The full speech, in case you missed it:
It's not a perfect plan, but nothing that emerges from Washington is. It's not going to magically generate strong growth; the Fed's upcoming meetings are more important. It is a package of sensible steps presented in a sensible way. Were Congress to fall into a momentary stupor and pass the bill as is, the American economy would clearly be better for it (though not obviously 2m jobs better). Americans should hope that most of it gets through Congress and on to the president's desk.
This is the type of jobs program initiative that many economists—and the American people—have been waiting at least six months for. In fact, the program would have been most effective if it had been announced and launched simultaneously with an endorsement by the President of the Bowles-Simpson deficit reduction plan, when the latter was first unveiled in November 2010. Then the economy would have had a double punch of a short-term job and recovery stimulus coupled with a medium-term deficit and debt reduction plan.
Explaining why nothing he’s done in his first two-and-a-half years in office has brought back economic growth may be politically tricky. By ignoring it, however, he cedes the narrative to the Republicans. The GOP’s story, of course, is that Obama’s past efforts to throw money at the economy have failed and so this will as well. Obama needed to respond to that tonight, to explain why his past economic policies merit confidence in his new ones. But he didn’t. And so a casual viewer might come away with the impression that he believes his first stimulus bill failed too.
Qua economics, the proposal looks a lot better than the 2009 stimulus. This new measure is not larded up with the Democratic wish lists and obsolete campaign promises that made such a mess of Stimulus 1. There are no tax rebates here, no Pell grants, only the basic material of a counter-cyclical program: investment tax credits, continuing payroll tax relief, and infrastructure spending.
Mark Zandi, chief economist at Moody’s Analytics, is frequently the go-to guy for both parties when it comes to analysis of various jobs proposals. So, what did he think of President Obama’s speech last night? His report is behind a paywall, but here’s the topline: “The plan would add 2 percentage points to GDP growth next year, add 1.9 million jobs, and cut the unemployment rate by a percentage point.”
One of the reasons for presidents to give high-profile speeches, indeed, is to signal to Congress (and to everyone else in the policy-making process) that this is something that's a high priority for him. This is something he intends to fight for, and that he's willing to bargain for. And if that's true — if Obama is in fact willing to give way on GOP priorities if they're willing to accept some of what he's proposing — then this thing does in fact have some chance of being enacted.
This is a stimulus bill; stimulus bills, by their nature, can’t be revenue-neutral or fully paid-for. And this one isn’t. Instead, it seems like Obama is going to tot up the cost of the bill — $447 billion is the number doing the rounds — and add it to the $1.5 trillion that the deficit supercommittee is being charged with cutting from the budget over a decade-long period. That’s not paying for a bill, it’s passing the buck to someone else.
The tax breaks for companies that hire vets and the like probably won’t increase hiring at all. It will encourage firms to employ targeted workers, but at the expense of those who are not on the preferred list. The payroll tax cut for employers may also help some, but not much. And many profitable firms will enjoy a windfall for hiring workers they would have hired anyway.
We are likely to see a real semantic scrum over the next few weeks as partisans seek to define the territory that the bill occupies. Pollsters, whether knowingly or not, will be a part of that battle. I would advise them to use multiple question variants where possible, taking a larger sample and splitting it into halves or thirds, and I would advise readers to be suspicious of articles that cherry-pick one or two polls without discussing the broader context.
Helping the country is unlikely to be enough of an incentive for Republicans to pass a bill, any bill, that Obama supports, even a bill, like this one, that is assembled mostly from refurbished spare parts collected from their own ideological warehouse. No doubt many of them sincerely believe that the end (upping the chances of defeating Obama and his nefarious agenda of turning America into a socialist hellhole like Western Europe) justifies the means (deepening the extent of mass unemployment, human suffering, and ancillary damage to the economy and to society).
Mr Obama's a dead man walking unless the economy turns around or he finds a way to somehow pin the still-flailing economy on the Republicans. Mr Obama's bill is a not-so-plausible way to achieve substantial growth, but, together with his speech, it's a savvy first stab at winning re-election by out-manoeuvring the right.
In style and structure the constant refrain provided the "music" of the speech. Do you wonder what point the President is trying to get across? Well, in case you've forgotten, every thirty seconds he will remind you: Pass this jobs bill; you should pass it right away. It's an approach familiar from religious speeches and sermons, and tent-revival orations. When done right, the recurrent refrain seems not repetitive and boring but rather cumulatively engaging: the audience knows where the speaker is going, anticipates the connections he is going to make, and sees how the parts fit together.
[W]hile all the proposals are well enough, they're hardly an exciting new direction for the administration. These aren't new ideas; they're things we're already doing, like unemployment assistance and the payroll tax cuts, or things that Obama has been proposing for a while, like the infrastructure bank. Even the "new" proposals, like added money for infrastructure, is a retread of ARRA.
Economically, this is mostly treading water while we wait for something to change.
Earlier reax here.