Obama Touting Job Training, Not Aggregate Demand, As Key To Boosting Economy

By Matthew Cameron

The Washington Post reports today that President Obama will be making an appearance at Northern Virginia Community College on Wednesday “to discuss the importance of job training to improving the economy.” NVCC is one of Obama’s favorite stops when on the road, and the fact that Virginia is likely to be a battleground state in 2012 means he is probably looking for any excuse to engage the state’s voters. Nevertheless, the message he plans on delivering seems oddly out-of-touch with the nation’s current economic situation.

Although we don’t yet know the specifics of Obama’s speech, its billing as a discussion about “the importance of job training to improving the economy” suggests that the administration remains attached to the idea that the nation’s unemployment crisis is structural rather than cyclical in nature. That unemployment spiked for all education levels following the 2008 financial crisis, however, indicates the economy is plagued by more than just structural unemployment caused by a dearth of human capital. Rather, it is coping with severely depressed aggregate demand.

Of course, Obama has little say in whether Congress or the Fed acts appropriately. And it is true that job training is a good policy objective for the long-term strengthening of the U.S. economy. But if Obama hopes to convince voters that he cares about the immediate employment situation, he should address the real issue and not settle for nice-sounding speeches that essentially are irrelevant to the average American’s ongoing plight.