By Eric DuVall<br><a href="mailto:duvalle@gnnewspaper.com">E-mail Eric</a>
OK, who forgot to push the button that creates the jobs?
Based on the way politicians, the media and average citizens have been talking lately, you’d think it was that easy. That President Obama just forgot or is for some reason unwilling to use his magical powers to end the unemployment crisis in America.
In reality, of course, it’s much more complicated than that.
There is no big red button to push; there is no lever to pull. The simple reality is that no president can easily create the kind of jobs necessary to end a crisis of the sort facing our country now.
That’s why I find it funny that Obama has taken so much heat for failing to “focus on unemployment” in a meaningful way. Yes, the health care debate sucked up much of the oxygen in the room, but beyond failing to talk about it enough, Obama has done pretty much all any president can do to address the problem.
Upon taking office he pushed through a stimulus bill that has had some marginal success, but at an enormous cost. Considering the fact that spending more than $700 billion dollars failed to move the needle in the right direction (though I think it has kept it from moving farther in the wrong direction), there’s absolutely no political will to try again.
The nation is fixated on the deficit. I understand the reason why so many people are worried about it. It’s counterintuitive to spend more money during difficult times. When it comes to personal finances, responsible people do the opposite. We save money. We don’t buy things unless we really need them.
But the budget of a government as large as ours isn’t like a family’s checking account.
In the absence of private sector spending, someone has to step up. The only thing large enough to fill the void of the money consumers aren’t spending is the federal government. To do that, the government needs to borrow money and run up a deficit. There’s simply no other choice.
Think of it this way: If your car breaks down and it’s beyond repair, you have to buy a new one. Most people can’t go on for more than a few days or weeks without a car. You need to get to work. You need to go grocery shopping. The kids have to go to their piano lessons, etc.
Maybe you can catch a ride from a coworker or borrow someone’s car for a few hours to run your errands. Maybe the kids can carpool with another family to their karate class. But that can’t go on forever.
At some point, you have to lay out the money to get a new car. It means going into debt. You go to someone who has more money than you (usually a bank), borrow thousands of dollars and buy a new car.
When that happens, it’s just a fact of life. Most people don’t walk around holding their head and moaning about how much they’re in debt. They just make their car payment every month and go about their business. Eventually the car is paid off and you go back to normal (or if you’ve got my luck, the car dies the day after it’s paid off and you’re forced to repeat the cycle.)
The nation’s car broke down. We had to buy a new one. It cost a lot of money and it happened at an inopportune time, but what choice did we have?
We have to get over this fixation on the debt. If things are going to improve — if Obama is to focus on job creation as everyone seems to want — we’re going to have to spend more money.
And even at that, there’s no guarantee it’s going to work. Government efforts to stimulate economies are at best a craps shoot.
Obama has proposed some small business tax cuts that should help to make it easier for business owners to shore up their operations. If that happens, hopefully there will be some increase in hiring. This might not be direct government spending, but it’s certainly going to increase the debt.
Obama has set out a handful of initiatives to jump-start the green energy industry, though if you ask me it’s not nearly enough to make America a leader. We still lack a comprehensive approach to energy generation and use. It’s the largest growth area in the economy right now and we’re not doing nearly enough to get the ball rolling.
Of course, to do that, Obama would likely need to spend even more money, which no one wants him to do. He’s facing a political double-standard that means he’ll likely be punished for doing the right thing.
In a crisis, you spend what you have to spend and worry about the long-term consequences tomorrow.
Eric DuVall is the managing editor of the Tonawanda News. His column appears Wednesdays and Sundays. Contact him at eric.duvall@tonawanda-news.com.
