I’m really not sure what the president can or should do about the sluggish economy. Economists like Paul Krugman have been asking him to stimulate, stimulate, stimulate, when that clearly isn’t something Mitch McConnell and John Boehner are going to allow him to do. At least, they’re not going to let him do it in any kind of straightforward or optimal way. I understand Krugman’s concern about the president adopting some right-wing rhetoric about the economy, but, at the same time, there’s little advantage to asking for things that the opposing party can swat down with no effort. And, it’s better to take credit for doing something than to sputter impotently about how the Republicans won’t do what is necessary.
Tackling the budget deficit at a time of high unemployment is counterintuitive, to say the least, but this process was largely dictated by the disastrous 2010 midterm elections that swept the Republicans into power on a platform of massive austerity. The trick for Obama is to structure cuts that affect employment so that they don’t take effect for a few years. At the same time, he needs to get some kind of short-term stimulus as part of the deal. How much is he willing to give away to get a below the radar stimulative bump? That’s the question.
In his remarks today about the monthly jobs report, the president offered up some weak tea. Yes, we need to spend money on our infrastructure, and patent reform would be nice. It’s possible that trade agreements with Colombia and South Korea could boost trade and create some jobs. And, while Krugman is certainly correct that the Confidence Fairy is not going to magically appear and create a bunch of jobs, getting our budget on a more stable footing should have some benefits. The thorny question is how to avoid further job loss while making some big cuts in government spending. It’s possible to accomplish that, but the structure has to be right.
Obama has proven to be adept negotiator in the past two rounds (in December and April), but the stakes are a lot higher this time around. What I’m hoping to see is some creative thinking. I’m hoping to see something no one is discussing included in the bill. Something that provides some short-term stimulus.
I say this because looking at what’s visible right now, the government appears to be about to respond to bad jobs numbers by destroying a bunch of jobs. And that doesn’t make any sense.
