“It’s the politics, stupid!”

Jim Surowiecki, who writes the Financial Page for the New Yorker magazine and is a resident of Brooklyn, takes a look at the short-run political dimension of fiscal policy making:

THE FINANCIAL PAGE

JOBS AND THE G.O.P.

by 

SEPTEMBER 26, 2011

There is no truer truism in American politics than James Carville’s catchphrase from the 1992 election “It’s the economy, stupid.” When people discuss Barack Obama’s current approval rating, which is at its lowest level ever, they may invoke his supposed lack of toughness or his tendency toward moderation, but the only really important factor is the dismal state of the U.S. job market. The American Jobs Act, which Obama is now promoting across the country, is an attempt to change this, by giving the economy a temporary boost with a mixture of tax cuts and government spending amounting to $447 billion. It’s an excellent idea: many independent analysts suggest that it could boost G.D.P. growth over the next year by 1.5 per cent or better, and create as many as one and a half million jobs. And it’s ideologically canny. A hefty chunk of it comes in the form of tax cuts, which Republicans typically love, and much of the rest would go toward more spending on infrastructure, which House Majority Leader Eric Cantor has expressed support for. Even so, it’s unlikely that House Republicans will pass the bill, and there’s a good chance that they’ll stop it even from coming up for a vote.

Read it all here:

http://www.newyorker.com/talk/financial/2011/09/26/110926ta_talk_surowiecki

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