James Pethokoukis

The White House and jobs stimulus

December 3, 2009

From Marc Ambinder:

Really: the White House does not seem to believe that (a) anything sensible to meanginfully reduce the unemployment rate can be proposed, completed and paid for — and executed — by next November. Nothing, in any event, that wouldn’t jeopardize recovery in the long-term. This frustrates people in the party to no end, as well it might.

How Obama is freezing the job market

December 3, 2009

Let’s assume that the much-hyped White House “jobs summit” turns out to be a free-flowing exchange of ideas and views. Could happen. If that’s the case, then President Barack Obama shouldn’t be shocked if a few CEOs dare suggest that the sweeping-yet-stalled Obama agenda might … actually … you know … no offense, Mr. President … be contributing to the jobless recovery. (The union and academic invitees will protest mightily, natch.)

Is the ambitious Obama agenda freezing the US labor market? CEOs think so

December 1, 2009

Just took a break from the Innovation Economy Conference sponsored by the Aspen Institute. Particularly interesting was a joint Q&A with GE’s Jeff Immelt and Intel’s Paul Otellini.  The latter said he was concerned about the “amount of variability in the system” created by Washington. Fluctuating policy when it comes to healthcare, energy, taxes. “It is very difficult for anyone to make a hiring decision” when the future is so uncertain, he said. Immelt added he would just like to “know what the rules are.” About ObamaCare, Immelt said healthcare “costs probably aren’t going to be coming down.” He is also worried about cost shifting due to proposed Medicare cuts

Why the U.S. may have a long-term unemployment problem

November 30, 2009

Wachovia’s John Silvia:

In recent years, permanent layoffs have surpassed temporary layoffs and this is reflected in the rapid rise in the mean duration of unemployment. In addition, the disparity of unemployment by education levels signals that the demand of employers for more highly educated workers does not fit well with the available supply of workers. Current policy initiatives have perverse economic effects. Health care mandates will likely raise the cost of labor and thereby discourage hiring.

Here is a way to create jobs

November 30, 2009

From Gary Becker:

My favorite approach it to try to stimulate the economy by cutting income taxes, especially corporate income taxes and other taxes on capital, both physical and human capital. Such tax cuts will stimulate investments in the economy, and in this way increase the demand for workers.

Obama’s reverse stimulus on its way

November 27, 2009

Jed Graham of IBD highlights the coming fiscal drag in a pretty picture:

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Me: What would that mean for GDP growth? A pre-financial crisis analysis by Goldman Sachs predicts, for instance, found that getting rid of all the Bush tax cuts at the end of 2010 would cause a 3 percentage point drop in the economy in 1Q 2011.  In any event, anti-growth fiscal policy is one more reason to believe in the dreary New Normal

Does Washington really get the jobs crisis?

November 27, 2009

David Rosenberg of Gluskin Sheff doesn’t think so:

These attempts to stimulate consumption at a time when household spending relative to GDP is already at an all-time high are not going to carry much of a multiplier impact. There is a youth unemployment crisis, a skills crisis, a crisis among the ability of small businesses, who have been responsible for 65% of the new hiring in the U.S.A. over the past 15 years — to secure financing for working capital purposes, there is a crisis in terms of a declining manufacturing capital stock, and the programs we get are these old and tired Keynesian attempts at temporary boosts to consumer demand. It truly boggles the mind, and as we show below, American taxpayers are still a long, long way from paying for all these transitory fiscal policies out of Washington.

Cap-and-trade prospects looking dodgy

November 27, 2009

Kim Strassel is right, cap-and-trade looks terminal for 2010 and beyond. Sure, the EPA could try to push its own draconian carbon regulation. But I think that would cause a firestorm on Capitol Hill. Strassel:

More Washington budget gimmickry

November 27, 2009

Karl Rove makes a good point:

The administration says it is now instructing agencies to either freeze spending or propose 5% cuts in their budgets for next year. This won’t add up to much unless agencies use the budgets they had before the stimulus inflated their spending as their baseline in calculating their cuts.