There's a Category 5 storm about to make landfall, and the president and the officials in charge of preparing for the approaching disaster don't seem to be particularly worried. Sound familiar?
Just as Katrina exposed critical weaknesses in the priorities and competence of the Bush administration, the unfolding unemployment disaster is threatening to do the same for the Obama White House.
The members of the Obama administration may not be attending a birthday party at John McCain's ranch in Sedona or shopping for expensive Ferragamo shoes in New York as a great American city is destroyed, but their decidedly lackadaisical response to what job losses are doing to multiple great American cities raises the question: will unemployment be Barack Obama's Katrina?
His economic team's resistance to a second round of stimulus, "lukewarm" reaction to Congressional jobs legislation, and prioritization of deficit reduction over job creation certainly has the feel of a taking-in-the-damage-from-2,500-feet flyover moment.
"There is no discussion of a package like a second stimulus," said deputy White House press secretary Jennifer Psaki. "But we are working closely with Congress and consulting with outside experts to determine the right policies and next steps." No word on whether those outside experts include the 1 in 6 workers currently unemployed or underemployed.
Of course, the real problem isn't the outside experts; the administration's wrongheaded approach is a classic inside job. Sen. Sherrod Brown summed it up on CNN, telling John King that when it comes to putting the focus on Main Street, the president's "advisors are mixed."
Which makes one wonder: what level of unemployment would it take to unmix them? Even 10.2 percent, the highest level in 26 years, after 22 straight months of job losses, doesn't seem to have quickened the pulse of Larry Summers and Tim Geithner.
And it's not like the levees haven't begun to crack, with the real unemployment rate -- factoring in discouraged and partially employed workers -- at 17.5 percent, the unemployment rate for workers aged 16 to 24 at 19 percent, and the unemployment rate for young African-Americans at 30 percent. What's more, the average length of unemployment is at a record high, while the ratio of job seekers to open positions is now 6 to 1.
A new ABC/Washington Post poll reported that 30 percent of Americans say someone in their home has lost a job. I'm guessing that Summers and Geithner are comfortably in the other 70 percent. But even if it hasn't hit home for them, it should be clear that unemployment is going to be the singular issue of 2010.
Congressional Democrats have certainly gotten the message -- and have grown tired of waiting for the White House to take the lead. According to The Hill, House Democratic leaders, including Speaker Pelosi, are "worried they've appeared unresponsive to rising unemployment because they were absorbed by health care." The article also says that Harry Reid has told colleagues he wants a jobs bill soon.
As John Larson, the fourth-ranking House Democrat puts it: "It's jobs, jobs, jobs, jobs. Members of this caucus feel... that a jobless recovery is just simply unacceptable to us."
The problem for the White House and for the Democratic Party -- and, most importantly, for the country -- is that the administration's response on jobs is being led by Summers, who actually opposed the extension of unemployment benefits Obama just signed. At this point you have to wonder what Obama's attachment to Summers and Geithner is. We know if you become a target of Glenn Beck and cause five seconds of embarrassment to the administration you need to start updating your resume (ask Van Jones, Greg Craig, and Anita Dunn), but if you slowly bring down the administration, and the party, and the country, that's apparently fine.
Back in February, when the $787 billion economic stimulus bill was signed, Summers and company promised that it would keep the unemployment rate from going any higher than 8.5 percent. With another 3.4 million jobs lost since then -- and the official unemployment rate at 10.2 and rising -- what does Summers say now?
"I think we got the Recovery Act right."
Really, Larry? What would getting it wrong look like?
The tone-deafness of that statement rivals the clueless response of a certain clothes-conscious former International Arabian Horse Association commissioner turned FEMA head.
I can hear it now: Heck of a job, Larry! Heck of a job, Timmy!
But though the alarm bells don't seem to be ringing in the White House, last week showed that there has clearly been a major shift in the tectonic plates on Capitol Hill.
For starters, there is increasing agreement that Obama's economic team is not up to the job of dealing with the unemployment crisis. According to Rep. Peter DeFazio, there is a "growing consensus" in the Congressional Progressive Caucus that Geithner should resign -- and that Summers needs to go, too. "We need a new economic team," DeFazio said on MSNBC. "We may have to sacrifice just two more jobs to get millions back for Americans."
And the next day, DeFazio told HuffPost's Sam Stein: "It is pretty embarrassing for a Democratic administration and a Democratic Congress to be identified with total attention to Wall Street and nothing for Main Street and jobs."
This comes just a few weeks after Senator Maria Cantwell told MSNBC's Dylan Ratigan that she was "not sure" why Geithner still has a job.
Even more dramatic evidence of the shift came in the House, where members of the House Finance Committee passed a measure to audit the Federal Reserve -- for the first time ever. The bill, sponsored by the bipartisan duo of Rep. Ron Paul and Rep. Alan Grayson, was passed over the objections of Chairman Barney Frank -- and of the Fed and its big time friends and lobbyists. That's a group that doesn't lose many votes in Congress. What's more, a last-minute "compromise" amendment that would have significantly watered down the bill was submitted by Rep. Mel Watt of North Carolina and heavily backed by the Fed. In normal times, this sort of "split-the-difference" amendment would likely have passed. But these are not normal times, and the amendment was defeated -- much to the shock of the Fed and its supporters.
The House Finance Committee was the site of another indication of how the ground is moving under the administration's feet. An hour before a scheduled final vote on the comprehensive financial regulation reform package sought by the White House, members of the Congressional Black Caucus cornered Chairman Frank and said they would refuse to vote for the bill because of the White House's lack of attention to unemployment. It was, as HuffPost's Ryan Grim reported, intended "as a direct rebuke of the White House."
When we hear about members of Congress holding up a vote (and we've heard it a lot lately), most of the time, it's a ploy to secure some kind of pork for their home district. This was an instance of the brakes being put on not for pork -- but for principle.
So, clearly, the winds of change are picking up in Washington and around the country. It's time for the White House to stop holding no-rush summits and insisting that everything is going as planned, and course-correct. Now. And there is no shortage of bold steps the administration can take to mitigate the damage before it turns into an all-out catastrophe.
Among the best ideas currently being floated:
-- Use Wall Street bailout funds left in the TARP program to hail out Main Street (via increased lending to small businesses and using money for public services being cut by states and cities).
-- Enact a one-year payroll tax holiday (creating a moratorium on Social Security, Medicare, and FICA taxes will encourage businesses to hire new workers).
-- Expand the Small Business Association's lending programs (45 percent of all job losses have been at small businesses).
-- Offer businesses a tax credit for every new job created over the next 12 months, or have the government pay a portion of the salary of new workers hired over the same period.
The bottom line: extending unemployment benefits, crossing your fingers, and waiting for things to turn around is just not enough.
In the post-Katrina fallout, video surfaced of a final briefing before the storm hit in which federal disaster officials warned President Bush that the hurricane could breach the levees and overwhelm the ability of rescuers to properly respond. Bush famously didn't ask a single question but assured local officials: "We are fully prepared." He later insisted, "I don't think anybody anticipated the breach of the levees."
Are we going to get similar protestations from Obama when the unemployment waters continue to rise?
The unemployment disaster has already inflicted great damage all across the country. And the Obama White House will be defined by its response to it.
So what is it going to be: a muscular, multi-tiered jobs plan to deal with reality or "heck of a job" delusion?
Follow Arianna Huffington on Twitter: www.twitter.com/ariannahuff
Arianna Huffington: Memo to Warren Buffett: Put Down the Pom-Poms and Tell Us the Truth About the Economy
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no Katrina was a natural disaster that Bush ignored and Brownie didn't know what to do with Unemployment (due to NAFTA, CAFTA & simply shipping jobs overseas), deregulation (causing unbridled greed to run amok), busting of unions (causing the middle class to have less spending and capital) = a country with no financial foundation and an increasing gap between the top 2% and the rest of us no - sorry - they are NOTHING alike
Almost every economist I hear says that we were so deep that it won't be until 2010 that we will see some jobs start coming back. They have also said that the stimulus package was the right thing to do because it did save us from going over the cliff. It is even harder because the jobs will be different jobs since the "big business industry" shipped many of them overseas. What we have here is not only a recession but a complete retooling of America that took over 40 years in the making to get us in this horrible situation. For some insane reason people think that it only takes "15 minutes" to get us out of it.
Short answer - NO This issues with Katrina were ignored by Bush, if nothing else Obama is not skirting the issue, it's just another mess the GOP initiated which they have no interest in resolving.
In re-reading this piece, I'm going to have to fall in with those who aren't convinced. I wouldn't go as far as calling it a false analogy; usually, with those, the reasoning contains fallacies, which is what gets you the latter : a false analogy has only the appearance of two things being very alike. But neither would I call it a good one.
What an unfair sensationalist comparison. One was a natural disaster which could easily of been dealt with afterwards with the resources available but was just plain ignored and the other was an economic event not seen since the great depression. It was a timebomb waiting to happen because of the golden goose strangling that took place over the last 8 years. The solution will not occur just because one person decides to make it work, it's not a flick of the light switch problem. It's a huge worldwide problem, that will take countless decisions and reactions to fix, it's a process. A process that is suffering setbacks because it's dependent on some very powerful people. Powerful people who have their finger in honeypots they don't want to remove or change. So patience is required. A simple comparison is losing weight, do you jump on the scales every day and if it goes up a little bit. So you jump on the web and write on your blog, this diet isn't working.... grrrr 30 years of bad eating and why is my belly tyre not shrinking. Every day is not newsworthy no matter the agendas of blogs and newspapers everywhere. All you can do is check in at montly intervals, important moments and see the difference. Have faith in the president!
We elected a moderate Democrat who is half Black, half White and who appears to be too beholden to corporate interests. He certainly lacks the passion of his campaign. Compared to W. Bush and the potential McCain, he was/is the obvious choice. Will he ever achieve the greatness of say an FDR that we thought was possible? Appears quite doubtful.
RE: The bill, sponsored by the bipartisan duo of Rep. Ron Paul and Rep. Alan Grayson, was passed over the objections of Chairman Barney Frank -- and of the Fed and its big time friends and lobbyists. This is very, very good news indeed. And this news is even better. RE: In normal times, this sort of "split-the-difference" amendment would likely have passed. But these are not normal times, and the amendment was defeated -- much to the shock of the Fed and its supporters.
I kept wondering why Harry Reid suddenly grew a spine while Barack Obama didn't, and I kept coming back to the same conclusion: Harry Reid is up for re-election soon. Barack Obama isn't.
that should tell you something else as well - if you think outside the box, perhaps even the reverse of your conclusion
Yes, And health care, and cash for clunkers, and the failed stimulus bill, and the attempt to push cap and tax, and the czar controversy, and and and.................................................. 2010=1994
all created by Bush, who left someone else to clean up his messes. At least Obama is attempting to do something....
I believe history will show Obama was a poor "dithering" President. One of the simplest measures of turning around the economy is to end the conflicts in Iraq and Afghanistan. The most recent report has the cost per soldier in Afghanistan as being $1Million a day. The WH outspends the entire world combined on military expansion. The attention is on world conquest, not jobs, infrastructure, healthcare,etc. The needs of our own country come last for some reason. His first year is almost up and little has been gained here. His foreign policy is in shreds. Mid-term elections are around the corner and he is already on the road to save those up for re-election. We can kiss next year off as more people lose their jobs and homes. He will then be on the move to be re-elected. He needs to spend far less time primping and appearing on Letterman. I am so sorry I voted for this man.
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