Over the next year, meaningful job creation does not lie within the power of Washington to fix. On the other hand, stemming the tide of additional job destruction does. Through the next presidential election, Obama’s jobs proposals, if passed, would have minimal effect on the unemployment rate. This economy and its financial system are too large and too sick. Time takes time, to unwind the credit and housing bubbles and heal the massive disruptions that have taken place.
Conversely, the President’s proposals would provide a backstop against further job destruction, mostly in the state and local public sectors. It would keep us from a double-dip recession. It would permit those who remain employed to unwind their debt and provide some level of spending and demand for goods and services.
Conservatives may revel in the fact that their elected representatives are giving the President no rope to implement his jobs plan. My view is that if conservatives were sure of their fiscal and monetary policy positions they would give Obama at least half the rope he is asking for, kicking and screaming to be sure, and let him hang his presidency. If a second recession is avoided they can continue to hammer Obama with the high unemployment rate. If the plan fails and we re-enter recession the Obama reelection would be dead on arrival.
This “I told you so” and “win-win” scenario for republicans will not happen because they want the economy to get worse and will take no bi-partisan action of any kind. Apparently they believe if millions more must lose their jobs, so be it. The irony is that without permitting a jobs plan republicans have bought responsibility for the inevitable job destruction and probable recession that will follow.