Politics as Showmanship

Obama has now claimed "jobs" as his job #1. Funny... he never finished healthcare as his job #1.

So the question becomes: how well will 'stick-it-out-and-finish-the-job' Obama do with his pledged new seriousness about jobs? Here's an estimate by Keith Hennessey in his blog. I worry about the accuracy of these numbers because Hennessey is a Republican and worked for Bush, two bad strikes against him in my books. But I believe the overall thrust of what he is saying is correct, i.e. Obama is "all hat and no cattle":

If enacted quickly, the President’s new Small Business Jobs and Wages tax credit proposal will therefore create fewer (and maybe far fewer) than 165,000 – 297,000 jobs this year. For comparison, remember that the U.S. economy has lost 2.7 million jobs since a year ago, and 7.2 million jobs since the beginning of the recession in December 2007. 297,000 is 4.1% of 7.2 million, so you’re talking about a policy change that at best would restore fewer than 1 out of 25 jobs lost since the recession began.

I find tax subsidies to be a big waste. If you want to create jobs, then cut out the middle man and create them directly. Do a WPA-style jobs program to build infrastructure, clean up streets, and fix the potholes. There is more than enough work that needs to be done and the easy-to-organize WPA-style get them out and get them busy is fast to organize and immediately puts money in the hands of people with a proclivity to spend 110% of their income, so you get really big bang for the buck.

The thing that kills me about tax inducements or capital gains cuts or across the board tax cuts is that they badly target the people who need the jobs. So you end up spending a fortune for each job "created". For example:

CBO estimates that for each million dollars of budgetary cost for this kind of tax credit, full-time employment in 2010 will increase by five to nine years. I’ll explain the difference between increased years of employment and increased jobs in a moment. That works out to $111,000 to $200,000 of taxpayer money (or deficit increase) per new employment-year, and more than that range per new job created this year.

That's crazy. My back-of-the-envelope estimate for a WPA-style jobs program says that for every 20 jobs you create at $25,000/year you need one manager type at $50,000/year and maybe $100,000 of back office clerical help and one manager of managers at $100,000/year for every 20 managers and another $100,000 of backoffice clerical expenditure. In short, you can create good WPA-style jobs for $32,500 per job. Not $111,000 or $200,000 per job!!!