I am not an economist, nor do I play one on TV. I am struggling along with others to understand all the moving – and not moving – parts. And I am yearning for President Obama to outline a bold and comprehensive approach to solidifying gains and moving forward.
Today’s “hastily arranged” Rose Garden speech by Obama was hardly satisfying. While he called for a comprehensive strategy on the economy, the only specific message was to blast Senate Republicans for blocking a bill providing tax cuts for small businesses, which is where jobs are created. It ought to pass, but he was beyond vague in laying out other strategies. I get the sickening feeling he doesn’t know. That feeling was reinforced by microphone difficulty, promptly the President to tap it repeatedly, asking “Can you guys still hear us?”
We can hear you, Mr. President, but what impact are you able to have? He reminded us that it “took ten years to dig us into this hole,” and it’s going to take longer than we want to dig us out. But we shouldn’t be paralyzed into inaction because of the more than $11 trillion debt built between 2001 and 2008. (In fact, the greatest build-up of debt since World War II occurred under Ronald Reagan and George W. Bush.) Yes, we all worry about the annual deficit and the aggregate national debt. But the answer to that is to grow the economy, and that means adding jobs.
We’ve been in a vicious downward spiral, wherein the economy lost some $12 trillion dollars in the housing and stock market crashes. Reduced consumer confidence, purchasing power and demand for goods chilled business investment. Steps taken at the end of the Bush administration and by the Obama administration stopped the great recession from becoming a full-blown depression. The economy has added an average of nearly 200,000 jobs a month this year, half in the private sector. At a minimum, the economic stimulus act reduced our net job loss. But we have a long way to go to make a dent in the unemployment rate. And, even if the rate does go down, if you don’t have a job, for you the unemployment rate is still 100 percent.
As has been noted, the economy has to grow 3 percent just to keep the current 9.5 percent unemployment from increasing. (Many economists say that the number is closer to 16 percent if you count those who have stopped looking for new jobs and those who are underemployed.) Yet quarterly economic growth (1.6 percent) was well below the 2.4 percent estimate; the rate of recovery has been slowing. Even if we achieved the rate of employment growth we enjoyed in the late ‘90’s, we wouldn’t reach pre-recession unemployment levels until 2015.
As Congressman John Tierney said in a recent speech, quoting others, “’I told you’ so is not a policy, and blame is not a solution.” Tierney and others in the Massachusetts delegation say it is premature to stop priming the pump. We need to sustain investments in infrastructure. (Even Scott Brown, speaking at the New England Council, conceded the need for “targeted stimulus,” while insisting he remains opposed to the American Recovery and Reinvestment Act..)
Will Obama’s “comprehensive” strategy include tax incentives for starting new businesses and for hiring? Will he address the need to end tax breaks that encourage corporations to outsource jobs overseas? Where do we go from here, and what will President Obama do to lead us there?
For a man who inspired hope and big picture vision just two years ago, for a President who led this nation to pass a generational health care bill as well as financial services reform, his vision is flirting with failure on the economy. As E.J. Dionne points out today in the Washington Post, “Obama has created the impression that he is taking things one decision at a time, without a passion for how he would like the country to look in the long run.”
Let’s hope he uses the Labor Day holiday to outline an imaginative and comprehensive approach to creating what Labor Day is all about: jobs.
Please let me know your thoughts in the comments section below