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The Economy Needs Its Own RGIII The Economy Needs Its Own RGIII

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Analysis

The Economy Needs Its Own RGIII

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Demonstrators chant for jobs outside Capitol Hill in December.(AP Photo/Jose Luis Magana)

About a quarter past eight on Thursday night, the Washington Redskins plucked Heisman Trophy-winning quarterback Robert Griffin III from Baylor University with the second pick of the NFL draft. In the Twitterverse, especially in Washington, there was much rejoicing. Hold that thought.

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Twelve hours and a few minutes later, the Commerce Department reported the U.S. economy grew by 2.2 percent in the first quarter of this year. That was lower than most economists expected, and well below the 3 percent rate generally considered necessary to bring down unemployment over time. Among economic commentators, on the left and the right, there was much hand-wringing, and rightly so.

First-cut GDP figures are notoriously subject to big revisions later, but even with that caveat, there’s plenty of reason to worry about the state of the recovery right now. The pace of job creation slowed in March. New claims for unemployment benefits are rising. Headwinds from Europe are picking up. The guts of the GDP estimate suggest investment growth is slowing and government spending cuts continue to suck demand out of the economy.

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This is not a secret among economists, or business leaders, or regular folks. Analysts have been issuing increasingly loud alarms over the past few weeks about falling activity, sluggish hiring, and emerging problems abroad. An ABC News/Washington Post poll this month shows three-quarters of Americans still believe the country is in recession. Everyone gets how bleak things look – everyone, it seems, except for the leaders who could actually do something about it.

Employers, investors, and especially 12.8 million unemployed American workers, could use some reassurance right now that Washington policymakers see the recovery stalling and are falling over themselves to rev it up. They could use a big dose of what the Redskins gave their fans on Thursday night: Hope. Confidence. A sense that finally, after a long spell of mediocrity, someone is doing something to make things better.

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Instead, policymakers are doling out a big load of wait-and-see. Federal Reserve chairman Ben Bernanke insisted in a press conference this week that the central bank still could do more, in the realm of unconventional monetary policy, to goose employment growth this year. But it won’t, he said, at least not yet, because the risks of higher inflation damaging the Fed’s credibility outweigh the potential rewards in job growth.

 

Bernanke at least held out the possibility that the Fed could act again this year to boost growth. There’s almost no chance of Congress and President Obama coming together to do it. Not in the throes of an election season that Democrats and Republicans alike believe will end in the ratification of their economic visions.

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And certainly not while Obama and his presumptive Republican opponent, former Massachusetts Gov. Mitt Romney, dance around the issue of immediate job creation in a campaign that seems to focus on fairness, deficits, future budgets, and almost everything but getting Americans back to work right away.

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There are still plenty of ways Republicans and Democrats could work together to boost growth and create jobs in the short term, including grand bargains on opening up more federal land to oil drilling and on welcoming a wave of new, economy-powering, high-skilled immigrants. Each of them carries some risk – largely political, but also economic. Guess what: So does trading a fistful of high draft picks, as the Redskins did, to move up and grab the guy who may be a Hall of Famer, but could just as well be the next in a long line of D.C. quarterback busts.

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Washington football fans didn’t want their team to play it safe this year – they wanted a chance to win. The same is true of America’s workers and business leaders. Polls show they want action on the economy. They don’t want another summer of mediocre growth. They want someone to do something. 

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