Saturday, May 28, 2011

"How to Create a Job" Misses the Mark

I am generally a fan of Ira Glass and "This American Life," but the recent piece they aired ("How to Create a Job"), that purported to answer whether government can create jobs, was pathetic and sad.   And the reason seems to be that the NPR reporters seem so bracketed in by their oh-so-practical, centrist, neo-liberal Zeitgeist, they have drunk the Kool-Aid along with everyone else.  They can't look outside the box, because they're in the box.

The teaser for the show says, "It seems like every politician has a plan for putting people back to work.  But we and the Planet Money team couldn't help but wonder... how do you create a job?  Can politicians truly create many jobs?  Is it possible the whole thing is just well-intentioned hot air?"

Glass opens the piece by blowing off the idea of public investment in infrastructure -- without any analysis of whether it works or not.

“One of the big ways that politicians used to create jobs, the way FDR did it back in the 1930s, [was to] put more people on the payroll, build dams, build roads, spend and spend and spend – nobody, nobody with any power anyway, is talking about doing that..."

In the first segment, "Can Government Move My Cheese?" a Planet Money reporter examines the questionable claims of Gov. Scott Walker, who claims to be creating 250,000 jobs in the private sector.   

This angle might be worthwhile, but the poor listener is left with the feeling that "government's" hands are tied when it comes to creating jobs.  Reporter Chana Joffe-Walt winds up her piece by suggesting that there is little a governor can do to create jobs:

"...So in the meantime, politicians with a jobs number to achieve focus on the short-term. Republicans and Democrats hand out tax incentives to seduce employers into hiring.  And of course, those goodies cost something.  In Wisconsin, they account for $117 million in taxes, that will not be collected over Walker's first two year, and this in a state where they are fighting over every dollar.  This leaves the government with less money to... spend on education so employers can hire smart people, to build good roads and infrastructure so businesses can transport goods, and innovate."

"If you go with tax cuts, you might seduce some employers to hire now, but you'll hurt future employers who needed you to spend on schools, so they can find educated workers to come up with great new ideas.  If you go with long-term spending -- schools and Internet -- you have to increase taxes to pay for it, which can mean that businesses on that job-creation fence will be pushed to anti-job creating territory.  In both cases, you've zeroed out your efforts.  You've had some effect on the one side, but canceled it out with what you did on the other side."

"But that's the choice you have -- long-term or short-term.  Whether the governor is Democrat or Republican, someone you love or someone you hate, politicians don't have a lot of options.  At best, they'll get some jobs for the somersaults it took to get there.  At worst, they had some impact, did something, but had no idea how to measure exactly what."

What's the problem here?  Joffe-Walt isn't wrong to suggest that there are short-term vs. long-term tradeoffs, or that the value of public investment might take some time to be realized, such as she suggests, in the end of the governors' second term, or even later.  But within the range of tax breaks, incentives and investments that are made by states in job creation, there is a wide variation in what actually works, and a lot of that actually could be measured -- something NPR might have learned about by talking to groups like Good Jobs First.   

But an even bigger problem is that the overall piece is looking at the wrong end of the horse.  With Glass' glib dismissal of the feasibility of infrastructure investment, Planet Money lets the Congress and the President off the hook for what the federal government actually can do to create jobs.  

Within the spending choices that are made by Congress, there are direct tradeoffs made by deciding whether to fund military spending vs. education, or subsidies for oil companies vs. investments in clean energy.  Those choices really could move the dial on whether we have jobs or not.   For every $1 billion spent on the military, $1 billion spent on mass transit or education would create twice as many jobs.  Spending $100 billion on clean energy and conservation investments would create 2 million jobs, and twice as many jobs as spending on investments in oil and fossil fuels.  (Not to mention, the tradeoffs involved in granting tax breaks to millionaires and billionaires, vs. making targeted infrastructure and social investments in a deep recession!)  So that is point #1.

Second, the federal American Reinvestment and Recovery Act (ARRA) did save and create many jobs, showing that expanded public investment in job creation does make a difference. A November 2010 report by the nonpartisan Congressional Budget Office (CBO) estimated that as of the third quarter of 2010, the stimulus lowered the unemployment rate "by between 0.8 percentage points and 2.0 percentage points," and "[i]ncreased the number of people employed by between 1.4 million and 3.6 million.   The stimulus bill has been criticized from the right as wasteful, but the truth is that broke the free fall of the economy and demonstrated that government can in fact save and create jobs.  

Third, the problem for states right now is that because the state fiscal stabilization and Medicaid assistance funds in the ARRA are ending, they are collectively shouldering huge fiscal gaps that are actually leading to thousands of layoffs.  The Center for Budget and Policy Priorities reports that 44 states and the District of Columbia are projecting budget shortfalls totaling $112 billion for fiscal year 2012.   One of the most important things that politicians could do to protect and grow jobs in this severe recession would be to extend financial aid to the states, to keep them from making deep cuts in education, health care and assistance for the unemployed.  (You would think Planet Money might want to take note of this context, because the same governor they are reporting on, Scott Walker, who claims to be interested in creating jobs, is seeking to fire thousands of workers in the public sector.)

Fourth, direct public job creation by the federal government would likely be much more cost-effective than granting tax breaks or incentives to private companies.   1 million direct jobs a year could be created for a direct federal investment of $46 billion, according to Prof. Philip Harvey, author of Back to Work: A Public Jobs Proposal for Economic Recovery, published by Demos.  

Fifth, why not interview Rep. Nancy Pelosi and Harry Reid, who are supporting Make It in America legislation to restore American manufacturing; or Rep. Rosa DeLauro, who has introduced a bill to create a federal infrastructure bank, or Rep. John Conyers, who has proposed establishing a national Full Employment Trust Fund by imposing a financial transactions tax on Wall Street; or Rep. Marcy Kaptur, who has proposed establishing a 21st Century Civilian Conservation Corps.   I guess they don't have any power... they're just members of Congress.   

Or reach out to the Blue-Green Alliance, a coalition of obscure environmental and labor organizations like the Sierra Club, the Natural Resources Defense Council, the United Steelworkers, and the United Auto Workers, which supports a ten-year program of federal investment in green energy and green manufacturing to create 5 million jobs.  This is a program that would actually pay for itself through reduced costs for imported oil.

No, we'd rather look at the wrong end of the horse...   and leave people with a sense that that there's nothing left for us but a fiscal crumb fight in the states, vague and unmeasurable statements by governors, and "well-intentioned hot air."  

I like This American Life and think this report is worth listening to -- for all its flaws -- but it tells us something about how mainstream media is missing the boat about jobs.  (Maybe, perhaps, because the reporters who work for NPR are in fact, not leftists.)  And we're left with the implicit assumption that the role of government can only be to support the role of the private sector in job creation.  It's all about education and human capital formation, never mind all the middle-aged, well-educated workers who have been spit out and left to twist in the wind by corporate America, and now -- public sector employers.  

Almost comically, early on in this piece, Glass accuses Dean Baker of the Center for Economic and Policy Research of engaging in "trope" by suggesting that job creation is more important that obsessing about the deficit.

"I mean, to my mind, it really is unconscionable just sit back and have people go, oh, we‘re worried about the deficit 10, 15, 20 years unite when we have 25 million people unemployed, underemployed or out of the labor force altogether... So, getting jobs in the economy really should be front and center."

Exactly right.  Why not let Baker, or some other knowledgable economist like Joseph Stiglitz, make a full-throated defense of how public investment actually does create jobs?  And how job creation actually is much more important than obsessing about the deficit?   

Jobless recovery is an oxymoron, and at the current slow pace of job growth, we're unlikely to get out of it without some major initiative by government, -- yet this piece (which claims "we have answers") provides few ideas on how that could even conceivably take place.  

Full disclosure:   The writer of this post, Charles Bell, serves as vice chair for the National Jobs for All Coalition, which advocates a New Deal, FDR-style federal jobs program of exactly the type that Ira Glass thinks no one -- or at least no one with any power -- is willing to talk about.

AddThis Social Bookmark Button


WPA Posters

Created with Admarket's flickrSLiDR.