Rather than send out press releases claiming Stimulus-caused job growth when the unemployment rate just hit 8.5%, the administration should actually map out some real short term growth projects. The smart grid and green tech utopia will takes years to create a substantial amount of jobs. For large construction projects ???shovel-ready??? and ???under construction??? are not synonymous with ???hiring now???. Typical construction projects need time to award contracts, mobilize equipment, address site needs and order materials. So the bigger the project the longer it takes to get into full employment.
So how do you do it? It's been done before by...JIMMY CARTER!
The program, HR11, The Public Works Employment and Economic Stimulus Appropriation, consisted of about $4 billion
(1977 dollars) which required projects to start within 90 days and be completed in less than 2 years with the bulk of the work well underway within a year. The reported results of the HR 11 were the creation of 300,000 construction jobs and 300,000 jobs in related fields. The unemployment rate dropped from 8% in November 1976 to 6.9% in November 1977. Hope someone remembers this one.
A Few Rays Of Hope
Economy: The stock market is up. Housing numbers are improving. But NEWSWEEK's Business Roundtable doesn't see a bottom yet—and gives mixed reviews to Obama's early moves to fix things.
Email To A Friend
Please fill in the following information and we'll email this link.
Confidence Is the Key to a Turnaround
Mark Zandi, chief economist, Moody's Economy.com
The difference between a typical recession and the severe downturn we are suffering through now is the loss of faith in our economy. We are panicked and, until our fears are quelled, the downturn will rage on. The best measure of investor confidence is the Dow Jones industrial average. This real-time economic report card sometimes goes up without it signifying the end of a recession, but this recession won't end until the Dow turns up and stays up. Initial claims for unemployment benefits are a window into business psyches—claims are surging as businesses struggle to survive. Consumers are also running for the proverbial bunker. Surveys of household sentiment are near all-time lows. This downturn will end only when these measures of confidence decidedly improve.
COVER STORY: THE ECONOMY
Paul Krugman has emerged as Obama's toughest liberal critic. He's deeply skeptical of the bank bailout and pessimistic about the economy. Why the establishment worries he may be right.
Nothing in the current data suggests that the downturn will soon end. There have been a few rays of sunshine: retailers have reported firmer sales since their disastrous Christmas, and a few very troubled big banks say that things have been going a bit better recently. But none of this will last if the economy continues to lose more than half a million jobs a month, as it has since November.
However, there are reasons to be hopeful that the downdraft will begin to abate in earnest this summer. The Federal Reserve, the Obama administration and Congress have gone way outside the box in responding to the crisis, and although they have made a few missteps, policymakers' actions will ultimately prevail. The stimulus plan is reasonably well designed and will noticeably lift the economy later this year. Obama's plan to address the foreclosure crisis will allow a couple million distressed homeowners to hold onto their homes. Unfortunately, the banking bailout hasn't gone as well. But fixing the banks is precisely what the president must do if the economy is to find its footing any time soon.
Do More for Housing
Allan Meltzer, professor at Carnegie Mellon's Tepper School of Business and a historian of the Federal Reserve
This recovery will be slow, I believe. The rate of decline has fallen, but there cannot be much improvement without ending the banking crisis.
In terms of the government's response, they are spending too much to redistribute income and too little to spur investment. Much of the stimulus program addresses old Democratic priorities that, whatever their merit, do not contribute to recovery.
The government could be doing more. One step would be to offer banks lowinterest loans if they raise half their needed capital in the markets. If they cannot raise the capital, they are insolvent and should be reorganized under existing law. They could also reduce corporate tax rates to encourage investment. The economy would also benefit if the government offered a tax credit to anyone who buys an existing house in the next two years—a broader program than the one they've passed, which offers a credit only to first-time homebuyers this year.
The Spate of Good News May Not Last
Larry Lindsey, CEO of the Lindsey Group and former governor of the Federal Reserve
The good news is that the global economy is showing some near-term signs of stabilizing. Commodity and energy prices have stopped falling and global shipments of goods appear to have bottomed. Moreover, it is likely that the short-term effect of the massive fiscal stimulus and associated actions of the Federal Reserve should produce a positive number for GDP growth in the second quarter.
Unfortunately, this rebound is likely to be short-lived. While the response of the administration and Congress has been massive in terms of quantity, the economic quality of the proposed spending has been low, with much of the spending far out in time. Near term, the president's budget projects borrowing this year of more than $2.5 trillion, or 18 percent of GDP. This demand for funds will put a tremendous strain on global capital markets and crowd out private-sector activity around the world.
- 1
- 2
- 3
- Next Page »
Discuss