Megan McArdle: Occupy Wall Street’s most compelling message comes from a simple website filled with the stories of desperate people who have lost their jobs. More than six million people have been out of work for more than six months. That’s almost half of all unemployed people.
But what can we — by which I take it we mean “our government” — actually do? We don’t really have another $800 billion to spend on a stimulus program that didn’t bring unemployment to anything near normal. The Federal Reserve has pushed interest rates about as low as we can go. And as the Solyndra experience shows, there are real risks to subsidizing firms that promise jobs: if the company goes bust, so do the jobs and all the taxpayer money you spent on them.
So what about just hiring all those surplus workers? The idea has a lot of appeal. The longer people are out of work, the worse the toll on their finances, their skills, and their families. Breaking that cycle might permanently strengthen the workforce. It might even help us recover faster. And after all, it worked for Roosevelt, didn’t it?
The problem is, this is not your FDR’s America. Roosevelt controlled a government without environmental rules, community review standards, or powerful public sector unions. The United States government is no longer flexible enough to create the kind of temporary jobs we need: upgrading infrastructure, improving national parks, beautifying our public buildings.
The red tape we used to bind our civil servants has now trapped us as well. So what can we do for the unemployed, if we can’t just hire them? How do we help the 99 percent? We can temporarily make unemployment benefits more generous, and allow people to stay on unemployment longer. In a normal market, we might worry that this would discourage people from looking for work. But right now there are almost five workers for every job opening. We can’t make employers give them jobs. But we can make sure they don’t starve while all of us wait for the economy to recover.
Ryssdal: Megan McArdle is a business writer at the Atlantic magazine. Your thoughts, whenever’s good for you — write to us.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.