What can Obama do about unemployment?
by desmoinesdem, Tue Oct 06, 2009 at 05:09:30 AM EDT
As Charles Lemos has recently written here, the U.S. could be entering a long period of structural unemployment, with enormous economic and social costs for this country (not to mention dire political consequences for President Barack Obama). Many of my friends and acquaintances have become unemployed or underemployed during the past year, and the Des Moines area has relatively low unemployment by national standards.
What can be done to create jobs in this environment?
Rinku Sen and Billy Parish are calling for a more aggressive "green jobs" initiative that would also take on the "structures that threaten to exclude people of color from taking part in the new, green economy."
Former Labor Secretary Robert Reich proposes four ideas that would be easier to implement than going back to Congress for another stimulus package:
(1) Use existing authority under both the stimulus package enacted earlier this year and the nefarious TARP bailout fund -- extending and combining them into a fund to make up for state and local cuts in public school budgets, children's health, public health (we need workers to administer swine flu vaccine) and public transportation. Instead of bailing out banks and giant automakers, we should switch to bailing out public services that average people need.
(2) Propose a one-year payroll tax holiday on the first $20,000 of income. Republicans as well as Blue Dog Dems could go along with this, and it would be a highly progressive tax cut since 80 percent of Americans pay more in payroll taxes than they do in income taxes.
(3) Give small businesses a "new jobs tax credit" for every net new job created over the next year. Granted, under normal circumstances this sort of jobs credit doesn't have much effect, and it's difficult to separate hires that would have happened anyway from net new ones. But we're not in normal circumstances; small businesses, which are responsible for most new jobs, still aren't hiring. They need a boost.
(4) Dramatically expand the Small Business Administration's lending programs and have the Fed buy up the SBA's debt. Big banks are not lending to small businesses. TARP has been an utter failure in this regard. The SBA and the Fed should circumvent them and help small businesses get the capital they need, so they can start hiring again.
Reich's ideas are probably easier to accomplish politically, but what Sen and Parish are promoting is probably more important for the long-term health of the economy.
Share any relevant thoughts in this thread.