Can we win the future if we lose the present?
Mike Konczal says that "in a non-crisis time, [Obama's State of the Union] would have been a great vision of the role of government in the economy." But this isn't a non-crisis time. Unemployment is stuck above 9 percent, we've not yet hit our peak rate of foreclosures, recent job growth hasn't even been enough to keep up with population increases, there's still a chance of further financial crises in Europe, and the United States government has basically walked off the field. We just had an election in which both parties proclaimed jobs the central issue, but the State of the Union had few answers for those who're out of work.
I sat in on a briefing yesterday where various "senior administration officials" explained the theory behind the State of the Union. When they were asked about shifting their focus to the future when the economy was so bad in the present, they explained that they got pretty much everything they thought they could get -- and, in fact, more than they thought they could get -- in the tax-cut deal, and it was time to let that work. Left unsaid is that they can't get anything more out of a Republican House, and so there's little point in begging.
This is, essentially, a bet: The economy isn't currently growing fast enough to bring down the unemployment rate. But the administration expects that it will be growing that fast very soon. The early numbers are looking good, the forecasts are optimistic, and Americans are more confident than they've been at any time in the past three years. But if that doesn't happen, it's not at all clear that they have a workable policy or political theory for what to do about it. And so far as the future goes, it doesn't matter how many tax credits you offer for college students: If 8 percent unemployment becomes the new normal, we've lost.
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