White House: Don't Count on Job Growth This Year
If President Obama wants a jobs bill with enough votes to pass Congress and enough firepower to create jobs, maybe his speechwriters should get started on a fall 2010 speech explaining why it's not working to the public's satisfaction. That's the message from this AP story:
It's a bipartisan jobs bill that would hand President Barack Obama a badly needed political victory and placate Republicans with tax cuts at the same time. But it has a problem: It won't create many jobs...
As for the bill's effectiveness, tax experts and business leaders said companies are unlikely to hire workers just to receive a tax break. Before businesses start hiring, they need increased demand for their products, more work for their employees and more revenue to pay those workers.
Jonathan Chait's take makes sense: Passing the jobs bill will be a political victory today because it shows the Democrats doing something, anything. But it could turn into a political liability in the fall when it turns out that "something, anything" didn't move the unemployment rate meaningfully.
The Council of Economic Advisers report doesn't do much to raise hopes of a jobful recovery. Last year, the White House embarrassingly projected that a stimulus would keep unemployment under eight percent. Instead it crossed ten percent. So you can understand why the CEA would want to be more circumspect about its projections this year. And circumspect, its projections are: 10 percent unemployment average for 2010; rising unemployment for the next few months as discouraged workers re-enter the workforce; and 9.2 percent U1 by the end of the year.
The jobs picture is unsightly, unyielding, and most importantly, unspinnable. But that doesn't always stop the administration from adding a twist. White House advisers frequently point to jobs that have been "created or saved," but this coinage has become such a PR joke that even President Obama poked fun at the term by claiming to have created or saved one turkey at the Thanksgiving Turkey Pardoning. My understanding was that the administration was going to drop the phrase entirely, but here it is again in the CEA report:
All told, the Recovery Act has saved or created some 1½ to 2 million jobs so far, and is on track to have raised employment relative to what it otherwise would have been by 3.5 million by the end of this year.
At the end of the day, I suppose it doesn't matter what your terminology is. Voters don't look at CEA economic models, they look at the unemployment rate. If Democrats want to create or save their own jobs, they need to move the latter.