Obama, crony capitalism and blue-collar jobs

November 11, 2009

Joel Kotkin has a great piece on how Obama can still save his presidency. The bit on jobs is particularly good:

The key rule of Chicago politics is delivering the spoils to supporters, and Obama’s stimulus program essentially fills this prescription. The stimulus’s biggest winners are such core backers as public employees, universities and rent-seeking businesses who leverage their access to government largesse, mostly by investing in nominally “green” industries. Roughly half the jobs saved form the ranks of teachers, a highly organized core constituency for the president and a mainstay of the political machine that supports the Democratic Party.

The other winners: big investment banks and private investment funds. People forget that Obama, even running against a sitting New York senator, emerged as an early favorite among the hedge fund grandees. As The New York Times’ Andrew Sorkin put it back in April, “Mr. Obama might be struggling with the blue-collar vote in Pennsylvania, but he has nailed the hedge fund vote.”

The Chicago approach works better in a closed political system controlled by a few powerbrokers than in a massive continental economy like the U.S. Health care and education, which depend on government largesse, are surviving.

But the critical production side of the economy that generates good blue-collar jobs – like agriculture, manufacturing and construction – is getting the least from the stimulus.

These industries need more large-scale infrastructure spending, as well as more focused skills training and initiatives to free capital for politically unconnected entrepreneurial businesses. Instead, productive industries face the prospect of more regulation while capital for small businesses continues to dry up.

Those in post-industrial bastions tied to speculative capital – think Manhattan and the Hamptons – are the ones most benefiting from Obamanomics. College towns like Cambridge, Mass., Madison, Wis., Berkeley, Calif., and Palo Alto, Calif., will also prosper, becoming even richer and more self-important. It seems, then, that Obama has done best for elite graduates of Harvard and Stanford and other members of the “creative class.”

The rest of America, however, is still waiting for a real sustained recovery. Industrial and office properties remain widely abandoned not only in Detroit but Silicon Valley. The future sustainability of our economy depends mostly on what happens to those who previously staffed these facilities – those who produced actual goods and services – not just on a relative handful of people working at Google or the national laboratories. In other words, we need jobs for machinists, welders and marketers as well as scientists with Ph.D’s.

2 comments

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I suspect that they are worried about blue collar jobs, but it is likely that the policy, and political, thinkers in this White House will look towards trade barriers as a quick fix for industrial decline. If you’ll recall, Obama promised that he wanted to create high-paying green manufacturing jobs that could never be outsourced.

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How can Obama save his presidency? It is the platform of the modern Democratic Party to lift up the impoverished, salute the failure, reward the takers, applaud the indecisive and elevate the self-centered to assure us more of these in the future. In giving away the treasure of the nation, they increase the line for hand-outs beyond all ability to satisfy. The downward slope increases its steepness and slip each moment. The result is to assign a willing dictator the control and management of what remains. Is this the future of America, once the greatest nation in the world for individual freedom and prosperity? The 19th century Democrat was the libertarian following Jefferson, cited in THE CHANGING FACE OF DEMOCRATS on Amazon and claysamerica.com. The 20th century Democrat follows Rousseau and Marx and condemns individual freedom, the free market and American exceptionalism to the ash heap of history, all at the hands of Obama and his cadre of communists. Khrushchev was right, that we will impose communism on ourselves, and we are doing it right now.