Robert Shiller Urges Revenue Sharing To Add Jobs

New York Times:

Protracted unemployment is eating away at millions of people. And the economy's failure to create enough jobs for them is part of a vicious circle that could keep turning for years to come.

In my last column, I called for big, temporary government programs aimed directly at putting people back to work. But how might we best accomplish this? The clock is ticking, and we don't have time to create new national organizations to employ people. Instead, the most efficient approach is to use existing organizations for specific ideas and projects.

State and local governments as well as nonprofit and other organizations need to be mainstays in this effort. We need to enlist their help -- without telling them exactly what to do. As for a framework, think of the general revenue sharing program adopted by Congress in 1972.

Read the whole story: New York Times

Comments

[Charley Dommel]

04:51 PM on 09/06/2010

The just posted comment is from Paul R. Dommel, not Charley. Charley is the name I use for my blog: charley-liberaldog.blogspot.com.

[Charley Dommel]

04:49 PM on 09/06/2010

In principle, Shiller may have a valid idea. But as author of the l974 book, The Politics of Revenue Sharing, I can almost guarantee you that any serious proposal to revive GRS will run up against a generally forgotten part of the history of the l972 legislation. Namely, that the principal support for GRS in the l960s and into the 70s came from conservative Republicans who saw it as a vehicle for substituting the "no strings" money for other federal aid grants existing at the time. It didn't work out that way but these conservatives gave their votes in hopes they could bring this about. If the idea is renewed, you can be assured it won't be new money but rather the avenue for substituting it for a variety of existing grants--dollar for dollar.

[MrMaus]

06:40 PM on 08/30/2010

The revenues of most states and local districts has not fallen by huge percentages but the accounting driven funding of defined benefit pension plans has exploded. How about we have the US government take over the unfunded and increasingly costly defined benefit plans? Then replace those plans with defined contribution plans that fund and 401k like plan that invests only in US Treasuries with a program to have firms sell annuities against the assets, with a federal government stable value wrapper. By removing the large and increasing cost of funding the pension plans and replacing it with a relatively fixed contribution about you solve the problem that now exists. The problem being that whenever there is an economic downturn, the markets goes down and the pension funding needs go up, causing states and local agencies to have to decrease services right when they are needed.

[ibsteve2u]

03:15 PM on 08/30/2010

More words...words, words, and words....meanwhile, the currency exchange rate is such that you can still hire a Chinese factory worker for 1/10th the cost of an American factory worker.

lolll...few of the financial blue bloods want to talk about that, though. No doubt they invested on the emerging markets years ago...and would hate to see their investments take a bath if someone dared to give the American worker a fighting chance.

[tacevad]

10:45 AM on 08/30/2010

The republican mantra of smaller government and too much government control has belied the facts for a generation.Reagan began the demise of revenue sharing that has increasingly raised state and local taxes to compensate for the lost revenue..and where did that revenue get lost? look no further than the MIC and the federal government itself.Government continues to grow and thanks to RR they have enjoyed even more of our money to play around with. Now with eyes on the SS Trust fund the Government from the right is building a case to eliminate yet another safety net that stands in the way of profits and greed.

[coolaid8]

09:15 AM on 08/30/2010

Why not take it one step further? Rather than give the money directly to corrupt state politicians, share it directly with the people? Take out all the middlemen and just give us some money?

[natgirrl]

09:09 AM on 08/30/2010

“Finland, Switzerland, Norway, Germany are all doing a hell of a lot better then we are. They have the lowest debt. Highest incomes and free healthcare. In fact, Germany grew by 9% last quarter, and now has a surplus. How did they do it? Government, labor and corporations actually work together. Germany made the decision during the economic downturn to cut everyones hours down by 25%. This kept everyone employed, which kept average people still spending money. Also, every corporate board has half of their members as labor. And, the government makes sure to protect its manufacturing base, unlike our country. They actually make stuff, and have a trade surplus. Go figure. Why can't Obama's team learn from them? Because many of them are cut out of the same cloth as the past 2 administrations. If he is to really make a difference, he is at the point where he needs either to fish or cut bait.”

[Boxerman]

09:17 AM on 08/30/2010

Fanned girl

[ibsteve2u]

03:18 PM on 08/30/2010

I don't think Germany, Finland, Norway, or Switzerland is cursed with an overclass that hates "common" people.

[henrypapillon]

09:05 AM on 08/30/2010

Share WHAT revenue.? The tax cuts of 2001 ended that.

[PotomacOracle]

07:32 AM on 08/30/2010

Shiller, Krugman, Stiglitz, et. al. have in the recent past written about the need to restore our manufacturing base. Yet they have not identified the industry or the product which could do this. They, I believe have not been thinking outdside of he box.

Doing so would lead them possibly to the following: We have expiermental farms for industrial hemp that ought to be made commercial and spread far and wide throughout the U.S. Since hemp matures in 8 to 12 weeks southern regions could produce four harvests yearly.

Hemp, nonpsychoactive, is used for food, fiber, clothes, baby oils, fuel and thousands of other products. It is a perfect substitute for fossil fuels and wood. It is the green miracle; zero carbon foot print. It will take millions of Americans to build this industry from farms to processing plants to manufacturing facilities, specialty tooling, trucking, sales, marketing, research, and all of the ancillary workers supporting each of these subsectors.

All the President has to do is pick up the phone, call the DEA Director and tell him to withdraw the regulations prohibiting the cultivation and commercialization of industrial hemp seed. It won't be instant but it won't take 90 days for Americas entrepreneurs, farmers and small investors to seize the moment and create a wholly American, non-exportable industry for literally millions and millions of jobs. No government funds, no increase in the deficit.

Mr. President, just make the phone call and you just may be reelected.

[Willow712]

08:16 AM on 08/30/2010

F&F, I agree completely. Hemp, I suspect, was kept illegal after prohibition because of the oil companies. They saw their competition and probably were thrilled to see hemp was continued illegal. Hemp would make wonderful ethanol. We could grow hemp on hills and valleys that one cannot plant in corn or beans. I live in Iowa, and I drive through the hills near south Dakota, thinking that would be perfect for hemp. And the hot wet summer w had this year would have been perfect. With hemp, and other green energies, we could become imported oil free very soon, compared to some places that would take 50 years to become import free. Hemp, in Iowa, is called ditchweed. Nobody would smoke it, yuck. But it would be a wonderful crop for our country.

[Samalabear]

08:48 AM on 08/30/2010

It's an excellent idea. I, for one, would be thrilled. I knit and crochet avidly and there is yarn that contains all hemp or some hemp out there, but it is expensive. Acrylic yarn is "oil" yarn. Most acrylic yarn is now produced in Turkey, as well, from what I've experienced. Yarn production is the United States has gone down considerably over the years. Hemp could revive this in a big way. Heck, we could become known as a big exporter of hemp products.

Comments like this really get my imagination going -- true hope for a better future, as did this article.

And then I wake up and remember our government, so I try not to get too excited. I liked Shiller's article because it makes sense, and it would really help ordinary people -- which is why little will come of it.

And I always remember reading in an article that Summers is dead set against big jobs programs and Obama will always defer to him, I'm sure. I have never heard anything Summers has said that indicates big thinking, or innovative thinking.

I agree with your last line. As of right now I will not be voting for Obama again. However, if he made these bold efforts and tenaciously fought for them, that would be another matter all together. I would know he really cared about ordinary people.

[Boxerman]

09:20 AM on 08/30/2010

I like your cat and thoughts-Fanned.

[PotomacOracle]

05:09 PM on 08/30/2010

You may enjoy reading, "The Great Book Hemp", by Rowan Robinson.
It contains a detailed discussion of the history, spirituality, patriotic and industrial aspects of industrial hemp. When India's coarse fibers were cut due to Japanese blockades and attacks on our shipping industry the Gov. resumed hemp cultivation to cloth and shelter our troops. What happens next time when our fuel and fiber imports are constrained for economic and political reasons? I'm jus' sayin'.

F & F

[smiththomas]

04:19 AM on 08/30/2010

Reduce the fed government size. They waste too much money

[henrypapillon]

09:07 AM on 08/30/2010

Reduce the tax cuts, They waste too much money.

[coolaid8]

09:10 AM on 08/30/2010

Do both

[StJames]

02:52 PM on 08/30/2010

Right, put a few million more people out of work...a really brilliant idea...bozo.

[smiththomas]

04:18 AM on 08/30/2010

Give the money to the states and copy the approach of the state that does the best job.

[henrypapillon]

09:08 AM on 08/30/2010

What money? and in Alaska's case what would that be, to get more federal money than they put in. That would be rich.

[jobrien1950]

02:55 AM on 08/30/2010

If Obama wants to do this, republicans will vote against it.

[henrypapillon]

09:09 AM on 08/30/2010

Fanned. Now this person has a point

[Charley Dommel]

06:20 PM on 09/06/2010

Just catching up on these comments. See the comment from me, Charley Dommel, just submitted. Believe the Republicans would support the idea, but as the history of revenue sharing shows, they would do so as a means of cashing out an equal amount of other grants in aid. So it would be a zero sum game. I may be blogging on this in the next day or so at charley-liberaldog.blogspot.com.

[latinonationreport]

02:51 AM on 08/30/2010

atgurl and milehigh are probably correct (sad, but true) on this one...Shiller's suggesting that we study and learn from history, enact programs that have a proven track record of succes!!
Not a novel ideaunto itself, but practically unheard of in this day/age. I only wish that the conciliatory demos and somewhat bigoted GOPers would learn from immigration measures such as "bracero"program from the 50's and Reagon's "amnesty" bill from the 80's...and enact meaningful imm. reform sooner rather than later!!!
www.latinonationreport.com

[MileHighCityMan]

02:41 AM on 08/30/2010

So...how is that going to enrich executives at Goldman Sachs and other financial monopolies again? Don't propose something that would actually work for people other than bank sheisters; Larry Summers would never approve of that.

Robert Shiller is a world renown economist with outstanding ideas...so he will probably be ignored by Summers and Geithner.

[Charley Dommel]

06:24 PM on 09/06/2010

It's not likely that the idea will catch on, UNLESS the Republicans see it as a means of cashing out on an equal amount of other intergovernmental assistance. They supported GRS in the 70s because they saw it as a means of substituting "no strings money" for other aid forms.

Paul R. Dommel (charley-liberaldog.blogspot.com)

[artgurrl]

02:10 AM on 08/30/2010

If Larry Summers doesn't want it, it isn't going to happen. If it doesn't serve Larry's master, Goldman Sachs, it isn't going to happen.