In addition to it being the right thing to do economically, there will be political momentum for trying to do more on jobs. The American people realize that we not only have $14 trillion in debt, we also have 14 million hard working Americans looking for jobs, and we have to do something about both. This means we no longer have the political winds in our face as we seek to do something to create jobs.
And I, for one, refuse to believe there is nothing we can do to improve our jobs outlook. I am unwilling to risk a lost decade, or even a lost generation, because we stood by, and did not challenge shortsighted policies driven by a small, ideological wing of the Republican Party. I refuse to believe that the same country that built the cross-continental railroad; the same country that rebuilt western Europe and Japan following the Second World War; the same country that built the interstate highway system and invented the internet, the cell phone and GPS; will now abandon the 14 million Americans who are looking for a job and put the economic future of an entire generation of young people at risk, because this Congress can’t walk and chew gum at the same time.
The “Jobs First Agenda” that Schumer launched included passage of the highway bill reauthorization, which would create jobs in the construction sector; a national infrastructure bank, which would “create a platform to leverage private sector investment for projects of national or regional significance,” and an energy bill that would have “incentives,” I’m assuming tax incentives, to create clean energy jobs. He also mentioned the cost-free stimulus of Chinese currency manipulation, immigration reform designed to attract high-skilled workers and entrepreneurs, and some of the other tax incentives like another round of payroll tax cuts. He wants at least some of these in a debt limit deal.
It’s not all that much, it’s barely a demand-side stimulus, but in this environment, it’s at least somewhat laudable.
But then today, Schumer got on a conference call and said that Republicans were intentionally tanking the economy and blocking job creation by stopping three NAFTA-style trade deals from coming to the floor.
So after Republicans boycotted a Finance Committee meeting Thursday that would have advanced trade deals with South Korea, Panama and Colombia that the GOP long has been seeking, Schumer pounced.
“It’s making many people ask, ‘Do they simply want the economy to go down the drain to further their political gain?’” Schumer said. “They seem to be tying themselves in a pretzel of contradiction simply to make sure the economy doesn’t advance so that their political fortunes might.”
Interesting that Schumer brought up the trade deals. As I said, Schumer spent the day before at EPI. EPI has a paper on just one of the trade deals, the one with South Korea, estimating that it will cost 159,000 American jobs within the first seven years. Even if you think this is an overly harsh estimate, how about the words of a Nobel Prize winner?
The case for free trade is about microeconomics, about raising efficiency. There’s no particular reason to think that trade liberalization is good for fixing problems of inadequate demand. I mean, you learn in Econ 101 that aggregate spending is Y = C+I+G+X-M; that is, consumer spending, plus investment spending, plus government purchases, plus exports, minus imports. Trade liberalization raises X, but it also raises M. For any individual county it can go either way; for the world as a whole it’s a wash, since total exports equal total imports.
So why is trade liberalization an answer to our current problems? Because, says Wessel, it would shore up business confidence. Why, exactly?
Chuck Schumer never misses the chance to make a good soundbite, but maybe the trade deals weren’t the best job-creation example to use.