There is a fundemental problem with the economy, or rather the way the that the Obama Administration hopes to fix the recession. Time. That one word is crucial to everything.
Before President Obama won the election in 2008, he ripped the Bush Administration for its poor handling of the economy, which was a major part of his election win. That was immediately followed by his work on Nancy Pelosi’s Stimulus Bill (an idea she started in October 2008, at $50 billion) before he even assumed office. The result was a plan that President Obama touted as the solution and a timeframe that would take less than his first term to fix.
“All we can do, those of us in Washington, is help create a favorable climate in which workers can prosper, businesses can thrive, and our economy can grow,” Obama said. “And that’s exactly what I intend to achieve – soon.” – President Obama, Jan. 2009
At the end of his first year he touted the Stimulus as a success, and suggested there needed to be more time for all the results to be seen. His second year he insisted that jobs was his priority as he worked on passing the Health Care Reform. He than boasted of the Summer of Recovery (which never materialized) and declared more time was needed. Now 6 months to his 3rd year, President Obama is asking for more time, avoiding speaking about his Stimulus at all, and is finally rolling out new plans to help the jobs and economy he has repeatedly said are his first priority.
Time is not on his side. Nor the American people at this point.
The latest plans, which we feel is a definitive statement of failure on the Stimulus (which everyone has realized EXCEPT the White House – based on their own projections), again involve time. An unspecified long-term plan. A plan that will eventiually have an effect.
President Obama is pushing to have 10,000 engineering students hired by businesses every year. A boon to college students in that specific field indeed. But how does that help the experienced engineer that has been out of work for some 40, 50, maybe 99+ weeks? How does that help get a job for the engineer that is currently working in McDonald’s or another service oriented job paying 1/3 their prior salary as they try to maintain a mortgage and family?
Given time, say 10 years, the annual hiring of engineering students will employ 100,000 people. That’s not even a blip on the unemployment rate. It also does nothing for the college students studying English, Math, Chemistry, Philosophy, and so on. It further does nothing for the unemployed that do not have college degrees (let alone engineering degrees), or anyone entering the workforce that did not go to college – which is most Americans. Most importantly that does not even scratch the 14 million, and growing, number of Americans out of work today.
But the plan does sound like it is making jobs a priority. Until you think of time. It does nothing today, or even in the near future.
Another plan proposed is to create jobs by making companies more energy efficient. Great idea, especially if you are an eco-fanatic that wants to make the planet green with renewable energy at all costs. But again there is a major flaw.
While this might create jobs now, approx. 114,000, it does not affect the unemployment rate in a significant manner. The jobs suggested by definition are short-term, once a company or building is energy efficient the work is essentially done. So it helps this small number of people for a little while, and then places them back in the same position they left.
Further, it lacks scope. Again, there are tens of millions out of work – most for the longest period of time in the nations history. But there is a long-term effect, a loss of jobs. Simple logic says that if all the light bulbs will last for 5 years each (as an example) fewer people are required to make light bulbs – if the light bulb company expects to stay in business, forget about just making a profit. That logic exends further out, but the point is made.
This would not be a problem if other jobs existed, or were being made parallel to the energy-efficiency effort. But they are not. As much as the Obama Administration would like to avoid it, the Stimulus failed and jobs are not forthcoming. The minor victory of 9.1% unemployment is a pyrrhic victory
“Unfortunately, he [chairman of the Council of Economic Advisors, Austan Goolsbee] also let a bombshell drop rather nonchalantly: That the average unemployment predicted by the White House across 2011 was 9.3% – making 9.1% “ahead of schedule.”
Who’s schedule involves barely beating 9.3% unemployment something to cheer about?” – Jeff Reeves on his thoughts at the finance roundtable at the White House
Therefore time is the central issue in the economic plans of the Obama Administration. Time that is drifting by, as the President tells the nation on the one hand that he is focused squarely on jobs, yet intiates programs that have no immediate reward (if there ever will be one). On the other hand the President is also spending his personal time on another important issue – to him.
“Obama spoke to 80 wealthy supporters who paid $10,000 each to meet him at the home of former Samsonite CEO Steve Green, who was ambassador to Singapore under President Bill Clinton. Obama also attended a fundraiser at the Arsht Center for the Performing Arts, where about 900 supporters awaited him. A third, more intimate event attracted about 40 donors who paid the maximum allowed, $35,800.”
Thus we are left with the conclusion that the only thing that there is plenty of time for is belt-tightening. Not from Congress, as they increase the debt ceiling again, nor the Obama Administration, as they persue another multi-trillion dollar deficit enhancing budget for 2012. The belt-tightening is also hopefully (for Democrat leadership) not happening to donors, whose funds will be sorely needed in the 2012 Presidential election and races for Congress across the nation.
No the belt-tightening will be for the American people. Because the jobs are not coming now. They will be here over time, according to President Obama, just not in a timeframe that he was elected for, nor at any point he is willing to state publicly before his re-election bid.
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