One of the recent issues that surfaced in the presidential race was certainly puzzling. It centered on which candidate was better qualified as a “jobs creator.”
Presidential candidates have always argued about their qualifications, and have often attacked and mocked the qualifications of their opponents. Experience tells us, though, that it is often difficult to predict the quality or success of a president based solely on his previous, nonpresidential experience. Some of our outstanding presidents had qualities that were always there but revealed more clearly in their presidency than in their candidacy.
Before his career in politics, for example, Harry S. Truman was a partner in a men’s clothing store in Hannibal, Mo., an enterprise that had failed unto bankruptcy. While under no legal obligation to do so, Truman eventually made good on every cent he owed his creditors. This says a lot about his character but is something that would certainly be missed by today’s resume and factoid-driven campaigns, especially as Truman did not advertise his actions.
Was he qualified to be president of the United States? In terms of character, he undoubtedly was. In terms of leadership, the best evidence we have, pre-presidency, was that he had been an outstanding artillery officer during World War I; respected by his superiors and his men alike.
Truman was not a major figure in the Roosevelt Administration. It was not until after he became president that the public got to know him, and for the most part they were unenthusiastic about what they saw.
Truman’s achievements were undervalued during his presidency and he was mocked and criticized the entire time. It was only later that his character, his leadership and his devotion to this country were appreciated.
Early in his presidential term, as World War II drew to a close, many people worried that when the U.S. demobilized, the sudden drop in spending would produce a massive economic slump that might lead to an economic depression — just as it had done at the end of the previous war.
In order to avoid that kind of slump, the Congress passed the Employment Act of 1946, which required the president to report to the Congress once a year on progress toward the goals of full employment, full production and price stability.
The new law greatly improved the quality of economic data supporting economic policy decisions, but had few other effects. In 1978, the Congress decided to get more specific about the economic policy goals and passed the Full Employment and Balanced Growth Act. Among other things, it set numerical goals and target dates for the president that included, by 1983, an unemployment rate of less than 4 percent — those were the days — and, by 1988, an inflation rate of zero.
Perhaps because its goals were contradictory and more than a little Utopian the new law has been largely ignored by presidents of both parties.
Both laws explicitly recognized the private sector as the engine of job growth. How those two employment laws morphed into weighing presidential candidates’ qualifications as “Jobs Creator-in-Chief” is a matter for conjecture.
In the first place, presidents cannot and do not create jobs. And, in a sense, neither does the private sector. Private businesses hire additional people only in response to, or in anticipation of, increased demand for the company’s products or services.
Keynes recognized that in his theory, which is why his remedy for stubborn recessions concentrated on investment. As a practical matter, because investments take time to pay off, companies will invest even when demand is currently weak — if they believe that things will get better. And that investment will get the economy fired up again.
Instead of phony arguments about “creating” jobs, presidents should concentrate on fostering an economic environment that encourages the private sector, and everyone else for that matter, to believe that things will get better and taking steps to make that happen.
That kind of encouraging outlook requires leadership and at least some sort of plan. It also requires accepting the components of the economy and appreciating their different roles, just as we accept the three branches of government and the parts they play.
It isn’t easy to judge whether a candidate will make a good president or not. Maybe that is one reason why we pounce on their missteps and mistakes during campaigns.
Phony issues will come and go, just as in any campaign. Given the state our economy is in, though, economic policies and the direction they are taking us will likely be the deciding factors for voters in November. The success of a presidency after the election, though, is another matter. In the end, it is clear that qualities like character and leadership count … a lot.
James McCusker is a Bothell economist, educator and consultant. He also writes a monthly column for the Herald Business Journal.