Analytical Summaries of Key Stories of the Week on Economics and Public Policy
A Setback on Jobs (New York Times)
In an analysis of unexpectedly high job losses reported for June, David Leonhardt describes the state of the economy as “stepped back from the precipice of depression” but far from being in good shape.
As U.S. Celebrates July 4th, Rest Assured that Obama is No Socialist (Chicago Tribune)
Citing opinions from economists and other experts, columnist David Greising characterizes the widespread cries of “socialism” from President Obama’s critics as intellectually lazy, arguing that the administration’s policies have been working “at all times from a capitalist frame of reference.”
In a Crisis, Rethinking Fiscal Federalism (New York Times)
Harold Pollack of the University of Chicago School of Social Service Administration and Ed Kilgore, Managing Editor of The Democratic Strategist, contend that complex fiscal crises occurring across the U.S. at the state and local levels reflect “a frayed partnership between states and the federal government.”
New White House Office to Redefine What Urban Policy Encompasses (Washington Post)
President Obama’s newly created Office of Urban Affairs seeks to “redefine the word urban and set the tone for policies not only for inner cities but for nearby suburbs as well, according to this report from Robin Shulman of the Washington Post
Taking Stock: Economy and Government on July 2, 2009 (The Atlantic)
Continuing to characterize the present crisis as a “depression,” Richard Posner cautions that, in spite of signs of “incipient recovery,” prospects for the economy remain uncertain amidst continuing fundamental problems of unemployment, underemployment, declining home prices, and reduced personal consumption.
U.S. Stimulus a Small Patch for Big Economic Hole (Reuters)
In this news analysis piece, Emily Kaiser takes stock of the impact thus far of the federal stimulus package, especially in the context of the daunting difference in magnitude between the federal program’s $787 billion scale vs. the “$12 trillion in household wealth that has been wiped out since the recession began.”
Why This Recession is Hitting Men Harder (Wall Street Journal)
Featuring commentary by experts from the Economic Policy Institute and the Center for Economic Policy and Research, this report from Andrea Coombes examines the factors behind and social impact of the gap in unemployment levels between men (10.5 percent in May) and women (8 percent), especially given that male dominated industries account for half of job losses since the beginning of the recession.
Sphere: Related Content
Showing posts with label unemployment. Show all posts
Showing posts with label unemployment. Show all posts
Tuesday, July 7, 2009
Wednesday, June 24, 2009
The Undismal Weekly Wrap-Up -- June 14-20, 2009
Analytical Summaries of Key Stories of the Week on Economics and Public Policy
As U.S. Takes Tumble, Growing Cries For Policy (Reuters)
Nick Carey reports that, in the wake of the current economic crisis, not only the general public, but now even corporate leaders are beginning to embrace the concept of an increased role of government in formulating financial, economic, and industrial policies and regulations.
Green Economy Investments Bring 300 Percent More Jobs, Reports Find (Reuters)
Analysis by Matthew Wheeland of reports from Green for All, the Natural Resources Defense Council, and the University of Massachusetts at Amherst's Political Economy Research Institute (PERI) indicates that moving toward a low-carbon, energy efficient economy could create 1.7 million new jobs.
How is Money Created? Debunking Some Myths About Recent Policies to Stabilize the Financial System and the Economy (FindLaw)
Neil H. Buchanan addresses popular misconceptions about current monetary policies in response to the recession, such as the misguided belief that the Fed’s actions are tantamount to “printing money” and pose the threat of hyperinflation.
Public Starting to Question Obama Economic Policies (ABC News)
In a review of several recent polls, Jake Tapper reports on indications of increasing unease among the general public about President Obama’s fiscal policies, in spite of his enduring personal popularity.
South Korean PM Says Threats From Climate Change, Economic Crisis Not Mutually Exclusive (Associated Press)
AP journalist Kelly Olsen reports on comments by Prime Minister Han Seung-soo of South Korea about the threats climate change poses to Asia and the danger of separating this situation from the global economic crisis.
Twin Threat: Jobless Rate, Deficit (Wall Street Journal)
Jonathan Weisman explores the quandary the Obama administration faces in attempting to deal with the often-conflicting goals of stemming the tide of unemployment while also trying to restrain runaway budget deficits.
US FED: Warsh Warns Against Singular Focus On 'Stability Experiment' (Forbes)
Federal Reserve Governor Kevin Warsh has cautioned that policy efforts that overemphasize economic stability could stifle future economic growth, according to this report from Reuters. Sphere: Related Content
As U.S. Takes Tumble, Growing Cries For Policy (Reuters)
Nick Carey reports that, in the wake of the current economic crisis, not only the general public, but now even corporate leaders are beginning to embrace the concept of an increased role of government in formulating financial, economic, and industrial policies and regulations.
Green Economy Investments Bring 300 Percent More Jobs, Reports Find (Reuters)
Analysis by Matthew Wheeland of reports from Green for All, the Natural Resources Defense Council, and the University of Massachusetts at Amherst's Political Economy Research Institute (PERI) indicates that moving toward a low-carbon, energy efficient economy could create 1.7 million new jobs.
How is Money Created? Debunking Some Myths About Recent Policies to Stabilize the Financial System and the Economy (FindLaw)
Neil H. Buchanan addresses popular misconceptions about current monetary policies in response to the recession, such as the misguided belief that the Fed’s actions are tantamount to “printing money” and pose the threat of hyperinflation.
Public Starting to Question Obama Economic Policies (ABC News)
In a review of several recent polls, Jake Tapper reports on indications of increasing unease among the general public about President Obama’s fiscal policies, in spite of his enduring personal popularity.
South Korean PM Says Threats From Climate Change, Economic Crisis Not Mutually Exclusive (Associated Press)
AP journalist Kelly Olsen reports on comments by Prime Minister Han Seung-soo of South Korea about the threats climate change poses to Asia and the danger of separating this situation from the global economic crisis.
Twin Threat: Jobless Rate, Deficit (Wall Street Journal)
Jonathan Weisman explores the quandary the Obama administration faces in attempting to deal with the often-conflicting goals of stemming the tide of unemployment while also trying to restrain runaway budget deficits.
US FED: Warsh Warns Against Singular Focus On 'Stability Experiment' (Forbes)
Federal Reserve Governor Kevin Warsh has cautioned that policy efforts that overemphasize economic stability could stifle future economic growth, according to this report from Reuters. Sphere: Related Content
Tuesday, June 9, 2009
The Undismal Weekly Wrap-Up -- May 31-June 6, 2009
Analytical Summaries of Key Stories of the Week on Economics and Public Policy
Central Bank, Government Policy May Have Ended Slump, BIS Says
A “green shoots” story in which Jennifer Ryan of Bloomberg reports on comments in the new quarterly report from the Bank for International Settlements (BIS) on improved investor sentiments, driven by such policies as interest rate cuts and purchases of assets by central banks, indicating that the “global recession may be past its worst.”
Chk It Out: Execs Use Twitter for Biz
Once the current tweetal-wave of hype begins to fade, will Twitter prove to be an ephemeral fad, or will it remain popular, useful and effective for the long haul as a business and marketing tool? A story in the News & Observer (Raleigh-Durham-Chapel Hill, NC) reports on insights from executives who are taking their tweets very seriously.
Economists React: “Why Would Companies Hire?”
Remarks from economists, in the Wall Street Journal’s Real Time Economics blog, on the “smaller than expected decline in nonfarm payrolls and increase in the unemployment rate.” Commentators include Heidi Shierholz, Economic Policy Institute; Ian Shepherdson, High Frequency Economics; Guy LeBas, Janney Montgomery Scott; Joshua Shapiro, MFR Inc.; Steven Ricchiuto, Mizuho Securities; Richard F. Moody, Forward Capital; Millan L. B. Mulraine, TD Securities; David Greenlaw, Morgan Stanley; and Scott A. Anderson, Wells Fargo.
Is GM Really Too Big to Fail?
Howard Wial, Director of the Brookings Institution’s Metropolitan Economy Initiative, and Daniel J. Ikenson, Associate Director of the Cato Institute’s Center for Trade Policy Studies, face off in the Los Angeles Times, in a “point/counter-point” format, on whether a complete failure of General Motors would have put more stress on the auto industry. Wial argues in favor of government intervention but urges more of an eye on strategically positioning the automaker for what is likely to happen in the market after the recession is over, while Ikenson argues adamantly for the laissez-faire approach, adding that government involvement with GM adversely affects the competitive playing field for other, healthier automakers.
The Facts About the Health Insurance Industry
In a blog post on The Daily Kos, a practicing family physician argues, after providing a scathing contextual background about the profit-driven motivations and heavy lobbying clout of the private health insurance industry, that “The only cure for our problem is a single payer, national, universal, health financing program like Medicare for All.”
Why This Crisis May Be Our Best Chance to Build a New Economy
Though some might describe his economic visions as new-agey, fancifully Utopian, kumbaya-ish, and reflecting a concept of human nature that may not hold true in practical reality, David Korten always makes for engaging, thought-provoking reading. His vision of an economy that serves people rather than the reverse, while also respecting the environment, was formed during his years abroad as an international development professional. In this article, Korten argues that the current crisis hit at an opportune time, “before the worst of global warming or peak oil,” and has shaped public opinion in a direction that creates an unprecedented opportunity to “build a powerful popular political movement demanding a new economy designed to serve our children, families, communities, and nature.”
The Real Roots of the Auto Crisis
Detroit Free Press columnist Carol Cain reports on her interview with David Cole, chairman of the Center for Automotive Research in Ann Arbor, who argues passionately that a misinformed national media in the U.S. have driven the public to the conclusion -- erroneous, in Cole’s view -- that the crisis of the automobile industry is the result of a failure of management. The crisis is attributable entirely to “the massive collapse of financial markets” according to Cole, who adds that automakers throughout the world have been the beneficiaries of government support during the global crisis, with the U.S. being a late entrant with efforts to aid its manufacturers. Sphere: Related Content
Central Bank, Government Policy May Have Ended Slump, BIS Says
A “green shoots” story in which Jennifer Ryan of Bloomberg reports on comments in the new quarterly report from the Bank for International Settlements (BIS) on improved investor sentiments, driven by such policies as interest rate cuts and purchases of assets by central banks, indicating that the “global recession may be past its worst.”
Chk It Out: Execs Use Twitter for Biz
Once the current tweetal-wave of hype begins to fade, will Twitter prove to be an ephemeral fad, or will it remain popular, useful and effective for the long haul as a business and marketing tool? A story in the News & Observer (Raleigh-Durham-Chapel Hill, NC) reports on insights from executives who are taking their tweets very seriously.
Economists React: “Why Would Companies Hire?”
Remarks from economists, in the Wall Street Journal’s Real Time Economics blog, on the “smaller than expected decline in nonfarm payrolls and increase in the unemployment rate.” Commentators include Heidi Shierholz, Economic Policy Institute; Ian Shepherdson, High Frequency Economics; Guy LeBas, Janney Montgomery Scott; Joshua Shapiro, MFR Inc.; Steven Ricchiuto, Mizuho Securities; Richard F. Moody, Forward Capital; Millan L. B. Mulraine, TD Securities; David Greenlaw, Morgan Stanley; and Scott A. Anderson, Wells Fargo.
Is GM Really Too Big to Fail?
Howard Wial, Director of the Brookings Institution’s Metropolitan Economy Initiative, and Daniel J. Ikenson, Associate Director of the Cato Institute’s Center for Trade Policy Studies, face off in the Los Angeles Times, in a “point/counter-point” format, on whether a complete failure of General Motors would have put more stress on the auto industry. Wial argues in favor of government intervention but urges more of an eye on strategically positioning the automaker for what is likely to happen in the market after the recession is over, while Ikenson argues adamantly for the laissez-faire approach, adding that government involvement with GM adversely affects the competitive playing field for other, healthier automakers.
The Facts About the Health Insurance Industry
In a blog post on The Daily Kos, a practicing family physician argues, after providing a scathing contextual background about the profit-driven motivations and heavy lobbying clout of the private health insurance industry, that “The only cure for our problem is a single payer, national, universal, health financing program like Medicare for All.”
Why This Crisis May Be Our Best Chance to Build a New Economy
Though some might describe his economic visions as new-agey, fancifully Utopian, kumbaya-ish, and reflecting a concept of human nature that may not hold true in practical reality, David Korten always makes for engaging, thought-provoking reading. His vision of an economy that serves people rather than the reverse, while also respecting the environment, was formed during his years abroad as an international development professional. In this article, Korten argues that the current crisis hit at an opportune time, “before the worst of global warming or peak oil,” and has shaped public opinion in a direction that creates an unprecedented opportunity to “build a powerful popular political movement demanding a new economy designed to serve our children, families, communities, and nature.”
The Real Roots of the Auto Crisis
Detroit Free Press columnist Carol Cain reports on her interview with David Cole, chairman of the Center for Automotive Research in Ann Arbor, who argues passionately that a misinformed national media in the U.S. have driven the public to the conclusion -- erroneous, in Cole’s view -- that the crisis of the automobile industry is the result of a failure of management. The crisis is attributable entirely to “the massive collapse of financial markets” according to Cole, who adds that automakers throughout the world have been the beneficiaries of government support during the global crisis, with the U.S. being a late entrant with efforts to aid its manufacturers. Sphere: Related Content
Monday, June 1, 2009
The Undismal Weekly Wrap-Up -- May 24-30, 2009
Analytical Summaries of Key Stories of the Week on Economics and Public Policy
Fed’s Trouble with Bubbles
In the Wall Street Journal’s Real Time Economics blog, Michael S. Derby reports that the Fed’s views are evolving beyond their historic reluctance, based on doubts about their ability to detect them accurately, to target interventions at preventing or mitigating price bubbles.
Geithner Goes to Beijing to Manage Bad Marriage: Relationship, Smooth During Recession, May Get Stormy
With the U.S. highly dependent on China, which now holds $1.55 trillion in dollar assets, to purchase U.S. debt, Greg Robb of Marketwatch describes the relationship as “a marriage of convenience” that may have new strains on the horizon.
How Economists Can Misunderstand the Crisis
In an article reprinted from the Financial Times, Harvard University Professor Laurence A Tisch counters many economists by arguing that current U.S. fiscal policy of heavy deficit spending financed by massive issuance of new bonds is likely to lead to inflation and upward pressure on long-term interest rates.
Marginal Workers, Underemployed Push Economic Fringe to Limit
Citing sources from the Center on Budget and Policy Priorities, the Economic Policy Institute, the National Jobs for All Coalition, and the Employee Benefit Research Institute, Martha C. White reports in the Colorado Independent on the plight of the underemployed, “a diffuse, often poorly tracked cross section of citizens … living on the economic fringes” and who, when added to the more widely reported circumstances of the outright jobless, paint a much bigger picture of economic strain in the U.S.
Millionaires Go Missing: Maryland's Fleeced Taxpayers Fight Back
Are millionaires in Maryland pulling a John Galt and disappearing? A column in the Wall Street Journal’s Opinion Journal reports that “nearly one-third of the millionaires have disappeared from Maryland tax roles” since the creation by the state legislature of “a millionaire tax bracket” that raises the state’s top marginal income rate.
Public Health Care and Health Insurance Reform — Varied Preferences, Varied Options
Taking the perspective that healthcare reform is inevitable, with only details in question, Mark V. Pauly, Ph.D., argues in the New England Journal of Medicine in favor of a menu of health insurance plans, available to all population groups, managed by both public and private organizations, to meet highly variable preferences of consumers. Sphere: Related Content
Fed’s Trouble with Bubbles
In the Wall Street Journal’s Real Time Economics blog, Michael S. Derby reports that the Fed’s views are evolving beyond their historic reluctance, based on doubts about their ability to detect them accurately, to target interventions at preventing or mitigating price bubbles.
Geithner Goes to Beijing to Manage Bad Marriage: Relationship, Smooth During Recession, May Get Stormy
With the U.S. highly dependent on China, which now holds $1.55 trillion in dollar assets, to purchase U.S. debt, Greg Robb of Marketwatch describes the relationship as “a marriage of convenience” that may have new strains on the horizon.
How Economists Can Misunderstand the Crisis
In an article reprinted from the Financial Times, Harvard University Professor Laurence A Tisch counters many economists by arguing that current U.S. fiscal policy of heavy deficit spending financed by massive issuance of new bonds is likely to lead to inflation and upward pressure on long-term interest rates.
Marginal Workers, Underemployed Push Economic Fringe to Limit
Citing sources from the Center on Budget and Policy Priorities, the Economic Policy Institute, the National Jobs for All Coalition, and the Employee Benefit Research Institute, Martha C. White reports in the Colorado Independent on the plight of the underemployed, “a diffuse, often poorly tracked cross section of citizens … living on the economic fringes” and who, when added to the more widely reported circumstances of the outright jobless, paint a much bigger picture of economic strain in the U.S.
Millionaires Go Missing: Maryland's Fleeced Taxpayers Fight Back
Are millionaires in Maryland pulling a John Galt and disappearing? A column in the Wall Street Journal’s Opinion Journal reports that “nearly one-third of the millionaires have disappeared from Maryland tax roles” since the creation by the state legislature of “a millionaire tax bracket” that raises the state’s top marginal income rate.
Public Health Care and Health Insurance Reform — Varied Preferences, Varied Options
Taking the perspective that healthcare reform is inevitable, with only details in question, Mark V. Pauly, Ph.D., argues in the New England Journal of Medicine in favor of a menu of health insurance plans, available to all population groups, managed by both public and private organizations, to meet highly variable preferences of consumers. Sphere: Related Content
Friday, May 15, 2009
Economic Policy Institute Says Workers Over 45 Hit Hardest
A news brief issued today by the Economic Policy Institute (EPI) argues that the current recession has taken an unusually high toll on workers over age 45, many of whom “say their job search is fruitless.” As one of the organizations co-sponsoring the Retirement USA initiative, EPI is particularly focused on concerns of older workers.
In an April 28 post, I argue as well for the need to re-think the retirement system in the U.S., based on the big question marks, raised by that the performance of equities markets over the past 10 years, over whether we can still think of the 401(k) model as a viable retirement solution for the average worker. My post also suggests that increasing the expected retirement age may also need to be a factor in an overhauled system, with the caveat that allowances may need to be made for the fact that, in spite of longer life expectancies, the health profile of Americans past age 60 remains highly variable.
Today’s brief from the EPI, however, references a briefing paper by economist Monique Morrissey that raises valid counterpoints on the retirement age issue, at least in the context of the existing Social Security system, favoring instead an increase to the rate cap on income subject to the Social Security tax.
According to a press release announcing Morrissey’s paper, “Most of the increase in life expectancy in recent decades has been among higher-income workers. Raising the Social Security retirement age would be especially hard on lower-income and minority workers, given large and growing disparities in life expectancy and poor health and/or job prospects.”
The point is well taken and, along with the issue of the current recession impacting older workers disproportionately, makes me recall a comment I heard a few weeks ago from a guest on Bob Brinker’s Moneytalk radio program that the administration should even consider allowing displaced workers as young as 55 to begin collecting Social Security benefits, based on how poor their job prospects may be in the current economy.
However, if we buy into the concept that the 401(k) model is not delivering on its early promises as a viable model, we can’t afford to lose site of the likelihood that tweaking Social Security will not be the long-term answer. Sphere: Related Content
In an April 28 post, I argue as well for the need to re-think the retirement system in the U.S., based on the big question marks, raised by that the performance of equities markets over the past 10 years, over whether we can still think of the 401(k) model as a viable retirement solution for the average worker. My post also suggests that increasing the expected retirement age may also need to be a factor in an overhauled system, with the caveat that allowances may need to be made for the fact that, in spite of longer life expectancies, the health profile of Americans past age 60 remains highly variable.
Today’s brief from the EPI, however, references a briefing paper by economist Monique Morrissey that raises valid counterpoints on the retirement age issue, at least in the context of the existing Social Security system, favoring instead an increase to the rate cap on income subject to the Social Security tax.
According to a press release announcing Morrissey’s paper, “Most of the increase in life expectancy in recent decades has been among higher-income workers. Raising the Social Security retirement age would be especially hard on lower-income and minority workers, given large and growing disparities in life expectancy and poor health and/or job prospects.”
The point is well taken and, along with the issue of the current recession impacting older workers disproportionately, makes me recall a comment I heard a few weeks ago from a guest on Bob Brinker’s Moneytalk radio program that the administration should even consider allowing displaced workers as young as 55 to begin collecting Social Security benefits, based on how poor their job prospects may be in the current economy.
However, if we buy into the concept that the 401(k) model is not delivering on its early promises as a viable model, we can’t afford to lose site of the likelihood that tweaking Social Security will not be the long-term answer. Sphere: Related Content
Wednesday, April 15, 2009
Beyond the Official Unemployment Numbers: Rutgers Survey Finds Wide-Ranging Distress
A new Work Trends survey by the Heldrich Center for Workforce Development at Rutgers University finds the American worker in a state of deep distress due to the economic downturn. Nearly a third (32%) of those in the labor force believe the United States economy is in a depression, and half (53%) think the economic problems indicate the economy is undergoing fundamental and lasting changes.
Job losses are widespread. Nearly one quarter (23%) of workers say they have been laid off from a full- or part-time job in the past 3 years. Four in ten workers (42%) have watched co-workers get laid off over the last three years. Nearly a third of workers (29%) expect layoffs to occur in their workplace in the next 12 months. Only 11 percent say they have a great deal of confidence in the American banking system.
Job losses are widespread. Nearly one quarter (23%) of workers say they have been laid off from a full- or part-time job in the past 3 years. Four in ten workers (42%) have watched co-workers get laid off over the last three years. Nearly a third of workers (29%) expect layoffs to occur in their workplace in the next 12 months. Only 11 percent say they have a great deal of confidence in the American banking system.
“Americans are experiencing the severity and depth of this recession on a daily basis,” says Carl Van Horn, Ph.D., Director of the Heldrich Center for Workforce Development and Professor at Rutgers University. “And they are not optimistic about the future job market either.”
Since the last Work Trends survey conducted in May 2008, perceptions of economic conditions have significantly declined and workers express significant concerns. Compared to the 2008 Work Trends survey, The Anxious American Worker, Americans in the labor force have become significantly distressed about keeping their jobs and are pessimistic about new job prospects.
Nearly 7-in-10 (67%) workers are now very concerned with the unemployment rate, compared to 5-in-10 (46%) workers in 2008. Nearly half of the labor force (49%) is now very concerned with job security for those currently working, compared to a third (32%) in 2008. And nearly 7 in 10, or 68% of respondents, say they are very concerned about the job market for those looking for work, up 20 percentage points since last spring (48%) .
The national survey was conducted March 19-29, 2009, among 700 adults in the labor force, defined as those working full- or part-time jobs or unemployed and actively seeking employment. Amid the stress of layoffs, lack of job security, loss of retirement savings, and the dismal job market, the survey depicts American workers stunned by the direness of the country’s economic situation.
For further details, see the full press release.
Sphere: Related Content
Since the last Work Trends survey conducted in May 2008, perceptions of economic conditions have significantly declined and workers express significant concerns. Compared to the 2008 Work Trends survey, The Anxious American Worker, Americans in the labor force have become significantly distressed about keeping their jobs and are pessimistic about new job prospects.
Nearly 7-in-10 (67%) workers are now very concerned with the unemployment rate, compared to 5-in-10 (46%) workers in 2008. Nearly half of the labor force (49%) is now very concerned with job security for those currently working, compared to a third (32%) in 2008. And nearly 7 in 10, or 68% of respondents, say they are very concerned about the job market for those looking for work, up 20 percentage points since last spring (48%) .
The national survey was conducted March 19-29, 2009, among 700 adults in the labor force, defined as those working full- or part-time jobs or unemployed and actively seeking employment. Amid the stress of layoffs, lack of job security, loss of retirement savings, and the dismal job market, the survey depicts American workers stunned by the direness of the country’s economic situation.
For further details, see the full press release.
Tuesday, April 7, 2009
Obama Administration Should Take More Direct Action to Reverse the Layoff Tsunami
The March jobless report, which shows no sign of a letup in the increasing monthly pace of job elimination, is alarming. Even more alarming are the recent comments by some experts that we may be nowhere near the peak of the layoff tsunami. This suggests, to me, that more action by the Obama administration is called for to target the layoff problem directly.
While the administration should be commended for the fast pace of immediate action it has taken, in its early months, on the overall effort to turn the economy around, several more months of layoffs at the current pace could impose tremendous human and financial costs from which it could take years to recuperate, and could retard the pace of the overall economic recovery when it finally begins.
Granted, this is easier said than done. We all understand that the layoffs are a dramatic sign of the measures businesses are taking to preserve precious cash in an environment of declining sales and still-tight credit. It’s also well known that, in recessions, the worst waves of layoffs often occur after the overall economy has already started to recover. Layoffs are a “lagging indicator,” reflecting events businesses experienced several months back. The March numbers likely reflect dismal results that were showing up for many businesses as they prepared to report their first-quarter financials.
Obviously the administration doesn’t have the power to control layoffs directly. But there may be certain interventions that could help. Here are just a couple of top-of-the head ideas, the administrative and financial viability of which, of course, would need to be evaluated:
- Tax breaks, perhaps in the form of a limited-time waiver of Federal Unemployment Tax payments, for each employee a business calls back from a layoff
- A tax break or partial federal guarantee to banks on any increase to a company’s credit line needed to return a laid-off employee to the payroll
I am sure that the likes of Paul Volcker, Austan Goolsbee, and the other great minds on the President’s economic team could come up with even better, more creative ideas. And it also seems logical that an incentive-based program to put employees back to work quickly at what they were doing previously could help the recovery by creating an efficiency advantage, compared to displaced employees churning through a slow-moving job market, only to face learning curves after finally securing new positions.
But regardless of what form any specific actions might take, the numbers seem to be warning us that action is needed, and soon, to intervene more directly in the layoff crisis.
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