Respectfully Submitted by Lawrence Rafferty-Guest Blogger
We have heard both sides of the aisle claim that they have the next big idea to bring jobs back to Main Street. Recently President Obama, according to an article from former Labor Secretary Robert Reich, has claimed that he will be submitting a Jobs Bill to Congress when they return from their 5 week summer hiatus. “He even says he’ll be proposing a jobs bill in September – and if Republicans don’t go along he’ll fight for it through Election Day (or beyond). That’s a start. But read the small print and all he’s talked about so far is extending the payroll tax cut and unemployment benefits (good, but small potatoes), ratifying the Columbia and South Korea free trade agreements (not necessarily a job-creating move), and creating an infrastructure bank. An infrastructure bank might be helpful, depending on its size. Which is the real question hovering over the entire putative jobs bill – its size. Some of the President’s political advisors have been pushing for small-bore initiatives that they believe might have a chance of getting through the Republican just-say-no House. They also figure policy miniatures won’t give aspiring GOP candidates more ammunition to tar Obama as a big-government liberal.
But the President is sounding as if he’s rejected their advice. That’s good policy and good politics.Good policy because any jobs bill has to be big enough to give the economy the boost it needs to get out of the gravitational pull of the Great Recession.” Truthout According to Reich and other economists, the legislation needs to be big and bold. Secretary Reich goes even further and presents a list of ten ideas he would like to see in any job legislation.
“What would a bold jobs bill look like? Here are the ten components I’d recommend (apologies to those of you who have read some of these before): 1. Exempt first $20K of income from payroll taxes for two years. Make up shortfall by raising ceiling on income subject to payroll taxes.
2. Recreate the WPA and Civilian Conservation Corps to put long-term unemployed directly to work.
3. Create an infrastructure bank authorized to borrow $300 billion a year to repair and upgrade the nation’s roads, bridges, ports, airports, school buildings, and water and sewer systems.
4. Amend bankruptcy laws to allow distressed homeowners to declare bankruptcy on their primary residence, so they can reorganize their mortgage loans.
5. Allow distressed homeowners to sell a portion of their mortgages to the FHA, which would take a proportionate share of any upside gains when the homes are sold.
6. Provide tax incentive to employers who create net new jobs ($2,500 deduction for every net new job created).
7. Make low-interest loans to cash-starved states and cities, so they don’t have to lay off teachers, fire fighters, police officers, and reduce other critical public services.
8. Provide partial unemployment benefits to people who have lost part-time jobs.
9. Enlarge and expand the Earned Income Tax Credit – a wage subsidy for low-wage work.
10. Impose a “severance fee” on any large business that lays off an American worker and outsources the job abroad.” Truthout
While I may agree with some of Sec. Reich’s suggestions, there are others that I don’t like. For example, I like number 10 on his list. I think the idea of the “severance fee” would act as an inducement to big companies to keep jobs here in the States. I don’t like the idea of an infrastructure “bank” because I would be afraid that some ex-Goldman Sachs big shot would be named to run it and I think we know who that would benefit!
However, since we have so many good minds here on Professor Turley’s blog, I am confident that together We can come up with ideas to jump-start the job creation process that will compliment the ideas already mentioned or actually replace those ideas. My big idea would be to challenge the corporations of America to create jobs through innovation and new technologies and provide the funds to develop the best of those innovations as quickly as possible through a national competition that would be open to corporations and individuals alike. The winning entry would have to be one that would produce significant, good paying jobs and would have to be designed and manufactured here in the United States with 85% of the materials also obtained or produced here in the United States.
So it is time to get to work and let us know what you think of these suggested ideas from Robert Reich, but more importantly, let us have your idea(s) and why it would work. Don’t be afraid to think big. We don’t have the political restraints here that Washington has so there is no excuse not to be bold in your ideas. Who knows, maybe President Obama and Speaker Boehner are secret readers of the Turley Blog and your ideas just might catch their eye!
Respectfully submitted by Lawrence Rafferty-Guest Blogger
raff:
I agree,but I thought her slogan was new.
“‘The Tea Party Can Go Straight To Hell”
Recommendation 1 cuts payroll tax on the first $20K but eliminates the cap. Eliminating the cap raises revenue, but it also increases outlay. Higher wages covered by SSA causes higher benefits paid out by SSA, unless one adds the concept of a means test to prevent the beneficiaries with higher benefits from collecting them.
There is a cheap and quick thing Obama can do to improve the economy. He can force down the price of oil. The two measures he can take are to dump two million bbl/dy onto the oil market from the SPR. THAT will torpedo the fortunes of speculators. He needs to then order the Commodities Trading Commission to raise the margin on oil buys to 50% of the price. Those two things will sink the price of oil quickly and give the economy some relief with NO need for Congress to act at all and no money is spent.
Raff,
Good article. I like Reich a lot more than most economists. He’s a very grounded guy as evidenced by the very practical suggestions of rebuilding infrastructure and penalizing companies for off-shoring (which we should have and would have been doing all along if Congress worked for the People instead of corporate lobbyists).
Eniobob,
I m not sure that Rep. Waters idea is a new one.
Here’s a starting point suggested by a congresswoman:
Maxine Waters On Jobs, Unemployment: ‘The Tea Party Can Go Straight To Hell
http://www.huffingtonpost.com/2011/08/21/maxine-waters-tea-party-jobs-unemployment_n_932421.html
Roco,
“I am all for tending to infrastructure when you are not trying to stimulate an economy by doing so.”
Stimulating the economy is a tertiary concern at best. If you don’t keep up with needed repairs and maintenance the country falls apart–and we are way behind on our maintenance schedule.
“But a good deal of infrastructure could be funded privately.”
Like private toll roads? Who are you kidding?
Roco,
All jobs are a form of transfer of wealth; thus the term pay day.
Simply put, you don’t want to pay to keep this ship in good shape; an incredibly non-conservative stance.
Bob Esq:
I am all for tending to infrastructure when you are not trying to stimulate an economy by doing so.
But a good deal of infrastructure could be funded privately.
Raff and Bob. I rest my case. 😀
Bob Esq:
With all due respect it does not. It transfers wealth from the butcher to the concrete finisher that is all.
Roco,
For the record, I consider your expressed disdain for routine ship maintenance, a.k.a. tending to the infrastructure, to be incredibly non-conservative.
rafflaw:
I dont need a new one, the old ones such as tax reduction and elimination/reduction of regulations will work just fine. Why do you need new ideas when the old ideas work if someone would bother to employ them?
Do you need a new theory of gravity or a new theory of relativity? Economics works on principles as surely as nature does.
Rafflaw,
Excellent post! Reich’s article is practical and to the point. Thanks.
Roco,
The WPA is not robbing Peter to pay Paul. It’s killing two birds with one stone by creating real sustainable jobs in tending to our infrastructure.
Raff, I think I can anticipate the answer:
Lower taxes!!! Do away with taxes!!!
roco,
What one, new idea do you have that will create jobs?
1. Exempt first $20K of income from payroll taxes for two years. Make up shortfall by raising ceiling on income subject to payroll taxes.
that is not a bad idea, also means test social security. But if you think the first 20K is a good idea why not increase it and/or say the first 20k is exempt from any tax at all?
2. Recreate the WPA and Civilian Conservation Corps to put long-term unemployed directly to work.
bad idea, they have to be paid. all this does is transfer money from where it can be used to actually create real sustainable jobs. It is the fallacy of the broken window. You are only robbing Peter to pay Paul
3. Create an infrastructure bank authorized to borrow $300 billion a year to repair and upgrade the nation’s roads, bridges, ports, airports, school buildings, and water and sewer systems.
again this money is being taken away from investment capital which does create jobs. Once the economy is back on track, this might be a good idea and we could fund it with gas tax. Actually put the money in a real account and only use it for infrastructure.
4. Amend bankruptcy laws to allow distressed homeowners to declare bankruptcy on their primary residence, so they can reorganize their mortgage loans.
how would you determine who should be allowed to do this? Again this will just be borne by people who use those banks in the form of lower interest payments, higher interest rates and more and/or increased user fees. Better for them to be foreclosed on and the properties bought by people who can afford them.
5. Allow distressed homeowners to sell a portion of their mortgages to the FHA, which would take a proportionate share of any upside gains when the homes are sold.
not a bad idea if that could be set in stone. but politicians would then be able to buy votes with equity forgiveness legislation.
6. Provide tax incentive to employers who create net new jobs ($2,500 deduction for every net new job created).
the idea of a tax incentive is good but $2,500.00 wouldnt do anything because it wouldnt even come close to paying for the job created.
7. Make low-interest loans to cash-starved states and cities, so they don’t have to lay off teachers, fire fighters, police officers, and reduce other critical public services.
how about having states eliminate unnecessary services. And implement fee for service programs.
8. Provide partial unemployment benefits to people who have lost part-time jobs.
dont they pay unemployment insurance?
9. Enlarge and expand the Earned Income Tax Credit – a wage subsidy for low-wage work.
how about not charging any taxes at all for these people? the money is theirs anyway.
10. Impose a “severance fee” on any large business that lays off an American worker and outsources the job abroad.”
how about reducing regulations and providing tax incentives to keep positions here in America?
Basically reduce the footprint of government in the day to day activities of business.
I am very complimented tho……..Wish u could find something better to do than teach me!
I guess as long as u r sitting on a puter all day typing to me u wont be running for prez!!
dats too long!