Jeffrey Sachs on Obama's "Inadequacy"
Esteemed economist Jeffrey Sachs has a column in the Financial Times today on Obama's failure to apply the breaks to the runaway train of unemployment. In a nutshell, he says both Republican's tax cut orthodoxy and the White House's misguided stimulus fail to address the structural changes we'll need to create jobs that last. I'll meet Sachs halfway here.
I agree with Sachs that we've got a jobs crisis. I've been yapping about the administration's failure to address rising joblessness today. It's both good policy and good politics to pass short-term measures -- like extending jobless benefits and giving direct aid to the states and maybe even considering a payroll tax holiday, so long as it's capped at a low income level to concentrate the benefits in the hands of poorer Americans who are more likely to spend their next dollar.
Sachs triptych solution to fix our job crisis is long-term: 1) Greater exports (2) Massive expansion of education spending and job training and (3) Invest in energy and infrastructure.* But it seems to me that Sachs is answering today's crisis with tomorrow's solutions. Certainly the United States needs a long-term strategy to grow the economy when the recession is fully behind us. But the recession isn't in the rear-view mirror -- it's hanging onto the car bumper for dear life. We're all still feeling the drag, and we need to shake off this unemployment now.
So I guess I'm confused. Sachs writes, "The Obama administration's stimulus policies are not well-targeted" to save jobs today. Then he proposes solutions that won't pay off for many tomorrows, if not months, or years. We'll need to think about the long game, and I'm glad Sachs is eager to kick off the brainstorming. But this column is the right answer to the wrong question.
*Those last two ideas are, Sachs acknowlegdes, somewhat in line with Obama's 2010 budget, which vastly expands college education spending and energy investment. In fact, between $50 billion earmarked for green energy in the stimulus and another $150 billion in the budget, Obama is making a $200 billion bet on green energy to drive the economy in the next few years.