Obama’s job #1: Create jobs
U.S. President Barack Obama speaks at a town hall style meeting at Country Corner Farm Market on August 17, 2011 in Alpha, Illinois. President Obama is on the last day of a three-day bus tour of Minnesota, Iowa and Illinois during which he will discuss ways to improve the economy and create jobs, and hear directly from Americans. (Getty Images)
August 18th, 2011
12:45 AM ET

Obama’s job #1: Create jobs

By Fareed Zakaria

Democrats are finally up for a fight — with President Obama. Having despaired that Obama gave in to the Tea Party on the debt deal, they now criticize him as too cautious in his proposals to boost American jobs. They’re right that Obama should present a sharp distinction to the public between his efforts and the Republican Party’s utter passivity in the face of a national employment crisis.

But perhaps Obama realizes that the most important factor that will help his reelection — and Democratic prospects more generally — is a rise in employment. And to have any impact on the actual economy, Obama needs proposals that can get through Congress, not ones that sound good on TV.

The problem before the country is more acute than people realize. It goes beyond the indebtedness issues that are surely depressing the recovery. In June, the McKinsey Global Institute published an eye-opening report called “An economy that works: Job creation and America’s future.” It points out that for 20 years, America has had huge difficulties creating jobs. After every recession since the Second World War, once gross domestic product recovered to pre-recession levels, employment also returned to pre-recession levels within about six months.

Until 1990. In the recession that began in 1990, it took 15 months for jobs to come back after GDP had recovered. In the recession of 2001, it took 39 months for jobs to come back.

And now? Since the start of this year, American GDP has returned to its pre-crisis levels — but with 6.8 million fewer workers. At the current rate of job creation, it will take 60 months — five years! — before employment returns to pre-recession levels.

Even these numbers mask the problem. The Nobel Prize-winning economist Michael Spence has found that of the 27 million jobs created between 1990 and 2008, 40 percent were in government and health care — sectors that can’t keep growing at their previous pace. Meanwhile, employment in the tradable sector of the U.S. economy, the sector that produces goods and services that can be consumed anywhere, such as manufactured products, engineering and consulting services — which accounted for more than 34 million jobs in 1990 — grew by just 600,000 jobs over the same 18-year period.

Read the rest of the article in The Washington Post. 


soundoff (250 Responses)
  1. jony3322

    The only reason that we can only create low wage and fast food service jobs is becuase almost all US manufacture companies big, medium and small size are outsourcing to China. This outsourcing has no ending. US corporations must have their factories here in US to make made in USA products to be able to sell here in US. US companies can build their factories in China, but those products are to sell oversea not in US. We are not able to create new jobs since not to many factories here in US to hire more people,and that is so simple to understand.

    August 18, 2011 at 1:50 pm | Reply
  2. douglas

    This article has so much truth to it. You must create goods, manufactured here, that can be sold to everyone in order to have a productive economy. Service sector jobs (including health care, minus pharmaceuticals) cannot sustain an economy. You must create goods the world wants (and needs).

    August 18, 2011 at 1:51 pm | Reply
  3. isolate

    1 of 2

    No president can simply wave Harry Potter's wand and create new jobs out of thin
    air. Jobs created by government are a net drain on the economy, as taxpayer
    money pays for them. Businesses create jobs in response to demand. But
    businesses are paralyzed by the uncertainty of the present economy, with
    Republicans eager to bring about default to satisfy their ideology, and a stock
    market that indicates investors are suffering from the same uncertainty.
    Uncertainty is the primary job- and investment-killer. Businesses would much
    rather face a predictable tax hike they can plan around than the perpetual
    brinkmanship in Congress that makes long-term planning impossible.

    During the recent recession businesses laid off workers to compensate for
    declining demand for their products and services, the classic response. But
    what's different this time is that during the recession business owners
    discovered they could make gains in efficiency and productivity, thereby
    reducing the total number of workers they needed when recovery began. We, like
    Europe, may be facing a permanently elevated unemployment rate among the
    unskilled and semi-skilled. The days when an American kid could graduate, or
    drop out of, high school and get a job at the local factory are long gone.

    August 18, 2011 at 1:53 pm | Reply
  4. Life_a_beach

    While the Asian companies figure out ways to drill for oil on the moon ...Americans fight over why their are not enough jobs at Home Depo ...No innovation ..our cars suck ..our public school education is a joke (and no1 cares) ..we all drive boats and eat our american company fast food .....then we blame the govt ...LOL i love it ...USA!

    August 18, 2011 at 1:57 pm | Reply
    • isolate

      Petroleum is an organic compound caused by the breakdown of biological organisms over millions of years. There is no life on the moon, and no possibility that a single drop of petroleum could form.

      August 18, 2011 at 2:03 pm | Reply
  5. Miss Direct

    Three brothers go into a hotel and the man says its $30.00 for the room. The brothers will share it. Each will pay $10.00. He calls the bellhop and sends them on their way. After 30 minutes he realizes he made a mistake. He calls back the Bellhop and informs him he overcharged the three brothers. It should have been $25.00. So he gives the Bellhop 5 singles and tells him to bring it up to them in their room. On the way he thinks to himself those cheap brothers didn't tip him so he keeps 2 dollars. He gives them back three dollars and they split it amongst themselves. no the only paid $27.00 for the room. $9.00 each x 3 = $27.00 total. Plus the $2.00 the Bellhop took = $29.00.
    WHAT HAPPENED TO THE EXTRA DOLLAR?!!!??? That IS WHAT OBAMA AND IS CREW ARE DOING. Misdirecting America. What a con job!!

    August 18, 2011 at 2:00 pm | Reply
    • isolate

      Thank you. I'm adding that to my collection of The Most Muddled Responses I've Ever Seen. I may write a book. 🙂

      August 18, 2011 at 3:21 pm | Reply
  6. Life_a_beach

    While the Asian companies figure out ways to drill for oil on the moon ...Americans fight over why *there* are not enough jobs at Home Depo ...No innovation ..our cars suck ..our public school education is a joke (and no1 cares) ..we all drive boats and eat our american company fast food .....then we blame the govt ...LOL i love it ...USA!

    August 18, 2011 at 2:01 pm | Reply
  7. William

    and we pour money into walmart and other stores where 95% of the products are imports. yet we complain about those countries taking our jobs. lol.

    August 18, 2011 at 2:01 pm | Reply
    • jony3322

      But there is nothing to stop US companies to outsource to China. Over 90% of products at Walmart and any other stores are made in China. We don't have any other choices for alternative buys.

      August 18, 2011 at 2:13 pm | Reply
  8. jjh

    Military spending taking up over half of the national budget is the elephant in the room that no one dares to see or admit. As long as this massive hole in America's budget is left open, nothing can be done for the country. America is a third world nation which still is a magnet for immigration from South Asia (India and Pakistan), the native American states of the Americas (Mexico, Central America) and Eastern Europe (Russia etc). Western Europeans stay home where conditions are better and there is a social net for their own citizens. The immigrants displace the more poorly educated locals because they are willing to work for less and are better educated: i.e. the Patel hotel on the corner.

    August 18, 2011 at 2:10 pm | Reply
  9. JeffinIL

    It is not the job of the president to create jobs nor is it his job to steer the economy. If you want a single person in charge of these things, I suggest you try the lovely country of North Korea. The best thing the government can do for the economy is to leave it alone. Everything the government does in this matter only makes things worse. The banks that were "too big to fail" needed to fail if that was how they had been managed.

    August 18, 2011 at 2:15 pm | Reply
    • jony3322

      I am sorry, but dictatorship in China controls everything including economy. Chinese government drives everything, and they are still rich and powerful. The only thing bad is that their people are not enjoying freedom like we do.

      August 18, 2011 at 2:20 pm | Reply
      • JeffinIL

        True, but it's dictatorship by committee not by Dear Leader.

        August 18, 2011 at 2:25 pm |
      • isolate

        Your image of China is 30 years out of date. China is the world's second largest economy and will replace America on the top in 5 years. China has a booming consumer economy and its population is becoming solidly middle class. Turn off talk radio and read a book about modern China. You seem to confuse it with North Korea.

        August 18, 2011 at 3:06 pm |
  10. Descarado

    Come 2012, there will be plenty of job opening after the American people put their fist around the beak of this blah, blah, blah parrot and tell Obama to STFU and go home!

    August 18, 2011 at 2:19 pm | Reply
    • jony3322

      Well, that may be true for more jobs at walmart and mc donald, and plenty job opennings at unemployment offices becuase more jobs will go oversea.

      August 18, 2011 at 2:22 pm | Reply
  11. Descarado

    BTW What size is Obama's empty suit? It must be at least one size larger than Jimmy Carter's.

    August 18, 2011 at 2:20 pm | Reply
    • JeffinIL

      Name one thing Obama has done differently than George W. Bush besides correctly pronouncing nuclear. Even his health care plan is based on a Republican one. This is more like a third Bush term than anything else. I fail to see why Democrats love him and Republicans hate him.

      August 18, 2011 at 2:32 pm | Reply
      • jony3322

        I wouldn't say one thing, but many things he did to keep the country slide into great depression. Just before he took the office the economy like a car running 100mile/hour downhill. The only thing, he can do is to try to stop it, but the momentum is hard to work on. It takes time to balance out the economy. Now it is still not completely back to normal, but at least we are not in deep recession. However, he is in trouble since there would be so difficult to create new jobs since most of US factories now in China. I think there is no one including any GOP leaders who can do anything about outsourcing. But that outsourcing is the problem to create jobs right now in US.

        August 18, 2011 at 2:42 pm |
      • JeffinIL

        He merely signed what congress sent him. W would have done the same thing. He was taking advice from the same economic people that W was.

        August 18, 2011 at 3:52 pm |
  12. All of America

    Typical obama rhetoric, all talk and no actions.Loser obama sounds like a crap salesman with a mouth full of samples!

    August 18, 2011 at 2:24 pm | Reply
  13. jony3322

    I would n't say so. If Mr. Obamama did not do anything, I would say we ended up with a great depression not just 1 year depression. What he can not do is to stop outsourcing. Can any GOP guy do anything about outsourcing? I don't see anyone at all.

    August 18, 2011 at 2:27 pm | Reply
  14. Artur de Freitas

    Small businesses are great contributors to new jobs but I wonder if the USA economy is ready to need more jobs and if banks are willing to lend enough to small business.

    August 18, 2011 at 2:34 pm | Reply
  15. Arthur Billems

    Just to amend to what was said about the corporate tax rates, if the rates are lowered then most of you are right. The corporations would not use the additional funds to create more jobs within their company. A mass hiring would not happen overnight, it would take years. And it is also correct to assume that these corporations would use the extra funds for this purpose. More than likely, the money would be put back into the pockets of the higher level executives as bonuses or used as reserve savings, or any number of other possibilities. The government can't impose regulations to these companies to use the tax breaks for job creation, since imposing regulations infringes upon the free market system. The governement cannot have a hand in how the money is spent. This isn't going to have the kind of outcome most would predict. The DOW is already dropping almost daily at triple digits, creating jobs isn't going to be the first idea of a big name CEO. Holding onto investment capital to please their shareholders is their main priority. If this idea is spread throughout the market, another Depression, you see, is inevitable. Once all the parts are in place, if the credit markets fail completely, as it looks like they will do, the rest of the system is definitely going to bottom out. Gold shares increased 300% and expect to continue to rise. The writings on the wall. Honestly, creating jobs is nearly impossible, unless you take similar action as Presidential nominee Rick Perry and create millions of low wage paying jobs at local Wal-Marts. the question isn't we can create jobs, because we can, the question is whether we can create GOOD jobs that can help lower and middle class families, some of which are still reeling from the mortgage crisis, to support their families and put food on the table. And with job benefits expected to be cut, the future value of these jobs is highly questionable. Education reform is out and financial aid for college students has already been cut. This means less educated people in America, and less qualified individuals for some of the best jobs. What is going to happen is, most of the qualified people in this country will relocate overseas where jobs are abundant, and will learn to speak another language to integrate into a new culture. Mor than likely, Asia's population will grow to enormous amounts with an exodus of American workers looking for employment elsewhere.

    August 18, 2011 at 2:43 pm | Reply
    • jony3322

      Who can stop US companies taking tax break money to build more facilities in China or Vietnam? That is why tax break not working. But
      there is one problem is that US corporations will go down with American people. US dollars become worthless if we are going into big recession. US corporations become worthless too unless they are fast enough to exchange US dollars into some other currencies.

      August 18, 2011 at 2:56 pm | Reply
      • isolate

        You miss the point that US companies are expanding in China and Vietnam only partly to return profits to their stateside executives and stockholders. The real reason is to serve the booming domestic Chinese and Vietnamese consumer economies, which are just entering their most productive and profitable phases and will not peak for another 30-40 years.

        America and the EU are in decline for a variety of reasons. A good comparison is Great Britain. just 100 years ago GB was the wealthiest, most powerful country in the world, the pound sterling was the reserve currency and the sun never set on the global British Empire. Look at it today, a shadow of its former glory. A century from now people will find it hard to believe that America once ruled the world. Throughout history economies have gone through this cycle, and the US is no exception.

        August 18, 2011 at 3:18 pm |
  16. William

    Those American companies are expanding into China, then selling the products made over there to us.

    August 18, 2011 at 3:29 pm | Reply
    • isolate

      No, that was the strategy 10-15 years ago, when American manufacturers fled rising American wages to seek out places where they could produce the same goods more cheaply. Today they are flocking to China to serve the burgeoning Chinese middle class, since Chinese workers' wages have risen so dramatically over the last decade that they are on the first lap of what will probably be a 30-40 year consumer spending boom. Strangely, most Americans seem blind to the advances Chinese citizens have made since 1978. In terms of consumption, China is where America was at at the end of WW II, when our own boom began picking up speed. China will rule the 21st century the way America ruled the 20th.

      August 18, 2011 at 4:02 pm | Reply
  17. kingignoramus

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    August 18, 2011 at 3:47 pm | Reply
  18. lynx Owe

    The climate in Washington today is so partisan and vitriolic that no program offered by the President no matter how good it is will be successful. If the Dems want any bill passed they must first get control of Congress failing that Republicans will stop any bill sponsored by Dems. This is a non-partisan observation.
    Why aren't the debt riders screaming about the millions we are spending in Libya. 100s of 120,000 dollar missles and millions of dollars in fuel to stop and kill people on one side of a conflict who will now need AID. Their hands will be outstretched with open palm while our people will have their homes foreclosed and be pushed into the street. It is sickening. There is no good reason to force a change in Libya. Gadaffi kept al-Qaeda in check there. This is just another slant on our oil wars launched under the veil of humanitarian need while in the Sudan and Somalia millions have died and are dying because of Brutal regimes that have ushered that region into an apocalyse. Our objective in Libya is not the rersue of a people from a brutal regime.

    August 19, 2011 at 6:38 pm | Reply
  19. Peter

    Actually the government can easily create millions of jobs overnight without doing anything fancy or complicated. Just tax the hell of American companies producing merchandise overseas.

    If it becomes more profitable to produce it inside of this country those companies will employ millions of people here, not out there and they would do this pretty fast! – They don’t want to lose a penny – It's that simple. However.... since some very powerful people are, with all probability, paying off some key people in order to keep this from ever happening, there is a very slim chance that this will ever happen. "Fat cats" want to get fatter without any regard for the rest of their fellow Americans. They care less if tens of thousands of people die of hunger or live on the streets (should this be considered treason in some way?)

    Want to create new jobs? You don't need to employ geniuses to devise an incredibly complex formula to solve the unemployment problem, in fact that would probably create some jobs that won’t make much of a difference. The answer is very simple and is in front of your eyes.

    Want to create even more jobs? Public works – rebuild old and dangerous bridges, fix holes in the streets, build new highways, housing for the needy, etc. With what money? Bonds: It has been done before – remember the Great Depression? – That’s the way it was done!

    If you want to see America back to work again pass this information to others. Maybe, just maybe, it will make a difference.

    August 20, 2011 at 11:06 am | Reply
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