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Kickstarting jobs tougher than you think
Job seekers wait in line at the Choice Career Fair held at the Doubletree Hotel in Dallas, Texas.
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Kai Ryssdal: On the theory, perhaps, that clean-tech jobs are only going to get the U.S. so far, no less a voice than the president's former chief economic advisor Larry Summers is calling for more stimulus. Another $100 billion or so for infrastructure, more tax breaks and more federal aid to cities and states.
We asked Marketplace's Mitchell Hartman to find out whether that might work.
Mitchell Hartman: If the economy were a basketball team, it'd need to pull a Mavs-type streak of three-point baskets. In economic terms, that'd be around 300,000 new jobs every month. So far this year, we haven't hit that.
So let's look at some game plans. How about a lower payroll tax on employers to encourage them to hire?
James Galbraith: I think it's an exercise in futility.
That's liberal economist James Galbraith at the University of Texas.
Galbraith: You can give a few tax incentives, but they aren't going to offset the basic caution that business has, when faced with the fact that it doesn't think its markets are going to grow very quickly.
But what if you could boost spending by consumers or businesses? Galbraith says banks are too scared to lend and consumers are sunk in debt.
So what about government? A few hundred billion for new schools and roads? It's not unthinkable, even to conservative economist Bruce Bartlett, who worked in the Reagan administration.
Bruce Bartlett: Increased infrastructure spending by government would be highly beneficial. The problem there is the long lag times.
You need to hire architects and engineers just to get started. Plus, putting more workers on the government payroll, or cutting taxes so employers can add to their payrolls -- well, it all adds to the deficit. Who'll vote for that?
Bartlett: As hard as it is technically to come up with something that might work, finding something that would work politically is, I think, quite impossible at this point.
I'm Mitchell Hartman for Marketplace.
It’s not like the reasons for the stalled economic recovery are a mystery. As long as there’s little demand there is no reason to increase supply. So businesses still refuse to hire. The only ones hiring these days are luxury retailers like Tiffany's and Mercedes...oh, and foreclosure specialists.
Meanwhile, states are laying off teachers, police, etc. and we still haven’t learned that less jobs mean more crime, more welfare, more problems! The federal government must step in. And NOT like they did with the 1st plan that basically bailed out Wall St and left Main St high and dry. All of the claims for government to get out of the way so the private sector can create jobs are delusional. The government and the private sector must team up to rebuild America. Our infrastructure is literally crumbling. Levies, roads, and bridges are falling apart. The railroads are antiquated. Too many classrooms lack 21st century technology.
The past 10 years have added $10 trillion in debt and there’s little to show for it. We’ve been scammed!
Congress:
As tempting as it may sound, we must not stop the spending. But we must start spending wisely!
We are currently creating thousdands of jobs...overseas. Look at that tag indiating where your shirt or pants were made. Most likely it was China, or Vietnam, or somewhere else outside the US.
It will take Americans stepping up to the plate and buying American products to create American jobs.
Increased infrastructure spending could indeed be beneficial ... but recent experience with this administration shows that funds allocated for it are inevitably diverted to administration cronies' pet projects instead, where they do no good and a great deal of harm.
But you didn't explore the alternative deeply enough. Taxes are not the only cost that government imposes on businesses. If we reduced the crushing weight of regulation from "onerous" to merely "sane"---not even going all the way to "sensible"---this would make new economic activity far more likely, and it could also reduce government spending significantly by reducing the cost of *enforcing* the regulations. But that's why this common-sense step is highly unlikely to ever see the light of day: Far too many legislators and staffers, and nearly all influential bureaucrats, have dedicated their careers to the proposition that government spending and regulation should never be reduced.
