I noticed the day after President Obama’s big jobs speech before Congress on September 8 that Mark Zandi, the often cited Chief Economist from Moody’s Analytics, praised it. True, he is an old-style Keynesian, but he is among the most respected economists in the country, so he deserves a listen to. Among the benefits he sees from the American Jobs Act are:
- Confidence would return to the public and therefore a stabilization of the economy would result.
- Just under 2 million jobs would be created with the unemployment rate being cut by a percentage point.
- GDP growth would be two percentage points higher next year.
- The $450 billion price tag would be paid between $250 billion in tax cuts and $200 billion in spending increases.
- If passed, another recession could be averted.
It has little chance of being passed by the Republican controlled House. Now that would be fine except that it is not clear what the Republicans are offering for immediate stimulation to employment. In fact, it seems that they do not like the word stimulation.
We are being asked to encourage reduction of government, which will in and of itself release an explosion of private sector expansion and economic growth. So the private sector that seemed to play a rather large role in creating the Great Recession is going to lift us out of it because government is diminished? Really?
If there was a credible plan to create jobs by Republicans aside from the usual cut taxes for the rich and reduce regulations I would be all ears. I want jobs to start growing as much as anyone and I really do not care which ideology produces them as long as they get created. But now that one of the two major political parties has been shanghaied by the Tea Party, who does not place job creation as their number one priority, we are not getting a full collaborative effort from all sides.
I will give the Tea Party credit for sounding the alarm on the growing Federal debt, which if left unchecked would constitute major economic problems, including unemployment in just a few years. However, what are they contributing to the debate of job growth now? Not much from what I can hear.
They seem more committed to eliminating the President’s job than in generating new ones for Americans. They are a one trick pony. Just reduce debt and morning in America will return. They seem to think that managing the Federal budget is no more sophisticated than balancing the family checkbook.
Perhaps most troubling is the Tea Party’s reluctance to negotiate and compromise with those who have a different viewpoint. They are so confident in the righteousness of their position that working across the aisle is seen as weakness and capitulation. There is value in decisions made as a result of consensus. And now is a time for our leaders to work together to expand employment. The Tea Party strikes me as an impediment rather than as a serious partner.
I guess we’ll never really know if Mark Zandi’s ecomomic predictions will come true. Probably the most President Obama will get out of that speech is a reelection campaign position. Meanwhile, the unemployment rate stays in the 9% neighborhood.
Perhaps government really cannot effect economic change and private capital (which the private sector is not releasing) is all that matters. But don’t we elect Federal leaders to solve national problems? And isn’t that best done when collaboration occurs? This climate of polarization during a time of national crisis is very disheartening. We should demand something greater from those we elected.
