Last week’s weak unemployment report was bad news. But here’s an even more sobering piece of news. Even with jobs playing a central role in the campaign, neither Barack Obama nor Mitt Romney is going to turn things around anytime soon.
Here’s the problem, in a nutshell: Obama has a plan for job creation but can’t make it happen politically. Romney has a long-term plan for economic growth, but it isn’t really a jobs plan.
Economists on both sides agree that the fastest ways to create jobs — not to say the best or wisest — are direct government employment or tax credits for low-income people. The president’s dilemma is relatively simple. Despite Republican claims to the contrary, Obama does have a plan. It’s called the American Jobs Act, and it consists of payroll tax cuts, direct aid to states and municipalities to prevent public-sector layoffs; job retraining; and a grab bag of other stimulative measures, like infrastructure projects and unemployment insurance reforms, all costing $447 billion. It’s by no means enough to solve the jobs deficit. To get the country back to 6 percent unemployment, the country would need 12 to 14 million new jobs, assuming workforce participation increases somewhat.
But with the exception of some pieces of the bill — like the Jumpstart Our Small Businesses Act and a February 2012 extension of existing payroll tax cuts — Congress won’t pass it. There’s simply no appetite for a major federal spending push — voters have soured on stimulus, because the $787 billion 2009 package didn’t live up to initial expectations; voters and lawmakers from both parties are concerned about deficits; the Republican House refuses to pass spending increases without offsetting cuts, which would defeat the purpose of pumping money into the economy to stimulate demand. (Based on the administration’s assumptions, the CBO estimated the Obama plan would essentially have a neutral impact on the federal budget.) Even if Obama wins reelection and Democrats hold the Senate in November, they’re unlikely to retake the House, and it’s hard to see a major stimulus package advancing in the near future.
But what about Romney? He’s also been accused of having no plan, including by the agenda-setting conservative editorial board of The Wall Street Journal. That’s just as false as the claim that Obama doesn’t have one. Romney does have a plan — 59 points worth, in fact. But while Romney bashes the president for not creating jobs fast enough, and has barnstormed the country with the slogan “putting jobs first,” the fact is that his agenda isn’t about jobs first. It’s primarily about improving the business climate, with the expectation that jobs will follow. And it’s essentially impossible to assess the job-creating impact of the plan, because — with a few notable exceptions below — the campaign has studiously avoided estimating how many jobs each component would produce…