Obama Not Doing Well Enough on Jobs

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obama campaign.jpg
This morning, Barack Obama appeared on five different networks — speaking about the economy, health care, and Afghanistan.
But in his exchange on CNN’s “State of the Union with John King“, President Obama articulated a softness on the imperative of job creation that is disconcerting.
From a CNN report:

Obama even suggested that the national unemployment rate, which is hovering at just under 10 percent, could climb higher in the near future.
“I want to be clear, that probably the jobs picture is not going to improve considerably — and it could even get a little bit worse — over the next couple of months,” the president told CNN Chief National Correspondent John King, “And we’re probably not going to start seeing enough job creation to deal with the — a rising population until some time next year.”
Obama added that he thought the economy would be creating jobs throughout the end of 2009 — but not enough to keep pace with population growth and to make up for steep losses in employment that occurred earlier this year.
“I think we’ll be adding jobs, but you need 150,000 additional jobs each month just to keep pace with a growing population. So if we’re only adding 50,000 jobs, that’s a great reversal from losing 700,000 jobs [a month] early this year — but, you know, it means that we’ve still got a ways to go.”

In January and February of this year, the President committed himself to a jobs creation plan of approximately four million jobs in created or saved jobs by 2011. We are no where near on that course. In February, Paul Krugman warned that the so-called economic recovery plan tweaks were already reducing the job-creating element of the stimulus package by between 600,000 and 1.2 million jobs.
The economy is in lousy shape still — though we are going to see robust third and fourth quarter upswings in the GDP — but this is GDP growth without job growth. . .and that is what economic advisers to Obama who are Wall Street-centric have scripted.
Lawrence Summers needs to get out of the White House more — and get to something other than fancy DC parties where folks fawn over him. He needs to go to heavily impacted communities where foreclosures and joblessness are high and needs to deal with the fact that the reflation of Wall Street has come at the expense of generating balance in the lives of average Americans.
A GDP recovery, which we are going to get — is something that the President of the United States should be apologizing for and for which he should be holding his economic team accountable. An uptick in GDP without growth in employment should not be treated as positive news.
The outcome we are getting on a no-jobs recovery was a “policy choice” – and we need to make better choices from this point forward.
— Steve Clemons

Comments

26 comments on “Obama Not Doing Well Enough on Jobs

  1. aj says:

    I have suggested…if you want jobs….give the homeowners an Home Improvement Stimulis….giving the tax rebates for new building, remodeling, etc….not just in one particular construction but all home improvements ex: carpets, roofing, painting, concrete, landscape, heat and air,…the list goes on. One stipulation: All work must be done by licensed contractors with proof of liability insurance and workmens comp. This will guarantee that taxes are taken from employees. Also if the government would back Home Improvement Loans …lower interest rate etc …that would pay contractors with drafts. All home improvement tax rebate to be verify with documents. This type of stimulus would benefit the whole country and not just one industry. Perhaps even give “landlords” better incentives to remodel long over due repairs since they get to write off there deductions anyway. We need some sort of “job stimulus for the whole nation” and we need it now. This type of plan could be initiated immediately.

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  2. silver slipper says:

    I don’t think President Obama plans for the stimulus package to work to decrease unemployment… YET. Remember? It doesn’t really take effect until sometime next year. Only a small percentage has been spent. I believe the prolonged unemployment will help President Obama advance his health care plan. Eventually, Americans will become so worried about their financial future, they will give in to any government plan.

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  3. Dan Kervick says:

    Steve,
    Do people really fawn over Larry Summers at those DC parties?

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  4. Bill says:

    No amount of being “hard” on jobs is going to create any jobs. He is sensibly setting expectations, knowing that jobs is a lagging indicator.
    The stimulous bill was a pretty good one, and we all just have to hold our breath and wait.
    Americans are known to react more to whether the unemployment is going up or down, not what the magnitude is. By a year from now, the rate may well be very high historically, but it will be moving down from the 10% range, and people will no longer be so scared. The Democrats got no traction talking about a jobless recovery 7 years ago, and the GOP will get none next year.

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  5. Calvin Jones and the 13th Apostle says:

    Marji:
    Considering he is listening to people like Summers and not people like Stiglitz, I don’t have my hopes up. Where is the job growth going to come from? Neo-liberal policies still hold sway with those who matter, sadly.

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  6. Calvin Jones and the 13th Apostle says:

    nadine:
    Depends on who you define as “rich”. If Obama were to tax the Lloyd Blankfein’s at 80%, I don’t think very many would complain. That’s the only way you are going to stop the Wall Street madness.

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  7. Neo Controll says:

    whoa, not only is ‘nadine’ and expert in foreign policy, she is versed in the ins and outs of American (we presume) small business. Only her bias shows the thinking of a repub fat cat who equates ‘small business’ with a net profit in excess of $250K. She should stick to promoting rabid political entities. Unless she is really reporting from a bunker in Brooklyn.

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  8. Zathras says:

    The comment immediately upthread actually highlights one of the trickiest aspects of job creation in this recession.
    If government programs to generate employment are the only way to do so in an acceptable period of time, and given that the federal deficit is already enormous, it is logical to assume that additional revenues will be required. If one assumes that government programs generating employment are not necessary, it is possible to argue that revenues to pay for them are not needed. Given the experience of the last eight years, however, when under the incompetent economic stewardship of the last administration marginal tax rates on upper-income earners were cut repeatedly and a very deep recession happened anyway, it is difficult to argue both that unemployment is a major long term economic problem and that the only steps needed to address it are the things we must not do.
    No one likes higher taxes. No one ever has. The question is whether the obligations the federal government either already has or should take on can be met without them.

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  9. nadine says:

    If Obama wants to encourage more jobs, he should stop threatening to hike taxes on small business (aka “the rich” in Obamaspeak) by a large and unspecified amount. Nobody is going to hire if he has no idea how much money he will have or how much the new employee will cost him.
    This is just Econ 101. But Obama never took that course.

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  10. Zathras says:

    Steve Clemons and the people he is criticizing may be talking past one another on this point.
    The Obama admininstration and Mr. Bernanke (perhaps it is the other way around) have been congratulating themselves for the last several months for averting a reprise of the economic collapse of the late 1920s and ’30s. In their view, and to a large extent in mine as well, those are the policy choices they made. I don’t disagree that steps taken by the Fed and the stimulus package enacted by Congress haven’t, and won’t, be effective in keeping unemployment rates from reaching punishing levels. Framing those choices as having been made for capital and against jobs, though, takes too much for granted.
    The economy is bad now. It could have been a lot worse. This isn’t a prescription on what we ought to do going forward; with respect to that I agreed with what Krugman had to say about the stimulus bill last winter, and would probably agree with Clemons as often as not. What I see doesn’t lead me to believe that recovery will reduce unemployment on its own for many years. However, I persuaded that the danger of a much greater economic cataclysm last fall and winter was real, and avoiding it the greatest achievement Bernanke and the Obama administration have to their credit.

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  11. WharfRat says:

    steve,
    Appreciate you giving my comment a second read. I think you’re on target about domestic politics here. And my needling was meant to be good-natured, but also strong enough to get your attention.
    As far as the substance of your reply re: infrastructure, I wonder what you make of the President’s (too-softly advanced) argument that health care reform is part of the economic recovery? The cries of “socialism” that are greeting this, frankly, bland program make me wonder what the tea-baggers would be saying about a more aggressive, WPA-style infrastructure investment on the part of the government. At least if you’re conceiving of infrastructure in the traditional sense (ie, roads, bridges, buildings) rather than things like fiber-optic networks, broadband, and technology.

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  12. samuelburke says:

    pay rationing…..lets go karl marx.
    Pay Czar Plans to Disclose Top Salaries
    By Dan Freed
    http://jsmineset.com/
    WASHINGTON (TheStreet) — Treasury “Pay Czar” Kenneth Feinberg is planning to disclose the salaries for the 25 most highly paid employees at Citigroup(C Quote), Bank of America (BAC Quote),American International Group (AIG Quote), GMAC,Chrysler Financial, General Motors and Chryslerwithin 30 days, according to statements attributed to him in an analyst’s research report.
    Feinberg made the statement at a Federal DepositInsurance Corp. research conference on executive compensation, according to a report from Concept Capital, a research firm. A Treasury Department spokeswoman did not respond to a call or an email message seeking to confirm the report. The analyst who wrote it, Jaret Seiberg, was also not available, according to a Concept Capital spokeswoman

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  13. samuelburke says:

    “What occurs first on the West Coast ALWAYS moves East, North and South. This is not Michigan, remember that.”
    “Job losses slowed? That is a big help. Maybe Wall Street will hire them all for the mail room.”
    http://jsmineset.com/
    California’s unemployment rate hits 12.2% in August
    The rate rose from 11.9% in July, setting a record, but the pace of job losses slowed.
    By Alana Semuels
    September 19, 2009
    California’s jobless rate set a fresh postwar high in August, rising to 12.2% from 11.9% in July and putting more pressure on the state’s tattered unemployment insurance fund.
    Though the state may be in the early stages of an economic rebound, the latest figures underscore what many economists fear: There is no obvious engine of job growth to put California’s more than 2.2 million unemployed residents back to work quickly.
    There was some encouraging news in the job figures released Friday by the state Employment Development Department. The pace of payroll job losses has slowed dramatically. California employers slashed a net 12,300 jobs last month. That’s down from 39,000 jobs lost in July and the average of more than 70,000 jobs shed monthly during the first half of the year.
    Still, the sheer number of Californians out of work — and the lengthening duration of their joblessness — is worrisome to economists and public officials. Nearly 30% of the state’s unemployed have been out of work at least 27 weeks.
    California’s unemployment rate is well above the national rate of 9.7%. And it’s the fourth-highest in the nation; only Michigan, Nevada and Rhode Island, at 15.2%, 13.2% and 12.8%, respectively, are faring worse. Unemployment will not decline until industries such as renewable energy, healthcare and construction experience significant growth, economists say. Most don’t expect that any time soon

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  14. JohnH says:

    I respectfully disagree with your assertion that “the outcome we are getting on a no-jobs recovery was a “policy choice” – and we need to make better choices from this point forward.”
    The crux of the problem is the way the American economy works: housing has led the way out of every recession since the Great Depression. There simply is no proven alternative.
    The economy was facing exactly the same problem in 2002, when Greenspan decided to keep interest rate artificially low for too long. The upside was that the economy grew. The downside was the housing bubble, which preemptively sucked all the air out of this recovery. With houses being foreclosed every day, there is simply no market for new construction even though interest rates are at historic lows.
    So I agree that jobs are desperately needed. What is even more desperately needed is a genius who can imagine a way for the economy to come out of recession without being led by housing. This is not a policy choice. It is a lack of imagination and the willingness to bet the country’s economic future on a glimmer in someone’s eye.
    It’s fine to criticize Obama’s lack of job creation, but let’s cut the man a little slack here. I have yet to see anyone propose a way to recover without housing. Nor have I seen anyone come up with a credible proposal for significantly stimulating demand in a heavily over-saturated housing market, particularly since that will require job creation first.
    The prospects here are simply ugly.

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  15. Marji says:

    As one of the unemployed, I am taking this time to develop new marketable skills and keeping current on others. I trust that by early next year, we will see our county’s job picture improve. I am even opptomistic that the jobs created won’t be the no benefits,low pay, part-time jobs that have ruled in the last eight or nine years. I have faith in what our president has said.

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  16. Ben Rosengart says:

    I was disappointed that the stimulus failed to fill or partially fill
    states’ budget gaps. I suspect there’s still opportunity there.
    Good post, Steve.

    Reply

  17. PissedOffAmerican says:

    Some reports are putting California’s joblessness stats at 23%. Of course, if I bring up the issue of illegal immigration, assholes like questions and wig-wag will flock to the thread to call me a racist.
    We just finished a high end home for a couple, the husband is an oil field engineer, and the wife is in accounting for one of the school districts in the ag lands outside of Bakersfield. She has, in her district, many poverty stricken children who are residents of the district. But who gets programs that feed hungry kids? The migrant workers. There is a program that caters to feeding migrant kids, with massive funding. But the poverty level kids that live in the district don’t get shit.
    Cool, eh?
    Lets ship a few more billion to these racists killing Palestinians in Gaza and trying to start a war with Iran, shall we?
    Why feed kids when we can feed wars?

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  18. ... says:

    shorten the headline to just say ”’obama not doing well…”’ that covers it right their… it is a beautiful trait to be idealistic, but the reality of obamas presidency to date has been everything but… change is not something that has anything much to do with obama, other then that he is much more ”’diplomatic”’ – read: talks the talk, but doesn’t do much of anything else other then continue in the same tried and true broken down american fashion….

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  19. Lurker says:

    Steve,
    You are good to reply even to your flippant posters, but the bottom
    line is that this was a great and important note on TWN. Thanks for
    speaking out about the jobs deficit that you, Leo Hindery, Leo
    Gerard, and former Senator Donald Riegle have been pushing on
    for some time.
    Just wanted you to know that your fans are aware of how you are
    working to be a constructive voice on the jobs issue.

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  20. Steve Clemons says:

    Wharf — just re-read your note and see that you were speaking about international travel, and my general note still applies. Happy to email you privately about what I’ve seen or not seen in the international muck. Your note about the Peace Corps is on target — though not for me at this stage. I almost joined in my youth and admire the folks in the Peace Corps greatly. all best, steve

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  21. Steve Clemons says:

    Wharf — when you spend some time in Quitman, Texas; Corpus Christi; Bartlesville, Oklahoma; McHenry, Maryland; and the like — get back to me. I will continue to write — as I do — about both the high end places I’ve seen — but also the real world places I go. I’ve written in the past about the job programs that should have been more a part of real economic restructuring of the economy — and have long argued that we needed something like a combination of a WPA approach to youth jobs — and needed a more active engine of federal and state collaboration on pumping out infrastructure spending. The Obama administration did none of these things and instead took an approach designed to reflate the financial sector, in turn hoping that this would get the economic lifeblood of loans moving again — and in my view, this hasn’t happened. Infrastructure investment remains meager. There are no national employment programs designed to take on youth in society building tasks – and banks are still very sluggish in providing small business loans.
    I liked your post for the most part — but don’t be challenging me that I never go to the world’s darker places unless you ask me first where I have and haven’t been. I’d be happy to discuss with an email with you. Your note just puts me in a position of having to say that your comment is not informed about a major portion of my travel.
    all best, steve clemons

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  22. Larry Martin says:

    Thank you for an excellent post, Steve. “Softness” is the word
    that best describes Obama’s approach to the things I care about
    most, like jobs and wages, health care, habeus corpus, privacy.
    The most important things he could do, the opportunities I
    believe he is wasting, are to rebuild the economic prospects of
    workers and restrain the government’s impositions upon their
    freedoms and the corporate dominance of their lives.
    It’s a big order. When we fought to elect him we didn’t expect
    him to win it all. But we did expect him to change the game. And
    the game today is still being played by the same rules.
    I can’t agree with WigWag that we should consider the blown
    stimulus opportunity to be “water under the bridge.” Not when
    the bridge is still sinking.

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  23. WharfRat says:

    “Lawrence Summers needs to get out of the White House more — and get to something other than fancy DC parties where folks fawn over him. He needs to go to heavily impacted communities where foreclosures and joblessness are high and needs to deal with the fact that the reflation of Wall Street has come at the expense of generating balance in the lives of average Americans.”
    ‘Pot, meet Kettle.’
    Very admirable analysis here, Clemons. I find myself largely in agreement that job-creation is the sine qua non of a genuine economic recovery that puts America back on track. I think, however, you are parsing Obama’s statements a little bit brazenly; I don’t really see the connection between what he’s saying on the morning shows and your analysis of the policy choices he’s made.
    Out of curiosity, what would a recovery plan that favored job creation have looked like? I’m not an economist, so I’m asking this question sincerely. What were the other choices in front of Obama?
    I do have to needle you a bit, however, in admonishing Summers like that when you pontificate about international politics while not really having a clue about how the rest of the world lives: being shuttled around the most sanitized corners of the developed world doesn’t really give you a picture of what life is like for the majority of the world’s population. Maybe you should consider the Peace Corps. It would give you a whole new perspective on lfie.

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  24. Michael Kahn says:

    Could Obama turn now to the New Deal? FDR really did create
    jobs-CCC , WPA, etc. He set out to hire people to rebuild America.

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  25. evie says:

    Soft on jobs? That’s absurd, especially since he knows his next
    election will come down to whether or not people have gotten their
    jobs back. Nothing else will matter at that point.

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  26. WigWag says:

    It’s easy to criticize Obama on job creation but not so easy to come up with viable, politically feasible plans to remedy the problem.
    Job creation always lags economic recovery; there’s not much Obama and his team can do about that. Had the stimulus plan been bigger, that might have helped but at this point that’s water under the bridge.
    There’s also the reality that even though health care reform is an absolute must, on balance, health care reform is almost certainly a job killer not a job creator. That doesn’t mean it’s not the single most important thing for Obama to do; but requiring employers to insure their employees (which is laudable) or pay a penalty if they don’t, raises the cost of job creation and will result in fewer jobs.
    With that said, health care reform is about the most critical thing Obama can do for the unemployed and underemployed. Allowing workers to remain insured when they lose their jobs takes the sting out of losing a job, at least a little.
    There are alot of things Summers, Geithner and the rest of Obama’s economic team are doing that I don’t like. They refuse to consider hard caps on executive compensation in the banking industry; the SEC’s proposed settlement with Bank of America over Merrill Lynch bonuses (that the judge in the case turned down) was pathetic, and there is little evidence that Obama wants fundamental changes in the tax system to make it far more progressive.
    Unfortunately even if the economic team adopted the right policies on those issues, it wouldn’t really save or create new jobs.
    The remedies Obama could put in place to spur job creation will take years to enact (if they can ever be enacted) and the jobs they produce won’t come for several years at best.
    For the time being the best Obama can do is muddle through.
    Those who don’t think that’s good enough can cheer themselves up by contemplating how much worse the problem would have been had McCain been elected.

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