By Hastings Wyman –
Last week, Baker Hughes, an oil services firm, announced it would lay off 7,000 employees, followed by American Express laying off 4,000; eBay 4,000; and John Deere 700.
Earlier in the same week, President Obama, in his State of the Union address, while acknowledging “It has been, and still is, a hard time for many,” avowed, “But tonight, we turn the page… the shadow of crisis has passed.”
If the layoffs in the days immediately following the President’s speech are aberrations, and the oil and gas recession is a special case, then his claiming victory over hard times will increase his popularity and his clout with Congress. But if these lay-offs are harbingers of things to come, then Obama’s declaration of progress will ring hollow.
The President’s victory lap, as it were, was founded on some significant developments. Most important, the nation’s unemployment rate, the economic statistic most noticed by voters, fell to 5.6% in December, the lowest in six and a half years. Gasoline prices fell to their lowest level in six years. And the stock market, as Obama noted in his address, has more than doubled since he took office.
In addition to an improved economy, much of Obama’s new-found political relevance stems from his decision to take the initiative by acting unilaterally when he can justify his actions as within his executive authority. Thus, he has moved forward on immigration, preventing the deporting of some 5 million undocumented aliens; global warming, with an agreement with China that does not require Senate consent, and new restrictions on the use of coal; and Cuba, recognizing the Communist regime while the Castro brothers remain in power.
Whether these actions are all that popular isn’t the point. Suddenly, the deadlock, the logjam, the stalemate – call it what you will – was broken and something was getting done. Moreover, President Obama did it all by himself, without having to negotiate with those just-say-no Republicans in Congress.
So President Obama’s approval rating had already improved before his Jan. 20 State of the Union address, up from 44% in October to 52% in mid-January, in the latest Rasmussen Reports poll. Suddenly, the GOP’s overwhelming victory last November was not hogging the political spotlight.
Moreover, President Obama added to his influence with the people by outlining a number of proposals in his State of the Union message that would require action by Congress, including two years of free community college, raising the minimum wage, providing leave-with-pay for new mothers, and raising taxes on the wealthy while cutting the rates for the middle class. “Middle class economics,” he called his program.
Former Obama press secretary Jay Carney said on CNN that the domestic policy initiatives espoused in the President’s speech were probably all “70/30” in the polls, accounting in part for the positive reception the speech received. Almost none of these new policies are likely to see the light of day once they get to the Republican-controlled Congress, but they have put the GOP on the defensive, having to explain why its lawmakers are opposed to popular programs. Do people want Santa Claus, or the Grinch? Grinch can make a case, but it’s not an easy sell.
In sum, if the unemployment rate remains low, if lagging wage rates begin to rise, if the stock market rewards the wealthy AND everyone with a 401K, if the price of gasoline doesn’t rebound to earlier high levels, then President Obama’s standing with the public will continue improve. And he will have presented the Democratic Party with a solid economic record to run on in 2016.
But if the aforementioned layoffs are only the beginning and the jobless rate rises, if the recent volatility in the stock market signals a coming crash, if economic or international currency rates create major problems for the US economy, if the Chinese and Indians buy significantly fewer US exports, then President Obama’s optimistic slogans will become the equivalent of George W. Bush’s “mission accomplished” in 2003 about the war in Iraq which, albeit with American “advisors” not combat troops, continues to this day.