White House Jobs' Report

by John M. Curtis
(310) 204-8700

Copyright Dec. 4, 2009
All Rights Reserved.                    

       In a stunning disconnect, the White House convened a forum on jobs’ creation, a pivotal issue with unemployment at a 23-year high of 10.2%.  Only two days from committing an additional 30,000-35,000 troops in Afghanistan, President Barack Obama expressed concern about the nation’s jobs’ picture.  He said he heard some “exciting ideas and proposals” to jumpstart dismal employment numbers where the U.S. shed around 9-million jobs since Dec. 2007.  “This has been a tough year, with a lot of uncertainty,” said Barack, failing to see the linkage between massive defense spending and a stubborn recession, paralyzing the jobs’ market.  Brainstorming with the nation’s top CEO and business executives, not one participant questioned the feasibility of spending another $75-$100 billion a year on a new Afghan War plan.  Nor did they see costly health care reform as a drag on the economy.

            Barack asked for suggestions what to do to create more jobs but wasn’t open to the very real possibility that excessive defense spending kills the economy.  Inviting “good hardheaded feedback,” Obama doesn’t see what Nobel Prize winning New York University Stern School economist Joseph E. Stiglitz saw when he warned former President George W. Bush that the Iraq War was breaking the economy.  If the economy is more fragile today then it was three years ago, more military spending will only wreak more damage.  Former presidential rival Sen. John McCain’s (R-Ariz.) chief economic advisor Douglas Holtz-Eakin warned of more damage to the jobs’ market from deficit spending.  Sounding more like Bush, Obama insisted the U.S. must spend more on Afghanistan or risk a new terrorist attack on the American homeland, something not subject to proof.

            Looking at the big picture, today’s ugly recession stems at least, in part, from excessive military spending over the past eight years.  Former Soviet Premier Mikhail Gorbachev, speaking Nov. 9 at the 20-year anniversary of the fall of the Berlin Wall, acknowledged that crushing military spending led to the collapse of the Soviet Union in 1991.  Obama now continues the same military spending binge that contributed to the eventual collapse of the Soviet Union.  Whether the U.S. economy can sustain more defense spending without more damage to the jobs’ picture is anyone’s guess.  “There’s no question it’s difficult out there right now,” Obama said.  “Digging ourselves out of the hole we have dug into is not going to be easy,” not admitting escalating the Afghan War digs the nation into a deeper hole.  Talk of new stimulus also harms the long-term jobs’ prospects.

            Obama’s economic program hinged on shifting Bush’s wartime economy to peace by deescalating he Afghan and Iraq Wars.  While Iraq looks like it’s winding down, more spending on Afghanistan throws into question the president’s economic theory.  Without a major shift of government spending from defense to the civilian economy, it’s difficult to anticipate future economic growth.  Federal Reserve Chairman Ben S. Bernanke has warned about new asset bubbles, like the one in real estate during the Bush administration.  Instead of reining in banking regulations to limit exposure to the risky stock market, the Fed restricted lending to small businesses and homeowners, paralyzing credit and driving many homeowners and businesses into bankruptcy.  Obama’s $787 billion Economic Recovery and Investment Act hasn’t stemmed the avalanche of mortgage defaults and foreclosures.

            Barack insists that, “we can’t go back to the business as usual,” despite the fact that the booming real estate market expanded consumer spending and drove up Gross Domestic Product.  Today’s recession is directly related to cash-strapped consumers, squeezed by rising unemployment and loss of real estate values.  Without employment and needed home equity lines, it’s difficult for consumers to spend enthusiastically.  Obama wants new ideas but tosses out the old ones that worked in good economic times.  He must work with his Treasury Secretary Timothy Geithner to preserve tried-and-true lending practices for homeowners and small businesses.   Geithner and Bernanke know you can’t create jobs, especially small businesses, unless there’s have enough credit, currently unavailable.  Working with the Small Business Administration and lenders, credit must flow more freely to create jobs. 

            Challenging his audience to come up with “innovative” ideas, Barack missed the golden opportunity to transition the economy from a war to peace.  Giving peace a chance, or at least not escalating military spending, would be just the kind of innovation needed to grow more jobs.  There’s nothing wrong with developing a green fuel industry but it must be weighed against current military and domestic spending.  Spending another $100 billion a year on health care at a time of growing budget deficits also doesn’t help the jobs’ picture, especially if it hurts the health insurance industry.  Barack wants the ‘biggest bang for the buck” but doesn’t want to apply basic common sense to fixing the economy.  When he decided to spend more on Afghanistan, he decided to spend less on growing jobs and the economy.  Spending on two wars hurts the domestic economy and prospects for jobs.

John M. Curtis writes politically neutral commentary analyzing spin in national and global news.  He's editor of OnlineColumnist.com and author of Dodging The Bullet and Operation Charisma.

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