What's Your Jobs Plan?
MICHEL MARTIN, Host:
This is TELL ME MORE from NPR News. I'm Michel Martin.
Coming up, the chronic use of excessive force, indifference to violence against women, racial profiling - those are just some of the problems plaguing the police force in Puerto Rico. That, according to a new report from the U.S. Department of Justice. We'll talk about those findings with Puerto Rico's Lieutenant Governor, Kenneth McClintock, and a representative from the ACLU, which has been investigating this issue for many years. We'll have that conversation in a few minutes.
But first, President Obama delivers his $447-billion jobs plan to Congress today. The American Jobs Act outlines a package of tax breaks, spending proposals and unemployment compensation reforms aimed at getting Americans back to work and easing the struggles of those who remain jobless.
In remarks from the Rose Garden today, the president insisted that the Congress should consider and approve his proposal immediately.
(SOUNDBITE OF SPEECH)
BARACK OBAMA: This is a bill that would put people back to work all across the country. This is the bill that will help our economy in a moment of national crisis. This is a bill that is based on ideas from both Democrats and Republicans. And this the bill that Congress needs to pass.
MARTIN: But even before the president spoke to Congress and the nation about his jobs plan last Thursday, we asked you, our listeners, on Facebook, to send in your plans for getting the 14 million unemployed Americans working again. We got over a thousand responses.
So to talk about just some of your ideas, we have with us, NPR's senior business editor Marilyn Geewax; and with us once again, Wall Street Journal reporter, Sudeep Reddy. He covers economics. Thank you both so much for coming in.
SUDEEP REDDY: Thank you, Michel.
MARILYN GEEWAX: Hi.
MARTIN: It was interesting, wasn't it, the responses that we got. Marilyn, were you surprised by just the level of detail and comprehensiveness?
GEEWAX: Well, the jobs issue is certainly priority number one for most Americans right now. We still got about 14 million people who are unemployed, lots of long-term unemployed people out there, almost half of everyone who doesn't have a job has been out of work more than six months. So, we've really got a lot of interest in this. And I think people are pretty detailed and eager to try to pitch in their ideas.
MARTIN: Let's start with a comment from Vincent Aguilera(ph) from Los Angeles. We wrote: Take a page from China. They're investing billions of dollars into three things - green renewable technology, stem cell research and nanotechnology. Also, we need to totally rebuild infrastructure on major American cities. They need to be updated for the upcoming century. Public transportation, high-speed railroads, you name it, that's the future. We're dead in the water if we don't do it.
Sudeep, isn't some of these already in the president's plan? But I'd like to ask, you know, how feasible is this in the current budget and political environment?
REDDY: Whether it's feasible or not, all of these are actually really good, important things for the government to do. It's, kind of, the core purpose of government to spend its money and its time on technologies that aren't yet being adapted in the private sector. When you think of nanotechnology today, you might look back and think of the Internet 40 or 50 years ago and how the government had a role in building that up and starting it, and creating an industry for the U.S.
The big question here, though, is it stimulus? And is it something that will actually stimulate the economy in the short term? A lot of this isn't immediate. It's going to be maybe a decade or two of investment. It doesn't mean it's not useful, it's just it raises the question of whether this is something that is the best use of money right now for this particular purpose.
MARTIN: And, Marilyn, what about that? I mean, there already has been - already have been, if you travel anywhere in the country, you will signs saying, you know, this project funded by the American Reinvestment and Recovery Act, you know, an earlier aimed at using infrastructure spending to boost the economy. Has that worked? Is there any evidence to show whether it's worked or not?
GEEWAX: Well, for the individuals who've gotten work, it worked for them. I mean, there really are people who have jobs today and are working on bridges and roads that wouldn't have had those jobs if it weren't for that spending. The question about all of these things is, when is it the best bang for your buck?
Now, when it comes to infrastructure, there's pretty widespread agreement that Chamber of Commerce wants more infrastructure, business groups generally want more infrastructure, you need to have good roads to get your goods to markets. You need to have airports that you can attract travelers to your region. Whatever. You need to have basic infrastructure that works.
Now, the questions are, how do you best stimulate that? Are there a lot of people, you know, sort of the image of people leaning on shovels? Is it wasted money or is it really effective? And there you'd have a lot of disputes. I think that everybody pretty much agrees that infrastructure is good for an economy. But whether or not the way it's spent, the way contracts are led, is the most efficient use of tax dollars? That's always debatable.
MARTIN: Speaking of people leaning on shovels, a number of listeners expressed interest in bringing back something called like the Civil Conservation Corps or the CCC. This was a program used to create jobs and increase conservation efforts. It was part of a New Deal back in the '30s and early '40s.
GEEWAX: When my father was a young teen, he was in the CCC camps and, you know, it kept him sending money home. It brought money into his family. It gave him responsibility. And ultimately, it left a legacy for a lot of younger people that - you know, I grew swimming in a swimming pool that was built by CCC-type workers, some of those government workers. They built parks, they built schools. They left a legacy that kept on paying out.
But, again, it becomes a question of, of all the CCC workers and that kind of New Deal program, how much of it really built infrastructure at the most efficient cost, and how much of it was, sort of, wasted? And, you know, you're always going to have a political debate about that and it was certainly controversial in the 1930s as well.
MARTIN: We're talking about our listeners' ideas for getting Americans back to work. Our guests are Marilyn Geewax, NPR's senior business editor and Sudeep Reddy. He covers economics for the Wall Street Journal. But really, our guests today, are our listeners who sent in more than a thousand responses to our call for what's your idea for getting Americans back to work.
Sudeep, listener Howard Love(ph) suggested that the government, quote, "eliminate all corporate income tax on U.S.-base corporations that have 90 percent or more of their employees and production here in the U.S.," unquote. He also calls for severely taxing imported goods.
REDDY: That would make a lot of those imported goods very expensive to come in from China, to come in from India. And that's a form of trade protection, essentially, that can actually hurt us in some areas of the economy as well. So, all of these things aren't as easy as they sound.
MARTIN: But is there any political consensus around that idea? Is there anyone arguing that idea?
REDDY: There are actually a few people arguing that today, which is why it's interesting to see somebody raise it. This was kind of the debate that was in the early '90s around NAFTA. It's come up a little bit with some of the recent trade agreements, whether it's really in the U.S. interest to give so much when other countries may not be willing to give up as much as we want to get our products into those countries. And so, that's actually a really good issue.
On corporate taxes, the biggest problem is so many other countries have taken action to draw in American corporations, to draw in other corporations by slashing their taxes and it's worked, in many cases, to pull them in. And that's where the argument actually is starting to gain some traction among Democrats, among people in the left, that you don't want to lead all this potential employers elsewhere. But there is a cost to it.
MARTIN: How would that work with something like a car manufacturer like Toyota or Honda or BMW who have plants in the United States. How would that work?
REDDY: Well, that's one of the problems is you don't - it's very hard to determine something like this when you have a global economic system like we have with goods flowing back and forth. A lot of these companies - BMW has built a plant in South Carolina and those are American jobs. A lot of the profits are reinvested here. Much of those go back to Germany. So, it's hard to untangle all of this.
MARTIN: And finally, I want to spend some time with what I think is going to be a provocative idea from listener Dan Wasinski(ph). He is from Michigan. This is what he had to say about unemployment benefits. Here it is.
DAN WASINSKI: Get the government out and let the market self-correct and don't give handouts so freely and for so long. Ninety-nine weeks of unemployment - it sounds like you might need to start readjusting your lifestyle. If you get to week 60 and you still don't have any employment, in certain cases, you may have to just consider downsizing, letting your home go and saving money and doing what's best for you.
MARTIN: Marilyn, what about that? This is an interesting debate that you're starting to hear more, you know, in the blogosphere and certainly among conservative pundits. And but what does the data say about the effect of extending unemployment benefits? This is something the president calls for in his plan.
GEEWAX: There is a growing body of thought that the longer you give people unemployment benefits in this economy, the longer you're out of the workforce, the less likely it is that you'll get hired. There are a lot of employers who say if you haven't had a job in two years, you're sort of damaged goods and we don't want to talk to you.
So there are economists who really can point to serious data that say the longer you drag it out, the worse off you are, that if you haven't had a job in two years, truthfully, you do need to make some real changes in your life, maybe move in with a family member, go back to school, do something, that just extending benefits does not really do you any good in the long run.
But there's also an economic stimulus argument, which is that, right now, we do need to have more economic activity and there are many households where people just can't afford to go back to school or move or whatever because their house is underwater. They can't sell the house. They can't afford tuition. So if you took away these benefits, it would really have an impact on the local grocery store, on retailers. All sorts of people could get hurt if those checks stopped coming into people's homes.
MARTIN: Sudeep, a final thought from you?
REDDY: This view is really one that's gained more attraction. Unfortunately, when you talk to people who are unemployed, you generally don't find that they're sitting around collecting an unemployment check and doing nothing because that check is a third of their former salary, sometimes less.
They're usually going out and actually trying to find jobs. The ones I talked to are spending a lot of their time applying for jobs, sometimes hundreds, and just not finding them out there.
So to say that just cutting everyone off is going to lead them to suddenly find a job is a little misleading. And there's a larger point there, this philosophical issue of whether the government should have a role in at least moderating a downturn or whether it should kind of purge the system. This was kind of the Herbert Hoover view right in the midst of the early stages of the Depression is purge the system. Have some really rapid unemployment. Get it out of the system.
The problem is you might be able to get 25 or 30 percent unemployment for a shorter period versus 10 percent for a longer period, but that creates all sorts of other effects, like dropping confidence across the economy. It's not quite clear that you can pull out of something as quickly as people make it sound in a theoretical basis.
MARTIN: And isn't part of the issue here that we are actually in sort of a political equipoise, that half of the people in government believe in the tough love approach and half believe in mitigating the effects of the downturn? Isn't that part of the problem? It's a political issue, not just an economic theory issue. Equipoise. I like that one. One of my favorites.
And thank you both. Sudeep Reddy covers economics for the Wall Street Journal. Marilyn Geewax is NPR's senior business editor. To be continued. They joined us to talk about our listeners' suggestions for improving America's employment rate. They were both here in our Washington, DC studio. Something tells me we're going to be talking about this some more.
Thank you both so much.
REDDY: Thank you.
GEEWAX: You're welcome.
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