I just returned from a run on the first nice day here in the DC area after a week of seemingly endless, and even fatal, rainstorms.
The contrast between day after day of rain and the beautiful, early fall weather here had everyone out on the streets feeling great. Dogs smiled like crazy on their walks, baby’s chortled and wiggled their fat little toes in their strollers, and all the joggers I passed smiled broadly as we finally got our endorphins swimming around again.
Which of course made me think about the political-economy dynamics of the unemployment rate.
It is sometimes said that the President’s re-election bid will be thwarted by the high unemployment rate that will certainly prevail about a year from now, when people start deciding in earnest which way they’ll vote.
But what if more than the level of unemployment, it’s the change that matters? We’ve been stuck so long in neutral, with trivial job growth and the unemployment rate stuck between 8.8% and 9.2% this year, that steady movement in the right direction might be enough to convince wavering voters that we’re finally moving in the right direction, so why change horses?
BTW, this makes the American Jobs Act that much more important, because if this analysis is correct, you don’t get the “delta” you need (i.e., unemployment doesn’t start to come down) with current fiscal policy.
You couldn’t help but wonder this week if it was ever going to stop raining. So when it did, everyone was elated. I suspect the same dynamic will apply to voters feelings about the economy a year from now. What we don’t know is whether that economy will still be rainy or whether the sun will be at least peaking through.