Economists: Focus should be on growth, not jobs

“There aren’t any jobs because there isn’t any growth,” said Martin Regalia, the Chamber’s chief economist and senior vice president. “When you grow below your potential, you don’t create any jobs. This isn’t rocket science.”

Kate Warne, an investment strategist at Edward Jones, echoed the call for economic-growth policies, not job-creation policies.

“What we’d much rather see is policies designed to promote overall growth, rather than policies designed specifically to target jobs,” she said.

Regalia said he was supportive of the government’s stimulus efforts shortly after President Obama assumed office, but recognized that the political climate now has eliminated that option for the economy.

“We’ve spent that money, and it’s not there anymore,” he said.

He did, however, take the White House to task for pursuing several regulation-laden projects, such as the Dodd-Frank financial reform law and the healthcare reform law. The influx of new rules are freezing businesses and keeping them from investing and growing the economy, Regalia said.

“When you continually change the parameters of the game, people don’t play,” he said.

As the new Republican majority in the House has shifted the fiscal policy debate to focus heavily on government spending cuts, the economists warned against taking an ax to the the government’s ledger immediately, as it could endanger the economic recovery.

“Start by making small changes that affect incentives over time as opposed to cutting spending dramatically today,” Warne said.

And while financial markets have now begun watching Federal Reserve Chairman Ben Bernanke’s every move for hints of further stimulus from the central bank, Warne threw cold water on the idea of the Fed doing much at this point.

“We don’t see the Fed’s tools as really the right ones to address the current slow-growth environment,” she said. “The Fed’s pretty much done what it can do.”

But because markets are now expecting some action from Bernanke, Warne said she expects the Fed will do something, just so it does not disappoint investors.

Meanwhile, John Felmy, chief economist at the American Petroleum Institute, sought to defend the oil industry from the recent Democratic push to curb its taxpayer subsidies.

“We pay our fair share,” he said. “Let’s take the Washington rhetoric out of it and do the right thing.”

The Hill helped sponsor the quarterly economic briefing hosted by the Chamber.