Some of the nation's top political commentators, legislators and intellectuals offer some insight into the biggest question burning up the blogosphere today.
Is the rush toward a jobs bill an implicit admission that February's $787 billion economic stimulus failed?
Glenn Reynolds, the Instapundit blogger, said:
Admission or not, it's obvious that the stimulus has been a miserable failure, with unemployment much worse than the Obama Administration said we'd see without the stimulus, and much, much worse what they promised us we'd see if the stimulus passed. Arianna Huffington is calling unemployment Obama's Katrina, increasing pressure for action. But a "jobs bill" is likely to prove yet another expensive flop. Legislation doesn't create jobs. Investment creates jobs, and in the current political environment, you're crazy to invest unless the political fix is in.
Much of the unemployment problem stems from uncertainty created by the Administration and Congress, as they rush one poorly thought out gimmick after another through the system and create the sense that the only good investment is one that's government-approved. The best thing they could do is probably nothing, but since doing nothing offers no opportunities for political posturing and graft, I predict that we'll see another expensive yet ineffectual program instead.
Craig Newmark, founder of Craigslist, said:
The jobs bill reflects that the damage done in the prior eight years will take more work to repair. There are many good people in Washington and elsewhere, working very hard on that.
Daniel J. Mitchell, senior fellow at The Cato Institute, said:
The so-called stimulus was a massive waste of tax dollars, but this should not be a surprise.
The $787 billion spending spree was based on the discredited Keynesian theory that did not work for Hoover and Roosevelt in the 1930s and did not work for Japan in the 1990s. It also did not work for Bush last year, so it is baffling that anybody would think it would work this year. Borrowing money out of the economy’s right pocket and then having politicians put the same money in the economy’s left pocket was the political equivalent of a perpetual motion machine. The only surprise was that the White House was foolish enough to make specific claims of the good results that supposedly would flow from all the pork-barrel spending. In part, this is the absurd notion of claiming 600,000-plus “jobs saved or created” when total employment actually has fallen by more than 3 million. But the bigger mistake was claiming that the faux stimulus would keep the unemployment rate from rising above 8 percent and that failure to squander $787 billion would cause the jobless rate to climb to 9 percent. The politicians got their wish, yet now the unemployment rate is above 10 percent. Brilliant.
Dean Baker, co-director of the Center for Economic Policy Research, said:
is little dispute among economists that the stimulus helped to boost
growth and prevented the unemployment rate from rising even higher.
This can be seen very clearly in the data. For example, consumption
grew in the 2nd quarter even though wage income fell. This was
obviously due to the increases in unemployment insurance and other
benefits, as well as the Make Work Pay tax cuts. Everyone who has
looked at the data recognizes the positive role that the stimulus
The reason why there is a need for a jobs bill is that the economy was hit harder than President Obama and most private forecasters anticipated. They can be blamed for not getting their forecast right (they are supposed to be good economists), but on the other hand, President Obama was not the person who let an $8 trillion housing bubble grow unchecked, or insisted that its collapse would be no big deal when it started to deflate. (That person would be Federal Reserve Board Chairman Ben Bernanke).
Anyhow, the economy was worse than was generally recognized, as some of us did try to warn last winter. This means that much more stimulus was needed at the time. The story here is of a hugely overweight person who cut back their food intake by 300 calories a day. If this person had originally been consuming 3000 calories a day, then this reduction in food consumption will probably not be adequate to get their weight down. But the conclusion is not to go back to eating 3000 calories a day, but rather to cut food intake more.
The Republicans will try to take advantage of the Obama administration's forecasting mistake to claim stimulus doesn't work. However, if the public gives into this nonsense then we will all end up fat and unemployed.
Bernie Quigley, Pundits Blog contributor, said:
Yes. If you drove south from northern New Hampshire to North Carolina on I-95 as I have done this past weekend, you would see extensive work conspicuously done by women and men in lime green clothing here in the frozen north where almost no one lives. Every road has been resurfaced; the ledges have been torn off the high cliffs by the highways that just last year housed hawks and peregrine falcons, lines have been painted everywhere.
Much of this work has been voted down again and again locally as work that did not need to be done, work that we did not want done; labor that we do not respect; work that we do not consider to be real work. Increasingly, the feds need to New Jersey-fy us so as to removeth chill of the cold, clear, northern night and the coyote’s chant that sends the willies up their spines. But there is less than 2 percent unemployment up here in these parts. This money is a complete waste by nostalgicos channeling the Inner Roosevelt and longing for the days of Woody Gunthrie and Big Bill Broonzy singing folkloric ditties in a box car heading across the western plains on the government’s tab.
Commodities guru Jim Rogers, in comparing the Obama spending to that of the Chinese, points out that the Chinese are correctly spending infrastructure money by applying it where it is needed for the 130 million new workers recently arrived in the industrial centers. Here it is just tossed anywhere, as if out of an airplane, regardless of need. All patterns of population and economy today point west. When people here in the Land of the Free move they tend to move today to Texas and Alaska. There has been no attempt to follow patterns of rising karma. And then when you get south to New York City, where employment is now most probably above 20% the roads and infrastructure are a mess and not a finger has been lifted. There appears to be no plan whatsoever as Rogers says.
Rep. John Carter (R-Tx.) said:
There is no doubt that the original
Stimulus failed to create jobs, and has in fact probably cost
additional jobs and prolonged the recession. To create jobs we need to
lower the tax burden to stimulate investment, which is the exact
opposite of what the Democrats did earlier this year and now
Rep. Mike Honda (D-Calif.) said:
The damage done to our economy by Bush policies will take longer than months to fix, especially to help the millions of American families who are still struggling to make ends meet. The economic recovery package was an important step in a new direction but we need to do more to help Americans who have lost their jobs due to years of deregulation and harm done to our social and economic fabric by failed Republican policies and tax cuts to the wealthiest.
Dick Morris, Pundits Blog contributor, said:
It is the political and economic equivalent of the escalation of the Vietnam war. If 100K troops don't win, send in 200K and so forth until the fact that the program isn't working becomes obvious to everyone, even its advocates.
The stimulus spending is not failing because it is inadequate but because it is counter productive. The capital it absorbs could be better spent investing in private sector job growth. All the stimulus is, is a heart lung machine to keep the economy alive. it does nothing to assure that it will be able to live on its own once the machine is disconnected. In fact, by absorbing all the oxygen in the room to pay for its deficit, it assures that it will not be able to do so
Read more after the jump.