In the much-buzzed-about Sunday New York Times Magazine article by Peter Baker on President Obama’s search for an “exciting” jobs plan that could be offered in his State of the Union address next week, a White House adviser describes Obama as “really frustrated that there weren’t solutions on the cheap” for addressing today’s jobs crisis.
But that’s the point. There are no cheap solutions. The past two years are a case in point. President Obama’s first and best effort to stoke the economy and produce jobs, the 2009 recovery act, was massive and extraordinarily successful at keeping the economy out of a depression—but its mix of $500 billion in direct spending and $300 billion in tax relief was not nearly massive enough, and thus not successful enough. Some of Obama’s advisers, such as now-departed Council of Economic Advisers chief Christine Romer, knew that the better course would have been to send a $1.2 trillion package to Congress. But political caution, combined with a failure to comprehend the extent of the damage done to the Main Street economy by the Wall Street collapse, overruled common-sense economics.
Now the Republicans who control the House of Representatives want to double-down on the “we can’t afford more stimulus” line, at a time when state and local governments are cutting jobs at an alarming rate and when private-sector job growth is not expected to lower the unemployment rate below 8 percent until after 2012.
One response favored by key conservatives to the state budget crises, as Kevin Williamson reports in the National Review Online today, is to essentially force states to go bankrupt. Congress would not offer aid to the states, and the Federal Reserve would be prohibited from buying their debt. That would force more cuts in services and state worker layoffs—and would, of course, prolong the economic recovery.
Let’s be real. Laying off teachers, police officers and firefighters is not the way to recover from a recession. Neither is cutting funding for roads, public transit and public facilities. Neither is cutting services for the poor, the sick and those who just need a helping hand through the wreckage of the recession.
And let’s stop capitulating a “political realism” that serves only to constrain the political debate to the limits of what is acceptable to the ideological right and its corporate benefactors but does not acknowledge the pain of the 25 million Americans who are unemployed, underemployed or are “discouraged” workers.
Last year, House progressives came up with a $100 billion plan to produce 1 million jobs. This funding would be sent directly to state and local governments. Much of the money would be used to protect the jobs of public workers who would otherwise be laid off due to budget cuts. Other funding would support jobs in nonprofit service organizations and the private sector. All of these jobs would have people employed doing work that must be done to support a growing economy: educating children, protecting life and property, building and repairing public infrastructure and facilities, offering support for people in need.
It’s the kind of thing the federal government used to do routinely before President Reagan ended revenue sharing, in line with the conservative argument that states should largely be left to fend for themselves.
Yes, $100 billion happens to be the amount of money House Republicans said they wanted to cut out of domestic discretionary spending in the federal budget this year. It’s a popular applause line, but the conservative plan for doing so is reckless—and a majority of the public agrees, according to a poll just released by Campaign for America’s Future and Democracy Corps.
Putting people out of work doesn’t lower deficits. Keeping people working does. Keeping people working at the things we need to secure our economic future is in our collective interest and should be our collective responsibility.
That’s why I would argue that President Obama should add a $100 billion program to create 1 million jobs to the State of the Union address. First, we need it. Second, it sets up a teachable moment that shows how the federal government can play a direct, supportive role in keeping people employed while the private sector and state and local governments recover—and it reconciles us to the cost of repairing the damage done to the middle-class economy by decades of conservative hubris and centrist timidity.
Finally, it’s one way for President Obama and his fellow Democrats to show that he is willing to go to bat for working people, and take a beanball from the right in the process. More important than the specifics of the proposal, President Obama needs to show himself free of the handcuffs that the right, and some of those on his economic team, are resenting to him. We have an economy that is increasingly working well for corporations, as evidenced by their record 2010 profits.
The Main Street economy is not working, and no amount of pragmatism and kowtowing to the inside-the-Beltway chattering class will change that. Only bold policies that put people to work in the short term and reform the economy in the long term will. President Obama has the ability and the platform to advocate for those policies, and if he can’t change what is politically possible, at least he has set the stage for the rest of us to help make that happen.
My colleague Dave Johnson has written a post with his own ideas for what should be in the State of the Union address, and he asks for your ideas. Read the post and offer your comments.