Where are the jobs?

Issue could cost Obama his job By Salena Zito

Where are the jobs?

Not the stimulus signs, rhetoric about "shovel-ready" economic voodoo or propping-up of an anemic manufacturing sector, but the real jobs?

Polls at the beginning of July showed President Obama in an increasingly hazardous position with voters on jobs and the economy.

A McClatchy-Marist poll put his economic approval rating at just 37 percent among registered voters. A Gallup poll found U.S. economic confidence had plummeted by 7 percent since June.

Last year, Obama used Pennsylvania's Allentown Metal Works as a backdrop to tout his stimulus and job-creation success. A couple of months later, the plant closed.

Vice President Joe Biden told a Pittsburgh crowd that 250,000 to 500,000 jobs would be created each month by the start of last summer. The numbers never even came close.

To date, this administration's handling of our economy is a failure.

"Excepting some unanticipated major event, the election will largely ride on the state of the economy and public perceptions of how Obama has handled it," said Mark Rozell, a professor of public policy at George Mason University.

All the political opposition must do is seed as much doubt as possible, early and often, about Obama's economic leadership, and he will have a political problem more potent than his rhetorical skills.

On a "Factory Belt" tour last month, Obama spoke about new worker-training partnerships between government and academia in political battlegrounds Iowa, Ohio, Pennsylvania and Virginia.

It was an attempt to project confidence in our economic future -- but it's hard to sell glacial-speed job growth.

"In the short term, there may be some support for the president because he is 'doing something' about the economy," explained Rozell, "but, ultimately, the real test is whether economic circumstances improve in time for election day next year."

In politics, perception is what counts.

Last weekend, this White House Council of Economic Advisers released its seventh quarterly report. It showed the Obama stimulus added or saved fewer than 2.4 million jobs -- at a cost to taxpayers of more than $250,000 per job.

Most Americans cannot understand how that can be considered sound economic reasoning. They find it difficult to rally around what looks, to them, like foolishness.

The private sector has regained about 30 percent of the manufacturing jobs it lost in the recession -- jobs created despite regulatory policies detrimental to manufacturing's expansion.

Add the administration's health-care policies (which drive up the cost of employment by increasing medical insurance costs) and environmental policies (which drive up the price of energy, particularly in Western Pennsylvania, where coal is a major source), and you can see why the private sector is skittish about enlarging payrolls.

That means the president has not only a small-business problem, but a blue-collar-worker problem. Both are sources of independent voters so essential to winning elections.

Add, too, the Dodd-Frank bill, which Larry Lindsey, former Federal Reserve governor, says "has made it much more difficult for banks to make business loans, as more of their resources must be devoted to regulatory compliance and (the) building of capital than to granting loans."

Partnerships are the key to economic growth. The great 20th-century economist Joseph Schumpeter described entrepreneurs as "gap-fillers and input-completers," meaning they bring together everything needed to create output and jobs in one place -- basically by partnering with various groups.

It's better that entrepreneurs, not government or academia, be central to this process because they typically know how to get things done, risk their own money and face real consequences if they fail.

"While the president often talks about having 'created' jobs ... he didn't," explained Lindsey. "Such jobs that have been gained have been produced by risk-taking entrepreneurs."

All that "shovel-ready" stimulus money filled many state budgets, but not so many private-sector job openings.

The president's resume includes little that indicates he knows how to create jobs -- which may, in the end, contribute to him losing his job.

Salena Zito can be reached at szito@tribweb.com or 412-320-7879

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