Remember Jobs…?

July 25th, 2011 at 12:37 pm

Days ago I wrote about the opportunity costs of the debt ceiling debate.  Well, those costs have sharply increased to the point where the only prominent politician discussing jobs right now appears to be Mitt Romney.

Well, I and some other stalwarts are here to change that.  I’m speaking on a jobs panel tomorrow, held by Politico.

And today, there’s an important piece by Leo Hindery up at HuffPo—a very compelling, thoughtful, and pretty sweeping jobs policy agenda, with a welcome emphasis on manufacturing.

Give this a read yourself, but cherry-picking a few points that especially resonated:

Buy-Domestic Procurement requirements: When the federal government procures goods, the default should be that those goods are made here.  When there’s a significant cost differential—when it’s a lot cheaper for contractors to buy project components abroad—it’s not hard for them to get waivers and they should do so.  But we had this provision in the Recovery Act and it worked pretty well.

Restructure the tax code so American companies stay here: total no-brainer, though a very heavy political lift, of course.  Ask yourself why, as my former White House colleague Gene Sperling used to say, it should be cheaper to create a job in Germany than in Cleveland.  My vote: end deferral—the ability of multinational firms to avoid taxation on foreign earnings by holding them abroad for as long as they like.

Better Enforcement of Fair Trade, including currency management: I’ve touted a bill that would give the president the authority to label currency management an unfair trade practice, a bill that got 99 R votes in the last Congress.  I challenge anyone to find a bipartisan bill that would make a real difference on the jobs front and doesn’t add to the deficit.

–Create and finance an Infrastructure bank: “The administration and Congress should create a national infrastructure bank that would be an independent financial institution owned by the government. Able to fund a broad range of infrastructure projects beyond roads, rails and runways, it would make loans and loan guarantees and leverage private capital.”

–Renew the 48c Tax Credit: A great idea to help promote green manufacturing here in the USA—again, a policy that worked well during the Recovery Act.  Note that this tax credit levers two dollars of private investment in domestic manufacturing for every one dollar of the credit.

Also, we should implement this work sharing idea that Dean Baker’s been pushing for awhile.  What’s important about Dean’s take here is that he’s thought through some of the implementation challenges that keep employers from taking advantage of the option.  Remember, this is the main reason why German unemployment is back to pre-recession levels, even while their GDP losses were comparable to our own.

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9 comments in reply to "Remember Jobs…?"

  1. foosion says:

    I’ve been paying careful attention to Obama and as I understand it the problem is that we have a big deficit resulting in low business confidence. One might think that business lacks confidence because people aren’t buying from them, but Obama has other explanations.

    Based on Obama’s narrative, your proposals wouldn’t do anything to address the underlying problems.

    As a centrist voter who wants big spending cuts, including to Social Security and Medicare, so that we won’t have to raise taxes on millionaires and billionaires, and implicitly prefers those cuts to a stronger economy and more jobs, I don’t see how I can support your proposals.

  2. jonathan says:

    W.B. Yeats summarized our problem:

    The best lack all conviction, while the worst
    Are full of passionate intensity.

    You really think that making rational arguments matters when people are gripped by the fever of belief? As a Jew – an assumption given your name – don’t you recognize the symptoms? You should because our history composes a liturgy of societies gripped by irrational beliefs. The believers are full of passionate intensity and the best lack the conviction to grapple with them about their beliefs. This never ends well. Belief cannot overcome fact but the believers believe facts must conform to their beliefs.

    Turning and turning in the widening gyre,
    The falcon cannot hear the falconer;
    Things fall apart; the centre cannot hold,

  3. FedEconomist says:

    Hi Jared,

    Re: “The administration and Congress should create a national infrastructure bank that would be an independent financial institution owned by the government.”

    Really? A new way to distribute wealth to political cronies? Tell me more 🙂

    Despite laudable intentions, you must realize that any type of “infrastructure bank” would quickly become an efficient way to transfer shovel money towards GE and banksters, right?

    Re: “Better Enforcement of Fair Trade, including currency management”

    US demanding fair trade, and blaming others for “currency management” is pretty hilarious. Glass houses and stuff.



    • Chigliakus says:

      I’m curious what the US does that’s even in the same ballpark as China pegging their currency to the Dollar. Quantitative easing and setting the federal funds rate certainly aren’t in the same ballpark, they aren’t even the same game! Maybe you can cry about glass houses after China floats their currency, but not while they’re engaged in mercantilism at the US’ expense.

    • Kevin Rica says:


      “US demanding fair trade, and blaming others for “currency management” is pretty hilarious. Glass houses and stuff.”

      Pretty easy to make that assertion. On what basis?

      When is the last serious currency intervention by the U.S. and how much?

      How many hundreds of millions of dollars? Compared to the TRILLONS that China and the other Asians have bought over the last decade.


      The remaining U.S. trade barriers are all pretty small stuff.

      But Asia’s trade barriers and other administrative stuff is huge and Byzantine, not to mention capital controls –although I admit that is a good idea — we should do it to prevent China from manipulating the dollar. We need to force the Chinese to allow the dollar to float.

      If you want to understand what China is really doing and the implications — read this interesting article on Communist China’s Capitalism.

      (Accept the trial subscription to get a free copy.)

      China intervenes by the trillions of dollars to defend an undervalued currency — and you think that we live in a glass house? Really??



    • comma1 says:

      Even giving you your wildly ignorant, and overly broad claim of cronyism, my guess is that the average American would prefer crony-built bridges rather than crumbling ones. You must not be from Minnesota?

      On the other hand, given that we are in three wars right now and men and women are in harm’s way for this government and it’s people, why don’t you show some respect? Would you prefer we don’t maintain our infrastructure — are we to teleport everywhere in the future, like Startrek? Are you really basing your policy on a tv show from the sixties? “Captain’s log… we’ve reached a strange and distant world… a world where bridges and roads take care of themselves… a world where gravity is strong enough that the usual ephemeral Repubo thoughts hold together for more than 3 seconds inspection.”

      Furthermore, Conservatives have shown over the past 30 years that if you want to transfer money to “crony’s and banksters”, as you put it, you don’t need an infrastructure bank. You can just torpedo the economy like Bush and his Repubo friends did when they built the “ownership economy”… or give money to your mercenaries and sheiks by invading a country or two like Bush and Cheney… or drive the economy into a wall as if you’re on angel-dust as Cantor and Bonor are doing today.

  4. Kevin Rica says:


    The Currency Reform for Fair Trade Act is a nice idea, but violates international trade law. On the other hand, capital controls used to prevent China from accumulating U.S. Treasury bonds are enumerated as legal in the IMF Articles of Agreement and would be a remedy directly targeted on the problem.

    Here’s another good idea by two Peterson Institute economists.

    Where did the EPI get that job sharing idea? Lionel Jospin? That’s just sharing the misery.

  5. Joseph Patrick Bulko MBA says:

    What do all of the Hindery proposals have in common? They require the federal government to take action! In the current political economic climate of ideological civil war, waiting for Washington to get its collective act together is like waiting for [Beckett’s] Godot! We need to find a private-sector solution to the high unemployment problem in order to jump-start the economy back to full employment. Fortunately, I have such a solution: Recognizing that we live in a plutocracy [United Plutocrats of America] where the wealthy control the means of governance, we must find a way to incentivize the barons of Wall Street to invest in new businesses for the regular folks on Main Street [i.e., the American proletariat]. I have devised a private-sector free market plan to achieve the goal of returning the U.S. economy to full employment. The plan provides a major (profit-generating) incentive to Wall Street to transfer massive amounts of investment funding to Main Street through the creation of a massive number of new entrepreneurial ventures. My plan effectively “piggy-backs” onto existing financial industry architecture to securitize the entrepreneurial investment process, thus enabling Wall Street to make boatloads of cash in the secondary market (a la the trading associated with the mortgage-backed security and its many many derivatives). The net result of the plan is the massive creation of new jobs to jump-start the U.S. economy back to full employment.

    You can read the proposal (“A Modest Proposal to Save the American Economy: Entrepreneurial Blitzkrieg as Job Creation Vehicle”) and its companion piece (“The 75 Percent Solution? A Moral and Economic Imperative to Create Good Jobs NOW!”) here:

    Joseph Patrick Bulko, MBA

  6. Peggy Dobbins says:

    Dear Jared Bernstein,

    I’m for your whole laundry list.
    But/and: you and Dean Baker could/should/please must get us a big campaign honing in on 1) educating a critical mass from whatever constituency on why reducing the labor time required for a livable wage is essential a) not only to sustain purchasing power and employed skills in bust economy, b) as the only proven means of ensuring that the fruits of sci and tech increases in productivity reach the general population in any lasting way. And 2) honing down a concise case for passage of legislation that a) reduces standard labor hours b) I think in a gov guarantee of 20 hrs of work at a livable wage to i) all who apply ii) vets with no other options. And 3) a bumper sticker slogan.

    We need leadership