The country is in full had-wringing mode over last Friday's anemic jobs report, which not only had job growth falling seriously behind population growth, but even revised down March's and April's numbers, suggesting that this was not just a bad month for the economy but potentially the sign of a long-term halt in the recovery.
Lots has been written about what it means for Obama's reelection chances (bad), and lord only knows what it will do to down-ticket Democrats. The news is so good for Republicans, in fact, that it raises the specter that this was what the GOP wanted all along. Just as the Republicans tried to make the Democrats out as wanting the 2007 Iraq surge to fail to better their election chances, it sure does now appear that the Republicans want the economy to stall to help them to victory in 2012. In fact, they may have already created that stagnation by blocking policies that would have generated the job growth that they say Obama has failed to produce.
In the wake of May's jobs report, everybody has suddenly remembered that Obama proposed a wide-ranging set of job growth policies in 2011 called the American Jobs Act on which Republicans refused to even allow debate. The $447 billion bill would have cut the payroll tax, funded additional infrastructure projects, and provided funding for public sector jobs like teachers and firefighters. All told, independent economists predicted it would have added anywhere from 1.3 million to 2 million jobs. Instead, via Steve Benen:
Despite public clamoring for action on jobs, congressional Republicans reflexively killed the American Jobs Act, saying it was unnecessary. The House wouldn't bring it up for a vote, and a Republican filibuster killed it in the Senate. For GOP policymakers, this was a time when Washington should stop investing in job creation and start focusing on austerity -- lower the deficit, take capital out of the economy, and everything would work out fine.
As panic sets in after this morning's brutal jobs report, take a moment to consider a hypothetical: what would the economy look like today if Congress had followed Obama's lead, responded to public-opinion polls, and passed the American Jobs Act? In 2012, do you think the nation could use those 1.3 million jobs or not?
I can tell you exactly what the economy would look like. Taking the AP's conservative estimate of 1.3 million jobs added, that drops May's unemployment rate to 7.3%, the lowest since December of 2008.
But for all that the AJA would have provided a huge boost to the economy, no one alive and awake in 2011 believed it would ever see the carpet of the Senate. Via Noam Schreiber.
Substantively, the time to propose such a package was the spring of 2010, when Democrats still controlled the House, had close to a filibuster proof majority in the Senate, and the economy was giving off the first hints of a relapse. (I elaborate on this in my book.) By late 2011, the AJA was still a good idea, but it had virtually no chance of passage, which the White House understood as well as anyone.
It's worth noting here that what's tossed off as "virtually no chance of passage" is an intransigent Republican House and a filibuster-saddled Senate, both of which were the GOP in the prime of its tea party resurgence. Their lack of participation in Obama's job growth policy was so thick it acquired the inevitablity of fate.
I remember Obama's joint address over the AJA, and the nationwide eye-roll it produced. In the midst of a painful austerity debate, Obama seemed less out-of-his-mind to propose what amounted to second stimulus package and more just strategizing: get the GOP to vote down a jobs bill and use it against them in 2012.
Welp, it's 2012. Wither the American Jobs Act? Schreiber thinks it's not too late to revive the Act as a political tool (which sure would drive home the point that that's all it ever was, but it's not like austerity was ever a real economic policy, either):
Politically, on the other hand, it's still worth flogging the AJA aggressively. As my former colleague Jonathan Chait has pointed out, the worst of all worlds for the administration is for Republicans to block additional stimulus without taking any blame for it. If you're Obama, you have to get at least one victory there--either the stimulus itself, or an issue with which to bash the GOP. The administration finally grasped this last September, after two-and-half years of mostly giving the GOP a pass. But the focus on stimulus has largely given way in recent months to a combination of attacks on Romney's private equity career along with efforts to tout the Obama record (which is not too shabby, I'd be the first to concede, middling recovery aside). If the only thing the administration does in response to these latest jobs numbers is revive it's focus on the American Jobs Act, it would be a politically important turning point, though obviously you'd like to get the actual stimulus, too.
Scott Lemieux doesn't buy this as a viable political strategy heading into the dog days of the campaign: "While actually creating jobs is crucially important fighting to create jobs is worth pretty much nothing...In itself, fighting for the AJA is worth about as much as a $6 umbrella in a hurricane."
I'm inclined to agree. "Hey, remember that time 12 months ago when I tried not very hard to pass a jobs bill" just doesn't seem like much of a stump speech, even coming from Obama. But Jonathan Chait's got a point about the vacuum such an argument would be up against:
It’s worth keeping in mind, whether or not it has any political force, that Romney is not offering a plausible solution to the crisis. If you define an economic plan as a proposal to do things that are a specific response to the crisis and not just long-term changes that he would favor under any economic circumstances, then Romney has no economic plan. His plan is to benefit from the short-term business cycle in order to implement long-term policy changes that Republicans would favor even if the economy was humming along.
Indeed, if you think about it, having a real proposal to boost the short-term economy would be counterproductive to Romney’s chances of winning. Romney’s advisers — and, when speaking off the cuff, Romney himself — all believe in a basic Keynesian view of the world. They advocate that short-term increases in the deficit will boost demand and increase growth. If Romney came out with a plan like that, Obama could just grab hold of it and demand that Congress pass it (and Republicans would be hard-pressed to explain why they were voting down their own nominee’s plan.) Romney could try to pair it with long-term changes Democrats would hate, but Obama could just pick out the short-term stuff and punt on the long-term parts. And if a plan like that passed, it would boost the economy and harm Romney. So he won’t do it.
The GOP is at a good position electorally with regards to a stalling economy. They're in a corner, however, politically with a stalling economy. They blocked Obama's bill and have no particular job creating solution of their own; it's a mirror of their obstinacy over health care, in which they stood on the sidelines and sneered at Obamacare without ever coming up with anything close to a substantive health care policy of their own.
So if Obama has to defend a weak jobs record, he should make the GOP defend their imaginary strong one. Let's see the Republicans' hands on jobs, in a situation in which tax cuts=job growth won't be enough (we are past that, right?). This would force the GOP to either double-down on their idea that wealthy tax-cuts and deregulation stimulate growth, despite the lack or evidence or logic for that position, or would force them to finally propose something involving government spending, in which case they would have to defend why they haven't allowed similar proposals through at a time when the country really needed them.
If the GOP sputters when it has its bluff called, and Obama can make a convincing case that they did nothing but pull pranks while the country suffered, he might have a shot at spreading the blame for lack of job growth around. It would be worth it just to hear the GOP actually propose something, as opposed to just point fingers and yell "Fascism" (health care) or "Socialism" (stimulus). If Obama's reelection really is in jeopardy, then we need to hear what the other side would do if in power. What's Romney's suggestion for restarting the economy?
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