Obama, Romney take different tacks on jobs

WASHINGTON -- Perhaps the most important thing President Barack Obama and Mitt Romney can do to win the job of president for the next four years it to show they can help other Americans find a job.

Hit by a great recession and now stuck in a weak recovery, the country has grappled with a jobless rate above 8 percent since February 2009, Obama?s first full month in office. That stretch of 43 months is the longest prolonged period of unemployment above 8 percent since record keeping began in 1948. It long ago passed the 27 months recorded during Ronald Reagan?s first term.

Roughly 7.9 million jobs were lost during the Great Recession, which spanned December 2007 to June 2009. Job growth turned positive in March 2010 and has stayed that way except for a few stray months. Yet 12.5 million Americans remain unemployed, and another 8 million work part time and are seeking full-time jobs. Hiring remains sluggish.

?The weakness in the job market during this economic recovery is due to a hiring shortfall of about 1 million per month,? said Mark Zandi, chief economist for forecaster Moody?s Analytics and an analyst sought out by politicians from both major parties.

?Hiring prior to the Great Recession was running at near 5.25 million per month. Hiring is currently running close to 4.25 million per month,? Zandi said. ?The economy is experiencing net job growth only because layoffs are extraordinarily low.?

The two major party candidates offer very different prescriptions to help the country create more jobs.

Obama offers a plan that depends largely on government spending and tax cuts. Economists say the Obama plan could create 1 million to 1.9 million new jobs through short-term efforts to stimulate hiring, coupled with continuation of longer-term efforts already started to promote employment in emerging ?green technologies? and spending on education to better prepare the nation?s future workforce.

Romney offers a different path that avoids targeted short-term government spending in favor of moves to improve the overall environment for business. He promises 12 million new jobs over four years through a revamp of both government taxation and spending, and pro-business strategies such as a lighter regulatory hand by federal agencies. The 12 million might be a safe bet: It?s in with Federal Reserve estimates of a return to full employment around 2017.

There?s evidence that both approaches could work, according to David Card, a labor economist at the University of California, Berkeley, and head of labor studies for the National Bureau of Economic Research.

Germany, he said, has been criticized for its high taxes, big health insurance costs and a strong government hand in regulating industry. Those are all things Republicans accuse Obama of seeking, and yet today Germany is one of the few developed nations that continues to do well despite a global economic slowdown.

Similarly, said Card, the smaller government, low regulation approach advocated by Romney has been undertaken in Hong Kong and has helped the former British jewel and now satellite of China become an economic powerhouse.

?The connection between these tax changes and policy changes are just so hard to figure out,? Card said, offering voters little help. ?An economy can do well both ways.?

Email: khall@mcclatchydc.com; Twitter:@KevinGHall This is the first of the McClatchy News Service?s analyses of five major presidential campaign issues. The others will be taxes, foreign policy, social issues and Medicare/Social Security.

Source: http://www.miamiherald.com/2012/09/29/3026283/obama-romney-take-different-tacks.html

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