Economics

"The blunt truth is that Obama's jobs plan will not work."

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New York University law professor Richard Epstein (read his contributions to Reason here) summarizes his part in a recent public debate over the merits of President Barack Obama's jobs plan:

It is never fun to be the bearer of bad tidings, but the blunt truth is that Obama's jobs plan will not work. The audience, however, was in no mood to acknowledge that there is no magic short-term fix of the sort that [debate opponents] Zandi and Rouse promised. Indeed, the full set of proposals in the Obama jobs plan is likely to set matters back even further. Zandi and Rouse's misguided optimism demonstrates everything wrong in today's thinking about job creation in the United States.

The only way to fix the short-term unemployment problem is by fixing the long-term issues that have fallen into treacherous disrepair over the past decade. Several long-term issues that must be fixed include, for starters, minimum wage legislation, unionization, and employer health-care mandates. Then, once we get an improved business environment, investors and employers will come off the sidelines and start investing and hiring. But without that change, prudent investors will shy away from productive ventures, preferring to hoard their money in treasury bills. The longer we wait to implement these overdue reforms, the more delayed the recovery will be.

Watch Epstein discuss his old University of Chicago Law School colleague Barack Obama with Reason.tv below: