Three days after the midterms, whichever politicians make it to Washington will get a stark reminder of one of the key challenges they're likely to face during the coming term—the unemployment number, which lands this Friday. Indeed, for many the number may come to be the one issue which defines their tenure in office. And yet, looking at the likely outcomes of the election, it seems that the result is destined to have very little effect on unemployment—at least if the parties stick to the rhetoric they’ve been offering in the run up to it.
Should the Republicans gain control of Congress—as they are widely tipped to do—it is difficult to imagine what they will accomplish with respect to creating jobs for the millions of Americans seeking work today. Their sworn mission—as per various members of their leadership—is to obstruct the Democrats, with the ultimate prize being the repeal of Obamacare.
With that as the major play in their playbook, it is reasonable to assume that the one initiative that could make a major dent in the unemployment number—a second stimulus bill, focused entirely on job creation—is unlikely to happen during the next two years. There is, of course, always the possibility of tax cuts, but the hard evidence to suggest that those would create a significant number of jobs is sadly lacking.
Of course, there is little to suggest that the Democrats would do anything different at this point, even if a late miracle did somehow see them retain control of both the House and the Senate: despite its successes, the first stimulus bill has acquired such a bad reputation that it has been political poison over the past few months for anyone seeking reelection who happened to be associated with it. That makes the likelihood of a second bill all the more remote.
So much for governmental initiatives to create jobs, then. But what of managing the conditions in which others can create them?
A key point in many of the campaigns run by Republicans is that "government needs to get out of the way of business"—shorthand for the claim that the key to creating jobs is to reduce taxes and regulation.
Make no mistake: the Obama administration came to power pledging to tighten oversight of business. Whether you think that's a good thing or not, the Deepwater Horizon spill and the recent revelations about dubious practices in the mortgage industry only serve to strengthen the administration's case. The most likely scenario for regulation, then: stasis.
The question of taxes is altogether more complicated. While it seems that some form of extension of the Bush cuts is likely in the coming months, the longer-term picture is much less clear—and impossible to predict. One thing is obvious, however: that if this or any other administration wishes to tackle the deficit in a substantive way, then taxes will have to go up at some point.
With all of that weighed, it is difficult to see much changing regarding the government's ability to influence the jobs picture over the coming couple of years—and perhaps the entire duration of this House and Senate term.
Whatever the final outcome of this election, a couple of things are already very clear at this point: first, that there will be no magic bullet to increase employment overnight. And, second, that the onus for recovery appears to be firmly on business owners: either they create jobs, or nothing changes. Within those points, some may find a reflection or justification of their own beliefs about the economy. Even so, if job creation is an issue you care about, there's likely to be precious little to celebrate in the result of this election.
--Phil Stott, Vault.com