Got to Have a J-O-B If You Wanna Be With Me

August 4th, 2011 at 8:13 am

Good piece in today’s WaPo on jobs ideas allegedly being considered by the White House, including:

–a wage subsidy (a tax credit to employers who add workers)

–FAST! (Fix America’s Schools Today—an infrastructure program touted on these very pages)

–an idea to move Fannie’s and Freddie’s foreclosed housing stock into the rental as opposed to the housing market—obviously less a direct job creator than a measure to avoid exacerbating the fall in home prices.

Are they politically viable?  The knee-jerk answer is, of course, nothing’s viable these days.  But there’s nothing particularly liberal or New Deal-y about these ideas…in normal times, they actually would appeal to at least moderates on the conservative side.

But these are not normal times.  Still, a day we’re talking about jobs ideas is a good day.  Especially compared to days obsessed with debt ceilings, deficits, spending cuts, and baselines.


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12 comments in reply to "Got to Have a J-O-B If You Wanna Be With Me"

  1. jhm says:

    Speaking of baselines, Hon. Rep. Ryan has made the claim that the super-duper debt deal has an explicit reference to ‘current law,’ making the repeal of the Bush cuts part of the assumptions of the bill (if not technically a baseline). What would this mean, if true (aside from the notable fact that Mr. Ryan was telling the truth)?

  2. Rich C says:

    I did a lot of work over the last year on the foreclosed housing-green rehab-rental project, and found that if applied to all foreclosed and delinquent mortgages held by the GSEs and the FHA, the project would create about 500K job/years. That’s not nothing, and is in some ways quite “new dealy.” If you assign responsibility to the GSEs to buy up privately held foreclosed homes as well, you get nearly twice that. And that’s the direct employment effect, not taking into account any multiplier or employment in supplier industries.

    Combine it with FAST and a universal principal reduction program, and I think it could just be enough to avoid disaster. But you need to fund it wo a congressional appropriation (ie through some very aggressive use of remaining TARP funds, loan guarantees, Fed action, or platinum coins).

    One other thing: I see that unemployment fell sharply over the past year in Nevada; about a year ago there were changes made to HAMP for a few, badly hit states including Nevada, which provided funding for principal reduction. Are you aware of any analysis of that program and its affects either on mortgage delinquencies or employment?

  3. Michael says:

    Nothing is viable. Grownups would articulate their vision during this time, then promise to implement it if and when the voters would be kind enough to cooperate.

    Of course, the Obama Administration is definitely articulating its vision…

  4. Scott Supak says:

    What about the infrastructure bank? I thought the GOP was on-board with that.

    • Jared Bernstein says:

      They are–I think this article was about some newer ideas that you may not have heard so much about before.

  5. D. C. Sessions says:

    But there’s nothing particularly liberal or New Deal-y about these ideas…

    They’re government programs that don’t involve weapons, aren’t they?

  6. Glissade says:

    How about an end to all these GDF free trade deals?

  7. bfuruta says:

    Gregor MacDonald makes a good case that economists are not giving enough weight to energy costs. From 1985 to 1999, energy costs as a percent of GDP fell from above 10% to just below 6%. It is now near 10% again.

    In an earlier post, he showed that same transition from low cost of energy to high cost of energy in terms of 2010 dollars rather than as a percent of GDP.

    MacDonald has been advocating stimulus that targets energy input costs.

    • Kevin Rica says:


      How can we target energy input costs without increasing energy input supply?

      Don’t tell me “alternative energy”. We’ve been subsidizing “alternative energy” but that doesn’t actually produce much energy. Texas has more installed wind capacity that any other state and is having an electricity crisis and is close to load-shedding because of the heat wave. There are 9,000 MW in Texas which produced 2000MW during peak hours the other day. The air is generally still during summer heat waves.

      Solar is great for powering your laptop, but that’s not what heavy industry needs.

      Natural gas prices have declined due to shale gas — that’s not a huge problem except to people who are opposed top all fossil fuels. Should we subsidize oil imports?

      I share your frustration, but trying to reduce prices without stimulating real supply on an industrial scale — which means fossil fuels, hydro, and nukes — stuff you can smelt metals with — is impossible.

  8. Kevin Rica says:

    The idea of converting foreclosures to rentals makes sense. Empty deteriorating houses are obviously an economic inefficiency. Not only for the GMEs, but it’s surprising that the private banks aren’t doing more.

    I wonder if there are any regulatory issues that discourage banks from forming something like REITs and spinning them off.

  9. PeonInChief says:

    One effect of converting foreclosed properties to rentals could be reduced rents, which sounds bad to everyone but tenants. Rental rates are rising in much of the country and reduced housing costs would make more money available for other things. In addition, I think that a good portion of the current foreclosures are actually already tenant-occupied. More than 2/3 of the people who come to my little tenants-rights-in-foreclosure blog are now specifically coming for information for tenants, rather than, say, cash for keys, which could be anyone.

  10. Ariel Mullowney says:

    I wish more people would write sites like this that are actually fun to read. With all the crap floating around on the web, it is refreshing to read a site like yours instead.