William Galston, a rare political philosopher who has ventured deeply into policy and political strategy, has an excellent post on The Democratic Strategist proposing a course correction for Obama White House.
As the economy struggles to stabilize, we find ourselves in a deep hole–even deeper than we knew. For the first time since the Great Depression, Floyd Norris reports that we have endured a decade with no private sector employment growth. In July 1999, there were 109 million Americans with jobs in the private sector; the comparable figure for July 2009 was … 109 million. By contrast, at the depth of the 1981-82 recession, private sector job creation over the previous decade still averaged about 1.5 percent per year. Until the current downturn, Norris finds, the long-term annual growth rate for private sector jobs had not gone below 1 percent for nearly half a century.
He goes on to note that the long and arduous process of reducing household debt over the next decade or two will likely mean sluggish growth. Galston also cites Zachary Karabell, a quirky and original economic thinker, who argues that,
As these companies profit from global expansion and greater efficiency, they have little or no reason to rehire fired workers, or to expand their work force in a U.S. that is barely growing. If you are a global company, you want to hire and expand where the most dynamic growth is. Unfortunately for Americans, that’s not the U.S.
So for Galston, the right approach is for Obama and the Democrats to embrace a job-focused economic agenda.
In this challenging context, the president would be well advised to focus more on the economy over the next three years, and to persuade average Americans that the economy is as central to his concerns as is it to theirs. That means taking what he can get on health care and climate change and clearing the decks well before the end of the year. It means going on the road to highlight the job-creating results of the stimulus bill, with events each week for as long as it takes to make the sale. And it means crafting proposals design to stimulate new hiring, not just in the long run, but as soon as possible. A revenue-neutral swap of lower payroll taxes in return for broadening the base of the income tax code could command support even among some Republicans.
Late last month, I called for conservatives to embrace a jobs-focused agenda in my Forbes.com column. My concern is that neither political party will go this route. Puzzlingly, the Democrats, Galston’s persuasive analysis notwithstanding, seem wedded to a strategy of creating new work disincentives, thus blunting the intended effects of fiscal stimulus. Suffice it to say, this creates an opportunity for Republicans.