The new jobs numbers prove that the recession continues to take its toll on the American economy. If Mitt Romney had a feasible plan to restore growth, the rising unemployment would help him boost his numbers in key states. Since that plan does not exist, Obama’s Electoral firewall persists and his strong polling numbers in key swing states, especially those hit hardest by the recession such as Ohio, will be the bulwark of his coming election victory.
This past Friday, a tired country saw the unemployment number move up from 7.8% to 7.9%, after an unimpressive 171,000 new jobs were added to the economy in October. The Romney campaign has subsequently revamped its message to focus on the economy’s weak performance. As the Financial Times reports, “Mitt Romney’s closing argument for the presidency now always includes a mention of single mothers who “scrimp and save” and fathers who work two jobs so that their kids can wear new clothes to school.” Unfortunately, Romney’s struggling Americans are the new reality of the American economy. They do exist; what does not exist is a Romney plan to help them.
The current “Romney plan” for economic growth effectively rests on two unfounded assumptions: 1) That tax cuts promote job creation; and 2) that Romney’s election and his free market policies will bring confidence to capital markets, thus spurring on business investment. The first is effectively handled by the recent Congressional Research Service report, which concluded that high-end marginal rates and economic growth are inversely proportional: during the first half of the post-WWII period, when rates exceeded 90%, growth averaged 4.2% compared to the meager average of 1.7% after rates were reduced to historic lows. The numbers don’t lie; Romney’s idea of cutting taxes to prosperity is unfounded.
As for Romney’s assertion that he can restore confidence to markets by reducing government and promoting free enterprise policies, his claims are eerily reminiscent of euro zone leaders’ evocation of the confidence fairy, the imaginary creature used to justify austerity. In fact, as the Wall Street Journal notes, the newest IMF report on global economic growth finds that “global efforts to slash deficits and debt may have hurt growth.” Thus Romney’s thinly veiled austerity and confidence fairy can be safely put to rest.
While the new unemployment report is no doubt a red flag to the Obama presidency it will not disturb his victory come Tuesday, since Romney has no way of seriously addressing it.