While acknowledging that the President’s approach to job creation is pretty thin gruel, the NYT editorial board once again underscores its economic ignorance by suggestion the adoption of more make-work projects to keep a few folks busy by spending more (borrowed) government money:
Mr. Obama has begun to talk more about jobs, but his agenda is thin. Its main components — extending federal unemployment benefits and the payroll tax cut beyond their expiration at the end of this year — are vitally important, but their extension will only maintain the status quo. His idea for an infrastructure bank to finance large-scale building projects is also good, but would take time, and would not address the immediate need for jobs. Ditto his push for patent reform and trade agreements.
There are other ideas worth fighting for. Take, for example, Fix America’s Schools Today, or FAST, an idea that has been incorporated into a House proposal to be introduced this fall by Jan Schakowsky, Democrat of Illinois. Public school buildings in the United States are on average over 40 years old and in need of an estimated $500 billion in repairs and upgrades. A $50 billion school renovation program would employ 500,000 workers (1.5 million construction workers are currently unemployed) and could be easily scaled up. The money could be disbursed through existing federal formulas to all 16,000 public school districts. The initial cost could be largely offset over 10 years by ending tax breaks for fossil fuels, as called for in Mr. Obama’s 2012 budget.
Other programs in the Schakowsky bill could employ an estimated one million young people for projects in federal parks, community centers and on college campuses, as well as 350,000 laid-off teachers, police officers, firefighters and health care providers.
Washington, in thrall to austerity, has abandoned one of the most immediate and powerful tools for supporting growth and jobs, namely, borrowing at today’s low rates to provide direct fiscal aid to states. But Mr. Obama can and should make the case for targeted new jobs today, to be paid for over time by closing tax loopholes.
First, extending unemployment benefits and the temporary payroll tax cut for employees (which, of course, offers employers no incentive whatsoever to hire) haven’t done anything to stave off unemployment or foster new hiring. More of the same tired redistributive policies will just result in more of the same stagnant economy. I will say that it is nice to see that the NYT finally recognizes the value of free trade agreements, at least in the abstract.
Second, if a $50 billion school renovation program were the cure for what ails us, it sure would have been nice to see that included among the $900 Billion original failed stimulus. Heck, I might have even supported it, at least in principle. But the last thing we need now is to throw more money at schools to temporarily prop up employment at the further expense of true organic job growth.
Third, the last thing we need is for the government to spend billions more hiring one million young people and 350,000 laid-off teachers, police officers, firefighters and health care providers for make-work projects in federal parks, community centers and on college campuses.
If we want to employ more young people, just lower the minimum wage so they can get real working experience and employers can get useful labor at the price the market will bear for unskilled workers just entering the job force. If we want to keep former union government workers busy, reform government worker benefits and compensation so they match the private sector, and these laid off folks can easily be hired back. But just throwing borrowed money at them on made up projects is asinine