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Friday, September 09, 2011

The Obama Jobs Plan Just Another Preemptive Cave-In

In case you haven't seen it, here's President Obama's jobs speech, here's the transcript, and here's the White House's bullet-point fact sheet on the plan.



You are now up to speed.

I, for one, remain less than enthused. But I take heart in the fact that Nobel Prize winner Paul Krugman is more excited about it than I am. He's not elated or even enthusiastic -- he calls it "a lot better than nothing" -- but he's apparently more impressed than I am. So I defer to the expert.

↓ CONTINUED AFTER THE JUMP ↓


Paul Krugman, New York Times:

O.K., about the Obama plan: It calls for about $200 billion in new spending -- much of it on things we need in any case, like school repair, transportation networks, and avoiding teacher layoffs -- and $240 billion in tax cuts. That may sound like a lot, but it actually isn't. The lingering effects of the housing bust and the overhang of household debt from the bubble years are creating a roughly $1 trillion per year hole in the U.S. economy, and this plan -- which wouldn't deliver all its benefits in the first year -- would fill only part of that hole. And it's unclear, in particular, how effective the tax cuts would be at boosting spending.

Still, the plan would be a lot better than nothing, and some of its measures, which are specifically aimed at providing incentives for hiring, might produce relatively a large employment bang for the buck. As I said, it's much bolder and better than I expected. President Obama's hair may not be on fire, but it's definitely smoking; clearly and gratifyingly, he does grasp how desperate the jobs situation is.

But his plan isn't likely to become law, thanks to Republican opposition. And it's worth noting just how much that opposition has hardened over time, even as the plight of the unemployed has worsened.


And therein lies my criticism; everyone (and I mean everyone) knows this isn't going to pass as is, so why the cautious approach? The entire purpose of the plan is political, to change the momentum in Washington and get things moving in the right direction, so why put forward a plan that's so difficult for anyone to get excited about? Why start, as this president always does, with a compromise position?

Allow me to demonstrate the foolishness of this approach.

Ahead of the jobs speech, House majority leader Eric Cantor said there were areas that the president and Republicans could agree on. These were tax cuts, infrastructure spending (although his support here is pretty weak), and extending unemployment benefits. So guess which parts of Obama's plan are going to get all the attention? That's right, tax cuts. In the coming weeks, Republicans will change the entire focus of the plan so that it's no longer about employment, but about cutting taxes and pretending that does something about employment. "The president agrees with us that tax cuts are necessary to move our country forward," will be the argument.

The president added a lever -- completely unnecessarily -- that Republicans could pull to set the debate on an entirely different track. And he did it because... Hell, I don't know why he does this stuff. But he always does it. He takes a good idea, sprinkles some sugar on it for the GOP, and they go straight for the sugar like ants, ignoring the good idea. By the time it gets through congress and on his desk (if it ever makes it that far), it's all twisted and FUBAR.

And here we are again, seeing the same damned mistake being played out before us. It's one thing to find a winning strategy and to stick with it, but this is an entirely different animal. It's like the president aims for a tied game every time and does it by handicapping his own team.

We're never going to address America's problems this way. Not if history is any guide.

-Wisco


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