How can Obama keep his job? Supply-side isn't the answer.
In terms of actual policy, President Obama's concession to Speaker Boehner on the timing of his intended address to a joint session of Congress is essentially irrelevant. The administration's policy on jobs, after all, does not hinge on whether the president makes remarks about his desired policies on a Wednesday or a Thursday. No new job will be created in the day that is lost by Boehner's forced deferral, nor will any current job be lost in the choice between speaking in opposition to the Republican debate or in competition to the the NFL's season kickoff.
From the point of political narrative, however, the kerfuffle was at the very least unhelpful, as Markos explained:
Capitulating to the GOP on matters big (and small) only reinforce the notion that he's weak. No one cares that he's the "grownup" in the room. No one cares that he's "reasonable" or "compromising" or "serious."
The president will give his speech on Sept. 8, and will do something Speaker Boehner has failed to do ever since he took his office twenty months ago: outline a series of concrete proposals that will actually create jobs for Americans directly, as opposed to through the insane notion that giving even more money to "job creators" will somehow produce the increase in demand that will be necessary for companies to start hiring. According to the Washington Post, Obama's speech will focus on infrastructure while also generating opportunities for the unemployed:
White House officials said Obama would lay out a much-anticipated package of new proposals to stimulate job growth, a package expected to include spending programs for roads, bridges, school repair and training for the long-term unemployed.
One thing is no secret: the Republican Party will excoriate everything Obama says, if for no other reason that that he is saying it. They will say that new spending on infrastructure is unthinkable at a time of massive budget deficits. They will say that we should be putting less money into public education, not more. And they will say that we should not be lifting any federal fingers to help the unemployed because they need to pick themselves up by their bootstraps, regardless of whether they've been out of work so long they had to sell their boots. And one can bet that a few conservatives might even say that far from helping the unemployed, we should try taking away their right to vote instead.
Republicans will fire back, calling the president a profligate big-spending socialist who is out of touch with the American people and wants to waste hard-earned taxpayer dollars on the indigent who don't deserve the help of government. They will do this no matter what he says, as long as the content is anywhere to the ideological left of Grover Norquist. And in the end, there will be negotiations and a back-and-forth exchange, name-calling, and perhaps even legislative hostage-taking before any final bill makes it to the president's desk. Consequently, it is crucial that Obama form a clear contrast between Democratic ideals about how to bring the economy back to long-term health and the failed Republican supply-side solutions concerning the same. Even if the desired policies cannot make it through an obstreperous GOP Congress, at least the president can have laid out an ideologically alternative vision that offers voters a clear contrast between his administration and the cacophonic choir of conspiracy theorists that seem to be headlining the other side. Unfortunately, it doesn't look like such a contrast will be forthcoming.
To begin with, there are reports that the president is considering including in his speech a proposal to implement a so-called job training program that rechannels unemployment insurance and turns it into a small subsidy that workers in "training" receive while they essentially intern with their employer. And on a seemingly unrelated note, Obama's administration chose to shelve planned regulations that would have given our country cleaner air and, in the long term, saved money in the process. And while the progressive, if not commonsense, investments in infrastructure are appreciated, these two concepts seem to suggest the alarming possibility that the administration is preemptively favoring supply-side economic choices.
The job training program is perhaps the more egregious, as Robert Kutter at The American Prospect explains:
But that’s not how the program works at all. Basically, the company gets free labor while the person is receiving unemployment insurance. If the company does hire the person, there is no ongoing wage subsidy or training subsidy. [...]
With unemployment stubbornly above 9 percent, and above 15 percent if you count discouraged workers and part-timers seeking full-time work, this program doesn’t make a dent in the problem. It doesn’t create jobs. It simply alters who gets available jobs, while putting downward pressure on wages. As Obama’s [sic] suggests, Smith gets his foot in the door ahead of Jones, by offering to work for free.
Conservative economic theory focuses on the "job creator" model: the idea that rich people and corporations (who, incidentally, are always rich because they deserve to be) should get all the advantages and be left free to their own unregulated devices, while labor should be disorganized and cheapened so as to improve profits. Progressive economics believes that organized labor and higher wages result in more consumption, more demand, and therefore more jobs to meet that demand. If President Obama follows up his rollback of proposed environmental regulations with a proposal that cheapens the labor supply by adding the availability of zero-wage jobs instead of focusing on improving demand, he will be tacitly acquiescing to the conservative supply-side model of how to run an economy.
Kuttner explains that this proposal might be part of a deal to prevent Republicans from taking his unemployment insurance extensions hostage—yet another preemptive concession, as it were. As Paul Krugman has repeatedly explained, supply-side solutions will prove completely ineffective in an economy plagued by low demand. But even more dangerously, the fact that a supposedly liberal Democratic president is introducing supply-side ideas will only help drive a narrative that those ideas are consensus solutions, thus marginalizing progressive demand-creating policies.
If the so-called business community could dig us out of the hole they dug us into, the record corporate profits they're currently receiving should have been enough for them to do just that. If they can't, then it's obviously time to try something else. But a Democratic president possibly giving in to supply-side theories? That's one of the worst possibilities of all.
Unless someone says that social security is a ponzi scheme or says we should drill in the Everglades. That would just be crazy.