“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  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