Tuesday, December 8, 2009

President Obama’s job creation program is short sighted

Today President Obama will be announcing that he wants to use bailout money to fund a new jobs program in order to stem the tide of unemployment rate that is still above 10%. The unemployment rate did decline over the past month, mainly due to people falling off the record. The national unemployment rate is "computed solely from the Current Population Survey (CPS) of about 60,000 households conducted by the Census Bureau. Residents of selected households are interviewed about their work experience. From these responses, the Bureau of Labor Statistics then estimates the size of the labor force and the number of people who are jobless" (http://dli.mt.gov/resources/howrate.asp). While statistics can be altered to establish the view one wants, we'd like to hope that our Government is not doing that as well. One thing the unemployment rate does not take into consideration is if people are working part-time or have taken a full-time temporary job.

That being said, President Obama is want to use the leftover Troubled Asset Relief Program (TARP) funds to go to new construction project and small business loans to assist main street America rebound. "It means that some of that [leftover] money can be devoted to deficit reduction. And the question is: Are there selective approaches that are consistent with the original goals of TARP," said President Obama (http://www.nydailynews.com/news/politics/2009/12/08/2009-12-08_bam_to_toss_tarp_on_jobless_woes.html). The trouble I see in this thought process is twofold. First, President Obama is trading a potential short-term gain (jobs) for long-term debt since new construction jobs will be temporary employment and will not be paid back thus the deficit continues to grow. Secondly, TARP is meant to be used as a slush fund; rather TARP was established to rescue the failing financial sector.

The door was opened though by using TARP funds to bailout the automotive industry. The door needs to be closed on TARP and the money needs to be applied to the deficit. If the president is serious about job growth and sustained job creation then it is time for the Obama Administration to look to nuclear power. Many detractors of nuclear power state it takes 8 to 10 years to get a plant fully functional. All the better I say then. That means that Americans can enjoy 8 to 10 years of constant construction work after which more jobs will be created; jobs that cannot be outsourced. Not only will the building of nuclear power plants bring sustainable, high paying jobs it will assist in the "Green" initiative going on.

As I wrote June 8th in my blog entry "Obama short sighted on summer job program" that "According to the Nuclear Energy Institute (NEI), a nuclear power plant generates "approximately $430 M in sales of goods and services in the local community and nearly $40M in total labor income." Nuclear power plants employ between 400 to 700 permanent jobs while offering, according to NEI, "36 percent more than average salaries in the local area." NEI estimates that during the construction phase a new nuclear power plant will create "1,400 to 1,800" jobs with a peak of 2,400." Does it not make sense to kill two birds with one stone by ramping up the establishment of nuclear power plants? The data provided by the NEI is for just one plant; imagine the job creation if each state started the construction of two or three power plants tomorrow.

Again, my question is why is nuclear energy not being given higher priority when it comes to Obama's energy and job creation policies? Instead Obama wants to tap TARP, which has its own legal issues to start with, and establish a pattern with TARP as a slush fund. Sort of reminds me when Congress decided to bring SSN into the General Fund. President Obama needs to allow the unused TARP funds to go to the deficit and focus on real job creation; nuclear power.