Obama's Smart Jobs Plan
Published in Financial Times Deutschland
(Germany) on 31.08.2011
by Hubert Beyerle (link to
original)
The U.S. president has not yet disclosed how he will keep his promise to create one million jobs. But his choice of personnel reveals that his plan will not be an easy one for Republicans to quash.
The message of Obama’s speech is simple: Jobs — above all, jobs. One million is his ambitious goal. He knows for sure that if he wants to be re-elected in the coming year, he must produce successes in the job market. An unemployment rate of 9.1 percent is still too high.
Admittedly, Obama has not said how he will reach that goal. Presumably he will do so shortly after Labor Day on Sept. 5. The appointment of Princeton professor, Alan Krueger, as chair of the Council of Economic Advisors betrays, however, what course he is taking. Obama will probably introduce tax credits for firms that create jobs.
That is politically adept. With a budget deficit in 2011 of $1.3 trillion and the newly imposed debt ceiling, new money is hard to come by. And Republicans will hardly approve new expenditures for Obama.
With tax reductions it is different. In that case, Republicans must weigh the pros and cons of the two goals that they support. Here Obama’s chances are higher.
And above all, the formula could result in success. In an interview in July, long before his appointment as an economic adviser, Alan Krueger suggested a “jobs tax credit” amounting to $5,000. At some point, businesses will in a position where they can create new jobs again. For that, the economic prospects must improve for business. And on this, Obama has only limited influence.
The message of Obama’s speech is simple: Jobs — above all, jobs. One million is his ambitious goal. He knows for sure that if he wants to be re-elected in the coming year, he must produce successes in the job market. An unemployment rate of 9.1 percent is still too high.
Admittedly, Obama has not said how he will reach that goal. Presumably he will do so shortly after Labor Day on Sept. 5. The appointment of Princeton professor, Alan Krueger, as chair of the Council of Economic Advisors betrays, however, what course he is taking. Obama will probably introduce tax credits for firms that create jobs.
That is politically adept. With a budget deficit in 2011 of $1.3 trillion and the newly imposed debt ceiling, new money is hard to come by. And Republicans will hardly approve new expenditures for Obama.
With tax reductions it is different. In that case, Republicans must weigh the pros and cons of the two goals that they support. Here Obama’s chances are higher.
And above all, the formula could result in success. In an interview in July, long before his appointment as an economic adviser, Alan Krueger suggested a “jobs tax credit” amounting to $5,000. At some point, businesses will in a position where they can create new jobs again. For that, the economic prospects must improve for business. And on this, Obama has only limited influence.