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
yuzeyurbrane
August 19th, 2011
11:02 pm
Kyle, I don’t know how many ways and times I have to tell you: stay out of economics and stick to politics. You are simply out of your element with your transparently shallow solutions to complex problems.
Michael H. Smith
August 19th, 2011
11:04 pm
I’m surprise no one has mention Bill “Slick Willy”… he has become a Vegan you know, or maybe you don’t? Anyhow, Micky Ds does have salads don’t they? I feel your pain Mr President, I just can’t bring myself to totally forsake being something of an omnivore. At least a low fat, low sodium one.
Curious George went to Washington
August 19th, 2011
11:05 pm
yuzeyurbrane, please enlighten us with your economic brilliancy? Is it raising taxes on business and adding regulations to businesses?
Linda
August 19th, 2011
11:07 pm
getalife, Did you copy your name from a health food store?
Did you ever try to compete in a spelling bee?
Did you ever work as a security guard at a prison? What manners!
Were you ever accused of sexual harassment?
Just wondering.
Bruno
August 19th, 2011
11:08 pm
Well, Am, I hope that HD read between the lines and understood what you wanted to say to him, you F-up.
Meanwhile, back to the music:
http://www.youtube.com/watch?v=h20FDGwzxmw
MarkV
August 19th, 2011
11:10 pm
Michael H. Smith @8:33 pm: As usual, you are not making any sense. Not surprising at all.
Bruno
August 19th, 2011
11:11 pm
For the Blog Band:
http://www.youtube.com/watch?v=egCW_as-Gm8
All things must pass………
Mick
August 19th, 2011
11:14 pm
One last night cap, amvet, really sorry about your vehicle, sometimes we really can get attached to steel and glass-
http://www.youtube.com/watch?v=R4s7s5tSk8E
Curious George went to Washington
August 19th, 2011
11:15 pm
Linda, are ewe a sckool teecher? Don’t bee so hard on gitalife pleeze?
Curious George went to Washington
August 19th, 2011
11:16 pm
If you are a teacher, do you work part time in the library with those sexy glasses?
Bruno
August 19th, 2011
11:16 pm
Brother Am–What we share is the heartbreak of losing our wives. Sometimes I suspect that HD was divorced as well, though he would never admit that in a million years even if it were true.
http://www.youtube.com/watch?v=85Smw33PKJA
All those years ago…….
Michael H
August 19th, 2011
11:17 pm
MarxV
11:10 pm
As usual, you don’t have the sense to match your bluster.
Bruno
August 19th, 2011
11:18 pm
Deep in the darkest night
I send out a prayer to you
Now in the world of light
Where the spirit free of the lies
And all else that we despised.
Mick
August 19th, 2011
11:18 pm
bruno – thanks for the tip, a lot of people make sport of jersey but I wouldn’t have wanted to experience my childhood any where else…just sayin…long live the brotherhood..
http://www.youtube.com/watch?v=KSd3yys69AE
Bruno
August 19th, 2011
11:19 pm
http://www.youtube.com/watch?v=yGKPHFrHVVY&feature=related
Bruno
August 19th, 2011
11:20 pm
long live the brotherhood..
Hear, hear, Brother Mick.
Bruno
August 19th, 2011
11:23 pm
Goodnight, HD. We’ll come by and harass you again one of these days. Once Brother, always a Brother.
MrLiberty
August 19th, 2011
11:23 pm
Read some legitimate economics texts for a change. You are clueless. Start with von Mises and Hayek.
AmVet
August 19th, 2011
11:27 pm
Bruno,One is one of a few songs that has always had the power to break me down and reduce to the very most basic emotions. And no, it has little to do with my state tonight.
And sometimes I wish you wouldn’t get to the heart of the matter like you tend to do, and in the process …damn…
http://www.youtube.com/watch?v=z_M_27ciAKI
AmVet
August 19th, 2011
11:33 pm
What a weird day. I lost my pearl colored beauty and here we are, in the middle of Kyle’s political bs, Trading music.
And reaching out to “lost” brethren…
http://www.youtube.com/watch?v=17u9mxdvQEo
Michael H. Smith
August 19th, 2011
11:39 pm
Only one problem with free markets Mr Liberty, markets are never really free. Free trade is more joke than reality, as nations will always manipulate, hedge and cheat.
I prefer the founders idea of imposing very limited government regulations on the marketplace to that of relying on a purely laissez-faire system.
Bruno
August 19th, 2011
11:43 pm
And reaching out to “lost” brethren…
HD always was the reluctant one, though he did address me as Brother Bruno once, right before he abandoned the JB Blog. It meant a lot to me, I wish I had told him.
Michael H. Smith
August 19th, 2011
11:48 pm
Thousand pardons, forgot a link. To a degree or in degrees, I tend to agree with certain points made by all of these economists. Which makes me I suppose a mix of conservative and libertarian – that’s spelled with a very small economic “l”.
http://www.youtube.com/watch?v=zhPKBbkQzHQ
Bruno
August 19th, 2011
11:49 pm
http://www.youtube.com/watch?v=Wq7jLEnZw6s
How can I go forward when I don’t know which way I’m facing?
How can I go forward when I don’t know which way to turn?
How can I go forward into something I’m not sure of?
Oh no, oh no
How can I have feeling when I don’t know if it’s a feeling?
How can I feel something if I just don’t know how to feel?
How can I have feelings when my feelings have always been denied?
Oh no, oh no
You know life can be long
And you got to be so strong
And the world is so tough
Sometimes I feel I’ve had enough
How can I give love when I don’t know what it is I’m giving?
How can I give love when I just don’t know how to give?
How can I give love when love is something I ain’t never had?
Oh no, oh no
Michael H. Smith
August 20th, 2011
5:42 am
A real Kodak moment to remember of the mentally lost and totally confused socialist MarxV thinking he is talking to Jay when making a reply comment to Kyle Wingfield. Though not exactly a shocker, the dementia is hilarious.
~
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.
Lil' Barry Bailout (Revised Downward)
August 20th, 2011
7:02 am
Obama pushes for action on jobs
VINEYARD HAVEN, Massachusetts (AP) — President Barack Obama says members of Congress should put country before politics, set aside their differences and act together to put people back to work.
The president is vacationing on Martha’s Vineyard in Massachusetts, but he recorded his weekly Saturday radio and Internet address earlier in the week while in Illinois during a campaign-focused Midwestern bus tour.
——————————-
Where is your Idiot Messiah’s plan?
Obozo: Loser.
ragnar danneskjold
August 20th, 2011
7:39 am
I always agree with Frederic Bastiat – the notion of government tearing down houses is ludicrous. A smarter course would be absolute auction. Once the houses are sold, the market clears. A corollary to that smart course, however, would be to abolish every Federal program encouraging building more, e.g., FNMA, FHLMC, FHA, etc. Think we’ll have to get rid of Johnny Isakson and his ilk to accomplish that necessity, however.
Lil' Barry Bailout (Revised Downward)
August 20th, 2011
7:48 am
Agreed, ragnar. Tearing down homes is destroying wealth, which makes zero sense. Establishing a market for these assets rather than locking them up in any kind of slow, inefficient government program (oops, triple redundancy) is the best way. Of course, some eeeeevil investor might eventually turn a profit on them (after mold abatement and refurbishment costs) so the libtards will oppose that.
Old Time Republican
August 20th, 2011
7:52 am
Why does this ill-informed guy have a column? Kyle, please educate yourself on policy and truly learn the way the real world works. You are really showing your ignorance and depth of understanding.
Sheila
August 20th, 2011
7:58 am
Keynes is dead. His long run arrived and we all know that his brand of economics is the medical equivilent of crack.
More failed policy from the left.
dcb
August 20th, 2011
8:09 am
Refreshing to see someone with suggestions for helping the economy, rather than pointing fingers and suggesting more entitlements to just extend the pain.
Three ways to spur the economy....
August 20th, 2011
8:20 am
Looks like some of you have already figured this out…… Here you go anyway….
1. Obama needs to resign…
2. Obama needs to resign…
3. Obama needs to resign…
That should be enough to spur jobs growth and the economy…
Just Saying..
August 20th, 2011
8:23 am
Ah, again with the Signing Statements. Just refuse to enforce environmental or labor laws that the CONGRESS has passed, and everything will be hunky-dory. Constitution anyone?
Just Saying..
August 20th, 2011
8:31 am
Sheila- Ya know, Washington, Jefferson, Madison – all those guys are dead too. And their “brand” of government produced Obama. Brush aside their failed policies as well?
Hmmmmmmm
August 20th, 2011
8:38 am
Just Saying…
The American Idol mentality, and the total ignorance of the American people produced Obama… Please don’t blame this administration on Washington, Jefferson and Madison…
Just Sayin…
jconservative
August 20th, 2011
8:38 am
So we want to lower wages thus increasing the number of low income people not paying taxes from 51% to, say 55%?
Doing this would not require any new legislation to help employers pay for additional wages, the law already exists, the Low Income Tax Credit. More government welfare being handed out creating more deficit. Is this now called ‘investing in America”?
The “jobs” problem will not be fixed by legislation or changing residents of the White House. The problem is much deeper than that. In the decade of the 2000’s US multi-national corporations added 2.4 million jobs in foreign countries. That is a lot of jobs. The same corporations in the decade of the 2000’s cut 2.9 million jobs in the United States.
Today’s US economy is not the US economic engine that drove the world economy for decades.
Economic growth is approaching zero, not only in the US but in the entire Western World.
US productivity is as high as it has ever been. Corporate profits are nearing an all time high. Corporations are not creating new jobs because they do not need more employees. They need less
employees.
Look at the numbers I gave in the 3rd paragraph – created 2.4 million foreign jobs and cut 2.9 million US jobs. That is a net decrease of 500,000 jobs. Corporations just do not need as many employees as they once did.
Look at Net Jobs Created by Decade: 31% in the 1960’s, 27% in the 1970’s, 20% in the 1980’s and 1990’s and 0% in the 2000’s. Am I the only person to see a trend here?
So far the only people to address the problem have been the political “spin doctors”. And spin doctors have never solved any problem; they are the problem. (Sorry Ronnie.)
Phil's Tel-A-Gramm
August 20th, 2011
8:43 am
Kyle,
If your neighbors started burning coal to heat their homes and the pollution always happened to drift over to your house and you and your family started suffering from breathing in all the partially burned hydrocarbons and carbon monoxide and sulfer compounds, etc., what would you do.
Ayn Rant
August 20th, 2011
8:49 am
Kyle, you misdiagnosis the job growth situation and prescribe dead-wrong reactions! Your “solution” is time-worn Republican party dogma that has nothing to do with the present situation.
Capital has not gone on strike; capital is excessive and is parked in non-equity, non-job-creating financial instruments. Capital will be coaxed into job-creating investments in the US whenever consumer demand grows to support increased domestic production and/or the products that Americans want and need are produced in the US instead of overseas.
Consumer demand can be increased by converting some of the excess capital into consumer spending. This is done by more federal spending of revenue derived by borrowing and/or increased taxation on the sources of capital (excessive income and profits). Increased taxation is preferred, as it does not drive up the national debt.
Unfortunately, consumer demand tends to creates jobs overseas, not just in the US. The $600 billion US yearly trade deficit is a tremendous economic opportunity if we can create a business-friendly, free-market environment so that the products that Americans want and need will be produced in the US rather than overseas.
The impediment to US business is not lack of capital, or consumer-protection and worker-safety regulations. The impediments are laws and regulations imposed by too many layers of government (federal, 50 states, and 12,000 local jurisdictions); an unreliable judiciary that cannot provide fair and timely settlement of business disputes; confused and overly-broad patent rights that guarantee continual litigation with no resolution; monopolistic practices by Big Business that leave only narrow niches of opportunity for small business and upstarts; excessive volatility of equity markets; a heavily-centralized banking system that serves itself rather than its customers; and the outrageous cost of employee health care insurance borne by the employer.
Kyle, you repeat the “drill, baby, drill” mantra as a solution to the energy problem. You know very well that the US does not have the reserves to appreciably affect the world petroleum market, and that our economically-accessible reserves are already being exploited. The oil companies have no intention of drilling in environmentally sensitive, marginally accessible areas unless they receive subsidies and liability limits; they only want to stake their claims for the future when the price of petroleum is high enough to justify the cost and the liability.
Kyle, you misrepresent the new Boeing plant situation: Boeing was enticed by the enormous subsidies offered by an impoverished state that can’t even afford to educate its children.
Kyle, your suggestion to lower the minimum wage is preposterous; no one can live on a minimum wage job without assistance from various federal and state welfare programs.
Michael H. Smith
August 20th, 2011
8:57 am
ragnar & llb you both should consider that some of these houses in all truth are on their last leg or they’re in such disrepair as to make them impracticable to restore. These are likely the optimal ones Kyle had in mind as I certainly did when speaking of destruction to re-construction. However, to take this further, future housing needs to move forward into the future, which will be far less costly to maintain, heat & cool and offer enhanced quality of livability. So there is a break point to consider in valuation when deciding upon keeping the old or tearing it down to replace it with the new. I’m sure people once said destroying a good horse & buggy to buy a darn new car just didn’t make any real sense. Face it, eventually nostalgia proves too costly, uncomfortable or inconvenient to merit real worth. But don’t fear llb, the evil investors can still turn a buck as the land which will always retain real worth regardless.
On government in the housing market we agree completely ragnar. No HUD, FHA, Fannie or Freddie, etc. We likely see eye to eye on rolling socialism back all the way before Woodrow Wilson created the FED – Rah, rah Ron Paul!
Constitutional speaking, Ron Paul, is the best man&candidate running for the office of President.
Just Saying..
August 20th, 2011
9:09 am
Hmmmmmm…etc @ 8:38am
The “total ignorance of the American people…”
You wouldn’t by any chance be in that ….group…of…(wait for it) American people? Na, didn’t think so. Another in the Hamilton group that wouldn’t trust Democracy to the masses. Hmmmmm….
Hmmmmmmm
August 20th, 2011
9:11 am
Yes, Ron Paul is the best candidate…. However, without help he will get sucked down the draino that is Washington D.C……
Hmmmmmmm
August 20th, 2011
9:14 am
No I’m not in that group, but I have a very good idea that you may be leading that group…. and it is TOTAL IGNORANCE! Make NO mistake…
carlosgvv
August 20th, 2011
9:17 am
What goes unrecognized in all this is that it is not the job of The President of The United States to create jobs. Job creation in this economy, which can be adversley affected by Banks in France, is not something that any one person can do, even The President. The only real chance we have is for the President, The Congress, the Governors and Business to all work together and try to solve this problem. Since we know this will never happen, some of us just blame it all on Obama. You may be certain that if the next President is a Republican, he or she won’t do any better than Obama at job creation.
Phil's Tel-A-Gramm
August 20th, 2011
9:21 am
Kyle,
Regarding your lowering of wages, do you have some relevent documentation to support your reasoning. Based on my family’s personal experiences, your statements simply do not coincide with existing conditions. In fact, a teenage family member was recently given a raise. And do you think it possible that the reduced number of teenaged employees during the past few years just might possibly be in some remote way linked to the fact that many older persons in need of a job just may have taken those jobs and left fewer jobs for the teenagers and just maybe many of those teenagers might possibly have even decided to stay in school or continue a higher education and then only work part-time as needed to help cover outrageous expenses that partially resulted from things like cut backs by states to education and others trying to increase profits from their education-related investments, just for openers.
Hmmmmmmm
August 20th, 2011
9:23 am
carlosgvv,
It starts at the TOP… To say that the President is not responsible is absurd… Your right in saying that it will require a group effort, but make NO mistake without a Leader in place we are all doomed… and this President couldn’t lead a group of Boy Scouts through the woods…
Michael H. Smith
August 20th, 2011
9:29 am
The “jobs” problem will not be fixed by legislation or changing residents of the White House. The problem is much deeper than that. In the decade of the 2000’s US multi-national corporations added 2.4 million jobs in foreign countries. That is a lot of jobs. The same corporations in the decade of the 2000’s cut 2.9 million jobs in the United States.
I disagree with your first sentence and add that NO solutions have come from obumer or the socialist democrats of his ilk to correct this “DEEPER PROBLEM”.
Reducing corporate tax rates to levels that are competitive to those of other countries and overhauling our regulations is part of the answer. A very aggressive pursuit of a mirrored trade policy and renegotiated trade agreements in some cases is another part answer. Pressing nations to allow their currencies to move freely on the open world market is another one – no pegging to our dollar as China has done to artificially lower the cost of goods produced by China.
In addition reforms on fed spending and the so-called entitlements or safety net is desperately needed. The minimum wage has always been a cruel joke. Creating a training wage would probably work better than messing with a minimum wage. It won’t do much of anything for under-employment but it probably would for the unemployed. As the old adage goes, it is always easier to get a job if you already have one. Programs like we have here, in Georgia Works, makes this concept a real viable solution.
GT
August 20th, 2011
9:40 am
Diana Furchtgott-Roth on FOX that says it all. The Republicans want to go back to the same formula that caused this crisis in the first place. If you are going to have loose federal regulations on the economy you cannot bail out your “too big to fail banks”. The fear in failure needs to be shared by the corporate world, not just the grassroots, while these corporate types stand by as unbiased observers. They don’t pay taxes; they don’t have the fire at the feet or the wolf at their door to motivate them, and this great life is not by their productivity but by government entitlement.
By bailing out the too big to failed banks you doomed community banking. The inefficient large banks would have been taken over by an efficient middle banking tier that would have local concerns instead of a national focus. Backyard banking and investing is what fed this economy from birth, blind investing and banking from coast to coast has destroyed it. Our economic system has to have failure, take that out of the equation and no model works. There has to be real competition. More money need to be poured in small businesses where the owner depends on the business to survive and does not have the luxury of not investing his capital. Employees of large companies are welfare precipitants just like the poor. Go to a golf course in the middle of the week and take ids on who is playing, you will see a large number of corporate types. When you are running a business as a hobby and not a life line it creates the situation we have today. The entitlements of corporate and rich and the stalemate of capital investments because these people do not have to do anything is a real problem not heard about on FOX.
How is that the labor pool working out in South Georgia? I haven’t heard much about it. I see the jails have 900 illegal immigrate in them ready to be shipped to wherever on our dime. This is a large problem in the federal judge wanting to lock Fulton County officials up. Here are thousands of minimum wage jobs in the field going wanting. The prices in stores of agriculture is going up faster than gas prices, the supply is not keeping up with the demand. Here is another inefficient area of the economy that could supply jobs, minimum wages. Obviously we need more stores competing against each other to drive food prices down, small businesses. There is food lying in the fields in South Georgia. A guy came to my high school reunion this summer with a truck load of watermelons the farmer in Cordele just gave him if he wanted to pick them. Rotting in the field.
Gas prices will drop 25% by elections, already dropping. We need to take the speculators out of the business of holding our life lines as a commodity. That ideal money sitting on the sideline can’t help America but they don’t mind profiting on our backs by driving up the price of gas. If we had not bailed out banks their would not be this sideline money and prices of gas would not be so high. Don’t hear that on FOX either.
Michael H. Smith
August 20th, 2011
9:42 am
What goes unrecognized in all this is that it is not the job of The President of The United States to create jobs.
By who carlos?
Lets get the record straight shall we? It is not the job of government or anyone in government to create the first damn job! – Got that carlos?
So what is the role of government or the President or the Congress concerning jobs?
The role of government and all those within it that serve us is “to create – and/or maintain – an economic business climate conducive to job creation”
You darn right I blame obumer, he has done everything to destroy the economic business climate that is necessarily conducive to creating private sector jobs in this country from day one he took office until now.
poison pen
August 20th, 2011
9:48 am
Hmmmmmmmmmmmm, Ditto!
josef
August 20th, 2011
10:05 am
Kyle and Company…
Thank you again for the opportunity to let some of us touch base with Hillbilly and to let him know how much he will be missed.