Friday, October 12, 2012

Romney Doesn't Have A Jobs Plan and Obama Won't Talk About His

Anyone who's been carefully following this presidential campaign has noticed that, for all the talk of job-creators, jobs-this and jobs-that, neither incumbent nor challenger has pushed an actual plan to create jobs. This may strike some of you as odd, but if you've listened to both of the debates, neither of them focused heavily on direct creation of jobs. Instead, they focused on debt, deficits, taxes, and foreign policy. Sure, they reference the unemployment crisis in the U.S. and how they'll create jobs, but these were more obligatory statements rather than specific plans to combat current joblessness. Ezra Klein noted this in a post today, and I wanted to expand on his points a bit. 

Let's take last night's debate as an example. Both candidates were asked this question by the moderator: 
"So will both of you level with the American people: Can you get unemployment to under 6 percent and how long will it take?"
Both responses were, in my view, unsatisfactory. Biden mostly described what has gone on since 2009 and then mentioned how the Bush tax cuts needed to expire for top earners but not the middle class. How that will create jobs is beyond me. Ryan, after falsely stating that unemployment was rising across the nation, offered a five-point plan for economic growth:
"It’s a five-point plan. Get America energy independent in North America by the end of the decade. Help people who are hurting get the skills they need to get the jobs they want. Get this deficit and debt under control to prevent a debt crisis. 
Make trade work for America so we can make more things in America and sell them overseas, and champion small businesses. Don’t raise taxes on small businesses because they’re our job creators."
This plan does almost nothing to address our current crisis and looks an awful lot like the same economic plans pushed by Republicans since 2004. This suggests that the Republicans lack a specific plan for combating unemployment. From looking at this plan, you would think that the Great Recession somehow flipped a switch and suddenly robbed Americans of all of their skills and made us a great deal more dependent on foreign energy. Needless to say, neither of these things are true. The bit about a debt crisis is just--as Biden would say--a bunch of malarkey. Balancing the budget during a recession doesn't create jobs, it destroys them. Just think about it: if you fire a bunch of government employees, they have less money to spend in the economy, firms have lower demand, they cut back, hire less/fire more people, and so on. That's what hurts business confidence, not our current debt levels, which is probably why so many CEOs are against going over the fiscal cliff. Making trade work for America is mostly irrelevant--what would that do to reduce household debt levels? I'm all for free trade, but arguing that it would address our current unemployment crisis is akin to a doctor prescribing a meningitis vaccine to a cancer patient--its not a bad thing in and of itself, it just won't help address the bigger issue. Finally, the last point in the plan is not raising taxes on small businesses. Again, I'm not against it, but old post of mine explains its irrelevance right now:
"First, imagine that you're a business owner. Imagine that you're employing, say, 20 people right now. You run a car wash, or something. Now imagine that, because of the economy, business is a bit slower than usual, so you only use about 60% of your workforce's capacity. Now imagine that the government comes and says, "Oh, hey, all businesses only have to pay half as much in corporate taxes this year, hope this makes you guys want to hire!" Now stop. If you're only using 60% of your workforce because of insufficient demand for your services, how would paying less in taxes make you want to hire more workers? The only way you'd hire more workers is if you were already using your workers at full capacity, which most firms are not doing right now."
So, again, even if you think all of these are laudable goals for long-term economic growth (I do!), they do almost nothing to effectively address the current unemployment crisis in anything more than a tertiary manner.

Now, on to Obama/Biden. They actually have a jobs plan, but the problem is that they haven't been pushing it at all. On the campaign trail, all they've been saying is that they'd like to hire new teachers and that taxes won't go up for most Americans. Hiring teachers is good, since so many were laid off because of state and local cutbacks, but maintaining current tax levels won't get us anything better than what we already have, which is not good enough. The sad part is that the jobs plan that Obama put out last September actually looks pretty good, since it does a lot to shore up state budgets and undo the public-sector layoffs there that have played such a big part in hobbling our recovery. In fact, state and local cutbacks have made total government investment including the $787 billion stimulus look something like this:
Government investment is way down, private/business investment is way up. You wouldn't know it, though, from the way many Republicans have painted the situation.

Anyway, it seems that, rather than focusing on actually addressing unemployment, both campaigns have instead resorted to trading barbs about their tax plans, one of which is mathematically impossible, while the other is a relatively modest change of current policy. You can be sure of one thing, though, none of it will help the jobless in America.