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TEXT OF INTERVIEW
Kai Ryssdal: You might have heard me say the other day that the legislative line-up for Congress for the rest of the season was health care, and then financial regulation, and then the climate-change package. Clearly I should have checked with Harry Reid. The Senate majority leader told fellow Democrats Monday night that he wants to get a jobs bill into the mix after the health-care package is passed. Another way to say jobs bill is stimulus package, which happens to be the topic of David Leonhardt’s column in The New York Times today. David, good to talk to you again.
DAVID LEONHARDT: Nice to be back, Kai.
Ryssdal: What can we say about stimulus and jobs that have worked so far that the government has done?
LEONHARDT: I think that the short version is that the stimulus has worked, but it hasn’t been enough. There are little stories about stimulus that doesn’t work, or stimulus that hasn’t been enacted yet, and those stories are true, but if you look at the overall effect of stimulus, the economists, private economists who have looked at this, have come up with estimates of somewhere between 700,000 and 1.5 million jobs that would not exist today were it not for the stimulus. That’s a huge help. It’s obviously not enough given that our unemployment rate is now above 10 percent.
Ryssdal: Right. So how much more now can Congress and the White House and the government in general do to get that unemployment rate down and get the millions more jobs that this economy needs?
LEONHARDT: Well, we should hope that the private economy, absent government, is now going in the right direction. Job losses seem to be shrinking just about every month, and so we can hope that by the middle of next year we have job growth, even if the government did nothing. But there’s a lot of reasons to worry that it’s not going to be particularly good job growth. And so given how many idled resources there are — plants, offices, people — it makes a lot of sense to think about some more stimulus. Again, it’s not going to solve the problem. We have the worse financial crisis since the Great Depression and that brings a really long hangover.
Ryssdal: And in fact you write about one of them in the paper today. It’s basically a weatherization stimulus program, right, you call it “cash for caulkers?” Explain it to us.
LEONHARDT: Yeah, that’s the term used by John Doerr, a venture capitalist who is really pushing this program. President Clinton, former President Clinton, is also pushing a version of it. The idea is to give people incentives to weatherize their homes, the same way we gave people incentives to trade in their gas guzzlers and buy more fuel-efficient cars. And I do think it’s promising because there are a lot of changes that people could make to their homes that in the long term would save them money. And getting them to make those changes now would stimulate the economy, it would also help the people in the long term. The question that I raised in my column today is weatherizing your home, which I’ve tried to do recently, is a lot more complicated than buying a car. So I think if the government is going to do this, it has to really make sure that it’s a simple program, and you make it very clear precisely what people are being given incentives to do.
Ryssdal: Well, and the other thing, since you brought up your personal experience in the column, you say it’ll cost plus or minus $4,500 for you to do your home and to weatherize it. But it’s going to save you $400 a year, which means that you have to be in the house 11 years to make it worth your while, and you’re not sure you’re going to do that.
LEONHARDT: That’s right, so one of the things that a “cash for caulkers” program could do is pay me to make that change now. So if I got $2,000 in new stimulus money and then it would cost me only $2,500 and then I might be willing to do it. One of the other intriguing ideas out there, New York state legislature just passed something on this, is an idea where you let people build the cost of their weatherization into their long-term property tax bill. So if I did that, I would be paying part of it, but if I sold my house within the next few years, the next owner would also be paying part of it.
Ryssdal: Connect the dots for me, though. How does this, you getting weatherization in your home, how does that create jobs, which is the point of any stimulus package?
LEONHARDT: The idea really is to get people to spend money that they wouldn’t otherwise spend, whether it’s businesses or consumers. And right now there are hundreds of thousands of people who used to be employed in the housing boom — construction workers, contractors — who are out of work, and they’re on the sidelines of the labor market. And we have some significant increase in the number of people who are, for example, weatherizing their homes, you put some of those people back to work.
Ryssdal: David Leonhardt. He’s an economics columnist for The New York Times. David, thanks a lot.
LEONHARDT: Thanks, Kai.