Has Hiring Languished B/C of Govt. Programs?by Tim Manni
Last week CNBC’s Jerry Bowyer asked “why isn’t America hiring?”
…given the political mood in Washington during the past two years which has been far more focused on job creation (or savings) than on general economic growth. The stimuli plans were supposed to be job plans. The auto/bank bailouts cum nationalizations were supposed to be about saving jobs, not ‘Wall Street’. So given two record breaking stimuli within two years, why isn’t America hiring?
Bowyer answers his own question by speculating that “America isn’t hiring precisely because of government policy.” He concludes by writing “Jobs aren’t languishing despite the government’s best efforts. They’re languishing because of them.”
But is that really the case?
President Bush’s stimulus package was designed more around the notion of ‘putting more money into the American peoples’ pockets will cause them to spend more.’ So we would argue that former-President Bush’s stimulus wasn’t specifically centered on job creation. While President Obama has claimed his stimulus package will save and create millions of jobs, the stimulus has yet to make a significant impact on the economy.
Call us realists or cynics, but we think a lot of people would agree with us when we say that the bailouts of the auto and financial industries were never foremost about saving jobs. While the factors that led to the saving of GM and Chrysler certainly focused on preventing an additional massive wave of unemployment, their bailouts had little to do with job creation. In fact every aspect tied to saving GM and Chrysler had to do with downsizing (dealerships, salaries, retirement benefits, etc.).
Take the bailouts in the financial industry — we’d argue that their saving was more about preventing global systemic risk than worrying about jobs. The financial bailouts were intended to save capitalistic economies as a whole, not as a mechanism for JP Morgan Chase to hold on to as many employees as possible.
Certainly bailouts and stimulus packages are intended to bring positive returns. The ability for the bailed-out companies to retain their workforce is a plus, but not the sole reason for their existence. Since most of the recent government efforts which Bowyer referred to weren’t designed first and foremost to create jobs, should we blame them?