What to do about jobs
Today, the White House focuses on the country’s unemployment rate with a jobs summit designed to generate solutions. Newt Gingrich is offering his own rival “Real Jobs Summit.” As usual, there’s widespread disagreement about how to make something happen.
The unapologetic Keynesian Paul Krugman is still pushing for a large-scale job stimulus program:
It’s time for at least a small-scale version of the New Deal’s Works Progress Administration, one that would offer relatively low-paying (but much better than nothing) public-service employment. There would be accusations that the government was creating make-work jobs, but the W.P.A. left many solid achievements in its wake. And the key point is that direct public employment can create a lot of jobs at relatively low cost.
The chairwoman of the president’s Council of Economic Advisers, Christina Romer, is calling for a more middle-of-the-road strategy — more direct government stimulus plus gov’t incentives to small biz:
This could include measures to restore the flow of credit for small businesses and targeted tax cuts. In these types of ways, a moderate and targeted investment by the government might be leveraged into significant employment gains and purchasing power by small businesses.
Marketplace commentator David Malpass writes at Forbes that Romer and Krugman are both wrong:
Romer and Krugman are advocating public-private partnerships and government jobs as America’s path to lower unemployment. That’s not the way America is used to doing it. The president may end up using their ideas to fill the policy vacuum, but he would be more effective (and popular) if he rethought the problem.
The great American jobs machine depends on small businesses, relatively free of government, yearning for after-tax profitability, earned in dollars that hold their value over the decades. The president could deliver this, but not based using the current economic program.
There are more radical solutions out there. Bruce Krasting proposes suspending payroll taxes for a year to grease the wheels for business.
Tonight on Marketplace, we’ll be looking at the converging events that have created this vexing job pickle.
Have any job solutions of your own?