Today’s jobs report is actually not that bad — unemployment steady at 9.1 percent, 103,000 jobs created, although that figure includes about 45,000 striking Verizon workers who returned to their workplaces. Of course, the broader jobless rate, the U-6 number that includes people who have stopped looking for work or those who are working part-time but who want to work full-time, hit its highest level this year.
Taking a look at Obama’s comments in his press conference yesterday, it is striking that he seems absolutely convinced that by offering a jobs plan, he is inoculated against dissatisfaction about the economy by 2012.
He’s probably quite wrong. For starters, he writes, “this jobs bill can help guard against another downturn if the situation in Europe gets any worse.” But it’s not merely that hard economic times in Europe means they’ll be buying fewer American products. (And even this factor can be overstated; only five of the top 15 countries for U.S. exports are in Europe: The U.K. is 5th, Germany is 6th, the Netherlands is 8th, Belgium is 12th, and France is 13th.) It’s that high-end European labor will suddenly get a lot cheaper.
Daniel Amerman writes:
There will be tens of millions of highly trained European workers who will abruptly be far cheaper to employ than US workers, as a direct result of the economic devastation in Europe and the European currencies being worth far less than the US dollar. When it comes to exporting anywhere else in the world, or even maintaining market share in the US, European workers will suddenly be much cheaper and able to take market share from US workers, as a result of the soaring differential between Euro collapse and the triumphantly powerful US dollar.
Obama also insisted:
Independent experts who do this for a living have said this jobs bill will have a significant effect for our economy and for middle-class families all across America. And what these independent experts have also said is that if we don’t act, the opposite will be true. There will be fewer jobs; there will be weaker growth.
Except that there’s no unified definition of the term “significant.” It would be really hard to spend $450 billion and not create any jobs. Even critics of the Iraq and Afghanistan wars acknowledge that high military spending can, at least within the first five years, increase GDP, increase industrial production, and increase employment.
The question is whether Obama’s $450 billion plan, or any comparable one, can really alter the dynamics of a $14.5 trillion economy or make a noticeable dent in an unemployed population of 14 million, plus 1 million discouraged workers, plus 9.3 million working part-time when they want to work full time. Obama is boasting that his plan would create 1.9 million jobs, which means that even if it lives up to the hype, his plan would help 1 out of every 13 people in this U-6 category.
Of course, Obama knows his plan is unlikely to pass, either a GOP House or an increasingly reticent Democrat-controlled Senate. But he thinks that voters will go into the voting booths in November 2012, with unemployment around 9.4 or 9.5 percent (according to Goldman Sachs’s projections), and believe, “if Congress had just passed Obama’s plan, back in fall 2011, this economy would be fixed by now.”
Just how likely is that?