Obama’s American Jobs Act

October 7, 2011 by
Filed under: Car Stop 

The first thing people need to understand about President Obama’s American Jobs Act is that it will be wholly ineffectual in creating jobs. Jobs manufactured by federal programs have no effect on the real job market. When the (borrowed) federal money runs out, the jobs end. The supply-side economists are correct: the only way to grow the real economy and create real jobs is by cutting marginal tax rates. While the President’s proposal includes some tax cuts, it does not cut marginal rates. Its long-term effect is therefore nil.

The American Jobs Act’s effects on public transportation and intercity rail will be similarly modest. It includes some worthwhile proposals, especially $9 billion for bringing transit systems into a state of good repair and $2 billion to improve intercity rail service. The $4 billion the Act includes for high-speed rail is either a misnomer or a fantasy. If it means higher-speed rail, achieved incrementally on existing tracks, that is not what the term “high-speed rail” means internationally. If it does meet the international definition of 250 kilometers per hour, then it is fantasy. The money would be do better service if it were simply allocated to improving regular passenger trains, raising the funding for that to $6 billion.

But all of this is just hot air anyway, if the Obama administration past performance is any indication. Why? Because public transit and passenger rail are not on its list of high political priorities. That means the White House will not put enough political muscle behind its proposals to get them enacted.

When Barack Obama was elected, many of the liberal pro-transit groups were in ecstasy. I cautioned them then that they had to consider two factors, not just one. The first, which was the only one they thought about, was the new administration’s policies on transit and passenger rail. The second, which they neglected, was where both stood as White House priorities.

As the administration’s subsequent performance has made clear, the answer to the second question is, “so low on the list that they are out of sight.” As the House vaporized most of DOT’s requests, the White House was silent and inert. Measured by its actions rather than its words, it simply doesn’t give a damn about transit and trains.

A cynic might note that sitting silent and inert has been the Obama administration’s posture on everything that comes before Congress. But that doesn’t change the fact that the transit and passenger rail elements in the American Jobs Act are meaningless unless the White House is willing to fight for them. I’ll bet doughnuts to celery it won’t.


One Response to “Obama’s American Jobs Act”

  1. Peter Kirsop says:

    Mr Lund
    the supply side economists are not right, if they were your country would be charging along while those in northern Europe (Germany, France, Norway and Denmark) or in Australia (where I am) and New Zealand – to take some examples would be doing poorly indeed. You are not, we are not, rather our economies are in better shape.

    The answer is not in cutting taxes (it doesnt work and the proof is out there) but in balancing budgets. And that is why the rest of your articles about thrift and doing better with less are so worthwhile.

    And yet your President is doing exactly that. Bits and pieces here and there fixing the worst problems such as http://www.narprail.org/cms/index.php/narpblog/u.s._and_illinois_departments_of_transportation_break_ground_on_chicago_hig

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