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Sunday, July 11, 2010

Jobs Or Deficits?

To prioritize worries about soaring deficits over worries about soaring unemployment in a long term economic crisis, means to reflect the greedy concerns of millionaires over the urgent concerns of average citizens. Obama is now signaling he doesn't think he can get the jobs stimulus through Congress that he wants. He is almost certainly right about this, flabbergastingly enough, given that although the country is filled with non-millionaires in distress, Congress is filled with millionaires who live in a world of millionaires and reflects that perspective more often than not. Obama tends not to fight publicly for things he doesn't think he can get, for fear that this will weaken his position given the current polarization of the country and the debased state of the media. He has probably been sensible in this for the most part, frustrating though it is to watch especially if you are of an activist bent. But in the case of giving up on jobs to genuflect to deficit hawks he is not merely being frustrating but he is almost certainly wrong strategically, since Republican obstruction of job growth is evil and will be seen as evil by majorities (including many Republican-identified folks). In losing this battle against Republicans (as he -- and we -- would, it now appears) Obama is less likely to seem weak rather than strong, but right rather than wrong, and in a way that will strengthen his and Dems' position for 2012 (as his economic policies otherwise no longer look like any kind of sure bet to do, despite his best efforts). If Dems take substantial losses in mid-terms this is a strategy Obama will have to get used to, I'm afraid.


Martin said...

The problem is that there's no guarantee that it will create private sector jobs. Obama's economic advisers predicted that unemployment would reach 8.5% without the last stimulus, and it reached 9.5% with it. One could argue, well, at least it didn't go to 12 or 13%, but how do we know it would have? Who's to say the stimulus even did anything?

I believe that what made Clinton the greatest president since FDR is that he did balance the budget, and all that has been grotesquely unraveled in the last 10 years.

Dale Carrico said...

The stimulus was too small and too high a proportion of it was devoted to magic free market tax cut fairy dust. Obviously one wants to balance the budget over the long term, deficit spending isn't inherently or interminably stimulative. But making that a priority at a time like this is economically illiterate. The urgent need to repair our crumbling infrastructure and create a new renewable energy infrastructure and economic base provides shovel-ready opportunity for recovery from this downturn directly hiring and training many of the currently unemployed, getting them spending, getting investment going again. Then, and only then, should we redirect primary attention to deficits -- and they should be handled when they are via steeply progressive taxation of income, investment, and property, a la Eisenhower and Defense spending cuts (including stealth cuts via repurposing Defense as renewable civil engineering and global water-treatment and wind-power development projects) if you ask me.