Political Animal
Blog
At Stateline, Pamela Prah asks a good question with respect to what voters will be hearing from gubernatorial candidates this year and in 2014: can they create jobs?
The general, bipartisan answer is “not as much as they would often have you think,” insofar as governors and aspirants to that position (and for that matter, state legislators) often pretend to have leverage over national and global macroeconomic trends they do not actually possess. Thus, when the economy is booming, they take credit for it as much as possible, and when it’s in the tank, they offer often-symbolic, sometimes-magical proposals to do something about it.
But as on so many topics, the idea that all gubernatorial “job-creating” ideas are equally questionable can quickly become an exercise in false equivalency. Conservatives often propose public subsidies to “attract businesses” or simply assert that state-level tax cuts will stimulate the private-sector economy in a particular place. At best, corporate subsidies, particularly if they are offered as inducements to individual “investors,” run a very high risk of simply offering windfalls to companies who would make such investments in any case for other, more fundamental reasons (i.e., proximity to markets or suppliers, or the availability of a work-force with suitable skills). And even if they “work” in attracting capital to a particular location, from a national point of view they represent a zero-sum game and encourage race-to-the-bottom gaming of state policymakers. Meanwhile, there is little or no evidence that lowering state taxes can have a stimulative effect that is anything more than a drop in the bucket in terms of overall economic conditions. The one sure thing is that to the extent that subsidies reduce public revenues, they will require offsetting reductions in expenditures that really do have a negative impact on jobs, not to mention the social goods that state spending on education, health care, environmental protection, etc., are aimed at producing.
On the flip side of the equation, proposals to provide jobs by direct state spending (e.g, for public works) may be a bad idea for one reason or another, but they do in fact provide jobs. More importantly in terms of the decisions actually being made by state policymakers in the current budgetary climate, reductions in state spending that involve layoffs of public employees have become a major drag on the national economy. You can argue (as many conservative politicians do) that public-sector jobs, or private-sector jobs directly created by government spending, are not as “good” or even as “real” as private-sector jobs generated without public investments, but you cannot pretend they don’t exist.
So in practice, state policymakers who deliberately cut public-sector employment or other forms of public investment in order to pursue vague notions of supply-side stimulus, or poorly targeted race-to-the-bottom corporate subsidies, are usually trading tangible jobs (not to mention public services) for fairy dust. Bad as federal-level conservative economic policies often look to progressives, they make vastly greater sense than their mini-me equivalents in state capitals.
Facebook
Twitter
Crissa on January 30, 2012 12:42 PM:
I really am hating this below-the-fold last paragraph. If you're going to cut it, make sure there's more below the fold than above, please.
T2 on January 30, 2012 12:43 PM:
they may not be able to create lots of jobs, but governors can surely cause people to lose jobs. In fact Republican governors have been quite busy doing just that, and it fits right into the overall GOP plan of sabotaging the economy/employment in order to blame Obama. Just part of a plan.
wvng on January 30, 2012 12:45 PM:
Hey Ed. You are doing a great job here, but I thought you would like to know that Steve is blogging up a storm over at Rachel's place and I think he may be trying to beat you. Not that I want you tom compete, of course.
c u n d gulag on January 30, 2012 12:46 PM:
I thought no form of government ever created A SINGLE JOB?!?!?
At least that's what I hear that from Republican Congresspeople who run around taking credit for the local jobs that the Federal Stimulus created.
FTW?
They need to be clearer in their meaning.
What I think the mean to say is:
"No government run by DEMOCRATS ever created a single job.
But us, we create, and will create plenty!"
If American voters had the critical thinking skills of sea-slugs, they should be able to see through this bullh*t.
And so, Your Honors, I rest my case!
beep52 on January 30, 2012 12:52 PM:
If American voters had the critical thinking skills of sea-slugs, they should be able to see through this bullh*t. -- c u n d gulag
Sums up just about every issue, doesn't it?
Tom Dibble on January 30, 2012 12:58 PM:
When I lived in Massachusetts, the weathermen would come on, apologize for the weather, and point out that they had nothing to do with it.
Now I live in California, where the weather broadcasts typically start with "Wait till you see the weather I've got for you!"
I think governors are about the same in terms of the economy. No one wants the blame for the nor'easter that froze your power lines and buried your car, but everyone wants the credit for the sunshine. Governors just have the potential for both evading blame and taking credit by casting about wildly in the hopes that the sun comes out sometime after they've done something they can take credit for.
John Dillinger on January 30, 2012 1:28 PM:
This issue would have been a good one to bring up last week, what with Mitch Daniels giving the SOTU response. Indiana jobless rate when Daniels took over: 5.5 percent. Indiana jobless rate now: 9.0 percent, above the national average.
JM917 on January 30, 2012 1:40 PM:
How many times does the MSM ever point out that governors claiming to have brought "thousands of jobs" to their state have actually lured those thousands of jobs away from some other state?
Unless we're talking about bringing back jobs from overseas, isn't it all a zero-sum gain? Texas's gain is Michigan's loss?
That kind of shell game is no way to bring down unemployment.
schtick on January 30, 2012 5:11 PM:
Ask fat slob Jersey Christie. He has all the answers. Just make sure no female talks to him or she'll get "sweetheart" or "none of your business".
crapcha....rmeany 137....come on. he's higher than that!
Doug on January 30, 2012 6:59 PM:
Governors CAN create jobs. They can campaign and get elected on platforms that stress fair tax rates, on businesses AND private persons. They can also provide the leadership required to ensure ALL children in their state received a decent education and are able to enroll in college if they so desire. They can see that infrastructure is maintained and expanded where necessary and that governmental services aren't cut to provide a cheap and easy slogan for the next campaign.
The problem is: once those policies are in effect, it usually doesn't redound to the credit of the person repsonsible (unless there are no term limits) because they take several election cycles to completely take effect.
Which explains why so many don't do it...