As published on Washingtonpost.com on July 8, 2009:

WASHINGTON — Around midnight on April 15, 1912, there were a few minutes when Capt. Edward Smith of the Titanic realized his ship was going down — six watertight compartments breached, less than two hours to float — yet his passengers slept in happy ignorance. A historical fate hardened while most of the participants dreamed on.

The jobs report last week opened a long gash beneath the waterline of President Barack Obama’s legislative agenda. Few yet realize it, but a scramble for lifeboats is about to begin.

On closer inspection, the economic news, which seemed bad, is even worse. Not only did unemployment rise to 9.5 percent but wages fell, undermining the consumption needed for the recovery of a consumption-driven economy. Unemployment increased among “breadwinners” — married men and women who head households — also making major family purchases more difficult. Recent increases in unemployment benefits and food stamps have helped many Americans pay for food and rent. Jobs, however, are what lead to the purchase of furniture, cars and homes. Paired with a decline in business investment, these trends make a second-half recovery less likely.

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