As you watch the State of the Union speech tonight by Barack Obama, keep in mind that his claims about creating jobs and his promises of generating many more are tarnished by a simple fact: Presidents have a very limited impact on the unemployment rate.
Ezra Klein, writing for Bloomberg News, recently surveyed several economists who have worked in the White House for various administrations – Reagan, Bush 43, Clinton and Obama. He asked them one question: How much of national job creation during a presidency can we properly attribute to the president?
The answers ranged from “very little” to “hard to say” to the caveat that any presidential policies put in place experience a lag time of at least a year before they have any impact.
Klein points out that the Obama administration wants credit for every job created ince January 2009, but not for every job lost. They also applaud Democratic economic policies for the millions of jobs created under Bill Clinton’s presidency, despite the dot.com tech bubble. And they blame Republican economic philosophy for the financial meltdown during Bush’s administration without mentioning Clinton era policies that allowed the Wall Street banks to grow bigger while rejecting regulations on derivatives.
Likewise, Mitt Romney takes credit for every job at companies assisted by his former firm, Bain Capital, even those that were generated after Bain severed all ties. But he blames Obama for the 1.5 million jobs lost in January-February 2009 when the president was either not in office or had not yet put any policies into effect. In addition, Romney takes all the credit for jobs generated in Massachusetts during his four years as governor (2002-06) and gives none of the credit for that growth to Bush.
Newt Gingrich lays blame at Obama’s feet for every food stamp recipient in America. On the other hand, Gingrich, who was one of 535 members of Congress during the Reagan years, takes credit (at least partially) for the 16 million jobs spawned by the U.S. economy from 1981-88.
In short, Klein concludes, those who place all economic conditions on the shoulders of the president are foolish.
Here’s a portion of his piece:
“To buy much of this requires you to hold deeply ridiculous beliefs about the American economy. You must believe that Obama bears responsibility for events that predate his presidency and deserves applause for the demand created by aging cars and worn-down machinery. You must believe that Congress, which controls fiscal policy (taxes and spending), and the Federal Reserve, which controls monetary policy, bear little or no responsibility for the economy, but that the president, who controls neither fiscal nor monetary policy, is the primary driver of job creation. You must believe that governors have absolute power over state economies and that global demand is irrelevant. You must also renounce belief in Christmas — or at least its influence on the consumer-driven economy.
“Virtually no one really believes these things. But partisans and the news media routinely act as if they are true. They make up a useful shorthand that is arguably good for the political system: Better for presidents to believe re-election hinges on economic performance than, say, on the quality of their attack ads.”
You can read the entire column here.
