One of the most visible and successful programs of the recovery act
was Cash for Clunkers. It breathed
some life, however short lived, into the auto industry and its beleaguered
dealers and got some gas-guzzlers off the road. Unfortunately it may have had little or no sustaining
benefit. The fact is that what we
really need are investments that will have a lasting impact. Among those of course are sorely needed
infrastructure projects and the like.
We are still beneficiaries of Roosevelt era WPA efforts three quarters
of a century later.
But our most immediate problem, as illustrated again in another dismal
report, are saving and restoring jobs.
While many of the losses can be attributed directly to the missteps of
past years – a misguided US auto industry, the nose dive of real estate and the
collapse of financial institutions, some of what we’re seeing now is the result
of businesses being overly cautious or running just plain scared. Whatever the reason, it is feeding on
itself, becoming a self-fulfilling prophecy.
Some economists believe that further stimulus will be necessary, and
unless we see a real upturn soon, they probably are right. Whether the President will have the
will or more importantly Congress will have courage to do the right thing
remains to be seen. I do think
that there is one program that they might consider, one that would have far
more lasting impact that the Clunker effort.
It’s time to offer employers Cash for New Jobs. This might come in the form of an
outright payment or a tax credit.
If we were willing to put $4 K on the table for a depreciating piece of
steel, glass and rubber, should we be willing to do any less for getting people
back on the road? The idea I have
in mind is a payment to any employer that puts a new person to work, provided
that it legitimately adds to payroll and that the job be secure for at least
one year, ideally two.
Think of what such a program would do. First it would put food on the table of thousands of
American families not to mention secure their shelter. That food would have to be purchased
which would accrue to the benefit of a whole other set of citizens. Other purchases, now on hold, might be
initiated. From day one, the newly
hired worker would become a taxpayer, in effect producing immediate financial
return on the government’s investment.
And if things go well, if the ripple effect takes hold, that job will
sustain for years to come and will, in its success, spur further employment and
further tax revenues. It is a gift
that will keep on giving.
Conventional wisdom has it that employment is a lagging indicator
(sounds like that terrible war euphemism, “collateral damage”). That may well be true, but why do we
have to just sit by and wait. More
to the point can we afford not to act now if we are to stem the tide and really
recover from this mess? The time has come to
put cash on the table for jobs.
A further note on the healthcare debate:
Health Cooperatives are a sad, if not disgraceful, joke. They don’t work competitively and, based on those that exist, don’t reduce costs or necessarily lead to lower premiums.