How can the government reduce unemployment?

By Felix Salmon
November 16, 2009
Nouriel Roubini says the federal government has to be much more aggressive on the unemployment front:

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Nouriel Roubini says the federal government has to be much more aggressive on the unemployment front:

There’s really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers. Helping the unemployed just by extending unemployment benefits is necessary not sufficient; it leads to persistent unemployment rather than job creation.

I’m sympathetic, but I’d note that the low-hanging fruit has already been picked, when it comes to “labor-intensive, shovel-ready infrastructure projects”, with the first stimulus, and I’m not sure that there are actually any left. Instead, might I suggest arts subsidies?

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Comments
8 comments so far

the low-hanging fruit of “shovel-ready” has been picked.

i’m not sure most of the people who fling that phrase around understand what it means.

“shovel-ready” isn’t “hey, it would be great to build a bridge over there.”

“shovel-ready” is “i’ve got this designed, engineered, permitted set of drawings to build a bridge over there.”

and people don’t spend money on the “designing, engineering, and permit(ing)” unless they have a strong reason to believe it will be built, so whatever was sitting around as “shovel-ready” was grabbed already.

what we need are newly commissioned designs for projects that will be shovel ready in 6-24 months (depending on the nature of the project), not pipe dreams that there are shovel-ready projects right now just waiting on construction funding.

Posted by howard | Report as abusive

Felix I think you are living in a New York bubble with the “Arts Subsidies” idea- the necessity here is to give unemployed people jobs – the vast majority of the unemployed aren’t artists – they are people living in Eastern Oregon, Michigan, etc. These are real people who are really screwed right now – I personally think there should be jobs programs out there as basic as landscaping, painting government buildings, etc. It’s not rocket science- just get these people a paycheck for doing some kind of worthwhile work.

Posted by Will | Report as abusive

Sure, pay the ‘artists.’
But how much in aggregate?
The common “1% for art?”
Sounds ok to me.

But pay them to do what?

If they are qualified to do construction — flatwork for sidewalks or tile/stone, etc — then that would work easily and they can apply their ‘special sensibilities’ to real things. And if not then should join an apprentice program.

By stupid war and stupid monetary policy, the Bush years have sapped our nation self-confidence. What this country needs right now is evidence we can do real things — not just paper manipulation.

And with so many unmet needs for infrastructure to encourage ‘walkable urbanism’ — i.e. sidewalks and curbs, primarily — maybe we should start with something simpler than creating ‘art’…like ‘walk before run.’

Projects for walkable urbanism have several other advantages:
- low tech
- simple to design so can be shovel-ready in short period of time
- labor intensive
- geographically widespread
- amenable to apprentice/training programs

And I should have added that sidewalks are genuinely needed and are by no means ‘make work.’

Also, such projects can help satisfy powerful construction materials and union interests.

Felix, are you constantly pushing art subsidies to make points with your artist wife? Do you get extra affection when you make proposals like this? ‘Cause you can’t really believe that pouring billions of dollars into art is going to help the economy, you have to know better than that.

Art would be just another form of spending on consumption, not investment. At this point, given how much in debt the nation has, we need our public (and many private) expenditures to generate some kind of economic return in the future, so we will be able to pay down that debt. Since the government is not in the business of selling things, its best investments will be those that reduce costs for everybody, like infrastructure that will reduce energy consumption, reduce health care costs, reduce wasted labor, etc., or things that will help us, like faster communications, better transportation systems, better education. Not all stimulus spending is equal: consumption yields transient, one time returns, investments produces recurring profits.

So while a little spending on art may not be a budget killer, it’s not going to turn the economy around, unless you’re going to be able to convince a billion people in Asia that they should buy American art.

Posted by keng | Report as abusive

What about vast improvements to public transportation and passenger rail?

ive already been attacked by a “shovel ready project” and had to spend half the summer repairing my front yard; i’d rather pay those goons to sit on their asses

“Art would be just another form of spending on consumption, not investment.”

I can still remember the WPA mural in the local post office when I was growing up. That lasted 40 years, probably as good an investment as any.

Posted by a | Report as abusive
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