Ideas but no fixes for creating jobs
As President Obama convened his "jobs summit" with business and labor leaders there was plenty of news about the conundrum he's facing -- a decline in the service sector and retail sales. So Bob Moon asked economic experts how we might jump-start the economy.
President Obama delivers remarks during the opening session of his administration's Jobs and Economic Growth Forum with Vice President Joe Biden in Washington, D.C. (Chip Somodevilla/Getty Images)
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TEXT OF STORY
Kai Ryssdal: Washington D.C. was a-poppin' today. There were two big events happening at opposite ends of Pennsylvania Avenue. Up on Capitol Hill Fed Chairman Ben Bernanke got a roughish going over from the Senate Banking Committee. They're considering him for a second term running the U.S. economy -- a job he will likely get. Down at the White House, President Obama called his jobs summit to order just after lunch, which is when we sent our senior business correspondent Bob Moon off on his assignment. Figure out exactly how the president's going to kick start the labor market.
BOB MOON: The recession may be over, but the crisis of confidence lingers. And job placement expert John Challenger sees that as the key.
JOHN CHALLENGER: One way or another, we have to bring back both consumer confidence and business confidence, or hiring confidence. Employers have to trust that if they hire people, their business is not going to just turn south again sometime soon, and they're going to be stuck with people that they have to let go, and all the trauma that that involves.
Easier said than done, of course. But there may be some escape from this circular fix.
Joshua Shapiro is chief U.S. economist for MFR Incorporated. He suggests thinking small, because most American jobs are created by small businesses.
JOSHUA SHAPIRO: If they could do things that could free up some credit to small businesses who would then hire people and create jobs, I think that would be the sort of thing that you would get the most bang for your buck for. As opposed to, you know, something like Cash for Clunkers or what have you, which causes a two-month blip in activity and then you're back to where you started.
Another idea to spur hiring comes from John Silvia, chief economist for Wells Fargo Securities.
JOHN SILVIA: Raising the minimum wage this summer was really a real mistake. The teenage unemployment rate really jumped. And it would be better to have at least temporary initial lower minimum wage for teenage workers or recently unemployed workers. But it's better to get paid $5 an hour than zero.
Almost all the ideas involve tough choices, but MFR's Josh Shapiro says if you're looking for some kind of magic, you could always try blinking your eyes "I-Dream-of-Jeannie" style. Which is another way of saying what economists have been telling us for months: It's going to take time to work our way out, and there still aren't any quick fixes.
I'm Bob Moon for Marketplace.
Comments
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From Milan, MI, 12/07/2009
The best thing the government can do to improve the economy, including the job market, is to get out of the way. Which is to say, drastically and permanently reduce spending and then reduce taxes as much as we can across the board (and while we're at it drastically simplify the tax code) without going back into deficit.
From merrimack, NH, 12/04/2009
Why won't anyone suggest hiking taxes, the solution to every poor employment markat in the US I can find?
After the 2.6 million job losses triggered by the 1981 tax cut, employment grew robustly after the late 1982 huge tax hike, the gas tax hike and huge Social Security tax hike in 1983.
After the recession following the market melt down and lingering bank failures triggered by deregulation and capital gain cuts which promote pump and dump invesment strategies that drive asset bubbles, Bush got a huge tax hike in late 1990 and employmnt growth resumed in early 1991, follwed by Clinton getting his 1993 tax hike, leading to a decade long economic expansion and the highest rate of employment in modern US history.
Of course, more dereguation and tax cuts on capital gains to promote pump and dump asset bubbles was passed in the late 90s, and the market collapse in the NASDAQ that resulted was quite predictable, along wih the retrenchment that produced a slight recession. But then a tax hike in 2001 dragged the economy down, followed by another tax cut in 2002, and another in 2003, placed a huge burden on employment growth. Lots of government spending, like contracting to have Americans build based in Iraq using supplies shipped from the US, plus military equipment design and manufacture, boosted employment, but once that government stimulus faded, the economy sank again. More tax cuts followed and now the economy is in a deep hole with the rate of employment back to the beginning of Carter's term, and the depth of Reagan's tax cut recession.
So, why are reporters and economists blind to the disasterous job killing aspects of tax cuts?
Are tax cuts called for simply because you have a job and expect to keep it, and it sounds like a good opportunity to justify putting extra money in your pocket at the expense of others?
From South Bend, IN, 12/04/2009
John Silvia's comments (Thursday night 12/3/09) about paying teenage and recently unemployed workers $5.00 an hour is outrageous; and tying summer spikes in teenage unemployment to the minimum wage hike is fatuous. I can't believe Wells Fargo is paying for that type of analysis; or that his company tolerates such a shocking 'let them eat cake' perspective.
From Portland, OR, 12/04/2009
These three guys are in the upper eschelon of society so their views represent such interests. That used to be called trickle down economics. First, you give those at the top money and maybe some will trickle down to the rest of society. That's what Obama, congress and Bernenke are doing: printing money ahd giving it to the TBTF banks in order to restore their former illusion of solvency at which point they will resume lending. But, of course, they will not lend until the economy improves. Instead, they use the money to speculate, inflating asset values, i.e., creating another bubble.
Wouldn't it be better to create jobs for ordinary citizens who will spend it and thereby get the economy moving again. What's needed is this kind of bottoms up policy not trickle down.
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