Saturday, November 22, 2008

Why Only 2.5 Million New Jobs?

The good news is that Obama wants to push fiscal stimulus ala public investment, but this seems way too conservative:

American workers will rebuild the nation's roads and bridges, modernize its schools and create more sources of alternative energy, creating 2.5 million jobs by 2011, Obama said in the weekly Democratic address, posted on his Web site.


With the employment-population ratio at 61.8% and population at 234.6 million, creating 2.5 million new jobs NOW would still leave the employment-population ratio below 63%. Over the next couple of years, we would new about 2.5 million new jobs just to be around a 62% employment-population ratio. I hope his goals for a recovery are more ambitious than this sounds.

13 comments:

Anonymous said...

I would think (and, no, I didn't vote for him) that this would be the first step in a plan to get more Americans working. I do wonder where the money for these improvements is going to come from when local and state governments are teetering on the brink of bankruptcy.

What I also wonder is how we fix the VOLUME of individuals who just plain don't want to work. Scale back on handouts and see what happens.

Anonymous said...

I am trying not to judge but I just don't see why Obama is not putting more African-Americans in his immediate cabinet. I mean visible people. He may have many behind closed doors but didn't we have enough of that hidden stuff in the South? We black people had to be ushered in the back door and go out the back door. I thought it might be different with him but obviously he identifies more with his Caucasian side. This must be because he was raised by them. If he doesn't do something about this I will not vote for him in 2012.

Anonymous said...

On the comment of Americans who do not want to work. I think you are buying into the welfare queen myth of a bygone era. I don't know any people who do not want to work. There are probably millions of people who have lost their jobs and have to work 2 and 3 jobs now to make up the difference. But wait, I am one who would prefer not to "work" any longer. I am 68 years old and past retirement but you know what; in America we don't have the luxury of retiring. So sad. The conservatives have ruined our country.

Anonymous said...

Do you think he came out with this number arbitrarily? He must have done a through calculation with his advisors and these are jobs created by the Federal programs he wants to do (and we can afford to do in reality). A careful thinking president is better than one just say "my friends, I know how to do this..."

Anonymous said...

The concern I have is that Obama has been stating and has written on his website that he will create 5 million new jobs. Why the 50% cut?

Anonymous said...

First of all, does anyone else think that 2.5 mil jobs is no where near what the goal should be? Rebuilding roads? Schools? I have a news flash. There are jobs out there. People are lazy, or have learned how to beat the system. i.e. Unemployment, fraudulent disability, falase mental illnesses. I just read that we just extended unemployment benefits. All I have to say is this is just the beginning. Soon, welfare benefits will increase without having recipients go through drug screening. In four years, my hard earned tax dollars are going to pay for medical benefits, disability benefits, unemployment benefits to all of those who know how to beat the system, thanks Obama.

Sandwichman said...

Anonymous said, ...my hard earned tax dollars...

Your hard earned tax dollars, my ass.

Anonymous said...

Roads and bridges are important, but for our future we really, really need the incoming administration to focus on high speed coast to coast, as well as north to south, passenger & freight RAIL transportation. This will do an enormous amount of good in getting us away from foreign oil dependence, provide thousands upon thousands of jobs, and will benefit our entire nation far into the future. The outgoing Bush-Cheney regime has decimated our rail systems, as they were completely auto/oil-focused, and many times, unbelievably, attempted to eliminate all rail funding completely. This not only needs to be reversed but put as one of our highest priorities. Reliable, economical, affordable public transportation networks are vital to national security and prosperity.

ProGrowthLiberal said...

"I do wonder where the money for these improvements is going to come from when local and state governments are teetering on the brink of bankruptcy." - CJM. Fair question. Maybe Federal revenue sharing as the FEDs can run short-run deficits. Yes, we have seen the Federal debt/GDP ratio increase under Bush and it will likely increase even more over the next couple of years. But we can - and should - go with short-run fiscal expansion with eventual long-run fiscal restraint once we get past this recession.

Sandwichman said...

...with eventual long-run fiscal restraint once we get past this recession...

Yeah, that worked out real well last time, right? "Oh Lord, give me chastity and continence... but not yet!"

TheTrucker said...

Tis spending that matters. Highly progressive taxation does not harm the economy. Those who seek fiscal restraint would do well to understand that trickle down is finally dead. And it is dead because it never worked and never will work. When you give rich people a tax break they have more money -- that is all that happens. The inverse is also true in that taxing that money away has the same effect --- zilch.

What matters is the spending and how the spending is done. I do not see a picture of taxation for 1935 - 1939 but the pictures I do see tell me the cause of the 1937 recession (or was it 38) was the lack of spending. There is lots of happy talk about infrastructure and jobs and funding through deficits. That may be the right course but deficits have two sides. The Republicans focus on less spending while cutting taxes. The focus should be on raising taxes appropriately and that means raising taxes on people who have so much money they can't figure out what to do with it.

Inflation is a tax on money. Inflation hurts people that have money. People who have little money and owe money are helped by inflation. The stock market also responds well to moderate inflation. The fear is deflation. That is a killer. Spend, spend, spend.

And yes, cut the work week.

TheTrucker said...

The "employment-population ratio" (EPR) is a two edged sword. My own interpretation of this number is that as it rises we understand that more members of the household must hold full time jobs outside the home in order to pay the bills. Increases seem more a curse than a blessing.

The economic "indicator" that has most meaning is the "unemployment rate" (UR) and it is also somewhat perverse. This number tells us that X% of the population are seeking employment and cannot find it. It does not tell us _why_ they are seeking or _why_ they are not finding.

In combination with the EPR we might get a better indication of true economic health. If both numbers are falling then the economy is doing better. There is less need for more than one member of the household to be working (wages are up) and jobs are not scarce (again, wages are up).

If both are rising then the economy is doing worse. Wages are in the ditch.

If the EPR is rising and the UR is falling then women really do have a lip gloss fetish. Demand for "stuff" really is insatiable. Leisure is bad,

And if the UR is rising and the EPR is falling then we are returning to the women as full time mothers days and the men are trying to work two jobs.

ProGrowthLiberal said...

Trucker - I appreciate both of your last 2 comments. While Sandwichman is (rightfully) weary of my sort of Rubinomics call for eventual fiscal restraint, you (rightfully) note that it is HOW we return to eventual fiscal sanity that matters. My path to this return would follow a Gene Sperling design and not something that Newt Gingrich might concuct.

"And if the UR is rising and the EPR is falling then we are returning to the women as full time mothers days and the men are trying to work two jobs." Actually - let's consider situations where EPR is falling as UR also falls - which is of course the situation where the fall in UR comes from lower labor force participation aka a discouraged worker effect. Can we all agree that this would be a worsening of labor market conditions. Oh wait - there are a few Lawrence Kudlow opeds that say that this scenario would be seen as good news over at the National Review. Never mind.