Yes, having listened to the Republican debate, I felt obliged to listen to the President's "JOBS" speech as well. Since it was a bit more subtle than the debate, I listened twice.
The first thing I noticed, of course, was that Obama was taking an aggressive tone — something he hasn't done since before he was elected. I'm wondering if David Plouffe, chief Obama political adviser and architect of Clinton's "triangulation" approach, might be tendering his resignation soon. Damn, I hope so, but I suppose that even Plouffe must have learned something over the past two years. It really is time for a new, ballsier* Obama.
*[Surprisingly, the word "ballsier" is not identified as a spelling mistake by my computer's dictionary.]
I liked the fact that the White House "leaked" a $300 billion proposal, then came through with 50% more. Maybe Obama is finally getting the hang of how to negotiate. By presenting the Republicans with policies they supported in the past, he leaves them with the choice of going along with most of it, or looking like the obstructionists they are. Count on seeing about $300 billion worth of stimulus.
The new stimulus package, based on politics rather than economics, will do little or nothing to create new jobs, of course. I suppose it's conceivable that a further extension of unemployment benefits might make it through the House, but I wouldn't place any bets on it. That leaves the payroll tax cuts, the infrastructure projects, and some state aid.
Tax cuts rarely increase demand. Payroll tax cuts for workers only affect people who already have jobs. Some of them will use the extra money to pay down debt, and most of the rest will use it to increase savings in the face of job insecurity. (When their jobs are insecure, workers tend to take defensive stances — not yell "Whoopie!" and buy a new sofa or a trip to Vegas.) If employers get cuts to their share of payroll taxes, they'll just pocket the money. They won't hire new workers unless there's a lot of new demand — demand that can't be met by bleeding their existing workers dry.
As for the infrastructure projects, they're unlikely to generate new jobs for a year or two. Granted, we'll certainly still need those new jobs in a year or two, and the jobs have to be done, but I can't see any great increase in construction jobs any time soon.
As I've said many times before, though, federal aid to the states can be one of the best things Congress can do. Yes, it will be too little, too late, but at least some jobs could be saved — provided the aid is targeted at keeping state and local employees from losing their jobs. We really don't need any more subsidized sports arenas, for example, providing short-term construction jobs followed by long-term tax drains.
To me, the jobs bill the President will be sending along to Congress was a pleasant surprise. It already has the likes of Eric Cantor on the defensive, and it just might give the Democrats a boost in the next elections.
On the other hand, it's hard to imagine any real economic progress any time soon.