America does not have a jobs problem. It has two jobs problems. And they are inextricably intertwined.
The first jobs problem is a lack of jobs. With unemployment hovering over 9%, more workers having to settle for part time work and many simply giving up seeking work jobs are desperately needed and are not being created nearly fast enough. Worse, many of the unemployed have been without jobs for six months or more and there are four to five unemployed for every job opening. And government jobs are being lost at a rapid rate at the state, local and, soon, federal level thus diluting the modest growth of private sector jobs.
The second job problem is in Washington, DC. Simply put, the government is not doing its job of governing. The recent food fight over raising the debt ceiling is example number one. And however unsound the economics were for the Standard and Poors (S&P) downgrade of the U.S. debt, their analysis of the political gridlock was spot on. If that fiasco was not enough, we have the example of the failure to reauthorize the Federal Aviation Administration (FAA). Here political gamesmanship cost the Treasury some $300 million and unemployed 74,000 Americans for ten days. Neither the debt ceiling nor the FAA issues were solved. The first was kicked down the street until December, the second only until mid-September.
The first jobs problem cannot be addressed until and unless Congress and the president do their jobs. But both appear to be willing to wait until after Labor Day to begin their labors. Meanwhile the stock market tumbles and the nation appears to be adrift. All sides are pointing fingers at others, thus confirming the S&P analysis. The American people are furious and have downgraded President Obama in the polls. And the favorable rating of Congress is so low that positive views may only be coming from Congressional staff and close relatives.
It is time for a new game plan. It is time to pick up the pace. It is time for the president to cancel his vacation and call Congress back to Washington and back to work. It is time to focus on the problems, not the politics.
Specifically, the president should call on the Gang of twelve Committee created by the debt ceiling legislation to begin work immediately. House and Senate leaders of both parties should pledge to only appoint members who are willing to support both revenue increases and entitlement reforms. The reaction to a deadlocked commission is likely to be a tsunami that will make the post S&P reaction seem like a gentle wave. The target should be doubled, from $1.5 trillion to $3 trillion over ten years. Both the Bowles-Simpson Commission and the still born Obama-Boehner "Grand Bargain" can serve as templates.
Next, Congress and the administration need to get creative. The ideas for stimulating jobs (infrastructure bank, free trade agreements, etc.) are fine but will have little near-term effect. What is needed is a way to loosen the purse strings of the $1.8 trillion in corporate coffers. Regulations need to be streamlined to promote oil drilling in the non- controversial sections of the U.S. and its off shore reserves. Fighting about ANWAR should not delay drilling elsewhere. Other tax incentives should be used to stimulate private sector job creation.
The president's business advisory council on jobs should be asked to focus on what can be done soon to spur investment and hiring. And every cabinet department needs to be pushed for new ideas on job creation. Labor Day should be set as the time to begin to legislate, not the time to begin thinking about the problem.
The only way to begin to solve the first jobs problem is for the president and Congress to do their job. Now, not after Labor Day. Get to work.