Thursday, January 28, 2010

Keep trying 

None dare call it Stimulus II.

Specifically, the president wants to give a tax break to businesses that hire workers, eliminate the capital gains tax on small business investments and use $30 billion in Troubled Asset Relief Program money to encourage community banks to lend to small businesses.

The president�s package also would pump more government money into �green jobs� and infrastructure projects and extend unemployment benefits to those still out of work.

While Obama�s emphasis on small business is new, many economists see the overall package as simply an extension of the $787 billion stimulus bill passed last year � and not a robust one, at that.

�He�s trying to turn his microeconomic policies into some macroeconomic solution. He�s grasping at straws,� said Peter Morici, an economist at the University of Maryland.

"We are just going to have to ride this out over the next six months. If things don�t get better in trade with China, we aren�t getting out of this,� he added.

Gus Faucher, director of macroeconomics at Moody�s, is not so negative, but he�s not exuberant either.

�I think the package will make a difference around the edges,� Faucher said. �But, at the end of the day, it will take a strong economic expansion to get job growth going again.�

And Anne Kim, the economic program director for The Third Way, a moderate Democratic think tank, said the White House really isn�t trying to secure a near-term boost in jobs.

�There is only so much anyone can do about the unemployment rate, and it�s largely out of the government�s control,� said Kim.

�What they�re aiming for is to lay out a long-term economic strategy and an agenda that re-engages middle-class Americans and persuades them that their best prospects for a better future lie with President Obama and Democrats,� she added.
The political spin Ms Kim places on this jobs bill is precise. The passel of job proposals offered last night are not going to change that graph very much. It is an attempt to appear serious rather than be serious.