Obama's talking jobs, but is he talking about the 'right' jobs?
An exit sign for economic recovery
STEVE CHIOTAKIS: The President's options are pretty limited to what he can do. Daniel Hamermesh is a professor of labor economics at the University of Texas at Austin. He's with us now, from Austin. Professor, thanks for being here.
DANIEL HAMERMESH: My pleasure, thanks for having me.
CHIOTAKIS: We just heard today, Google, spending $12.5 billion to pick up Motorola Mobility -- corporations have reported quarter after quarter of profits -- what's it going to take for these companies to start hiring, like spending that money on hiring people?
HAMERMESH: Well, remember, right now they're just buying each other. That does put cash that's just sitting there into the economy to the extent that those that get bought actually start spending on things. And that'll help a little bit in keeping up with consumer demand and have a little bit of an effect on jobs, but not a whole heck of a lot.
CHIOTAKIS: Well, let's look beyond the corporations then. We've seen such rancor in Washington, professor, over the last few months, what's left for the President's to do as far as job creation goes?
HAMERMESH: I don't think he can do very much. I mean we did a huge amount during '08 -- '09 rather and '10, and that did prevent things from getting worse. We had a combination of a recession and a financial meltdown and in some sense, we should be thankful that it didn't go beyond 10 percent unemployment. But given what the budget deal requires, I don't think there's a whole heck of a lot he can do, because everything he can do requires increasing the deficit -- and we're not allowed to do that.
CHIOTAKIS: So if the recovery is depending on better jobs numbers, and businesses are waiting for a solid recovery to hire, I mean, this sounds like a catch-22, like a cycle. How do we get out of chasing our tail?
HAMERMESH: Well, I think something has to come first. And what I think is going to come first and already has been coming first is consumer demand. That has been picking up. And there is a concern about this viscous cycle that you point out. But I think it will get better slowly. It's not going to get better from anything the government's going to do, but rather because people are sitting on all this cash, the financial system has gotten somewhat better, although I worry about the European situation, but I think consumer demand's what's going to lead us out of the mess.
CHIOTAKIS: Daniel Hamermesh from the University of Texas at Austin. Professor, thanks.
HAMERMESH: Thank you for having me.