Follow us on

Saturday, May 25, 2013 | 6:45 a.m.

Web Search by YAHOO!

Posted: 12:00 a.m. Monday, Sept. 10, 2012

Economy goes beyond politics

Voters encouraged to vote what’s best for them

By Randy Tucker

Staff Writer

Polls show jobs and the economy remain the key issues in the November election and the incumbent president and his challenger both say their economic plans will speed up the anemic pace of job growth.

The federal government’s jobs report last week showed U.S. employers added an underwhelming 96,000 jobs in August, barely enough to keep up with population growth and new workers entering the labor market. The unemployment rate dipped to 8.1 percent from 8.3 percent in July, but the drop was largely the result of more than 300,000 workers exiting the work force.

Republican presidential challenger Mitt Romney has pledged essentially to double the pace of job growth over the next four years and create 12 million jobs in his first term, while President Barack Obama is confident he can add another 1 million jobs to the manufacturing sector alone if he is re-elected.

Those goals are achievable, experts say, but the veracity of the campaign promises will be depend largely on underlying market forces, not presidential mandates, because the government’s ability to create jobs without directly hiring more workers is limited — regardless of who’s in charge.

“The basic force behind job production is the business cycle,’’ or fluctuations in economic activity, said Ken Mayland of the forecasting firm ClearView Economics in suburban Cleveland. “Politicians and their policies work on the margins of that cycle. They can accelerate it. They can also depress it. But they ride the wave.”

Ohio Gov. John Kasich is a prime example.

He narrowly defeated incumbent Ted Strickland, in part, by promising to create more jobs with more business friendly tax and regulatory policies. That’s the same strategy Romney has adopted, most recently in an ad blitz started last week in Ohio and at least seven other swing states promising to create a specific number of new jobs in each state, but without offering details on how he plans to create them.

Business cycle drives political terms

Ohio already has seen out-sized job growth under Kasich’s administration: Through the 12 months that ended in July, the last month for which figures are available, the Buckeye State had added more jobs (100,300) than any other state except Texas, California and New York, according to the U.S. Bureau of Labor Statistics.

But Mayland noted that much of the job growth in Ohio was tied to a rebound in auto manufacturing that began before Kasich took office in January 2011. And while Kasich’s business friendly policies may have aided that growth, many of the tax reforms that businesses enjoy today started under Strickland.

“Politicians’ terms of office are mapped on the business cycle, the business cycle is not mapped on politicians’ terms of office,” Mayland said.

No matter what government policies dictate, the fact is most companies only hire more workers when they cannot keep up with the demand for their products, said Dave Dysinger of Dysinger Inc., a precision machine business in Dayton, and slow-growing economy has provided little incentive for employers to step up hiring.

“They (politicians) can create government programs, and give you subsidies like paying half an employee’s wages to encourage you to hire them,” Dysinger said, referring to an Obama initiative. “You might pick somebody up temporarily, but sustainable employment has everything to do with the marketplace, and I don’t think very much to do with the government.”

‘Pandering’ for votes

Dysinger said he does not expect either Romney or Obama to meet their job projections unless they can break the government gridlock that has the economy poised to fall off the so-called fiscal cliff, or the $500 billion in tax hikes and spending cuts scheduled to hit in January that economists say could cut economic growth in half.

“I’d say the political uncertainty is more damaging than what either party says they might do,’’ Dysinger said. “As far as presidents bragging about the jobs they’ll create, I think that’s just pandering to their constituents on either side.’’

Obama’s plan calls for reinvestment in infrastructure and energy that would put more manufacturers and construction workers back to work as well as stimulating demand by allowing middle-income workers to keep more of their money by maintaining their current payroll tax cuts.

But those cuts have been in place for months now, and still have not spurred spending and economic growth back to pre-recession levels, said James Brock, a Miami University economics professor.

“The economy is so big that it pretty much goes where it wants to go, and it pretty much operates on it’s own time schedule,” Brock said. “You can maybe hurry that up a little bit or slow it down a little bit, so politicians have some influence. But not nearly as much as you might be led to believe.

“Of course, they want to take credit for all the good things that happen, and blame the other guy for all the bad things that happen.’’

Brock said the tendency for politicians to “over-promise” and blame their opponents when they fail to deliver is one of the most self-destructive tendencies of American politics.

“Over time, people become kind of immune to those promises,” he said. “So in a sense they become less influenced by such claims because they learn that they’re not entirely credible.

“That’s bad for politicians, but I think it’s good for us because it means people are more likely to do what they think is best for them and not what politicians tell them.”

More News

 

Hot topics

 

© 2013 Cox Media Group. By using this website, you accept the terms of our Visitor Agreement and Privacy Policy, and understand your options regarding Ad ChoicesAdChoices.