Obama, Forget the Deficit and Take a Stand for Job Creation
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Why not use government policy to directly create jobs -- labor-intensive service jobs in fields like education, public health and safety, urban infrastructure maintenance, youth programs, elder care, conservation, arts and letters, and scientific research?
Would this be an effective use of resources? From the standpoint of economic theory, government expenditures in such areas often provide benefits that are not being produced by the market economy. Take New York subway stations, for example. Cleaning and painting them in a period of severe austerity can easily be neglected. Yet the long-term benefit to businesses from an appealing mass transit system is enormous.
Meanwhile, senior Republican economists as orthodox as former Fed Chairman Alan Greenspan and former Reagan budget director David Stockman are excoriating the Republican Party and leaders like Senator Mitch McConnell for wanting to extend the Bush tax cuts at a time when a long-term path to fiscal discipline needs to be a combined recovery program.
So here is the state of play:
Republicans are setting themselves up as the wildly irresponsible party by arguing that we can have both tax cutting and effective fiscal and economic policies, too. Sensible moderates are breaking with the orthodox view that we need smaller government.
This is another of those teachable moments.
But where is the high-profile Obama speech making clear that the top priority for now is putting America back to work, that deficit reduction will come when the economy is back on track -- and that the budget will not be balanced on the backs of those who depend on Social Security, Medicare, and other key social outlays?
The misguided Erskine Bowles, with his austerity program, did not drop into the budget debate from Mars. He was appointed by Barack Obama.
The New York Times reported Sunday that Obama has been meeting with vulnerable Democratic members of Congress, offering to do anything to help them -- including staying out of their districts. The front-page piece, by political reporter Jeff Zeleny, was headlined, "To Help Democrats in the Fall, Obama May Stay Away."
Uh, why does this not sound like a winning political strategy? Maybe if Obama got serious about putting Americans back to work and explaining the real connection between an economic recovery and deficit politics, incumbent Democrats -- and voters -- might welcome the president into their districts.
Robert Kuttner is the author of A Presidency in Peril: The Inside Story of Obama’s Promise, Wall Street’s Power, and the Struggle to Control our Economic Future, recently published by Chelsea Green Publishing Company. Kuttner also authored Obama's Challenge: America's Economic Crisis and the Power of a Transformative Presidency and several other books on politics and the economy. He is coeditor of The American Prospect magazine and a Distinguished Senior Fellow at the progressive think tank Demos. He is a regular commentator on TV and radio, and a contributor to The Huffington Post and The Boston Globe, and a former longtime columnist for BusinessWeek. Previously, he was chief investigator of the U.S. Senate Banking Committee and a national staff writer on The Washington Post.