“A Sensible Plan, An Obstructionist GOP”: The American Jobs Act One Year Later
On September 8, 2011 — exactly one year ago tomorrow — President Obama delivered an important speech to a joint session of Congress. In it, the president unveiled a proposal he called the American Jobs Act.
You may recall the economic circumstances at the time, and how similar they are to 2012 — though job growth looked strong in the early months of the year, the summer proved disappointing. Obama sought to shift the national conversation away from austerity and towards job creation, and presented a sensible plan, filled with ideas that have traditionally enjoyed bipartisan support.
Independent analysis projected the American Jobs Act, which was fully paid for, could create as many as 2 million jobs in 2012.
I mention this now because what happened a year ago is incredibly relevant to what’s happening now. This morning’s jobs report was disappointing, and we know exactly how the political world will digest the news — if the job market is underperforming, it’s Obama who’ll get the blame.
There’s not much I can do to change the course of that conversation, but if we’re going to play the blame game, we should at least try to keep some semblance of reality in mind.
The American electorate was clamoring for action on jobs; the Obama White House crafted a credible plan that would be helping enormously right now; and congressional Republicans reflexively killed the Americans Jobs Act for partisan and ideological reasons.
With this recent history in mind, how are we to assign responsibility for high unemployment? Should we condemn the person who threw the job market a life preserver, or those who pushed it away? Or put another way, are we better off now as a result of Republican obstructionism and intransigence, or would we have been better off if the popular and effective job-creation measures had been approved?
By any reasonable measure, the GOP argument, which will be trumpeted loudly today, is completely incoherent — they were wrong a year ago and now we’re paying the price.
As we talked about in June, for Republicans, when there’s discouraging economic news, Obama deserves all the blame. When there’s good economic news, Obama deserves none of the credit. Job losses in 2010 were Obama’s fault; job gains in early 2011 and 2012 have nothing do to with Obama; and tepid growth in the spring of 2012 are back to being Obama’s fault again.
Remember learning the “heads I win, tails you lose” game as a kid? It’s the GOP’s argument in a nutshell — whether the president deserves credit or blame for a monthly jobs report is due entirely to whether the report is encouraging or not.
But even this doesn’t go far enough in explaining the absurdity on display. If we’re going to assign blame to Washington policymakers for the state of the nation’s job market, how is it, exactly, that Congress bears no responsibility at all? This is, after all, a Republican-led Congress that has plenty of time to fight a culture war — I’ve lost count of the anti-abortion bills that have reached the House floor — but has shown passive disinterest to the jobs crisis.
Follow this pattern of events:
1. With the job market struggling, Obama unveils the American Jobs Act, a State of the Union agenda filled with economic measures, and an economic “to-do list.”
2. Republican lawmakers ignore the proposals, and the job market deteriorates.
3. The GOP then blames Obama for the failure his policies, which Congress didn’t pass.
The accepted truth this morning is that weak job numbers are absolute, concrete, incontrovertible proof that the president’s jobs agenda isn’t working. News flash: we aren’t trying Obama’s jobs agenda.
By: Steve Benen, The Maddow Blog, September 7, 2012
“Taboo Ideas”: Regular People Could Use A Bailout Every Bit As Much As Wealthy Elites
Via Atrios, I see that the idea of just printing money and handing it out is gaining some elite traction. Here’s Anatole Kaletsky in Reuters:
Last week I discussed in this column the idea that the vast amounts of money created by central banks and distributed for free to banks and bond funds – equivalent to $6,000 per man, woman and child in America and £6,500 in Britain – should instead be given directly to citizens, who could spend or save it as they pleased. I return to this theme so soon because radical ideas about monetary policy suddenly seem to be gaining traction. Some of the world’s most powerful central bankers – Mario Draghi of the European Central Bank last Thursday, Eric Rosengren of the Boston Fed on Monday and Mervyn King of the Bank of England this Wednesday – are starting to admit that the present approach to creating money, known as quantitative easing, is failing to generate economic growth. Previously taboo ideas can suddenly be mentioned.
The nice thing about this is it wouldn’t rely on some second-order effects through the expectation channel. With a big cash windfall a major fraction of the population are sure to spend it or use it to pay down some debt. When you’re in a depression, as we are, that’s just what the doctor ordered. This is as opposed to normal quantitative easing, which relies on pushing on the economy through the rotten banking system. Like a sponge, the banks absorb most of the money before it seeps out into the real economy.
Probably the biggest obstacle with this is how ridiculous it sounds. “The money has to come from somewhere,” people say. Actually, no it doesn’t. That’s the whole idea behind fiat money. Nothing behind it. “It’ll create hyperinflation,” conservatives will say. Nope. Right now we’re in a depression: we have very low inflation from too few people with jobs and money buying not enough goods and services to run the economy at potential.
Therefore, more spending will just pull in more idle people and resources. Only when the economy is at capacity is serious inflation a possibility. If it starts to happen, the Fed can easily act to restrain it.
The least convincing counterargument is the moral hazard one. “Can’t give people free money,” people say, “otherwise they’ll lose their moral fiber. Success must be earned.” I suppose all other things equal that’s the case, but that argument sure didn’t stop the Treasury from stuffing $700 billion down the rotting throats of the banks back in 2008, and it hasn’t stopped the Fed from stuffing God knows how many more trillions in cheap loans after it.
Again, I agree that moral hazard should be a consideration, especially for the richest and most powerful people and corporations, but we recognize in a crisis sometimes it’s more important to keep the system from collapsing than make sure every person gets exactly what she deserves. When we had a banking crisis, everyone agreed on this. Elites everywhere panicked, and swooped in with “incredible speed and force to bail out the financial sectors in which creditors are invested, trampling over prior norms and laws as necessary.” We’re now in the fourth year of an unemployment crisis, and it’s high time we found some similar urgency.
Nothing I haven’t said before, and still probably little chance of happening, but here’s hoping. Regular people could use a bailout every bit as much, if not more, than wealthy elites.
By: Ryan Cooper, Washington Monthly Political Animal, August 9, 2012
“The GOP’s Favorite Government Jobs”: Republicans Didn’t Realize Government Budget Cuts Result In Layoffs
Politico’s Austin Wright has a crazy little story about a spat between congressional Republicans and the Labor Department that hinges on the possibility of mass defense contractor layoffs.
The fight is over whether defense contractors are required to send out notices warning their workers of layoffs that would kick in as a result of the large defense spending cuts due Jan. 1 — aka”sequestration.”
Republicans say yes, citing the WARN Act, which requires large employers to give 60 days’ notice of possible layoffs. The GOP has been chortling in glee at the prospect of such notices going out to every single employee of the largest defense contractors, because the 60-day countdown just happens to arrive four days before Election Day. Because, you know, layoffs are bad, even if they mean Big Government is shrinking.
But the Labor Department says no! Labor’s main argument is based on the reasoning that sequestration is not inevitable — Democrats and Republicans still have time to come to a budget deal that would avoid sharp defense cuts. (Indeed the whole point of sequestration was that the prospect of such cuts was supposedly so drastic that it would force a compromise.)
According to Politico’s Wright, congressional Republicans consider the Labor Department’s decision a “political stunt.” That accusation has a high likelihood of being true, but it seems just a little bit hypocritical coming from Republicans who are hoping that layoff notices timed to be delivered just before Election Day will help their own electoral chances.
And that’s hardly the tip of the hypocrisy iceberg. Buried beneath the surface of this latest example of Washington dysfunction is a basic truth: Government budget cuts result in layoffs. That’s not good during a period of very slow economic growth. And yet, Republicans seem to have little problem when the newly unemployed are teachers or firefighters. But when defense’s ox is getting gored, then it becomes a big deal, and then the layoffs are presumed to be Obama’s fault and thus embarrassing to the White House.
By: Andrew Leonard, Salon, August 6, 2012
“Deliberate Sabotage”: The Public Sector Is Bleeding By The Knife Of Republicans
Public-sector jobs continued to disappear last month; according to today’s report, government employment is down by 4,000. To Republicans, these aren’t “real” jobs. For the rest of us, however, the decline of the public sector over the last three years has been a tremendous drag on economic growth. Since June 2009, state and local governments have shed more than 600,000 jobs. At the Economic Policy Institute, Josh Bivens and Heather Shierholz crunch the numbers to find that the economy would have 2.3 million more jobs if not for those ongoing losses:
Putting our four components together—the jobs lost in the public sector, the jobs the public sector should have gained just to keep up with population growth, the jobs lost in the private sector due to direct public-sector job declines, and the jobs likely lost when state spending cutbacks on transfer programs were made—we find that if it weren’t for state and local austerity, the labor market would have 2.3 million more jobs today—and half of these jobs would be in the private sector.
This is more than a fifth of our 9.8 million “jobs gap”, the number of jobs needed to bring the economy back to full employment. If all of these 2.3 million jobs had been filled, it is likely that the unemployment rate would now be between 6.7% and 7.5% instead of 8.2%, and the labor force participation rate (which has dropped dramatically in recent years due to weak job opportunities) would be up to three-tenths of a percentage point higher than it is.
Remember: Thanks to Republicans on the state and local level, the United States has been going through austerity for the last two years. Our sluggish economic growth has less to do with the administration’s policies and everything to do with a Republican Party that sees mass immiseration as an opportunity to cut spending.
BY: Jamelle Bouie, The American Prospect, July 9, 2012
“Turning America Into One Big Pottersville”: Obama Can Really Hurt the GOP By Focusing On Its Radical Economic Plan
Three years ago, two years ago—heck, six months ago—I and a lot of people I know thought: Surely the jobs situation will have picked up as we round the clubhouse turn toward Election Day. I envisioned Barack Obama at the Democratic convention, being able to claim… something fairly modest, but something: three straight months of 200,000-plus-jobs growth. Some kind of hook for an upbeat narrative.
Well, it looks like it ain’t gonna happen. Obama will be able to make some claims, and he damn well better make them without apology or fear of how the 48th Street Fantasy Factory will spin them. But the story isn’t good enough, so there’s but one alternative: convince people that Mitt Romney and a Republican Congress will make things worse. In a rational world, that wouldn’t be too hard, because except for Ronald Reagan’s second term, making things worse is all Republicans have ever done since Nixon. But our world isn’t rational, and Obama is going to have to confront that fact in a huge way or risk being sent to the showers early.
It’s amazing, first of all, the importance now of these jobs numbers. Partly it’s because the economy is bad, true; but partly it’s also the blog-and-tweet, more-faster-now political culture. Romney was having an awful week—and, by the way, still did have an awful week. Those issues—the mandate confusion, Bain, the offshoring, the million-dollar IRA—aren’t going anywhere, and they’ll resurface. But obviously, they had to be relieved up in Boston when the 80,000-jobs number came out Friday morning. Big conversation changer.
It’s the third straight month of anemic growth, and the economists seem to agree that it means we’re not going to be seeing the bulls run any time soon. A decent unemployment picture—say, 170,000 jobs a month being gained, which might, by election time, have gotten the jobless rate back down below the 7.9 percent it was when Obama was sworn in—augured for one kind of Obama fall campaign. Emphasize that we’re finally getting out of the woods first, and bash Romney second.
But the treeline is still on the far horizon. So Obama and the Democrats’ No. 1 job is clear: tie all the Republicans together—Romney, congressional Republicans, and George W. Bush—and warn people about how much worse things could be.
Romney is Bush on steroids. His tax plan is far more extreme. He wants to give millionaires an average—average!—tax cut of $250,000. The same plan would add $3 trillion to the deficit over a decade. Haven’t we tried this before, and didn’t it help lead—along with massive deregulation, which Romney also promises to pursue—to the biggest meltdown in 80 years?
The radical tax plan and its affect on the deficit hasn’t stopped Romney from backing “cut, cap, and balance,” a congressional GOP plan that calls for a Balanced Budget Amendment! Imagine that chutzpah. It’d be as if I torched all my neighbors’ azaleas and then demanded we form a block-beautification committee. Cut, cap, and balance is so extreme, so ludicrous, that 35 GOP senators—a pretty hardened assemblage, you’ll agree—haven’t signed it. It’s out there in Tea Party land.
Want more hypocrisy? Glad you asked. Cut, cap, and balance requires gargantuan and immediate cuts to the federal budget. But remember what Romney told Time magazine in May?: “if you take a trillion dollars, for instance, out of the first year of the federal budget, that would shrink GDP over 5 percent. That is by definition throwing us into recession or depression. So I’m not going to do that, of course.”
Then there’s the Ryan budget and assaults on Medicare. The fact that Romney has no actual jobs plan beyond letting the free market work its magic… It’s just endless. Complete and willful vacuity. Vacuity as a matter of principle. Almost virginal vacuity, as if intercourse with facts were somehow deflowering, leading to a lapsarian state of loss of ignorance. Nothing adds up at all. No attempt is made for things to add up. Except, of course, for those core items that Romney and the congressional Republicans will agree on: cut taxes for the rich, deregulate as much as possible, and re-wreck the economy.
It’s so bad it’s almost hard to believe. I mean this literally. Via Kevin Drum and Jon Chait, I note this nugget from Robert Draper’s New York Times Magazine piece coming up Sunday. The Democratic super PAC, Priorities USA Action, did some polling on Romney. Here’s one thing they found, and place your hand below your jaw, so you don’t hurt yourself as it hits the table: “For example, when Priorities informed a focus group that Romney supported the Ryan budget plan—and thus championed ‘ending Medicare as we know it’—while also advocating tax cuts for the wealthiest Americans, the respondents simply refused to believe any politician would do such a thing.”
There’s some word beyond “perverse” for that—a politician benefiting from the fact that his plans and commitments are so radical that voters simply can’t believe he’d pursue them. That isn’t the only perversity at work here. As Greg Sargent noted on his blog Friday, you might think that when the jobs picture is unsatisfactory, the political debate would be about which candidate has better policies. But instead, it’s a “referendum on Obama.” This is dumb, especially when the other guy is running on such a nest of contradictions and obfuscations. But it’s how life is. I get that. Even so, it shouldn’t stop Obama from making it a co-referendum on Romney and the GOP. Obama’s Bedford Falls may have problems, but the GOP’s Pottersville—no General Motors, no Chrysler, no health care for 32 million, no public investment at all, no regulation of banks, and all the rest—is an ugly place where we don’t want to live.
By: Michael Tomasky, The Daily Beast, July 7, 2012
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