The Campaign Trail: No Help for the Unemployed

The Campaign Trail: No Help for the Unemployed

REUTERS/Jessica Rinaldi

There was something important missing from both the Democrat and Republican National Conventions -- the unemployed. We have an unemployment crisis on our hands, and nobody should be satisfied with an unemployment rate in excess of 8 percent and the slow decline in unemployment we have experienced. Yet we heard very little about plans to address the jobs crisis at the conventions, and it’s the same on the campaign trail.

I didn’t expect the Republicans to say much about the unemployed, except to criticize the president over the slow progress in bringing the number down. The deficit was their convention focus, including the debt clock above the stage, but it is telling that they have little to offer the unemployed beyond criticism of President Obama.

I don’t mean that Republicans never mention jobs. They squeal loudly about the loss of jobs when it comes to cutting government spending on defense – all the while telling us that government spending programs can’t create jobs – and they claim that tax cuts will promote economic growth and jobs as the effects “trickle down” to the working class. Jobs are even invoked as a reason to cut deficits. A fall in the deficit will, according to Republicans, cause business owners, managers, and CEOs to become more confident about the future, and this spurs investment, growth, and jobs. Of course, the empirical evidence is quite unfavorable to claims about trickle-down economics and confidence fairies, but jobs aren’t the real objective anyway. They’re just one of the excuses for tax cuts at upper income levels, cuts to social programs, and other Republican objectives.

But I did expect to hear more about job creation from the president. He mentioned this issue at times during his convention speech, he even tossed out a number here and there. However, he didn’t do anywhere near enough to highlight the job creation issue or the fact that he proposed a plan to promote job creation a little over a year ago, but the Republicans are standing in the way. According to several private sector estimates, Obama’s proposal, if it had been enacted, would have created in the neighborhood of 2 million new jobs, saved a substantial number of existing jobs, and increased GDP by 1.5 to 2 percent per year. Yet we hardly know about this proposal. Why don’t people know the details of this plan inside and out? Why hasn’t Obama, at every opportunity, highlighted his proposal and hammered Republicans for opposing it?

Republicans are critical about the pace of the recovery on the campaign trail, but the slow recovery is, in part, their fault for putting politics ahead of people. Obama’s stimulus proposal included tax cuts for individuals and businesses, and increased spending on infrastructure. It also included help for state and local governments so they could avoid additional layoffs of teachers, firefighters, and public safety workers. Republicans surely could have supported some of these proposals – tax cuts are their favorite remedy for anything that’s wrong with the economy – but they decided to put winning the election ahead of policies such as tax cuts for businesses and the hope of providing jobs for struggling households.

Part of the reason for the difference over policy can supposedly be attributed to a different diagnosis of what ails us. Republicans say it is mainly a structural problem best addressed by policies such as tax cuts to enhance long-run growth. Democrats, while acknowledging the benefit of long-run growth policies, believe the structural problems predate the recession and our current problems are due to a lack of demand. Thus, our employment problems are best addressed by demand stimulus policies. Once again, the evidence is against the Republican claims. Demand deficiency rather than structural impediments appears to be the main problem. But since the structural interpretation supports the call for tax cuts for the wealthy, it should come as no surprise that Republicans persist in making the structural claim.

Romney and other Republicans talk a lot about job creation, but it’s mostly a cover for tax cuts and ideological pursuits. Democrats, meanwhile, don’t talk enough about their job creation plans. Their proposals don’t go far enough, but it’s still considerably more than what Republicans have to offer.
Obama made a mistake by pivoting to deficit reduction after the 2010 elections at a time when the unemployment rate was still far too high. This led to the perception, with some truth attached to it, that he had forgotten about the unemployed. Hammering the Republican’s refusal to go along with his job creation proposal, the tax cut provisions in particular, would help to show that he hasn’t completely forgotten about the unemployed after all. It would also make clear that Republican obstructionism has been standing in the way of a faster recovery, and show the extent to which Republicans have put their own interests ahead of the greater good.