As President Obama's Jobs Summit begins today, the economy has really moved back to the forefront of the public debate, leading many to wonder why it was back-burnered in the first place. The obvious explanation is that the Stimulus bill along with the TARP funds issued during the Bush Administration needed some time to do...well, whatever it is they were expected to do- presumably to prob up the failing banks so that lending could resume and companies could begin to loosen their belts.
As we're nearing the one-year-later mark following the stimulus, the number of constituents hailing its success is slim to none. New unemployment statistics are due out on Friday, but most are expecting the 10.2% Unemployment rate to grow, or at best remain stagnant for many months to come.
I've been drawn to a interesting debate on NPR's Intelligence Squared, which is an hour-long Oxford-style debate in which the winner is decided by an audience vote at the end. The most recent debate was over the notion that "Obama's Economic Policies are Working Effectively." There are three panel members on each side of the debate ranging from former Treasury members, to economic policy developers, professors, writers, and governors.
It's a great debate to throw on in the background at work if you're still as utterly conflicted about the economy as I am.
The basic arguments seem to be as follows:
ON ONE HAND:
- Had we not acted the way we did, banks would have failed and the country would have fallen into a severe depression
- As a result, massive layoffs would have played into the market and we would have been unable to recover for several years if not a decade after
- Markets as they are have stabilized and are no longer free falling
- States have received a large amount of funds to help them combat the recession and create jobs
- Unemployment benefits and COBRA benefits have been extended
- House and Auto markets have turned around
- lending and credit markets are stagnant, banks simply aren't loaning to small businesses
- unemployment has skyrocketed this year, reaching its highest level in three decades; not enough jobs have been created
- "Jobs Saved" is a questionable statistic that was created by the administration, NOT economists
- the bail outs have essentially propped up that same troubled system that failed in the first place; it was naive to cut a blank check without serious regulation
- bank CEO bonuses are an outrage
- Housing markets are questionable at best and the auto market was falsely propped up by government programs rather then a true market shift
- financial support to states only shifts state debt onto the federal government
- government spending and the deficit is out of control and unsustainable
I think that about accounts for all the basic arguments one could make regarding the government, and I think the reality is that they're all accurate. The audience in the debate ultimately sided that Obama's policies are working, but I think the outcome of the debate is moot.
However, I would tend to agree. Had the question been "Have Obama's Economic Policies Fixed the Economy?" the answer would surly be "no." The Obama administration was way too quick to take credit for slight improvements that haven't exactly built us a solid foundation yet. However, overall I think Obama's policies are working and I think we can see a clear improvement in the economy from one year ago when this country's financial institutions were literally dying. However, things are not fixed and the situation is still dire.
You can make a valid argument that Health Care Reform and Cap and Trade proposals should have been put off until the economy was on more solid ground, and while that's a very reasonable proposal, it also wasn't politically realistic to do so. The Democratic majority in Congress won't last and the economy was not going to simply bounce bank to 2005 levels within the first year no matter what policies were enacted.
Call me an Obama sympathizer, but I think people through heavy expectations on this President that might have been a bit more then he could bare. Perhaps the jobs summit is a PR stunt, or perhaps it is a legitimate attempt to garner opinions from across the board on how to solve this unemployment crisis. Critics have a lot to complain about, but only time will tell for sure whether the Democratic approach was successful or not.
For my part, I'm looking for a serious action plan to come out by the end of 2009, and I'll be looking with a very critical eye towards the 2010 budget proposal to come out in February. If there aren't signs of serious spending cuts and deficit reduction; if the President fails to keep his promise that the 09 budget would be the last pork-laden budget during his term then he will lose the support of those of us who still hold out hope for 'change.'
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