Can Brown Or Warren Really Create Jobs?

U.S. Sen. Scott Brown, left, attends a Capitol Hill press conference promoting "keeping jobs in the USA" on July 18. (Lingjing Bao, Talk Radio News/Flickr)

U.S. Sen. Scott Brown, left, attends a Capitol Hill press conference promoting “keeping jobs in the USA” on July 18. (Lingjing Bao, Talk Radio News/Flickr)

BOSTON — The tight race between Republican U.S. Sen. Scott Brown and his Democratic challenger Elizabeth Warren has become the most expensive election in Massachusetts history. As dollars continue to pour into the battle, it’s issues that are more likely to decide the race. And many voters say the biggest issue is jobs.

But truth be told, in many ways, the issue of job creation is a non-issue.

“The ability of an elected official to make job growth happen is overstated,” said Michael Goodman, an economist at the University of Massachusetts Dartmouth. He says there’s not a lot politicians can do — at least in the short term — to encourage more hiring.

“Elected officials get far too much of the blame, and far too much of the credit during good times, for economic conditions,” Goodman said.

Case in point? Just last week Congress had Federal Reserve Chairman Ben Bernanke stop by. He wasn’t there to hear what senators were doing to create jobs. They wanted to know what he was doing to create jobs.

“The ability of an elected official to make job growth happen is overstated.”
– Michael Goodman, economist

“We are looking for ways to address the weakness in the economy,” Bernanke told Congress, “should more action be needed to promote a sustained recovery in the labor market.”

Even so, both U.S. candidates from Massachusetts have jobs plans. And in some ways they’re similar. Brown and Warren both say they would reduce regulation of small businesses. Both oppose the tax on the medical device companies. And both say they want to invest in education and infrastructure.

That long-term investment is important, according to economist Goodman.

“It’s the efforts that are made at the national level to make a more competitive United States, in terms of infrastructure, skilled workforce and technology, that have had the biggest bang for the buck and the biggest impact on prosperity and job growth in the United States,” Goodman said.

The problem is, those efforts pay out long term. They won’t make local business owners such as Glynn Lloyd hire more people overnight. Lloyd is the CEO of City Fresh Foods in Roxbury.

“The product comes in raw, we cook it up, package it up,” Lloyd said, surveying workers cleaning up from the day’s shift. “We ship out nice, fresh, hot meals to school-age kids, child care, elderly.”

Lloyd employs 85 people and would like to employ more. He likes that Brown pushed a crowdfunding law that could make it easier for him to raise money from average citizens.

“It’s so easy for capital to flow to Wall Street,” Lloyd said. “We need to make it easier for capital to flow more easily to Main Street. And these are the folks who are actually employing people.”

Lloyd thinks Warren’s budget plan is better for jobs. She would keep more workers employed in the public sector for now. Plus, much of Lloyd’s business comes from the federal dollars — including the school lunch program.

“We need to keep that [fiscal spending] mode going, from my perspective,” Lloyd said.

Another food company CEO warned against politicians focusing on short-term policy in the name of jobs.

“You know, politicians don’t create jobs, private industry does,” said Ron Shaich, CEO of Panera. The food chain employs 100 people at its offices in Needham. Nationally, Shaich says the company and its franchisees are hiring as many 25,000 people this year alone.

“Our decisions are not made in reaction to government policy,” Shaich said. “All these tax breaks, all these tax credits, all these incentives for social policy — that’s not how we make our decisions. We make our decisions on whether the company’s growing and whether we need people.”

And in the end, whether a company needs people depends on the bigger economic picture. Harvard Business School professor Michael Porter said today’s enduring high unemployment rates were in the works for a long time.

“Our job creation stopped way before the deep recession,” Porter told MSNBC last week. “Our participation in the workforce is at a 30-year low. We’re stagnant in terms of wages. We’re stagnant in terms of wealth creation.”

Porter says Congress needs to fix long-term problems to keep America competitive. In the short-term, he said, compromise on a budget is necessary so that businesses have some certainty.

“If we actually had a glimmer of progress,” Porter said, “just the simple act of doing something and moving forward would be transformational for our economy.”

In other words, the best thing any U.S. senator from Massachusetts can do in Washington to create jobs is to do their job.

From The Campaigns:

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  • X-Ray

    Can the President create jobs?  He says he has.

  • sjw

    no politician or govt can create jobs. govt just takes wealth via taxes from its citizens, and redesstributes it. 

    • Duke Briscoe

      sjw expresses a popular opinion, but it is simplistic and worse it is wrong.  Government at all levels (local, state, federal) provides services and material items (such as bridges, school buildings, vaccinations).  The difference between government and corporations is in the mechanism of consumer choice.  Government production of jobs and wealth is a consumer choice that is mediated by elections – citizens make a decision about which services and material goods are best provided by government.  Private production of jobs and wealth is controlled by direct consumer choices.  Elections and political power struggles determine the activities of government and the sphere of government economic activity.

      sjw’s argument makes as little sense as saying that “Private corporations just take wealth via prices from citizens and redistributes it.”

      If France nationalized its McDonalds restaurants, the product and jobs would remain the same.  Only the mechanism of response to consumer preferences would change.  And yes, that would be a bad thing in the case of McDonalds.  That is why it would be unusual for such a political decision to be made (to take over such consumer companies), yet we decide that some things such as police service, fire service, roads, and public recreation facilities are done by government.  Some market needs are most efficiently served by government, or we want government to provide them for other socially desirable reasons – and we make these choices via elections in the USA.

  • J. Ferreira

    Neither Prof. Warren nor Sen. Brown nor President Obama nor Gov. Romney can create jobs while in office. All they can do is use taxes wisely to maintain infrastructure, public safety, public education, et cetera to establish a baseline of equal access for everyone so that the private sector can create jobs in the long run. They can maintain and reform the public safety net programs to help folks retrain and obtain the basic necessities of life in the interim between jobs, but the over-all creation of jobs must come from the private sector.

  • Lee

    As was talked about in the NPR program, This American Life, politicians do not “create jobs.”  The ebb and flow of jobs in most economies is more related the ebb and flow of economic cycles.  Although government policies may be helpful anybody who believes that politicians are directly responsible for creating jobs.  Its a nice marketing message for politicians to leverage or use against one another but really has no basis in fact.  

  • X-Ray

    President Obama claims he has created new jobs in the economy.

    But I suspect he anticipated that the normal economic cycles would have recovered the U.S. economy by the time of his re-election campaign. But since it hasn’t (of course, it’s all ex-President Bush’s fault) some new spin has to be put to obfuscate the poor situation.  

  • Duke Briscoe

    Not such a great story because it is limited in scope and interviewees.  Clearly the federal government can create jobs in the short run through deficit spending in conjunction with money supply expansion by the Federal Reserve.  The fact that the Federal Reserve is keeping interest rates near zero means that the federal deficit is not crowding out private investment.  By choosing worthwhile government projects paid for by current deficit spending, we should be better off in the long run (more material wealth).  The legitimate objection is that in the long run the debt is likely to be paid by taxes on the wealthy and returning to tax rates of the 1990s on the middle class, but overall we should be better off the sooner we can get unemployment back to its “natural rate” of around 4 or 5%.  The wealthy (top one percent of the top one percent) will be less powerful, less rich, but then they have done very well compared to everyone else for the past 30 years.  Or maybe the extremely wealthy will be successful in getting a chokehold on politics and the economy and the middle class will get squeezed into submission – we are halfway there.

  • Lee

    @ prior post + more general comments:  
    Whether or not it is Bush’s fault is certainly debatable – as many economists have argued the stimulus plan should have been even more heavily funded than it was and one could theorize that there wasn’t enough spending in the Recovery act to fully spur recovery.  Additionally, the banks used funds to bolster profits, pare down operations and avoided real accountability for their role in the collapse of the economy.   Something which the Obama administration has basically encouraged.So, if you believe one side of the argument it could be said that the headwinds which curbed the amount of stimulus spending are a major contributing factor to the economic recession.  On the other hand one could also argue that a more targeted effort by the current administration to support job creation, instead of putting all the eggs in the healthcare basket, may have been a better approach, not only for himself politically but also for the country in general.People seem to think of Dems and Reps as different in that one is a tax and spend party and the other is a small government party and wants to curb spending/ size of customer.  Whatever administration you want to point in the last 30-40 years it is obvious that both parties favor rampant spending.  One party in particular seems  to like to cut taxes as it spends money – i.e.  spend more money while making less money aka a recipe for disaster – usually on defense or war – both of which are theorized to dampen technological innovation and progress in a society.  

    Although not a foolproof solution it would be great, although it won’t happen, if this party had an odd number of  multiple viable political parties.  The current us vs. them mentality will only serve to erode this country.  There are  many disconcerting similarities to what is going on now in the US to past societies which have come and, alas, gone.

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