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American Jobs Bill 2011: Too Late For A Do-over For President Obama
By EconMatters
When President Obama delivered his much anticipated jobs speech on Sep. 8, I was actually driving on one of those highways the President said would benefit from the infrastructure spending included in his proposed $447-billion American Jobs Bill. Listening to the live speech, and judging from the audience reaction, it was a good speech reminiscent JFK-style and was what American public wanted to hear.
However, the proposed bill is short on implementation detail, and the claim that “Everything in this bill will be paid for. Everything” seems more of a wishful thinking and empty rhetoric as it rests on the assumption that the resulted budget and deficit cuts would not be rolled back by future leaders and policymakers. And that, of course, would not be President Obama’s problem.
Looking at the proposal on the basis of allocation, there does not appear to be any provision for the public sector, which is shedding jobs at an accelerated rate outpacing the job gains in the private sector due to budget cuts, revenue losses, and the winding down of the stimulus package. U.S.News noted that since the end of the recession, government employment--including federal, state, and local jobs--has fallen by roughly 600,000.
Furthermore, there’s no provision for the housing sector which is still hemorrhaging from the financial crisis dragging down the rest of the U.S. economy.
At $447 billion, the proposed Jobs Bill is about half the size of the first stimulus package passed under President Obama – the $787-billion American Recovery & Reinvestment Act of 2009 (ARRA 2009). While both bills have a significant portion allocated to tax cuts/relief, one notable difference is that the Jobs Bill 2011 has devoted a much greater percentage and dollar amount to infrastructure—31% or $140 billion vs. 10% or $81 billion in ARRA 2009. (See Chart)
In the speech, the President made reference to China’s construction spree noting that the U.S. has the capability as well to build out infrastructure on its own. The heart of the matter is that Beijing gets that ….three years earlier than the Obama Administration, which made a decision to go the ‘alternative’ route.
As a result, China has overbuilt in some areas, and its “ghost city” has become somewhat an international laughingstock. But on the other hand, it also suggests China would rather have many ghost cities and empty railways than risking an economic recession. Meanwhile, it is fair to say the under-funding and poor condition of many roads, bridges and ports in the nation could soon turn the U.S. (still the largest economy in the world) into a laughingstock as well.
The ARRA 2009 was heavy on health care, alternative energy, and certain special interest programs. The country now has almost 2 million fewer jobs since 2 1/2 years ago. President Obama and his “brain trust” basically failed by not asking questions like the following in advance:
- Does, for example, health care reform, in the middle of an unprecedented recession, really add to net new jobs, without taking jobs away from other sectors?
- If the answer is NO to #1, then the second logical question would be: Should we wait till after the economy gets back on its feet?
- Could a policy and legislative change of this magnitude rattle business and negatively impact business hiring and investment decisions? If yes, then go back to question #2
The point is that if the nation has to take on more debt to get the economy going, then at least put the money into established sectors with a large number of workers such as construction and manufacturing that got hit the hardest by recession and job losses. (See Chart Below)
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| Chart Source: CEPR.net |
The ARRA 2009 was literally a no-questions-asked check of $787 billion reflecting the excitement and support of a newly elected (and charismatic) President. The political and fiscal climate then was one such that stars were aligned for President Obama (and the Democratic Party) to go down in the history book as the hero turning the U.S. economy around from the Great Recession…had the resource been properly utilized and implemented.
With the deteriorating domestic housing market, the unemployment rate of the construction industry peaked at 27.1% in February 2010 (See Chart Above), and just lost another net 5,000 jobs in August. One has to wonder what difference it could have made had the ARRA 2009 been allocated the old fashioned (and proven) way—heavy on infrastructure and other business-friendly programs to spur growth.
Large scale infrastructure projects typically take anywhere from 6 to 24 months to go into the actual construction phase. So even if an infrastructure stimulus program is put in place today, the more significant impact on employment most likely will not be seen for another year or two. On the other hand, had the infrastructure program been implemented three years ago, the expected benefit to the labor market would have manifested by now.
Obama challenged the lawmakers to “pass this jobs bill now”. Unfortunately, unlike the time of the ARRA 2009, the GOP is now the majority, and will not be as cooperative, and helpful to President Obama’s re-election. So most likely, the final version of the Jobs Bill could be further watered down. Some analysts said that the Obama camp could call it a victory with 50% of the proposal passed.
By refocusing on infrastructure with this newly proposed jobs bill, the President seems to have admitted as much the mis-direction of the first stimulus package. Nonetheless, since Obama missed the best opportunity three years ago, it is too late for a do-over now.
Further Reading:
Million 99ers Scream Hard Recovery for The Jobless
U.S. Economy: 12 Years To Fill the 12.4 Million Job Gap?
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Obama Bin Lyin'
That corporate whore and Wall Street puppet is going down like a Brzezinski run One-Term-Carter...
And good fucking riddance...
W: Give the New Guy Your Dunce Cap
This moron makes W. Bush look smart...
Off topic but just occurred to me and I've had too much sugar today, but...If abortion is legal because "it is a woman's body" and thus her business, then why is prostitution illegal, or gambling. Oh and what about drugs being illegal too. If they legalized some of these "victimless crimes" that on the face of it seem much less disgusting than killing a baby, they could probably raise some serious taxes from drugs, gambling and prostitution. I mean they could probably raise hundreds of billions in annual taxes. That is on the revenue side. On the expenditures side, we no longer need to pay to enforce laws in those areas, and thus probably save tens of billions more each year.
BCWYWF
Legalized drugs will simply lead to higher profits for the pharmaceutical companies. For the government to benefit from more taxes it can't kill the profit off completely, so will make sure dealers are licensed pharmacies, etc, to control supply. Meantime, alot of gang bangers will be unemployed, and guilded rims aren't getting any cheaper. And if you choose to grow your own, you'll no longer be taking from the cartels but from big pharma and Uncle Sam.
Legalize prostitution, and there will be a whole lot more imported labor doing the work that Americans can't or won't do, and for a lot cheaper. That, and a reduction in risk, equals falling prices, driving many women out. Of course, with legalized drugs in the cards, the cost of addiction might get cut in half so perhaps many who work the streets today can withstand the three-fold in competition.
Because there is a faction of the reactionary ruling elite that says they want government out of THERE lives... but not out of YOUR lives...
There is profit to be made at every reactionary turn...
And that is what Crony Capitalism is all about, Charlie Brown...
Shovel ready projects???? tried that already Obamasan, how about some innovative infrastructure projects like rail, energy, technology (not internet?)
Shovel Ready Projects... HAH!
Shovel more Chicago style, graft, corruption, pork and bullshit in our faces...
This is a lot of damn words (and time) to waste on critiquing the Titanic's deck chair rearrangment.
There comes a time in life to put away childish things.
The Procrastinator in Chief has missed his opportunity.
It would take at least a year AFTER this bill was passed(one we cannot even see yet) before you would begin to see the effects in the emplyment numbers.
This just reinforces the concept that Obama does not understand how the private sector functions. He continues to offer marcro solutions(that would not work anyway) for microeconomic problems.
Obama and the left will continue to become angrier and angrier as we move forward. And when he actually realizes that his days in office are numbered, he will become even more dangerous.
He repeatedly says he wants to take politics out of the equation. There is really only one way left for him to do that.
You talk as if there really is a "private sector" anymore that actually makes things of real value. Don't bullshit anyone with those "financial products" which now make up 20% of the GDP. Plus you better look at were all that government spending ends up eventually. Lots and Lots of government contractors in the "private sector". Now add the actual military employees, education system, judicial, executive, congress, EPA, on and on and on
I simply see no other way, aside from a complete collapse, debt jubilee, and return to sound money. Only then will compensation return to people who are actually worth a shit.
Obama wants the GOP to shoot this down, and he will make their actions as public as possible. Always the consumate politician, his last hope is to be able to say in Nov 2012, "look America, I put a bill before congress that was less than half of what we gave to the financial sector and would go to all you working stiffs but the GOP shot it down."
Ron Paul 2012.
Either that, or the Repubs do go along, and Obama can say "look America, massive tax cuts don't work either!" Because by now he knows it's not going to work, except as a political vehicle to keep the White House.
"Listening to the live speech, and judging from the audience reaction, it was a good speech reminiscent JFK-style and was what American public wanted to hear"
The idiot who wrote this drivel lost me right there. The guy thinks Obozo doesn't pack his "live" speaking engagements with Obamabots ? What a tool.
Government can't seem to understand the problems which are twofold: 1-debt saturation and 2-fraud. Until the government stops the looting of the middle class, prosecutes the fraud, reins in the banks, and allows debt to default, there can be nothing the government does that will have any positive effect.
They can't figure this out because they are 1-stupid or 2-complicit. Take your pick; both are bad. One is inadvertent due to incompetence, the other is deliberate.
Aside from inheriting large sums of money to get elected, if the representitive started with nothing they are typically pretty inteligent, so #2 is most likely.
...gee, you guys have had a run of TERRIBLE people as president. Moral vacuums, the lot of'em: Bush Snr, Clinton, Bush jr and Obama. What a pile of excrement. Sorry guys, I admired US so much (and there are millions of still fine citizenry there)...but there is so much rot in moms apple pie that I cannot see a way out of this mess...for you...and for us (rest of the world)
The list goes on from Reagan all the way to Johnson.
I will not argue with your sentiment. The Bush family did more to sabotage the conservative movement from within than Clinton and Obama have done with direct attacks.
We are paying for our lack of principles and will continue to for years to come.
A lot of us in America agree with your observations and share your concerns.
President Obama has been a disppointment. Interesting to see how history will judge him. From current perspective (and granted, he did inherit a shitpile), he might gio down as US's worst president. I would not be such a harsh judge were it not for the brilliant campaign he ran. I honestly thought he was going to redress the egregious issues confronting America...but he is, and always was, just a bankster stooge who read a script well. MAJOR disappointment.
What part of "Hope and Change" assured you he'd be all-in for complicated solutions to "egregious issues confronting America"? "Hope and Change" is a slogan fit for Barney to teach preschoolers about patience or some shit. 2008 was a lesson: it's easy to get elected if that's all you want, but that which aids in getting you elected makes you all the more incapable of actually doing the damn job. Conversely, if you want to get something specific done with a specific plan, foresaking the many political divisions their expected dose of pandering, your stump speech is left in pieces on the editing floor of the 24-7 news machine.
Republican stooge?
I wouldn't be so hard on him, the PTB will only allow stooges. He was always one at heart, he just fooled a lot of people. But not me ... maybe because I'm just a little older, wiser and jaded. Expect no better from the next selection (aka election).
OT: Sorry why am I getting a pop-up to visit OBAMA 2012 site when I contributed to Ron Paul? Is this a fucked up algorithm or am I just confused?
Circular File drawer along with ending the Iraq War, bank reform, TARP I, II and III, and previous promises of jobs and pension reforms.....
Too late.
The deflation black hole has already begun - and will not stop until it has been completely satiated. We're just now in the second inning. Dead ahead = 30+ years of depression, asset value collapses, bankruptcy, foreclosures, rising taxes on declining incomes ...
Fiat money can't exist outside a context of growth. No growth in debt, no permanant money supply. "Poof" its all gone. Everyone who has saved up a few million dollars in cash and is already off the grid is going to be okay. Everyone else is going to be homless and penniless.
That the price to pay for the fiat spending orgy of 1940-2008.
1971 - 2008
Too late for Negrodamus to wheel out some 1,000 page bill with the same old crap in it...they just want another $1 trillion to throw around.
The fact that Emperor Obama is asking for another "simulus" bill now is a tacit admittance that his first one didn't have any utility. Why should we trust him the second time around? His cred... is dead! And well it should be!
Agreed, but next for you is the republican "rimulous"plan and boy is your rim gonna get a stretching. The Texan drawl will be sooooooothing.
Ricky Rimulous 2012!!!!!!!!!
Whoop whoop whoooooa.....
Definition of insanity only applies after the 3rd time you try something...
Mission Accomplished! What do you mean Barry's former bailouts were of no utility. Their mission was to hand out two years of record high Wall Street bonuses....that was achieved easily by none other then Barry "No More Bonuses" Obama and his Ace economic team.