The MacNeil/Lehrer Report; The Politics of Unemployment

JIM LEHRER: Good evening. The nation's unemployment rate jumped to 10.1% last month, the government reported today, marking the first time it's gone to double digits in more than 40 years. It was no real surprise because economists and others had predicted its coming. But the fact of it, and the 11.3 million jobless Americans it represents was still jarring, particularly to those with a stake in the November 2nd mid-term elections. Predictably, Democrats leaped to blame it on President Reagan and the Republicans. Senator Edward Kennedy called it a national tragedy, and urged Americans to tell the President he has flunked the course. House Speaker Thomas O'Neill asked the Joint Economic Committee of Congress to immediately chart emergency measures to cope with unemployment. Just as predictably, Mr. Reagan and his supporters tried to deflect the blame. The U.S. Chamber of Commerce agreed it was a national tragedy, but said the Reagan course remained the way out. Reagan Cabinet members said similar things. Mr. Reagan himself had spent the last several days in anticipation of today's double-digit figures, doing some advance innoculating. Earlier this week he said he was willing to accept the blame for the increase since he took office, but not for the 7.4% that existed then. The blame for that goes to the Democrats, he said. Today he was in California signing an export bill he said would help create new jobs, and deploring those who would make "a political football out of this cruel fate for so many people."Tonight we explore the politics of unemployment and 10.1. Robert MacNeil is off; Charlayne Hunter-Gault is in New York. Charlayne?

CHARLAYNE HUNTER-GAULT: Jim, the politics of unemployment are being played out in almost all of the 435 congressional districts in the United States, but it stands out most blatantly in those districts where first-term Republicans elected in the 1980 Reagan landslide are facing the voters for the first time since then. Earlier this week we looked in on one of those districts in the state of Idaho, a vast region of timber and mining towns where unemployment last month reached 9.6%, the highest rate in 22 years. In the contested First Congressional District, unemployment ranges from a high of 33.3% in depressed mining areas like Shoshone County to some 16% in Boise County. In a few minutes, from Boise, we'll be talking with incumbent Larry Craig, a strong supporter of Reaganomics, and his challenger, Democrat Larry LaRocco. But first, a look at how they each have responded to the unemployment issue in their campaign ads.

ANNOUNCER [Craig campaign commercial]: The past two years, Larry Craig has worked to protect the jobs of all Idahoans. He sponsored the bill to prohibit grain embargoes that threaten Idaho farmers. He authored the housing act to help young people buy homes and produce more jobs in Idaho's lumber industry. And when the jobs of miners at Bunker Hill were in jeopardy, he was there, working with government agencies and local people to remove the roadblocks that stood in the way of protecting Idaho jobs. He's Larry Craig, and he's at work for Idaho.

WORKER [LaRocco campaign commercial]: The massive budget deficits and the high interest rates have been devastating for Idaho's economy. You know it and I know it.

2nd WORKER: We have people lined up out here every day trying to find jobs.

3rd WORKER: All we're really asking for is an opportunity to work and support our families as we've been able to in the past.

LaROCCO IN CAMPAIGN COMMERCIAL: When my opponent took office two years ago, the unemployment rate in this district was 6.4%. It's now 10.6%. That's not economic recovery; that's misery, and we've got to get off that and get on the road to economic recovery with fair policy.

HUNTER-GAULT: Earlier this week we sampled reactions from laid-off mill workers and other voters who face unemployment in Lewiston, one of the largest cities in the First Congressional District.

1st VOTER: And there just isn't any work at all up here. I look, oh, about two or three days a week, and I haven't found anything yet.

2nd VOTER: There have been a lot of jobs. You look in the paper and find a lot of jobs, but they're for skilled personel or somebody that has a lot of experience in technical work or something. There's really not much for just anybody, you know, that has minimum skills or something.

3rd VOTER: It's gotten worse instead of better. We see that with the 10% umemployment, plus the fact that we don't count the people that run out of unemployment, which is really a tragic thing to me, because I think the thing would probably approach 13 or 14% rather than the 10% that we're talking about.

4th VOTER: It's been going on too long, and I think as far as -- I know how I feel about it, and I think there's a lot of other people out there that feel the same way I do. It's got to change, and if it don't change, you know, something dramatic is going to happen.

5th VOTER: So if you feel that somebody is manipulating your life and your situation, and you don't have anything you can do to turn around and make a change in that, then you'd feel more helpless.

1st VOTER: It's got to get better sooner or later. Who knows what it looks like later; if we all hang tough, it'll come out.

3rd VOTER: I don't hear anything good at all. And I happen to be one of the guys that goes to the same restaurant every morning and drinks coffee and listens to the same tales from the same businessmen and people that I know personally, and they aren't optimistic. They all say we need a solution, but they have no idea of what the solution may be or what the politician's idea and what his may be, and they don't believe the politician any more than they'd believe anything they'd say themselves. So I don't know. I don't know what the solution is.

1st VOTER: It's bound to get better. You know, he's only got four years to try to undo what it took other people 20 years to screw up.

6th VOTER: But he's giving everything to the upper-class people, and going to put the tax burden upon us. And how long are they going assume that the poor and the lower-class people are going to be able to pay for this?

5th VOTER: I'd be glad to hear other ideas on it, but I'm not going to jump right on, "Oh, hey, this is a much better idea." I would certainly like to see alternatives proposed, but until something really sounds good, I'm willing to stay with things the way they are.

4th VOTER: I want to vote, but that person's going to have to make me believe that he's going to really try to change things. You Can't -- 'cause I am not going to fall for a con, and that's the way I feel, that American politics have been conning the American public for a long time.

HUNTER-GAULT: All right. In Boise, Congressman Craig, you just heard one of your constituents say that American politics are just conning people. Are you a con man?

Rep. LARRY CRAIG: Charlayne, of course I'm not, and I think the commercial you saw demonstrates the kind of work that I and my staff have been involved in the last 22 months that I have served the people of the First District to work to save the jobs that exist. And, most assuredly, to bring those interest rates down from that 21-point high that we inherited to the Mellon bank's announced 12.3 or three quarters of a percent today, which is very dramatic.

HUNTER-GAULT: Mr. LaRocco -- excuse me, Mr. LaRocco, how do you feel about that con-man label. Do you wear it?

LARRY LaROCCO: No, certainly not. I'm not a con man; I'm a straight-talking Idahoan that has been out working with the people for a year now in every one of the 19 counties of the district. And what I've been telling the people is that we need fair policies in this country. We don't need policies that, you know, give tax breaks to the rich, and then they just don't add up because they are spending so much on defense. And the Idaho people are common-sense people. They don't need a Philadelphia lawyer to tell them that these policies don't add up.

HUNTER-GAULT: Congressman Craig, how worried are you that voters like the ones we just heard are going to take their frustrations out on you at the polls?

Rep. CRAIG: Well, Charlayne, our polls clearly show that the people in Idaho are willing to stay the course with the President, because people like my opponent and those who he supports in Congress, like Tip O'Neill, have offered nothing new. They want to tax and spend and return to those old policies that got us where we were. You just simply cannot tax people to death and starve the American business community of capital to create jobs, and then, of course, not have any money for the consumer to go out and buy.

HUNTER-GAULT: So, even --

Rep. CRAIG: We've charted a program. We see it now beginning to work.

HUNTER-GAULT: So, even though the kinds of frustrations that we just heard from the people right there in the First District are expressed in the terms we've heard, you're not concerned that they are going to -- you think they are going to stay the course regardless of what they've said?

Rep. CRAIG: Well, remember what several of those people said. They had to see something new and different that really looked like it was going to make the difference. Now, we haven't heard any of that other than moving back, high taxes -- and my opponent supported the OB budget, which was 2,400 new tax dollars on the average working family here in the state of Idaho. Now, if that's putting people back to work, then that isn't the approach that I want, and certainly it isn't the approach that that working man and woman out there want.

HUNTER-GAULT: Mr. LaRocca, how confident are you that you're going to benefit from unemployment as an issue at the polls?

Mr. LaROCCO: Well, I'll tell you what. This smile that you're seeing right now is on the record, and I'm very confident. I take personal polls every day as I get out with the people of the district. Of Course, I supported the President when he was trying to reduce the deficit; my opponent didn't. I thought the President was on the right course when he was attempting to form this bipartisan coalition to reduce the deficits. And I think the statistics today show the people of the First District that they're going to be focusing on policies now and not on scapegoats. You see, the word Tip O'Neill comes up a lot out here in the state of Idaho, and my opponent just hasn't realized, when you really analyze it, that he's not running against Tip O'Neill. He' running against Larry LaRocco in the First Congressional District.

HUNTER-GAULT: Well, what about what Congressman LaRocco just said, that was also echoed by some of the people on the tape, that they're not hearing any solutions from the other side, from your side.

Mr. LaRocco: Well, Congressman LaRocco sounded good, I like what you said, but it was Congressman Craig.

HUNTER-GAULT: I'm sorry, right.

Mr. LaRocco: No, that's fine. I like the ring to it. But I think that what they want are common-sense approaches to government, and this is really going to be a referendum out here in the state of Idaho on fairness in government and equality. You see, it's not fair right now the way the federal government, or the administration is going with the budget cuts. And they've cut every area, but they've shifted the spending over to the military spending.

HUNTER-GAULT: So you --

Mr. LaRocco: And, I agree with Mr. Feldstein, who is now coming aboard as chairman of the Council on Economic Advisors, where he said that they should roll back the third year of the tax cuts. I've been saying that for a year because I think what we've got to do is we've got to have some equality, and we've got to provide some revenues for this government, and we've got to reduce the deficits. That's what's really important.

HUNTER-GAULT: So you see your race out there, really, as a referendum on Reaganomics, right?

Mr. LaoOCCO: Well, out here in the state I call it recessionomics, and I think it's going to be a referendum on that because the Republicans have a funny way of driving the Democrats out of the state. They put them out of work. We've lost 10,000 jobs permanently in this district -- 7,000 in timber and 3,000 in mining.

Rep. CRAIG: Well, Charlayne, I think there is an important point, though, and I've got here a September 17th, 1980, Chicago Tribune. June of 1980 there was 8.3% unemployment in this state. I inherited an awful lot of unemployment, as did a lot of other people around this country. Certainly our President did. And the efforts that we have worked at to try to stem this 20 years of the tax-and-spend philosophy that my opponent so clearly advocates -- it's simply going to take us some time to get out of this. Now, we see the movements. You listen to those people on Wall Street today. Wall Street's bullish, they say there's a recovery in place and working at this time, that we're going to see some movement through the winter and some strong movement in the spring. The people in Idaho are working men and women. They don't want the makeshift jobs of a government program. They want to go back to that mill; they want to go back in their mines. And that's only going to come when we see total recovery in the economy -- when we see that automobile industry in Michigan beginning to move, and of course, the forest products industry that is so dominant in our state. When those mortgage rates come down -- and they're now coming down -- and people can afford to buy homes, that means we'll build them. And I think in the spring, based on the kind of movement we currently see, we're going to see that unemployment rate dropping dramatically. I'm anxious for this referendum in November because I know what the people of Idaho are saying. They're saying, "Stay the course." We believe we want something new.

HUNTER-GAULT: But they're also saying what we just heard on the tape, and I'd like a brief response from you, because we have to move on, that they're not hearing any real solutions from the Democrats or the Republicans. Do you think that's just not the case?

Rep. CRAIG: Well, there's no question, Charlayne, there is a tremendously high level of frustration at this moment. I'd be frustrated too if I were unemployed, I couldn't meet my house payments or my car payments. It's a very dramatic, traumatic time for an awful lot of people, and when I'm out there and I ask them, "Then do you want us to return to what got us to this mess?" they say, "Absolutely not. We're willing to last this thing out and make sure that those programs that you're working to put in place now bring some long-term economic stability instead of the yo-yo kinds of recessions that we've seen in this country over the last 15 years."

HUNTER-GAULT: Right. I need a yes or no answer. Do you see this -- your race -- as a test of Reaganomics?

Rep. CRAIG: I'm willing to stand it as a test of Reaganomics because I will win in November, and I think that means the President and our programs win.

HUNTER-GAULT: Thank you. Jim?

LEHRER: As Charlayne said earlier, unemployment is a factor to some degree in just about every race on the ballot in November. For a national perspective on it as an issue, we have two campaign professionals who measure this kind of thing for a living. One does it for Democrats. He is pollster Pat Caddell, who did all of the polling for Jimmy Carter, as well as numerous other Democratic candidates past and present. The other is J. Smith, a political consultant to Republican candidates past and present. Generally, gentlemen, how is 10.1% unemployment likely to affect the November elections? Mr. Caddell?

PAT CADDELL: Well, I think it is the breaking of a psychological barrier more than it is any particular number that affects people, much as the difference of Roger Bannister's breaking the four-minute mile. If it had been four minutes and a half a second or something, it would not have had the impact that it was when he broke the barrier. It's a psychological barrier that's been broken. It's -- just the fact that you're having this show and that so many people are concentrating on it is really heightening attention on the issue of unemployment. It's not the number but the trend in the movement of the issue, and it's clearly going to be a major factor this November.

LEHRER: A major factor favoring the Democrats?

Mr. CADDELL: Favoring the Democrats, obviously.

LEHRER: How do you see it, Mr. Smith?

J. BRIAN SMITH: Well, I don't see any empirical data or evidence -- to rely on one of the phrases in Mr. Caddell's profession -- to at this point predict that it's going to be a major factor in the November elections. I think it's too early to tell. Obviously it's not a red-letter day for Republicans when unemployment goes up, but again, it has to be put into perspective. Unemployment went up this month three tenths of one percent. I agree with Pat that it's

on what is really a symbolic piece of news.

LEHRER: Are any of the Republican candidates that you represent or advise, or that you are aware of, panicking as a result of the unemployment issue?

Mr. SMITH: Well, I've said for some time, for some weeks now, that I've detected what I call an unusually high level of Republican paranoia out there, even before this news, certainly in anticipation of this news -- which you yourself said was not really news; it was expected -- has heightened that sense of fear. There are a lot of scared ducks out there, and I even know of many Republican House incumbents who are leading their Democratic opponents as of last week by 20 and more points who are absolutely convinced, or at least who are acting as though they're convinced that the sky is going to fall on them and that they're going to be a casualty in November.

LEHRER: And you tell them what, to relax?

Mr. SMITH: Well, you know, it depends on who they are and where they are in the country and who their opponent is and what the issues are in their campaign. Every race is different; every state is different. The problem with this kind of what I call paranoia is that there's always a chance that it could become a self-fulfilling prophecy, because if you don't keep your cool and you don't keep to your strategy, you could do something that you may live to regret.

LEHRER: Mr. Smith says the important thing or the crucial unanswered question is whether or not the Democratic candidates will be able to capitalize on this unemployment issue. Are they doing it effectively to this point?

Mr. CADDELL: Well, I think that some of them have been and some of them have not been. I think that, if anything, the Democrats have bee somewhat reticent about making their case. Off-year elections are always a choice about direction. They're not referendums on past blame nor are they generally referendums about the future. They're really a fulfillment of answering the question of, "What have you done for me lately?" or "What have you done to me lately?" And I think the Democrats are in a stronger position; I think history points to that, and I think also the fact that the trend has been rising -- that there are three million more people unemployed than two years ago, that this is the highest unemployment rate since the Great Depression -- those are obviously issue points the Democrats are making and will make with more gusto, probably, in the weeks to come.

LEHRER: But both of you would agree -- I assume you would agree with what Pat said a moment ago, that there are 11.3 million unemployed people; it's not the fear that they will all vote one way or another; it's the psychological impact that it's going to have, is that right, on other people?

Mr. SMITH: I would think so. I mean, you know, clearly there are more people unemployed today than there were during the Great Depression, but there are more people at work today than there were during the boom period that started during World War II. I mean, you're comparing apples to oranges, and I think that, you know, unemployment certainly is a major economic indicator that people care about, but there are other economic indicators like the rate of inflation, which is coming down; the rate of interest rates, which are coming down. The question is -- and the other thing I think we should mention is that there's an unusually high undecided vote out there. You know, 30, 35 percent in many states and many districts, with three weeks to go in the elections. The question is, are those people going to vote, or are they just apathetic? Are they going to just say, " A pox on both your houses"?

LEHRER: Yeah, you wanted to say -- what does 10.1, just the fact of 10.1 today, what is it going to do to the undecided?

Mr. CADDELL: Well, I think that it becomes a dominant factor for them. It clearly says the economy is not healthy. Growth is not coming. They can see it in their own communities. This is not a surprise for most people, and the people who are working are very nervous about continuing to work. And they know people generally who are not working. Unemployment is always -- you look at the academic studies or the Republican studies or the Democratic studies -- is always a major issue. But the point is, this is the period when voters are making a decision on how to vote, what kind of definition do they make this election to be. And I don't see how the Republicans can argue that this is anything but not good news.

Mr. SMITH: No, I didn't. If you recall what I said in the beginning, I said it wasn't a red-letter day, but I find it interesting that the professional pollster is talking about what he thinks is going to happen, and the political strategist is talking about where is the empirical data. The fact is that the polls --

Mr. CADDELL: Well, if you --

Mr. SMITH: Let me just make the point, that even in states in the East, where one would think that Reaganomics is not so popular as it is in states like Arizona where it's a plus to be for Reagonomics, the fact of the matter is that if it comes down to an issue on, should we stay the course, to use that advertising slogan, or should we go back to the government policies of pre-Reagan, the question is, they want tostay the course. Do you have any polls that show that that's not the case?

Mr. CADDELL: I certainly do. I mean, it's very simple. If you're doing polling to find it, look. This is the first period since --

LEHRER: When asked in the way that Mr. Craig put it earlier, which was, when you ask a voter, "Things are bad; should we stay the course with President Reagan or do you want to return to the Democratic policies of old," what do the people say?

Mr. CADDELL: Well, I mean, if you ask that question you might get a very mixed response, or even a response that you're saying. But that's not the issue. The question is, do you think the program today -- this is not a debate about the past or who is blame for the past. That's the point I made earlier. It's a question, do you stay with these programs or do you think they should be changed or altered? And if you ask that question, you get an overwhelming majority that they should be altered.

LEHRER: Well, look, let me ask both of you. You're both professionals, and I realize that both of you charge thousands of dollars for the answer to the question I'm about to ask you. You've heard both Mr. Craig and Mr. LaRocco out in Idaho, and they both gave, it seemed to me -- now, you correct me if I'm wrong -- about what is the best defense or the best offense. Would you agree, from a Democratic point of view, that Mr. LaRocco laid it out pretty much the way a Democratic candidate ought to?

Mr. CADDELL: Yes, I think so, very well.

LEHRER: What do you think of Mr. Craig's defense?

Mr. SMITH: You mean his voting record? I think he did a very admirable job.

LEHRER: I see. All right, now, anything else that -- tell Mr. LaRocco, Pat Caddell, anything else he ought to do to kind of toughen up his act.

Mr. CADDELL: Well, I think that -- you know, I think the Republicans in this election, the President runs around saying he's not to blame and his programs are working. Yet, if you go back and you look at what the President promised if his tax bill was passed and his budget cuts were passed in 1981, the economic performance that was promised by the Republicans in cold black and white has not been met.And those are not the Democratic expectations. Those are the President's expectations.

LEHRER: So, in a word, take on the President a little more directly?

Mr. CADDELL: Well, his policies, for sure.

LEHRER: What about --

Mr. SMITH: Mr. Caddell still thinks in terms of presidential --

LEHRER: All right, now, wait a minute, though. Tell me what you would add to Mr. Craig -- what you would advise Mr. Craig.

Mr. SMITH: I think Mr. Craig as an incumbent can make the point, and I think most people will accept it that to be a congressman is not to vote for jobs in your district. You vote to create an economic climate that hopefully will create jobs in your district. I think there is no question that if there was a vote on the floor of the House to keep open a mine in his district in Idaho, Mr. Craig would vote yes. I think Mr. LaRocco would do the same if he were in the same point. That's not the way Congress works. You can vote for job training, you can vote to take care of people who are unemployed, but Congress really has to set the climate and chart the course so that jobs can be created. So in many cases, a lot of incumbents should be scared.

LEHRER: I see. You'll get your bills in the morning, gentlemen. Charlayne?

HUNTER-GAULT: Well, we can start right now with your responses. Mr. LaRocco, how do you feel about Pat Caddell's advice and your inclination to take it?

Mr. LaROCCO: Well, I think it's good advice, and my instincts have told me that for years, so he and I both agree. I've been on the attack, and I've been talking about the recessionomics program out here, and of course my opponent has come out and given us the good news that 90% of the people are working, and of course 10% of the people aren't working. And I'm aiming to represent those at the bottom of the trickle, those that haven't gotten the benefit of this great program. So I'll take his advice, and over the next 24 days I'll be hitting it hard, very aggressively, and on November 3rd we'll see how well I did.

HUNTER-GAULT: Congressman, how do you respond to the advice you just got?

Rep. CRAIG: Well, Charlayne, I think that basically we know what we're talking about. When you look at where we've been and where we're trying to get, and the kind of unemployment we inherited and 21% interest and 12% inflation, and all that was driving this economy at a breakneck speed right over the cliff and the great efforts to try to turn it, to pull it back, to stabilize it, to allow business and industry to create new jobs, it's been a very, very difficult task. It's a task that is not over. But it's a task that is well underway, and that 12 3/4% interest rate today is going to create more jobs down the road in a few months than any kind of federal program and any kind of massive deficit spending we could ever come up with.

HUNTER-GAULT: Mr. Smith, is that the way you would like to see your advice pursued?

Mr. SMITH: I think given Congressman Craig's record, and I think he believes that the people in his district want to stay the course, I think that's a very good way to put it.

HUNTER-GAULT: Well, how much, Pat Caddell and Mr. Smith -- Pat Caddell first -- how much of the kind of advice you give like that -- I mean, can any Republican or any Democratic congressman in competition this term listening to the advice that you've given these two gentlemen follow up on it and expect it to work there, or does it have to be specifically tailored to local conditions?

Mr. CADDELL: Well, of course, Charlayne, every race has its own local implications, whether it's local issues or candidates, but far more than normal, this is a national election. Everywhere in the country the issue is basically the same; for the first time since 1975, unemployment vastly leads inflation as a major issue. Everywhere we survey, when we ask people to agree or disagree that the present current election policies are hurting people like me, over two to one, people agree with that. By two to one people believe that the current policies are unfair. They're unfair to middle-class people and to people who are poorer than that. And those are messages, I think, all over the country, and I think you hear them everywhere with a local flavor and a local adaptation, which is normal in American politics.

HUNTER-GAULT: Do you agree not so much with the position, Mr. Smith, but with the approach?

Mr. SMITH: Well, I just have a problem agreeing with Pat Caddell's analysis that this is a national campaign, that this is a national referendum like we might have seen in 1974 during Watergate. I just don't see it. Every race has its own set of unique circumstances, its own candidates with their own personalities. Even in a state as Democratic -- overwhelmingly Democratic as Massachusetts, you take a House race like Margaret Heckler's against Barney Frank's, and Barney Frank is trying to make that a referendum on Reaganomics, and the polls show that it's a dead heat. So obviously Mrs. Heckler is doing something different. Millicent Fenwick is leading her opponent in New Jersey for the Senate race by 20 points according to the latest Rutgers poll. So she, obviously, even though she's a Republican, is being able to tell the voters something other than, you know, vote for Reaganomics. So I think you have to look at each state, each district, and the candidates involved.

HUNTER-GAULT: All right, thank you. We're going to have to leave it there. Jim?

LEHRER: Yes, gentlemen in Boise, Congressman Craig, Mr. LaRocco, thank you very much for being with us. Gentlemen here, thank you very much, and good night, Charlayne.

HUNTER-GAULT: Good night, Jim.

LEHRER: And have a nice weeked. We'll see you on Monday night. I'm Jim Lehrer. Thank you and good night.