Why No Action on Jobs?

October 28th, 2011 at 3:19 pm

Why, you may be wondering, do politicians refuse to take the necessary fiscal steps to dislodge the unemployment rate from its elevated perch of 9.1%?  Why, to the contrary, do they seem if anything intent on austerity measure that will push it in the wrong direction?

I can think of three reasons:

1)      They want the President to fail;

2)      They don’t believe fiscal measures will work;

3)      They irrationally fear a higher budget deficit, even temporarily.

Re 1, what can anyone say?  If you’re will to throw the economy under the bus to gain political advantage, you, not the millions hurt by your actions, should be the one who loses their job.

Re 2, I’ve got more sympathy for you.  Folks have a hard time accepting counterfactuals—the idea that things would have been worse absent the Recovery Act.  But the evidence is at this point pretty plain to see: here, where the economy improved while the Recovery Act was in place and stumbled as fiscal stimulus come off too soon, in the UK, where austerity is clearly stifling growth, and in southern Europe as well.

Re 3, it can’t be emphasized enough that temporary spending measures, even large one, are not what drive the long-term debt problem.  Note how the Recovery Act—all $800 billion of it—adds nothing to the growth of the debt/GDP ratio starting around now.  The culprit there would be the Bush tax cuts—it’s the permanent spending, not the temporary stuff that whacks you here.

I’m all for laying the groundwork to get on a sustainable budget path once the private sector is back in the business of creating jobs for people here in America.  For now, the question regarding budget deficits should be: are they large enough to help pick up the slack until that moment arrives?

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8 comments in reply to "Why No Action on Jobs?"

  1. perplexed says:

    You forgot #4 Jared:

    4) You’re really representing a small group of very wealthy people who will pull your campaign funding and support another candidate to take your job as soon as the opportunity presents itself. Its political suicide to say no to your bosses.

  2. Michael says:

    It’s (I), with a smidgeon of Class Warfare under any President thrown in.

  3. AnnMaria says:

    I’m with Perplexed, I think it’s #4

  4. Geoff Freedman says:

    Campaign contributions and lobying are huge contributors to Perplexed’s point. Until we take the money out of politics, there is no chance for policy changes that will effectively change the direction this country is headed (evolving into a banana republic).

    • perplexed says:

      -“(evolving into a banana republic)”

      “Evolving”? Our .84 Gini coefficient for wealth and 20 million under or unemployed should be telling us that the “evolution” is complete. Nothing in our current political discourse has any potential of slowing or stopping this trend let alone reversing it. This “evolutionary process” is much further along than most people realize.

  5. Walt French says:

    5. You believe unemployment is God’s punishment and helping the unworthy get jobs will merely reward laziness, low IQs, youth, dark skin color and the like. Let’s hear it for Eugenics!

  6. Michael says:

    I think the problem has more to do with the reasonable dilemna: reasonable people make reasonable assumptions that lead to reasonable results, but their assumptions fail when applied to unreasonable people acting unreasonably. And unreasonable people can vote in this country too.

    If you hold a position that is basically untenable, you have no incentive to abandon that position when it fails, especially when you have built your idenity on the foundation of being in opposition to the other side to begin with. That is because your position was not based on any assumption of reason, as it is understood by reasonable people, to begin with. The thinking goes “If my enemy uses ‘reason’, I’m going to use my gut or religion or some other form of ‘higher reason’ to gain an advantage.” And the more reasonable people use reason to deflate your unreasonable ideas, the more incentive you have to hold onto them because you gain everything if you win, or hold out, and nothing if you lose.

    So, while unreasonable people use various aspects of irrationality to portray authenticity to their supporters, everyone else is left shaking their head wondering “But that doesn’t make any sense.” It is the fundamental nature of making sense that they are opposed to, because sense and reason and evidence goes against all of the things they want to believe are true. And it doesn’t matter if that is actually true or not, its the truth they want to believe in that counts.

  7. MattJ says:

    The Bush tax cuts have ended. Those would be the Obama tax cuts that are reducing revenue (not increasing spending; that’s a pretty weird Freudian slip there).