Our View

‘Fiscal cliff’ threatens improving economics

By From page A6 | December 13, 2012

The issue: Without a balanced plan by the end of December, we’ll plunge back into recession

You know the election is over when the unemployment picture improves and President Barack Obama doesn’t come bounding out of the Oval Office to tout the progress. Last Friday’s jobs numbers showing that 146,000 jobs were added in November and that the unemployment rate has fallen to 7.7 percent are heartening. That’s a full percentage point below a year ago.

THE NUMBERS are especially surprising given the billions of dollars in damage to the Northeast from Hurricane Sandy. We remain slightly suspicious of the analysis by the Bureau of Labor Statistics that Sandy did not have a large impact on the national economy. We reserve judgment on that point.

But for now, we’ll take the good news that unemployment is at a four-year low. That’s not good enough, to be sure. Millions of Americans remain unemployed or, nearly as bad, underemployed. But retail job growth is improving, an indication that consumer confidence is rebounding. There will be no full recovery without consumer spending.

That’s why this “fiscal cliff” impasse is so critical. If Obama and House Speaker John Boehner, R-Ohio, do not come up with a balanced plan by the end of the month to avert tax hikes on everyone, but also to show that spending restraints are a reality, the economy will plunge back into recession.

There is no reason (other than politics) to prevent these two men, who both care deeply about this country, from reaching a solid agreement behind closed doors that will reassure the stock markets and set the ground work for a full-scale fiscal plan next year.

Business yearns for certainty, and real hiring will not begin until there’s more confidence that Washington can get its act together.

THERE’S MORE good news in that Apple, one of America’s most successful companies, plans to spend $100 million to make some Mac computers in the United States once again. (Elk Grove officials are hopeful that the jobs will come to this region; Apple already has a manufacturing facility on Laguna Boulevard.)

It won’t be easy — we have lost an alarming component of skills and supply chains to other nations. But without reinvigorating our manufacturing base, the national economy will not rebound to where it must be to get this country back on track.

Our View

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