Obama Re-elected With Highest Joblessness Since FDR
Jobs and the economy were big themes in Tuesday's election, according to the exit polls, but even with tepid job growth and an unemployment rate of 7.9% voters elected President Obama to a second term.
That's the highest unemployment rate for any re-elected president since Franklin Roosevelt in 1936, when the jobless rate was a whopping 17%.
What happened? The exit polls provide some explanation.
More than 50% of voters blamed Obama's predecessor George W. Bush for the weak economy rather than Obama. Voters in the Midwest credited the president with saving jobs through the bailout of the auto industry and lauded his promise to create 1 million more manufacturing jobs by 2016.
That sounds good, says Matt Nesto of Breakout, "but he doesn't explain how he will do it."
President Obama also plans to create more than 600,000 jobs in the natural gas sector, recruit 100,000 math and science teachers and use about half the money saved from ending the wars in Iraq and Afghanistan to fund infrastructure projects.
Again, sounds good, but where will the money come from?
Mike Santoli, senior columnist at Yahoo! Finance, says, "There is room out there for some kind of infrastructure investment but I don't think it will get to the scale where you would really call it much of a stimulus."
Santoli says, however, companies that have lagged in job growth will be forced to hire a little bit more if there's a "long enough period without another economic shock." He expects a "rotation from corporate profitability and productivity to hiring" if growth picks up.
What happens to the jobs market is all about growth, says Nesto. "We only have 2% GDP growth and that is standing in the way of anyone having the foresight to want to add jobs."
The Daily Ticker's Henry Blodget suggests that a change at the corporate level could help get employers hiring.
"Corporate profits are at a record high," says Blodget. "If we could just get corporations to stop focusing so much on this quarter's profitability" and instead plan three to five years ahead to create more growth, that investment could pay off in more jobs.
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