The President's new jobs program

by: Hopeful

Tue Dec 08, 2009 at 04:49:05 PM EST

I participated in an on-the-record "Blogger Call" with Austan Goolsbee of the President's Council of Economic Advisers to learn more about Barack Obama's new jobs proposals. You should check the transcript of Obama's speech, the summary at the White House blog, and Chris Bowers' look at all the various job programs. The overall message is that "good management" of the TARP financial rescue money allows additional resources to be put into improving the jobs situation. The President proposed out investments in 1) Small business expansion, 2) Infrastructure, and 3) clean energy retrofits. Goolsbee warned that the programs described in the speech are not the "full enchilada" of what the Administration is doing.

Many questions asked about the details of funding: That is, there is talk of using the extra $200 billion saved in TARP, but the TARP program cannot be used on just anything. Legislation is therefore necessary and Obama is working with Congress. (Again, see Bowers.) Asked about a financial transaction tax, Goolsbee did not reject it, but argued that any such tax would have to come from international action. (Presumably because the financial trading could easily flee to a low-tax country.)

Anyway, I asked about the high unemployment numbers for the high-school (or less) educated which are far worse than the 10% overall unemployment, and even worse for minorities and for the young. I suggested that (other than unemployment benefits being extended) there wasn't much for them directly in this program.

Goolsbee did not agree with my assessment. He first pointed to the proposed construction jobs, in infrastructure and in energy retrofitting, which particularly benefit the young and less well educated. (He had earlier noted that unemployment in construction is around 35%!) He then pointed to the small business provisions, arguing that younger people are more likely to start their own businesses or work for small businesses. He noted a statistic he was told (which, however, he admitted he has not verified) that half of Fortune 500 companies originally started during recessions. Small business creation and growth is very important to how the nation recovers from recessions -- this is the upside of recessions -- but the "credit contraction" is preventing that normal process from working. Hence, the Administration's small business proposals. I think it is fair to say that Goolsbee's answer focuses on unemployment and the young rather than minorities.

Hopeful :: The President's new jobs program