For President Obama and the Democratic-controlled Congress, the economy could prove to be a “political horror show” for years to come, said David Ignatius in The Washington Post. In newly released minutes from a Federal Reserve meeting in early November, Fed members paint an extremely gloomy picture of the next few years, predicting that unemployment—now at 10.2 percent—will stay between 8.2 percent and 8.6 percent through 2012. Big companies, the Fed members said, aren’t hiring for fear of another downturn, while small businesses, the traditional engine of job growth after a recession, can’t get loans to expand. The outlook is so bleak that Fed economists project it will be “five or six years” before we see the return of sustained economic growth and a normal job market. That means that when voters go to the polls to elect a new Congress in 2010, and perhaps even in the presidential election year of 2012, “the politics of rage” may be in full force.
Obama had better act now, said Paul Krugman in The New York Times. There are “six times as many Americans seeking work as there are job openings,” and the average time spent looking for work—more than six months—is the longest since the 1930s. It’s simply wrong to let this kind of widespread pain prevail for years, while waiting for the private sector to rouse itself. Obama, therefore, should launch the modern equivalent of Franklin Roosevelt’s Works Progress Administration. At the cost of $40 billion a year, such a program could hire about a million people to do public-works projects. Their wages would be low, but at least they’d have a paycheck.
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