Candidates take on welfare, the Fed at debate

Republican presidential candidates Michele Bachmann, Mitt Romney and Rick Perry debate during the Republican Presidential Candidates debate September 7, 2011 in Simi Valley, Calif.

Jeremy Hobson: President Obama will lay out his big job creation plan tonight when he addresses Congress. Last night, we heard from the Republicans hoping to replace the president after next year's election.

We're going to dig into some of the economic thought that came up in the Republican debate with our economics correspondent Chris Farrell. Good morning Chris.

Chris Farrell: Good morning, Jeremy.

Hobson: Well let's start with jobs. And Rick Perry, the governor of Texas -- in the debate last night -- he was talking about welfare and jobs. Here he is.

Rick Perry: John Kennedy said that the most powerful welfare reform program was a job, and that's what we need to get focused on in this country today.

Hobson: Now, Gov. Perry has come under fire for a lot of the jobs that were created in Texas during his tenure were low-wage jobs. But isn't a low-wage job better than no job at all?

Farrell: Oh, absolutely. Look, there's not an economist that I can think of -- and I live in this economic universe where there are liberal, mainstream, conservative -- that wouldn't agree with what President Kennedy said, and what Gov. Perry said, which is that the best welfare program is a job. The question is: how do you get those jobs? And then later on, there's a question about the quality of those jobs. But yes, the best welfare program? A job.

Hobson: So is there a problem with Gov. Perry saying, "I had this great job creation program in Texas" even if a lot of those were low-wage jobs?

Farrell: Well there you start getting into the questions about the price of those low-wage jobs. One, there's a high unemployment rate. There's a real concern about the steep high school drop out rate in Texas. And remember, we exist in a global economy. And what is our comparative advantage? What does our edge really exist in? And that is education, knowledge, skill. So these are the questions that start being raised -- not just partisan questions, but these are economic questions as we look forward to what kind of an economy will we be.

Hobson: Alright, well let's turn to Ben Bernanke, chairman of the Fed. And here is Gov. Mitt Romney talking about him.

Mitt Romney: I think Ben Bernanke has overinflated the amount of currency that he's created. QE2 did not work -- it did not get Americans back to work, it did not get the economy growing again. We're still seeing declining numbers in prior quarter estimates as to what the growth would be.

Hobson: So he says he wants to fire Ben Bernanke. What do you make of his criticism of the Fed?

Farrell: I think a lot of economists would disagree with the criticism of the Fed. The Fed has taken extraordinary actions in order to shore up the economy. There's a big debate about whether the Fed is overreached. But there's not a whole lot of inflation out there right now -- inflation's pretty tame. And the other point is, by the way, he can't fire the chairman of the Fed. The president can be really mad, I mean really mad. But, that's like being mad at a Supreme Court justice -- you can't fire them.

Hobson: Marketplace economics correspondent Chris Farrell. Chris, thanks so much.

Farrell: Thanks a lot.

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