Monday, September 26, 2011

First Rule of Job Creation: Creating Jobs

It's really not as complicated as people would have you believe. Dean Baker: (via atrios)
It is essential to remember that this is a crisis of a lack of demand, not supply. For this reason, it is ungodly stupid that so many people are being made to suffer from unemployment and declining living standards.

We know how to get out of this mess, we have known how for 70 years. We just need the government to generate demand. That means spending money. Ideally it would spend money on useful things like education, health care, and infrastructure, but even if it spent money in wasteful ways it would still create jobs and put people to work.

In the 30s we got much of the way back to full employment with the Works Progress Administration and other programs. Much of what was done was useful -- look around, you won't have to go far to find infrastructure built by depression-era programs. However, it took the massive spending associated with World War II to get the economy back to full employment. There is no magic associated with war that makes military spending more effective in creating jobs. The only difference was that the threat to the nation from the Axis powers removed the political obstacles to the necessary spending.

The same situation applies today. We just need to spend money. That applies to both the United States and the euro zone countries. The problem is that we have more people in political leadership positions who want to be morality cops and lecture about balancing budgets rather than focus on policies that will restore economic growth. This includes the top officials at the European Central Bank, many of the voting members of the Federal Reserve Board's Open Market Committee and much of the political leadership in the euro zone countries, the United Kingdom and of course here.
It's really that simple. We know what works, and we know what could restart the economy and alleviate suffering for millions of people. Our elites have simply decided these solutions aren't going to be considered. Republicans and quite a few Democrats won't support government spending that isn't related to killing brown people and Jared Bernstein has stated repeatedly that there is "no appitiete" for direct government job creation in the White House.

So for all the talk of jobs, there is no discussion of the best way to actually create jobs. Frustrating.


  1. Second rule of job creation: no talking about job creation.

    Sometimes I wish life were more like Fight Club. I could just beat the hell out of some of these guys. And I may not look it, but I can hold my own.

  2. @Kari if I remember the movie correctly I don't know if you thought about what you are suggesting all the way through?

    although, I guess homegrown terrorism might create a demand for jobs. Call it "In-sourcing the war in Afghanistan". Bet you didn't see that coming @ThomasFriedman

  3. i was thinking about the scene where Edward Norton beats the hell out of himself in the office. But yeah, random acts of violence toward representatives could be a go.