House Speaker John Boehner, Republican of Ohio, last week took issue with how President Barack Obama is managing the economy. Mr. Boehner’s critique of Mr. Obama’s economic skills came in the wake of the release of the jobs report released by the U.S. Department of Labor last Friday.
Unemployment increased to 8.3% in July. Unemployment among African Americans was 14.1% in July while Hispanic Americans saw unemployment fall to 10.3%.
In his critique of the President’s policies, Mr. Boehner noted that Mr. Obama had never held a real job, implying that he was not only out of touch with the American people, but had no knowledge as to how a real economy should work.
Mr. Boehner may be correct that Mr. Obama has not spent a lot of time digging ditches, flipping burgers, entering data, cleaning hotel rooms, or running factory machinery. According to the President’s biography as published by the White House, Mr. Obama did some community activist work in Chicago after finishing his undergraduate degree. Mr. Obama attended law school and returned to Chicago to continue his community work, teach law school, and later run for state senate and U.S. Senate.
No cleaning bathrooms or data entry for Mr. Obama, which, according to Mr. Boehner’s comments meant that he didn’t work a real job.
Others would argue that as long as what Mr. Obama did for work was legal and gave him a check every two weeks, then it was a real job. So should the fact that Mr. Obama didn’t spend time working for a private equity firm or run a small business disqualify him as president?
From a fairness standpoint, there were other presidents that didn’t run machinery or flip burgers during their careers. Harry S Truman was a failed businessman and school teacher.
Dwight D. Eisenhower didn’t fit today’s definition of a job creator, having spent most of his career in public service, first as a soldier, then after World War II, as president of Columbia University.
John Kennedy, who could have probably been one of those ad agents in “Mad Men”, was a naval officer in World War II, and ran for Congress after recovering from war injuries, serving twelve years as a congressman and later a senator before his run and eventual presidential win in 1960.
Obviously, Americans weren’t too concerned about what either if these men did for work as long as it was legal and they got paid. From an economic management standpoint, whether a presidential candidate flipped burgers or persuaded banks to lend him money so that he could rebuild and flip a business doesn’t translate into managing an economy either. The dynamic economy of the 1960s grew under the Kennedy and Johnson Administrations (Lyndon Johnson, himself a school teacher and career politician). Bill Clinton, a far cry from a person who had a real job, managed to govern during a long period of economic expansion.
If anything, what Mr. Boehner’s comments have done is raise the issue of what exactly is the role of a president in managing an economy.
For one thing, as pointed out above, the president doesn’t need a real job in order to be qualified to manage an economy. Economists do not label jobs as real versus not real. Any president at a minimum appreciates the societal hardships American households experience when a breadwinner is unemployed. Given that personal consumption expenditures account for seventy percent of our national output, a president should appreciate the negative impact unemployment can have on economic growth.
But presidents are expected to do more than just appreciate the hardships that unemployment brings down on American households. Government, according to the Employment Act of 1946, is expected to maintain the conditions under which individual businesses and individual job seekers can succeed. Government creates an environment of success by coordinating its resources, plans, and functions and promotes maximum employment, production, and purchasing power.
Under the Employment Act, the President’s role in the management of the economy is that of monitor and policy promoter. In his annual Economic Report to Congress, the President describes the nation’s current level of production, purchasing power, and employment and the levels needed to continually sustain the U.S. economy.
The President also identifies trends in production, purchasing power, and employment, and provides a review of the Federal government’s economic program, including the level of federal government investments and expenditures necessary to help keep the economy at full employment when private sector investments and expenditures fall short.
The President has a Council of Economic Advisors that assists not only in preparing the Economic Report to Congress, but also in walking the President through the mind numbing jargon that economics has to offer. Mr. Boehner never bothered to share with us what specific “real job” experience a president would need in order to monitor and propose policy on the nation’s production, purchasing power. Based on what the Employment Act requires of the President, a more generalist background and ability to process, synthesize, and reconcile technical economic information appears to be an appropriate qualification.
Do Messrs. Obama and Romney possess these skills? Yes, they do. The real job of the electorate will be to determine what the real role of a U.S. president is in managing the economy and comparing those duties with each man’s skills set and experience.