Getting Past The Gridlock Of The U.S. Economy

Earlier this week, President Obama and Congress negotiated a deal to raise the debt ceiling before the deadline. But that deal hasn't calmed American and global stock markets as recent economic reports indicate the U.S. could be headed toward another recession. Steve Inskeep talks to National Journal economics correspondent Jim Tankersley, about a few ways the U.S. could boost much-needed economic growth and create jobs.

RENEE MONTAGNE, host:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

STEVE INSKEEP, host:

And I'm Steve Inskeep.

More than once in this program we've heard references to governments running short of bullets to deal with the weak economy.

Jim Tankersley of the National Journal has been asking now what Congress could pass to fight unemployment and economic weakness in the months ahead. He's in our studios. Welcome to the program.

Mr. JIM TANKERSLEY (Economics Correspondent, National Journal): Thanks for having me.

INSKEEP: Your starting argument, I should point out though, is that Congress keeps talking about jobs but that they actually blew their chance to do something over the summer.

Mr. TANKERSLEY: Right. Yeah, they just spent the last three and a half months basically focusing on a problem that they created themselves, which was whether or not to raise the debt ceiling. And in that time, things got very bad in the economy. A bunch of data went south. They didn't deal with it.

And now, it's time for the president, for Harry Reid, Nancy Pelosi and the Republican leaders John Boehner and Mitch McConnell to sit down and devote the exact same sort of attention to the jobs problem that they devoted to the debt problem.

INSKEEP: Although we should point out, as you do, that there doesn't seem to be widespread political support for massive, massive spending at this moment as there was in 2009.

Mr. TANKERSLEY: Absolutely not. No. I think that big spending initiatives are basically off the table.

INSKEEP: So, what is on the table?

Mr. TANKERSLEY: Well, what should be on the table are a variety of things. I'm not sure anything's on the table right now. This is part of the problem. They're just not talking about it. But you could do some very creative things that could get some bipartisan support.

INSKEEP: Such as?

Mr. TANKERSLEY: Such as free trade grand bargain, as I put it. You could pass the outstanding free trade agreements with Colombia, South Korea and Panama and you could couple that with a serious crackdown on China's currency manipulation, which is something liberals want.

INSKEEP: Because Republicans want the free trade agreements and you say liberals want the crackdown on China. Didn't the Senate leaders, Harry Reid and Mitch McConnell, actually this week agree on some framework to consider these free trade agreements?

Mr. TANKERSLEY: Right. They'll start moving those. And the important thing is if you move those quickly and actually start opening up those markets, but you're also do something about currency, then you could really start creating a lot of jobs fairly soon.

INSKEEP: Fairly soon? This is something that could actually make a big difference in this economic cycle that we're in right now?

Mr. TANKERSLEY: I mean, I think within the next year, particularly if you could really do something about, you know, China buying more of our exports would be one of the best things you could do. Exports have been a strength of this recovery. And if you can make that stronger by really upping how much China buys from us by getting their currency more fairly valued, you can have a chance.

INSKEEP: What is one other thing that might be done that could boost the jobs picture in the United States and the economic picture of the United States?

Mr. TANKERSLEY: Well, the big thing you have to deal with is the housing market. And this is, again, if there's something that Washington has paid less attention to than jobs, it's housing. But it is the big restraint in our economy. So you could, again, grand bargain time here. You could give Republicans what they want, which is to move people as quickly as possible through the foreclosure process if they really can't afford the house they're in.

But then you could give Democrats what they want, which is some bridge loan type of abilities, some money for people who maybe lost a job and can't make their mortgage payments. Give them a loan from the government, like student loan, let them keep those payments up until they find a job. And that would stabilize the foreclosure rate and stabilize the housing market, which would lead to a lot of job creation.

INSKEEP: But wait a minute. The deal you're talking about here, you're getting people out of their houses they can't afford while also helping people stay in the houses they can't afford.

Mr. TANKERSLEY: Here's the trick: you have to figure out who can really afford their house and who can't. People who bought a house they just couldn't afford from the beginning; the people with a subprime loan maybe or just bought way too big of a house. You got to get them out, because they're clogging up the system right now with slow foreclosures.

But the people who can afford their house if they're working, but just lost their jobs because of the recession, those are the folks you want to help stay in for now.

INSKEEP: Well, Jim Tankersley of the National Journal, I want to ask one other thing. A couple of polls, CBS and New York Times this week as well as CNN -CBS/New York Times poll and a CNN poll show Congress with an approval rating of 14 percent. Lawmakers have got to know by now they seriously damaged their brand over the summer, more than usual. Are they actually going to feel pressured to accomplish anything this fall?

Mr. TANKERSLEY: I mean, I sure hope they do. And I sure hope that they would actually come back and feel pressure not just to dance around and make big rhetorical statements, but to get down - again, lock themselves in a room literally until they can come out with some real agreement on jobs.

INSKEEP: Jim, thanks very much.

Mr. TANKERSLEY: Thank you.

INSKEEP: Jim Tankersley is economics correspondent for National Journal.

Copyright © 2011 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by a contractor for NPR, and accuracy and availability may vary. This text may not be in its final form and may be updated or revised in the future. Please be aware that the authoritative record of NPR’s programming is the audio.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.