Barack Obama’s job – and yours – Opinion – Al Jazeera English

“No president since World War II has been re-elected with an unemployment rate over 7.2 per cent.” That’s a snippet of conventional wisdom that’s been floating around almost since the day that Barack Obama was inaugurated in January 2009, a month that ultimately closed out with an ominous unemployment rate of 7.8 per cent – although it was only reported at 7.6 per cent at the time.

That too-rosy, though still dismal employment statistic was just one factor feeding into a too-rosy economic projection that ended up getting the Obama Administration into a good deal of trouble. Although economic adviser Christine Romer originally pushed for a $1.8tn stimulus in a December 2008 memo, that was considered politically impossible, and Obama officially asked for less than half that amount – and still was greeted with intense GOP opposition, even though around 40 per cent of his stimulus package was tax cuts. The projections released on January 10, 10 days before his inauguration, anticipated peak unemployment of 8 per cent with the scaled-down stimulus, and 9 per cent without it. In reality, the 8 per cent figure was passed the next month, which ended with at 8.3 per cent unemployment. The stimulus plan was signed into law on February 18.

On the surface, Republicans were able to argue the stimulus was a failure, since unemployment peaked at 10 per cent in October 2009. But Romer’s original calculations had been generally vindicated: the recession was far more severe than originally anticipated, and a much larger stimulus had been called for. The unemployment rate could have easily been over 11 per cent or more without the stimulus. That’s scant solace, of course. But those stubbornly high unemployment rates may not be as politically deadly as they once seemed.

For one thing, they are finally coming back down to earth – though still nowhere near what they should be. Yet, at 8.3 per cent – down 0.7 per cent in four months – the unemployment rate now matches that of February 2009. It’s still a far cry from 7.2 per cent, but that level nine months from now is far from impossible.

via Barack Obama’s job – and yours – Opinion – Al Jazeera English.