The Democrats’ Jobs Problem
Even as you read this, Democratic and Republican presidential candidates alike are ferociously campaigning on issues of paramount importance to voters – their voters, that is. In an election that has so far been dominated by jockeying for position on the issue of immigration on the right and income inequality or climate change on the left, it’s easy to forget that the majority of voters – general election voters – still regard the economy and job creation as their primary concerns. Republicans will have their fair share of struggles in the effort to appeal to swing voters, but Democrats aren’t so much better off. When it comes to the matter foremost on voters’ minds, the field of Democratic White House aspirants has demonstrated clearly that they do not have a grasp of the problem and are at sea when it comes to solutions.
For evidence to reinforce that contention, we need look no further thanMonday night’s Democratic town hall broadcast on CNN. Despite the audience’s demographic similarities, the questions posed to candidates were generally broad and ranged across the spectrum of issues Democratic primary voters care about. When it came to the matter of job creation, however, the three candidates demonstrated that they would have about as much luck as President Barack Obama has had in jumpstarting the economy for Americans who remain jobless.
“I believe that if we end this absurdity of allowing corporations who make billions of dollars a year in profits to stash their money in the Cayman Islands, Bermuda, and other tax havens, we eliminate that, we’re going to bring $100 billion into the Treasury,” Sanders insisted. “That money goes into rebuilding our infrastructure, creating 13 million jobs in five years with a trillion dollar investment.”
The Vermont senator’s solution to the problem of a stagnant job market is to extract more capital from the private sector to pad the Treasury. From there, his Keynesian instincts lead him toward, essentially, “shovel-ready jobs.” Perhaps the self-described socialist is not aware that this fantasy has become a punchline. Even Barack Obama acknowledged that “shovel-ready was not as shovel-ready as we expected.” The president hoped to combat the effects of the 2008 financial meltdown by essentially establishing a new Tennessee Valley Authority from some of the $800 billion Stimulus, only to find that make-work, public sector construction projects had about as much effect on the jobless rate in 2009 as they did in 1934.
Sanders revisionism is not limited to the present decade; he’s also interested in refighting the battles of earlier generations. “Trade policy,” Sanders shouted. “I have understood from day one that our trade policies have cost us – NAFTA, CAFTA, PNTR with China, millions of decent-paying jobs. I didn’t have to think hard about opposing the Transpacific Partnership.” He’s right; “Free trade does not create jobs,” wrote the Hoover Institution’s Melvyn Krauss in his book, How Nations Grow Rich. Rather, “it creates income for the community by reallocating jobs and capital from lower-productivity to higher-productivity sectors of the economy.” Sanders might think he can command the tides of history to recede, demand that global economic integration reverses its course, and insist that the United States become a low-cost source of manufactured goods again, but these are not policies; they are wishes.
The Democratic Party’s more pragmatic candidates were no better on this issue. When asked specifically about his plan to increase GDP and create opportunities for those who have fallen out of the workforce, former Maryland Governor Martin O’Malley offered some wisdom: “Without jobs, nothing works very well.”
Well, you can’t argue with that.
After a conspicuously longwinded soliloquy, O’Malley finally revealed that his plan to create jobs amounted to increasing the minimum wage, empowering tort lawyers to sue businesses for suspected wage discrimination, and making it easier for labor to organize into unions. You don’t have to be an economist to know that these policy prescriptions not only do not create jobs; they cost them. When the president pushed for an increase in the federal minimum wage to $10.10 per hour in 2014 (well below Sanders’ floated $15 per hour minimum), the nonpartisan Congressional Budget Office estimated that it would likely result in the elimination of about 500,000 jobs. Perhaps up to 1 million low-skill workers – those who can least afford it – would be cut from the workforce. There is no rational way to characterize this as policy competence, let alone anything resembling compassion.
Of course, these two candidates remain longshots for the nomination. Perhaps you’re hoping that Hillary Clinton, still the prohibitive favorite, was able to demonstrate some aptitude on the issue that resonates most with the general electorate. Prepare to be disappointed. “So, I know in order to deal with the problems I want to, to get the economy working, creating more good jobs, getting incomes rising, making sure we build on the Affordable Care Act,” Clinton said. Like a bolt from the blue, Clinton pivoted from this perfunctory nod to the issue of employment to lavishing praise on the Americans with Disabilities Act, which generated some of the loudest and most passionate applause of the night.
Still hungry for more substance? Too bad. To the extent that Clinton articulated a philosophy, if not a policy, regarding job creation, it amounted to waxing nostalgic about the 1990s. “At the end of eight years,” Clinton said of her husband’s presidency, “we not only had 23 million new jobs, what was most important is incomes grew for everybody, not just those at the top, more people were lifted out of poverty, incomes rose, in the middle and working people.” A theme is developing here. Again, the basic idea is to reverse the forces of history. If Clinton’s economic philosophy is to manufacture a second dawn of the information age, a dot-com bubble, and the end of the Cold War, we might also consider asking her to bring back David Bowie.
These are not policies; they’re positioning statements. If the target audience was Republican and the word “jobs” was replaced with “immigration,” the political press would see this performance art for what it is. Fortunately for Republicans, Democrats are not held to particularly high standards in their efforts to appeal to their most fringe constituents. If a Republican nominee cannot make a better case for job creation than what suffices for it in a Democratic primary, the GOP doesn’t deserve the White House.
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