Three cheap ways for Obama to spur job growth

“We should not have to choose,” President Barack Obama said this past week, “between getting our fiscal house in order and jobs and growth.”

If that sounds unobjectionable, that’s because it’s another of those “false choices” Obama imagines to be filling the minds of everyone else in America.

But the solution is not more public spending now and higher taxes later to pay for it.

Corporate balance sheets are flush with cash. Banks have the problem of a “reverse run”: Instead of a rush of withdrawals, they have too much money coming in (which are recorded as liabilities and raise their deposit-insurance costs).

Private money is available. But capital has gone on strike.

The way to get jobs and growth without adding to the debt is not to seize it through taxes or government borrowing and force it into the economy. Washington has tried that.

What hasn’t been tried lately is encouraging private actors to put their money to work on their own volition. Here are three low- or no-cost possibilities for Obama:

1. Make some phone calls.

Not to business leaders, but to his own Cabinet secretaries.

In a recent appearance on Fox News, a former chief economist for the Labor Department, Diana Furchtgott-Roth, said Obama could “make things a lot easier on employers and on hiring” by telling the bureaucracy to stop making new rules that crimp businesses.

“He could call EPA Administrator Lisa Jackson and say, ‘Why don’t we just hold off on those new ozone rules, or clean air rules, until the unemployment rate is down to 7 percent?’ ,” Furchtgott-Roth said.

“He could call his Interior secretary and say, ‘Why don’t we just allow more oil drilling in the Gulf [of Mexico]?’ Because there’s been a moratorium since the BP oil spill — that’s about a year and a half ago.

“He could tell his National Labor Relations Board acting general counsel, Lafe Solomon, ‘Hey, why don’t you just lay off Boeing?’ Because Boeing wants to open a new plant in South Carolina to build [787] Dreamliners, and [Solomon] says they can only a new plant in Washington state, where they have their existing plant.”

The list, she said, is long. “Each cabinet secretary is doing things that impede businesses from creating jobs.”

2. Temporarily lower the minimum wage.

I don’t mean lowering existing workers’ wages. Rather, allow companies to pay additional hires a little less. To sweeten the deal, the government might continue to pay the new worker a portion of any jobless benefits to which he or she is still entitled, to offset the lower wage. This would save the government from paying full unemployment benefits while lowering the company’s cost.

One of the more ill-timed moves by Congress in recent years was that of the new Democratic majorities in 2007 to raise the minimum wage in three steps. Even after the recession hit, the floor for wages kept rising. The higher wages have only hurt the millions of low-paid workers who lost jobs.

In fact, the jobless rate for high-school dropouts began rising soon after the 2007 bill. By this July, it stood at 15 percent — much higher than any other grouping by education level.

The absolute number of 16- to 19-year-olds with jobs in July was the lowest since 1963 — when there were 5 million fewer Americans in that age range.

3. Tear down some houses.

Normally, I would agree with 19th century French economist Frederic Bastiat’s “broken window fallacy.” You don’t create wealth by destroying wealth.

But hundreds of thousands of foreclosed houses are already destroying wealth by bringing down the value of other homes. And the longer they sit empty, the more likely they’ll become uninhabitable anyway because of mold or other conditions.

The feds own about 248,000 foreclosed homes. They should follow the example of some commercial banks and raze a portion of them. This would create truly shovel-ready jobs in an ailing sector, and perhaps end the freefall of home values.

– By Kyle Wingfield

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357 comments Add your comment

Hillbilly D

August 19th, 2011
6:26 pm

The idea of tearing down some of those houses , might have some merit. From the quality of a lot of the boomtime construction that I saw, it might be more efficient just to let them sit empty about 10 years. A lot of them will be falling apart by then, from what I’ve seen.

I know of one subdivision where virtually every house in it, has already had to have a new roof and they are less than 5 years old.

Bruno

August 19th, 2011
6:31 pm

Howdy, Brother HD.

Just wanted to let you know that everyone has been missing you over at Jay’s blog. I guess you have your reasons for not stopping by…….our loss.

Best wishes to you.

Lil' Barry Bailout (Revised Downward)

August 19th, 2011
6:41 pm

You forgot #4…Have Obozo and Biden resign simultaneously.

hatorade drinkers

August 19th, 2011
6:45 pm

You will be needing a job soon if you don’t blog with a lot more intelligence, with facts and arguments based on reasoning and logic. I don’t know how long your employer will accept your inability to attract throngs of commentators to your asinine posts. Shows you are hopelessly out of your depth and you should consider a fruit picking job in southern jawja.

MarkV

August 19th, 2011
6:49 pm

Jay,
Do you really believe that the companies will start hiring if some rules are postponed, when there is no demand for the products the companies make? The way to spur growth and reduce unemployment is to create demand, and you will not do it by allowing dirty air or dangerous drilling, or by reducing the minimum wage.

ByteMe

August 19th, 2011
6:50 pm

I hope this isn’t running on Sunday, Kyle, because it reflects terribly on you.

“He could call his Interior secretary and say, ‘Why don’t we just allow more oil drilling in the Gulf [of Mexico]?’ Because there’s been a moratorium since the BP oil spill — that’s about a year and a half ago.

There was a moratorium on “deep-water drilling”, not on all drilling. And that moratorium was lifted LAST OCTOBER. Jeez. There are more rigs operating in the Gulf this year than last year. Just check the EIA site for details. Or this… http://www.platts.com/weblog/oilblog/2011/08/02/us_regulators_i.html

The feds own about 248,000 foreclosed homes. They should follow the example of some commercial banks and raze a portion of them. This would create truly shovel-ready jobs in an ailing sector, and perhaps end the freefall of home values.

And who exactly would tear these down for free? Oh, wait, you have to spend money to make that happen? Whose money? The taxpayer owns them, so wouldn’t that be taxpayer money? Isn’t that the same choice you said didn’t exist?

ByteMe

August 19th, 2011
6:53 pm

And as MarkV pointed out, the problem with employment isn’t on the business side: corporations are sitting on $1 Trillion in cash. The problem is on demand side and has been since the “bank of my house” went belly-up for much of the nation. Increase demand and employment solves itself. How do you increase demand? Just ask Keynes what he would do.

Hillbilly D

August 19th, 2011
6:54 pm

Bruno

Good wishes to you, too. I’m done over there, though.

MarkV

August 19th, 2011
6:56 pm

Kyle,
As a matter of fact, the regulations you have mentioned, like the ozone and clear air rule, are ways to spur growth, because they lead to innovation and development of clean energy sources.

Lil' Barry Bailout (Revised Downward)

August 19th, 2011
6:59 pm

“The way to spur growth and reduce unemployment is to create demand”
———————

Obozo wasted $800 billion “creating demand”. How’d that work out?

If more regulations were the answer, the economy would be booming under your fascist Idiot Messiah.

Bruno

August 19th, 2011
7:09 pm

Good wishes to you, too. I’m done over there, though.

I certainly hope that I didn’t have anything to do with your choice, HD. You know that I’ve always had the highest regard for you. Thanks for all the great times and especially for all the great tunes. I’ll drop by Kyles’ every so often to check on you.

Tommy Maddox

August 19th, 2011
7:13 pm

“…the regulations you have mentioned, like the ozone and clear air rule, are ways to spur growth, because they lead to innovation and development of clean energy sources…”

Is this what gave rise to the Chevy Volt?

getalife

August 19th, 2011
7:19 pm

Was it something I said HD?

Now you cons are finally worried about jobs?

Nothing from the gop house and they will vote down the President’s plan as usual.

Stop stealing them will be a good start.

Bruno

August 19th, 2011
7:23 pm

Alright, HD, from the gang:

http://ww w.youtube.com/watch?v=eFHJ41ktt3Q

getalife

August 19th, 2011
7:23 pm

Where is that Andy character?

Catch any lunkers?

MarkV

August 19th, 2011
7:24 pm

Tommy Maddox @7:13 pm: You want to make a bet on the future of electric cars?

Jack

August 19th, 2011
7:25 pm

I’m not sure which corporate balance sheets Wingfield is referring to. His information may come from the media or some other “official” source. Whatever. If a company has surplus funds, they’re likely set aside for improvements or new equipment. It takes profits to expand and the uncertainly recently about tax increases has made money managers a little nervous. Managers could hire additional employees if they knew payroll and unemployment taxes would be reduced. But all the liberals, including Obama, want to increase taxes; increase taxes on the “rich” and kill the golden goose: “poor” people don’t produce jobs.

Bruno

August 19th, 2011
7:27 pm

Kyle, hope you don’t mind, but this is tribute night to Hillbilly Deluxe:

http://www.youtube.com/watch?v=uw1bHaUk1CM&feature=related

MarkV

August 19th, 2011
7:31 pm

“Managers could hire additional employees if they knew payroll and unemployment taxes would be reduced.”
Since that would apply to their competitors as well, they would hire new employees to make more of the products, for which there was not enough demand?

Bruno

August 19th, 2011
7:32 pm

Here’s from Soothsayer to you, HD:

http://www.youtube.com/watch?v=eOi0tC00Luc

Last week I went to Harper’s Ferry, WV. Antietam was just north of there.

Bruno

August 19th, 2011
7:34 pm

From josef to you, HD:

http://www.youtube.com/watch?v=W_vtOd_d40o&feature=related

Why don’t you come on back for just one night????

Mick

August 19th, 2011
7:35 pm

Hillbilly d

Hey just wanted to wish you the best, common sense ain’t so common anymore-
http://www.youtube.com/watch?v=U5HlfXPG0HI

moonbat betty

August 19th, 2011
7:40 pm

Enter your comments here

moonbat betty

August 19th, 2011
7:41 pm

Bruno

August 19th, 2011
7:44 pm

josef

August 19th, 2011
7:52 pm

I miss you greatly. Somehow, though, I think I understand…you’re a True Southern Gentleman of Culture and Breeding…

posted this one for you over there….

http://www.youtube.com/watch?v=W_vtOd_d40o

Bruno

August 19th, 2011
7:53 pm

rural one

August 19th, 2011
7:55 pm

Kyle,
Jobs are NOT the Presidents responsibility and he/she can do little about it. Even if you take the view of policy influence. Industry creates jobs. Period. Companies looking to expand will certainly expand, if the costs are higher than they used to be they will factor them in and /or pass them along or they will innovate, but they will expand, they will create new markets, they will test their competition. Presidents have no more control over jobs than they do over gas prices at the pump and anyone buying that a President can somehow take the price for a gallon back to $1.79 does not know how these things operate. Now can the government stir more motivation? I think so.. but the buck stops with Industry on job creation.

Bruno

August 19th, 2011
7:56 pm

josef

August 19th, 2011
7:57 pm

And Kyle and Company…

Our loss is your gain…

I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...

August 19th, 2011
8:02 pm

Bruno

August 19th, 2011
8:10 pm

josef

August 19th, 2011
8:16 pm

Reporter…

We all miss Hillbilly. He is a gentleman. You, on the other hand… however, I DO miss you…but then I love everybody but Helen Thomas and Duk-shan-ee U-ni-lu-tsv-hi! :-)

getalife

August 19th, 2011
8:20 pm

Make phone calls?

They are out of kitchen sinks to throw at the w collapse.

We lost a decade thanks to w.

Man up and deal with it cons.

I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...

August 19th, 2011
8:21 pm

Whats up, B&J?

So yosef, are you now a stone cold Republican like the rest of the world or what?

Surely you can’t still be………….an obozo cult member.

ew

Hillbilly D

August 19th, 2011
8:26 pm

Somehow, though, I think I understand…

Probably more than you know.

I love everybody but Helen Thomas and Duk-shan-ee U-ni-lu-tsv-hi!

I never met Helen Thomas.

This’n is for you.

http://www.youtube.com/watch?v=oGAFOz5GA8I

Hillbilly D

August 19th, 2011
8:26 pm

getalife

August 19th, 2011
8:27 pm

Hey Andy,

We told you w was a disaster.

We are looking at a decade to recover the over 14 million jobs w lost.

Did you really think Obama is super man and can clean up your mess in two years.

“Need a little patience, yeah, yeah, yeah” GnR.

Hillbilly D

August 19th, 2011
8:28 pm

Forgot my ;-) after the 2nd Helen Thomas.

IR/YW

Probably never been a more underappreciated band than Badfinger.

http://www.youtube.com/watch?v=C53QAuOoSgc&feature=related

Michael H. Smith

August 19th, 2011
8:33 pm

MarkV

August 19th, 2011
7:24 pm

Yeah, I’ll make a bet on electric cars, MarxV. Or against them, pick your argument, just be sure it’s your usual choice – socialist or for BIG GUB’MENT. :)

One other thing MarxV, companies aren’t chomping at the bits to add employees to their payrolls for the sake of small reductions in payroll and unemployment taxes. In fact, companies really don’t want anymore employees on their payrolls than they must have to make a profit and they would like those profits to be very nice big ones that are not eaten-up by the overhead of expendable employees.

Bruno

August 19th, 2011
8:33 pm

Probably never been a more underappreciated band than Badfinger.

Except maybe Spanky and Our Gang:

http://www.youtube.com/watch?v=-5PfbqIErKE

This’n is for the rest.

I do my share of dishing, HD, but you’ll have to factor in that I’m a Yankee. Growing up in those cold Jersey winters puts a crust on you. ;-)

josef

August 19th, 2011
8:34 pm

Hillbilly

Thank you ever so much…that one just, well, says it all to me…

However, I’ve still got my stick out for the Imam Bruin Torquemada and his MAJOR historians! It’s dirty work, but somebody has to do it! :-)

Bruno

August 19th, 2011
8:36 pm

Well, crap, if we could get Am over here, the Blog Band would be together again one last time. He’s crying in his beer tonight over wrecking his Lexus. That after all his bashing of corporatists. ;-)

josef

August 19th, 2011
8:37 pm

REPORTER

Me? A Republican? The Party of Diocletian of the Potomac? The party of the occupation? Bite yo Yankee tongue…Granny’s gray ghost would rise and smite me cold!

I Report (-: You Whine )-: Thee Magnificent!!! mmm, mmmm, mmmmm! Just sayin...

August 19th, 2011
8:37 pm

Sorry, gitmo, but you’ll have to help me remember when Bushie brought us a 1 trillion dollar Porkulus, lost 3 wars, regulated the air we breath, Quantitively Eased our children’s future to China, armed the Mexican drug gangs so they could kill border patrol agents, pulled a Castro on General Motors, shutdown the national energy production industry, tore the Constitution to shreds taking over the most successful health care industry in the world, released all the illegals back into your neighborhood, must I go on?

Do you libs ever own up?

Lil' Barry Bailout (Revised Downward)

August 19th, 2011
8:38 pm

W was a disaster? Your Idiot Messiah has produced unemployment higher in every month of His regime than in any month of our President Bush’s eight years. Some disaster. And it only cost us $800 billion in failed stimulus and $1.5 trillion deficits every year.

Heckuva job, Obozo!

Obozo: Loser.

Lil' Barry Bailout (Revised Downward)

August 19th, 2011
8:40 pm

Corporations will add jobs when they damn well feel like it. Ever since Obozo started getting his program through Congress and revving up the regulatory machine, they haven’t much felt like it.

The best jobs program? Firing Obozo.

Michael H. Smith

August 19th, 2011
8:40 pm

Hillbilly D – Ever notice the musical style similarities between Baby Blue-Badfinger and The Fab Four- And Your Bird Can Sing

http://www.youtube.com/watch?v=1XtdQTLL-XU

getalife

August 19th, 2011
8:41 pm

Well, you can still bring it Andy.

He will serve another term and then he can collapse the global economy, hand over a couple more wars, tax cuts for the rich, corporate welfare for the drug companies and pass it back to your party like w did.

Just to be fair.

Are you a wild eyed, crazy bachmann voter?

Hillbilly D

August 19th, 2011
8:43 pm

josef

Since you’re here. I saw a documentary the other day on South America, it’s economic development, colonialism as viewed through the current situation, etc. Wish I could remember the name of it. Anyway, since we’ve discussed before how the terms “liberal” and “conservative” have lost much of their meaning, the people talking in the documentary, when discussing the concept of laisse faire, taking the resources out of South America for U.S. and European profit and such, they referred to laisse faire as “neo-liberalism”. Bet that’d send heads a-spinnin’ on both sides of most of these blogs. :-D