How to Create Jobs

In the New York Times, Paul Krugman says the administration needs to do more to promote job growth. “It’s time for an emergency jobs program. How is a jobs program different from a second stimulus? It’s a matter of priorities. The 2009 Obama stimulus bill was focused on restoring economic growth. It was, in effect, based on the belief that if you build G.D.P., the jobs will come. That strategy might have worked if the stimulus had been big enough — but it wasn’t. And as a matter of political reality, it’s hard to see how the administration could pass a second stimulus big enough to make up for the original shortfall.”

Separately, Gary Becker and Richard Posner debate what to do about unemployment. Becker: “It is wiser to cut labor costs in other ways. I fully endorse Posner’s suggestions to cut the minimum wage, but I do not see that happening with the present Congress. My favorite approach it to try to stimulate the economy by cutting income taxes, especially corporate income taxes and other taxes on capital, both physical and human capital. Such tax cuts will stimulate investments in the economy, and in this way increase the demand for workers.”

Personally, I prefer Becker's approach. That policy option has worked best in the green industry historically.