Read his lips: No new jobs.
Sep 12, 2011, Vol. 16, No. 48 • By FRED BARNES
'The simplest question,” Dick Cheney writes in his memoir In My Time, “is the most important one.” He mentions this in the context of asking how many American nukes were aimed at Kiev during the Cold War. For President Obama, with job growth stuck near zero, the simplest question is a domestic one. How do you think jobs are created?
President Obama in Cannon Falls, Minnesota
This has never been asked of Obama and never answered, so far as I know. And chances are he won’t answer it definitively when he unveils his new jobs program before a joint session of Congress this week.
But there are big clues from his prior policies and the batch of ideas now emanating from the White House. The president believes government is the premier job creator. Why? One reason is government understands markets better than the private sector, so long as the right people are in charge, like Obama himself.
“You can’t just make money on SUVs and trucks,” he said at a town hall meeting in Cannon Falls, Minnesota, on August 15. “As gas prices keep going up, you’ve got to understand the market.” Having bailed out Chrysler and GM, he instructed them to invest in electric cars and added, “We put investments” in advanced batteries. “It creates jobs.”
There you have it. U.S. auto companies would be producing more SUVs and trucks, both popular with car buyers, and fewer electric cars if Obama hadn’t intervened. That practically nobody, except the federal government, is lining up to buy electric cars—that’s seemingly irrelevant to the president. What’s important is that Obama—government—knows what’s best for the future of the auto industry.
Despite propping up car companies, Obama generally believes consumers are more reliable job creators than producers are. There’s no empirical evidence for this—quite the contrary—but Obama is unfazed. In his stimulus package in 2009, he included tax cuts for the poor and middle class. This year, he cut the payroll tax by 2 percentage points, though the well-off were excluded. He’s extended unemployment benefits to 99 weeks.
That private sector hiring has ground to a near-halt with the payroll tax reduction and longer jobless payments in effect hasn’t changed his thinking. He said last week his new jobs plan “will be laying out a series of steps that Congress can take immediately to put more money in the pockets of working families and middle-class families.”
What will these steps produce? They will “make it easier for small businesses to hire people, to put construction crews to work rebuilding our nation’s roads and railways and airports, [along with] all the other measures that can help grow this economy.” Sounds familiar.
Obama is especially fond of unemployment benefits as a job creator. His press secretary, Jay Carney, echoed his view in explaining how this works and insisting it would create up to one million jobs.
“It is one of the most direct ways to infuse money into the economy because people who are unemployed and obviously aren’t earning a paycheck are going to spend the money that they get,” according to Carney. “That money goes directly back into the economy, dollar for dollar virtually. . . . Every place that money is spent has added business, and that creates growth and income for businesses that then lead them to making decisions about jobs, more hiring.”
Can it really be that easy? Just hand out money to tens of millions of Americans and the economy experiences a growth spurt and the unemployment rate falls? The problem is it’s never worked that way. It didn’t on two occasions for President George W. Bush and hasn’t for Obama. Subsidizing “green jobs” is another expensive Obama favorite that’s failed.
It’s worth noting these programs are temporary and targeted. The president prefers that approach. It has the value of keeping the government in control. Permanent, broad-based tax rate cuts for individuals and corporations would shift control to the private sector. This was the Ronald Reagan approach. It spurred a stronger and quicker economic recovery than Obama’s efforts have.
The president’s blind spot is the mountain of impediments and disincentives to job creation he’s erected. An obsession with raising taxes on the well-to-do is only one of them. Yet these are the people with the wherewithal to invest in new ventures that create jobs.
Another is his tireless campaign to increase the power of unions, though where unions flourish there tends to be slower economic growth and less job creation. But organized labor backs the president with money and union workers as he’s seeking reelection. Compared with that, job growth is secondary.
Then there are regulations, some already in effect and many more on their way. If Obama consulted entrepreneurs and the small business community, he’d discover regulations are a bigger hindrance.
Recent Blog Posts