Jobs Will Rule November

Health care lays behind him, financial reform and climate change ahead, but for President Barack Obama--and his opponents--there is only one real issue: jobs. The recent employment reports signal some small gains, yet the widespread prognosis for a slow, near-jobless recovery threatens the president and his party more than any major domestic challenge.

Tea party activists and conservative ideologues often link the president's dwindling popularity to an overreach on health care, but it all boils down to the old Clintonian adage: It's the economy, stupid. Health care reform is simply too complex and its long-term effects too unknowable to be a winning issue for either side.

The jobs deficit, on other the hand, is immediate and affects tens of millions of families. You can start with the highest-ever percentage of long-term unemployed on record. In recent months there have been roughly five to six applicants for every open position. Youth unemployment reaches near 20% for workers in their 20s--more than 25% for teenagers and over 43% for black teens. Even if the economy improves, according to the administration predictions, unemployment could remain close to double digits by the mid-term elections and over 8% by 2012.

The prospect of long-term unemployment, and underemployment, is clearly damaging the "hope" brand once associated with the president. Recent CBS poll data show that 84% of Americans are worried about the economy.

Over a third of those polled were concerned that someone in their household might lose their job. Some 52% identify the economy as the most important issue, while health care registered only 13%. Given the administration's focus on health care and other issues--such as climate change--it's not surprising that barely two in five of those polled approve of the president's handling of the economy.

Those inside the Washington bubble are too absorbed with political maneuverings to focus on the basic. The primary domestic challenges for the country lie not in addressing climate change, suburban sprawl or gay marriage, but spurring employment and generating new wealth.

Part of our problem is that the two main parties are committed primarily to serving the interest of aligned constituencies .Republican dogmatism and canine-like obedience to short-term corporate profits contributed mightily to the economic meltdown. In its period in power , the GOP failed to either restrain Wall Street or address the nation's indebtedness. No surprise then that many even moderate, middle-class voters opted for the Democrats over the past two elections.

The question now is whether the Democrats are squandering their advantage. After almost 15 months in office, Democratic dogmatism--a mixture of faith in all forms of federal spending, "green jobs" and ever more regulation--has not exactly turbo-charged the economy. As a result, middle-class voters--those making $50,000 to $75,000 annually, have been slipping from the Democrats, according to a recent Wall Street Journal poll. These are precisely the voters who also put Scott Brown into the Senate.

Yet the president's situation is far from hopeless. Manufacturing payrolls are slowly beginning to grow, and industrial production is on the upswing. Survivor sectors such as health care continue to create new jobs. The bleeding may have finally stopped in construction, where the recession has been particularly devastating. Although the generally high-wage finance and information sectors continue to shrink, rapid growth in temporary business services could presage a new wave of permanent hires.

These improvements suggest new opportunities for Obama. It allows him to point to a relatively stronger economy--particularly compared with Japan and the E.U.--as proof both of his policy acumen and our country's overall vitality.

This is when we really find out whether Obama is a thoughtful moderate of the campaign trail who embodies American exceptionalism or the hard-edged tool of the Democratic constituency groups. So far he has been a man of the left more comfortable with expanding the public sector than finding ways to boost private sector payrolls.

The stimulus, crafted by old-dog Democrats like Nancy Pelosi and Harry Reid, with its emphasis on government workers and the university-industrial complex, solidified this notion. A public-sector-oriented approach has proved to have limited popular appeal, particularly at a time when many in the private sector regard the public workforce as an oppressive and overcompensated privileged class.

Administration fiscal policy also erred in its focus on Wall Street. Obama, described during the 2008 campaign as the "hedge fund" candidate, has indeed done very well for this privileged class. Yet Democrats are hard-pressed to make the case that what's good for George Soros is good for the USA.

Now the question is whether the president can refocus on jobs. This will take, among other things, backing off the economically ruinous climate change agenda. Even the most gullible economic development officials are beginning to realize that "green jobs" are no panacea.

In fact, as evident in Spain, Germany and even Denmark, over-tough green legislation can destroy the productive capacity of the most enlightened industries. Similarly in green strongholds like California and Oregon, the mounting climate change jihad could slow and even explode the incipient recovery by imposing ever more draconian regulation on businesses that can choose to migrate to less onerous locales.

There are some hopeful signs of Obama's repositioning. His recent moves embracing nuclear power and off-shore oil drilling, however inadequate, show that he's at least trying to triangulate between the green purists and the unreconstructed despoilers. Some sort of moderated energy legislation--there's no way to get the more radical House version through the Senate--would reassure businesses and the public that the president has jobs as his No. 1 priority.

The well-funded, politically connected environmental lobby, no doubt, will try to head off any dissent from its agenda. But the same hard-boiled pol who threw his own pastor under the bus--remember Rev. Jeremiah Wright?--would seemingly be willing to diss pesky affluent white greens who, after all, have nowhere else to go politically.

An equally good opportunity lies in the push for financial reform. As in the case of health care, the Republicans have a miserable record to defend. After all, the GOP dominated Congress and White House did little to rein in the out-of-control financial sector. Sure, there's blame to go around for folks like Barney Frank but the buck was definitely with the Republicans, and they failed.

Main Street businesses that felt ignored by the stimulus might look favorably on tough administration polices against big banks. Republicans could yet score points by opposing "too big to fail" provisions, as Mike Barone suggests, but one has to wonder if Republicans possess the moxie to stand up to large corporate interests, even detested ones.

But right now the burden is on the president. Building on what is still a weak recovery, he must make clear that jobs and growth are his top domestic priorities. If he fails to communicate that message adequately, the voters, however leery of the Republicans, will rebuke him.

This article originally appeared at Forbes.com.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His newest book is The Next Hundred Million: America in 2050, released in Febuary, 2010.