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Obama Plays Small Ball at Brookings

By Matthew Rothschild, December 8, 2009

President Obama went to the Brookings Institution on December 8 to give his much-anticipated speech on jobs.

But he decided to play small ball instead of taking the big steps necessary to resolve the job crisis that afflicts so many millions of Americans.

At least he recognized the moral dimensions of the crisis, calling the unemployment level “a continuing human tragedy.”

He added: “Behind these statistics are people’s lives, their capacity to do right by their families.”

And at the end, he talked about the anguished letters he’s been receiving from workers and business owners and family members. “The toughest letters are in children’s handwriting—kids write to me, my dad just lost a job; my grandma is sick, she can’t afford health insurance—kids who can’t just be kids because they’re worried about mom having her hours cut or dad losing a job, or a family without health insurance.”

This was refreshing from Obama, who too often speaks like a technocrat or an economics professor.

But when he got down to policies, his speech fell far short.

His first proposal was “a complete elimination of capital gains taxes on small business investment along with an extension of write-offs.”

That’s a very inefficient way to promote growth. According to a study by Mark Zandi of Moody’s Economy.com, for every dollar spent on this kind of tax cut, the economy as a whole gains only 37 cents. Some businesses will simply pocket the tax cut and won’t do any more hiring.

Second, Obama proposed “a boost in the nation’s infrastructure.” This is a much more sensible way to go, yielding $1.59 for every dollar spent, according to Zandi.

Third, Obama proposed “a new program to provide incentives for consumers who retrofit their homes.” Nothing wrong with that, except that “Cash for Caulkers,” as it is called, will provide much less of a boost to the economy than “Cash for Clunkers” did, since caulk is a lot cheaper than a car.

Lastly, Obama proposed extending “emergency assistance to seniors, unemployment insurance benefits, COBRA, and relief to states and localities.” All good, sound ideas. Extending unemployment benefits yields $1.64 for each dollar spent. And providing relief to state and local governments yields $1.36, according to Zandi.

But Obama didn’t spell out how much he was willing to spend on each facet of his jobs program.

And nowhere did he even suggest that he was willing to invest at the level that is truly necessary.

That level is around $400 billion, according to a new report by the Institute for Policy Studies entitled, “Battered by the Storm: How the Safety Net is Failing Americans and How to Fix It.”

The report says the government should shell out $270 billion to state and local governments, a little more than $100 billion to rebuild the social safety, and $40 billion on a public jobs program.

At Brookings, however, Obama again derided public sector jobs programs. Sounding like an old Rotarian, he said, “Job creation will ultimately depend on the real job creators: businesses across America.” And then he hailed the Business Roundtable.

For those who dreamed they were getting FDR when they voted for Obama, wake up.


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Comments

In many ways, your thinking sounds reasonable to me.
I am surprised at the "Knee Jerk" response, I have received from you. Perhaps you were not reading into what I said clearly enough.
I have read "Harry Hopkins" by Henry H Adams -- I always found that era fascinating, and now unfortunately and increasingly relevant.
I am aware of the math -- 1 buck a day -- which was the Prevailing Slave Wage at that time.
The individual CCC worker got paid 5 dollars per month for their labors, with the bulk automatically sent home to some family member, where these monies did stimulate the economy somewhat -- but not nearly as much as our services in WW2 did.
As to the "Concentration Camp" reference -- that was
the term applied in most of the early News Reels I have seen from the time.
There were no complaints from Veterans of the CCC, I understand this -- or at least as expressed from the remnants of that generation, presented by our media.
All my elders, from that era, were still employed by
private industry, so I have no personal reference to the contrary. Other than they were trying to get Unions established at that time, in order to maybe get more than the "Prevailing Wage" of the time, and seemed resentful of the CCC, which were kept isolated in local concentration camps, in the Neck of the Woods where I grew up.
As to opinions on FDR, around these parts most of my relatives and acquaintances, from that era, felt he had "Hung the Moon".
In my opinion, FDR at least showed compassion for the American People -- whether that was because the Agenda still had work for Americans to complete? I'd say perhaps -- plenty of evidence that we knew, by 1932, what was about to go down in the World.
Coincidence, that as the CCC was being phased out, the Military were being phased in? You decide.
Factor in that Military Officers were used in CCC
training and Camp Management and from the Accounts
of CCC veterans -- they dove tailed perfectly into the Military as we were going into war.
And I still stick to my hopes that we will not be needing another FDR. I did not say, that under conditions during the 30's, we did not need an FDR then.
Our choices were limited, it seems at that time, between some Julian Socialist (FDR) or some branch of the Fascist School, so prevalent in those times.
I would have to vote for Julian Socialist, given only those two choices, as at that time in the evolution of things, there still seemed to be a difference, which is not the case now days,
where we seem to be offered "Fascism Brand Socialist BS" or "Fascism Brand Nazi BS". I will choose neither for our times today.
They each seem to resemble one another way too much.
However much you may, or may not, be hoping for another situation, where we all have to work for the Government, I do not relish that turn of events.
And I will still stick by my opinion that all these Major Financial Crashes are engineered in order to meet a larger agenda.
With the events of '08 -- one can clearly see the agenda rise to the surface again.
Hegelian dialectic -- "Thesis -- Antithesis -Synthesis" or "Problem --- Reaction --- Solution".
That is how it's "worked".
And here is a "Book" back at you -- "Tragedy and Hope" by Georgetown University Professor Carroll
Quigley -- if you struggle thru these mostly tedious
scholarly pages, and then go on to read his book -
"The Anglo - American Establishment -- your World view will be shaken and all these Conspiracy Nuts, like me, will not seem so "Nutty" anymore -- he will lay it all out for you.
He was more in support of the Agenda, than not, also. And he was also, one of Billy Clinton's Mentors.
Or perhaps you will write it all off again to
"Right Wing Nonsense" due to my lack of a decent education in America.
To which, I'd have to respond that "Education is something you do for yourself outside of School".
And I have had both, including the best of what the Liberal 60's in America had to offer. Furthermore --
Naa -- Naa -- Naa

Submitted by Rev. JimBo on Wed, 12/09/2009 - 2:18pm.

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