Second stimulus must focus entirely on jobs

A fairly compelling case can be made that the $787 billion stimulus package is not having the desired effect.

Some signs indicate the recession has hit bottom and the economy may be on the way back up. Let’s hope those signs are right.

But Mort Zuckerman, editor in chief of U.S. News and World Report, writing recently in the Wall Street Journal, argues that the most important indicator of all — jobs — does not lead him to believe that a recovery is just around the corner.

Zuckerman breaks down the sorry state of employment — 7.2 million lost jobs so far — and concludes: “Job losses may last well into 2010 to hit an unemployment peak close to 11 percent. That unemployment rate may be sustained for an extended period.”

One big problem, he contends, is the stimulus package included too few dollars for actual job creation. A lot of the money was allocated for Medicaid, jobless benefits and cuts. These are important but don’t create jobs. Meanwhile, a good portion of the money that was earmarked for job creation still hasn’t been put to use.

A chorus of economists and others is calling for a second stimulus to jumpstart the economy. So far, President Obama has rejected the idea, urging greater patience with the first stimulus. Writing in the New York Times on Sunday, Vice President Joe Biden argues that the stimulus was never intended to be an overnight cure.

“Our balanced approach,” he writes, “recognizes that there is no silver bullet, no single thing, that can address the many and complex needs of America’s vast economy. We need relief, recovery and reinvestment to cope with our multifaceted crisis — and only 159 days after it was signed by President Obama, the Recovery Act is already at work providing all three.”

Perhaps, in an excruciatingly slow and quiet kind of way. But if a second stimulus plan does emerge, count Mr. Zuckerman and me among those who believe it must be 100 percent focused on creating jobs.

It’s difficult to imagine a simpler calculus: Employed people have more money to spend and have better credit ratings, giving them a better chance of securing loans for houses, cars and such. And the more money is spent and loaned, the better off our economy is.

Obama’s call for patience may be prudent, but it can’t possibly sit well with those 7.2 million people who have lost their jobs since the downturn started and are struggling mightily. It’s tough out there, tougher than it’s been since the Great Depression, and more help is badly needed to turn things around. Nowhere is this more true than in Las Vegas, where unemployment well exceeds the national rate. Health care reform will help, absolutely, but it would be awfully hard to imagine it having any notable effect in the next year or two.

There’s a lot going on in the world these days, and Obama has to keep his eyes on all of it. But Obama and the Congress seem to have taken their gaze off the pressing crisis of the economy. It’s difficult to imagine the House and Senate taking their traditional August recess at a time like this.