Richard Epstein squares off with economists on Obama's Jobs Plan

On October 25, Laurence A. Tisch Professor of Law Richard Epstein participated in a debate, “Congress Should Pass Obama’s Jobs Plan—Piece By Piece,” sponsored by and Intelligence Squared U.S., a program that organizes Oxford-style debates as a “forum for intelligent discussion, grounded in facts and informed by reasoned analysis; to transcend the toxically emotional and the reflexively ideological; and to encourage recognition that the opposing side has intellectually respectable views.”

The debate paired Epstein with Daniel Mitchell, a senior fellow at the Cato Institute who is an expert on tax reform and supply-side tax policy; the two were arguing against the jobs plan. For the plan were Cecilia Rouse, professor of economics and public affairs at Princeton University, and Mark Zandi, chief economist of Moody’s Analytics.

After the $40-per-ticket debate, held at the Skirball Center at New York University, Epstein took a few moments to write an essay describing his experience and assessing the audience’s reaction.

Professor Richard EpsteinThe Intelligence Squared debate in which I participated on the evening of October 25, 2011 offered an instructive insight into the current state of domestic politics.  The resolution was whether the Obama Jobs Bill should be adopted—piece by piece. I had already written strongly against the Bill in the attached article, and advanced some of those arguments on behalf of the negative, where my able partner was Daniel Mitchell of the Cato Institute.  Arrayed on the other side were two economists, Cecilia Rouse of Princeton, and formerly of the Obama White House, and Mark Zandi, the chief economist of Moody’s.

Much of the arguments proceeded along familiar lines, with the debate between two Keynesians who think that this stimulus program is the only way to stop the threat of an immediate second recession, and Dan Mitchell who argued, rightly in my view, that the stimulus program could not succeed in its stated objective, and that long term tax reform was needed. My own contribution to the debate was to look at some of the provisions of the Act that I find particularly troublesome, including its Buy American Provisions, its prevailing wage provisions, and its new antidiscrimination provision that would prohibit discrimination against individuals due to their unemployed status. 

It was a tough sell on our side. The audience came in with a strong willingness to support the legislation and it grew during the talks. The constant theme was that something had to be done now to ease the pain and that the stimulus legislation should not be held up by a concern of the various issues to which it was attached. The opposition made a tactical judgment not to fight my views on the other pieces of the job bill, but to say that they should be considered in due course, which means that they will never get sufficient support. I came away convinced that there was a real mood of anxiety in the audience that from time to time lead to vocal displeasure, much of which was directed to the top one percent income-earners who were perceived as the source of much of our current economic difficulties. 

I thus left the debate pessimistic. The short term fixes won’t work, as they have not worked, and the more fundamental reforms will be harder to achieve as new limitations on labor and trade will have both an immediate adverse effect, and will become embedded as part of the “new normal.”  Continued stagflation and a slow but inexorable decline in living standards is the most likely result as the political process runs its rocky course.

Posted October 26, 2011