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Thursday, December 3, 2009

The Jobs Summit

The President held his jobs summit today.

Chronic unemployment isn't merely academic but rather "a struggle that cuts deep and touches people across the nation," President Obama said at a much-anticipated jobs summit Thursday where he acknowledged skepticism over the ability to produce results.

Still, the president claimed progress toward an economic recovery while saying much more work needs to be done -- even as the left wing of his party accused his administration of not doing enough to increase employment.

Obama sought fresh ideas from the 130 corporate executives, small business owners and labor leaders who attended the jobs forum. The president said the leading question of the day is "how do we get businesses to start hiring again."

After his opening remarks, the group broke into smaller study groups. Obama planned to address the entire group again at day's end.

I've said it before. Politicians hold summits, councils, and advisory committees when there's a problem they know they need to address and they have answers. Instead, politicians want the folks to think they're making every effort on this matter.

That's what's happening here. The optics on this thing, however, are horrible. In reality, it's the president's policies that are horrible. Wasn't the stimulus supposed to create jobs? Why has he been in office for nearly a year and only now getting ideas to create jobs? Wasn't job creation a top priority? Wouldn't a jobs summit have been the first thing he convened?

Of course, when things are going bad the optics are always bad on everything. The real problem is that we've spent record amounts of money and have a 10.2% unemployment rate to show for it. If he hadn't held a jobs sumit, his opponents would be complaining that people are struggling and the president isn't doing anything.

Now, they'll complain that it's either worthless or ten months too late. Either way, their complaints will resonate only because the unemployment rate is so high and there's a reason to complain.

Back when the stimulus was about to pass, Bill O'Reilly said that Obama was staking his presidency on its success. He said that there was something admirable in taking that large a gamble on such a policy. I suppose there is something admirable in believing so much in a policy that you stake your presidency on its success. It's even more admirable, however, if said policy actually works.

Back at the beginning of his presidency, Ronald Reagan faced a unique problem. He faced high unemployment and high inflation. While he was working on cutting taxes to stimulate the economy, Paul Volcker was raising interest rates to reverse inflation. Of course, the second stunted the first and it was driving factor in the double dip recession that occurred. Reagan never wavered and he never questioned Volcker as he was stemming inflation. I was too young to remember so I don't know if Reagan held any jobs summits in 1982 when things looked bleak. Reagan wound up watching his Republican allies suffer heavy losses in those mid terms. Then, in 1983, the economy began a remarkable turnaround that ultimately only ended in 2008. Reagan indeed, also, staked his presidency on a bold policy, dropping the top rate from 72% to 28%. It's even more admirable that he risked everything on a policy that worked.

The jury is still out on whether or not Obama's gambit will work. It may still shake out that running up a near $2 trillion deficit will create jobs. We're still years away from making a final judgment. That said, Obama is now married to his stimulus. The fate of his presidency rests entirely in it working and leading to economic prosperity. It will be that success or failure and not any jobs summit that will matter. This is the story of the day but the real story is the fate of the stimulus.


AG said...

"Then, in 1983, the economy began a remarkable turnaround that ultimately only ended in 2008." Turnaround, or bubble?

Its a shame that the President wasn't given the opportunity to "stake his Presidency" on a policy he didn't have to water down to appease the conservatives.

mike volpe said...

what bubble was that exactly? 25 years of near uninterrupted growth is growth no bubble. Where do you come up with this?