Obama Economic Plan Falls Short

November 23, 2008


Saturday, November 23rd, President-Elect Obama announced that he has tasked his economic team with creating 2.5 million new jobs by the end of 2010. 

“We’ll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children and building wind farms and solar panels, fuel-efficient cars and the alternative energy technology that can free us from our dependence on foreign oil and keep our economy competitive in the years head,” he said.

I certainly hope there’s more to come because, although this would be a nice start, it will fall far short of what’s needed to breathe life back into the economy.  Two and a half million jobs in two years may sound substantial until you understand that our labor force grows by approximately three million workers in the same amount of time, due simply to populaion growth.  So, if this is all there is to Obama’s plan, we’ll fall behind by another half million jobs in the next two years, which will raise the unemployment rate by another 0.3%.  Since the year will end with unemployment somewhere near 7.0%, is Mr. Obama saying that the best he can promise is 7.3% unemployment midway through his term of office? 

There’s certainly nothing visionary about building roads and bridges and refurbishing schools.  Anyone could have come up with that.  Putting people to work building solar panels, wind “farms” and fuel efficient cars sounds good, but Mr. Obama hasn’t explained how this will be done without raising the ire of the WTO (World Trade Organization).  It’s not as though none of these devices aren’t already available on the global market.  Is he talking about the Chevy Volt, the electric car which is supposed to be available in 2010?  Why will people flock to that car in particular when, at the same time, virtually every import brand is expected to introduce their own electric car?  Does Mr. Obama have a plan for guiding electric car demand disproportionately to the domestic brands?  Similarly, Denmark is the world’s leader in manufacturing wind turbines.  Why would our power companies choose to purchase American-made turbines disproportionately over Danish machines or those from other foreign manufacturers?  The same goes for solar panels. 

If his plan is to somehow steer domestic demand toward domestic producers, the WTO will see it as a violation of trade rules and will quickly move to put a stop to it.  Then what?  The point I’m making is that anything that Mr. Obama attempts, beyond public works projects, to put Americans back to work in manufacturing any product of any kind will quickly get him cross-ways with the WTO.  Frankly, I hope that’s exactly what happens because a showdown with the WTO is long overdue.  Perhaps only such a confrontation will finally drive home the point that unfettered free trade is what lies at the root of our economic problems and that only a system of protectionist measures offers any hope of salvaging our economy. 

C’mon, Mr. Obama.  We’re expecting better.  With 25 million people filing for unemployment every year, we need to create 20 million new jobs, not 2.5 million.  We need to return to manufacturing everything we use, not just a few things.  If someone has sold you on the idea that transforming to a “green” economy  will put everyone back to work, then you’ve been mislead.  A green economy that still experiences a $700 billion per year trade deficit is still a fundamentally unsound economy that is doomed to collapse, just as our current economy has.