Commentary Magazine


Contentions

Did Someone Forget the Jobs?

Democrats have always fancied themselves as the politicians most concerned with jobs. They authored the Humphrey-Hawkins Full Employment Act. In every recession, they chide Republicans when economic growth initially outstrips improved employment and they inveigh against “jobless” recoveries. From city councilmen to presidents, they have repeated the mantra that they would “create good jobs.” But in President Obama’s mind-numbingly complex scheme for economic recovery the one element overlooked is, ironically, jobs.

Unemployment is 8.5% and rising. Even Thomas Friedman recognizes that all the other bailouts and economic stabilization efforts falter if more and more people are out of work:

Because unemployment is still rising — ensuring that the initial spate of mortgage defaults, which came from loans to people who could never repay, will be followed by another spate of defaults from those who could repay but now can’t because the deteriorating economy has stripped them of their jobs, their businesses or their credit lines.

The best they could come up with to fight unemployment was a pork-laden “stimulus” plan. That did precious little — nothing, actually — for job creation outside of temporary government boondoggles, many of which don’t kick in for some time and which won’t last unless the pork is refunded year after year.

Part of the reason for this, as Francis pointed out, is an inappropriate and unwise hostility toward private industry, which is where the jobs are. If you are mainly interested in supplanting private industry you don’t spend much time thinking about ways to allow it to flourish, invest, and grow.

So several months into his administration, Obama faces both a policy and political problem. He has already cast his lot and launched the ship of state in the direction of governmental growth, higher taxation, and private industry displacement. Can he now turn on a dime and suggest what we really need is job-promoting assistance for the private sector? The money has been sent and the rhetoric has been unleashed, so it is difficult if not impossible to reverse course and suggest, for example, payroll tax cuts to promote private sector hiring. And then there are Obama’s Democratic colleagues in Congress who simply are not willing to reduce taxes for anyone or lighten the mandates on private industry. To the contrary, Nancy Pelosi et al. are fighting hard for cap-and-trade and some form of mandated healthcare.

Many financial gurus in this and the preceding administration convinced themselves that the root of the crisis was a financial meltdown and credit freeze. But the recovery won’t happen without private sector job growth and the bump in consumer spending it will bring. You can take over GM and mandate all the green cars you want, but if unemployment goes to 10% fewer people are buying cars — and paying their mortgages on time. Perhaps the party of good jobs should think harder about how businesses create them — and what the administration can do to help.