by the govt. is going to be under that mark. Its called politics. The writer of this opinion article is so grossly uninformed it sickens me. Look up the real statistics.
Ill end on this note, ” Opinions are like A$$holes, everyone’s got one.”
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