The politics of "jobs, jobs, jobs"

The White House keeps saying that President Obama is focused on "jobs, jobs, jobs," but what is he going to do to create jobs? The only examples I've seen are small-bore ideas like "cash for caulkers" that are the economic equivalent of President Clinton promoting school uniforms.

In reality, the jobs push is mostly for show. Besides big pump-priming stimulus measures (which are now ruled out due to the deficit), the president's ability to affect the economy in the short term is limited -- he is largely a prisoner of circumstance. However, it's politically important to appear to be trying to do something to (a) limit the political costs of the economic slump and (b) be able to claim credit for subsequent growth.* That's why you're going to see such an emphasis on jobs from the administration going forward.

* For an example of how (b) is often done in a misleading way, see this post on how Treasury Department tried to claim that the 2003 Bush tax cuts were responsible for subsequent jobs growth (while omitting the 2001-2002 period, including the 2001 tax cuts).

Update 1/15 5:33 PM: Kevin Drum makes a similar argument in objecting to a specious Charlie Cook column stating that Obama should have "pivoted back to jobs and the economy sooner":

Is it a purely political argument that, regardless of the merits, Obama should have been viewed as spending 24/7 hunkered down in the West Wing helping create jobs for American workers? Or is it a substantive argument that governments have limited bandwidth and Obama should have spent more of his on reducing the unemployment rate?

The former is puerile and the latter is mysterious. What exactly should he have done? He passed a big stimulus bill, and it's plain that there's no political will in Congress to pass another one of any size. He extended unemployment benefits. He tried to take action on mortgage foreclosures, and perhaps he could have done more along those lines. But the financial lobby fought him, Congress wouldn't support cramdown legislation, and banks have resisted taking part in his program. The Consumer Finance Protection Agency would be a nice pro-worker feather in his cap, but it wouldn't help anyone find a job and probably wouldn't have gotten through Congress any quicker even if they weren't busy with healthcare.

So exactly what would his "pivot" back to jobs have looked like? Nobody ever really says. But aside from giving rousing speeches, the big levers available to fix the economy are monetary, which is in the hands of the Fed; fiscal, which he's done; and meliorative, which he's largely done too. The rest is mostly window dressing.

Comments

[David]

Government spending and regulations are burdens on private industry. Trying to improve private job creation by adding government programs is like trying to speed up a runner by giving him additional weights to carry.

The President could improve the job picture dramatically by the following 6-point program:

1. Announce that he will oppose any health care bill
2. Announce that he will oppose any cap 'n trade bill
3. Announce that he will oppose any new "stimulus" or other spending bill
4. Set as a top priority converting all government pensions from a defined benefit basis to a defined contribution basis.
5. Set up process to reduce the number of government employment by 10%.
6. Set up a process to reduce the amount and reach of government regulatons.

[David]

Note to Instapundit re job growth:

Glenn, in the unlikely event you publish this email, I’d ask you not use my name. As a partner in a midsize firm (annual gross about $50,000,000) I can give you our perspective on hiring: we’re not doing it. And we’ve always been in hiring mode in the past. We’re not struggling, but we simply are not willing to take on the risk of hiring people in this environment. Just look around: small businesses are still closing. How many “For Lease” signs do you see right now in front of empty commercial properties that used to house small and mid-size businesses? With taxes and interest rates expected to rise later this year or next, thus sucking even more cash out of the economy, and consumers still cutting personal spending, most businesses would be idiotic to go on the type of hiring sprees that would be necessary in order to create robust job growth. Instead, many businesses are still looking everywhere they can to slash expenses. Unfortunately, that includes payrolls.

I doubt anybody in the Obama Administration gets this. They’d have to take a break from their obsession with health care reform, and you know, actually talk to people who run businesses to understand what’s going on. But except for hobnobbing at fund raisers with the occasional fund manager or Fortune 500 CEO who’s so rich he can afford to be a liberal Democrat regardless of what happens, they don’t do that.