Paul Krugman's Advice for Obama Job Summit

Silicon Valley -- Paul Krugman shared some wisdom last night about the White House Job Summit, which President Obama announced earlier in the day. The Nobel Prize winner for Economics was in Silicon Valley as part of the Foothill College Celebrity Forum Lecture Series. In an exclusive interview, he was forceful in his view that "the jobs summit cannot be an empty exercise."

In particular, he said that the Obama administration ought to use a combination of tax credits for jobs added, and subsidies to encourage companies to retain their employees. He pointed to Germany as a country that has largely contained the extent of its job losses despite the Great Recession, thanks to job conservation measures.

"He can't come out with a proposal for $10 or $20 billion of stuff because people will view that as a joke. There has to be a significant proposal," said Krugman. "If I had my druthers, if there were no limits politically, I'd say let's just have a really massive second stimulus plan to get the economy going, but since that's not going to happen, we need some measures that are cheaper, don't maybe do as much for GDP but create a lot of jobs."

When asked if he has a minimum spending level in mind, Krugman was clear, "There's no hard and fast number, but if it isn't several hundred billion dollars... OK, probably it's not going to be as big as the first stimulus bill and not going to be as big as I think it should be. But I have in mind something like $300 Billion, you could do quite a lot that's actually targeted on jobs."

Krugman has not yet received his invitation from President Obama to be part of the Job Summit but indicated that it would be "revealing" if he didn't get an invitation. The full five minute interview is featured at FreshDialogues.com, along with a transcript.

 

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Comments

[Dahun]

Krugman in a story from the NYT linked by the HP touts the miracle of Germany producing jobs instead of what we have in this country which is to continue to lose jobs.
Didn't Merkel quickly reject joining Obama in instituting a huge stimilus program? Perhaps the huge deficits caused by TARP, Stimulus, bailouts, buyouts, quadrupling the budget may be a drag on any recovery.
You bethcha.

[CommunistUtopia]

Maybe Little o should appoint a Blue Ribbon Task Force or perhaps set up a committee to figure this out. Maybe he should hire a consultant.

Oh, wait. He is POTUS. By definition, that job entails making decisions. What a concept.

[CommunistUtopia]

A job summit? It is obvious that Little o has no idea what to do.

[john456]

An example of the problems with the job market in the US is demonstrated by the recent Health Care proposaxl. All the proposals and the existing health care programs in the US tie Health Insurance to employee wages. That is employers have the burden to provide health insurance in addition to Medicare and Social Security as part of the wage structure. All of these items are necessary, but so long as they are funded through payroll rather than the general tax rate American workers will be at a disadvantage to other nations, and not just low wage third world emerging markets. I don't know how Canada funds its similar programs, but I'd be interested to find out. As an aside, I don't know why the progressive Health Care proponents have not emphasized that tying health care to wages is a competitive disadvantage. Such an argument could provide a basis for true health care (not just insurance) improvement.

[sc300nc]

MichelleObama is going to be hosting a job fair on the white house lawn.

[Alanlak]

I don't know what Krugman expects from an administration based on empty exercises.

[confuseddemocrat]

My question is why wasn't the Job summit announced on Jan 21, 2009 as oppose to 10 months into his tenure

[den1953]

If this country can't and want to deal with the foreign cheap labor all the talk in the world will not help Americans to get back to work for way to long our political leaders wrote off the spirit of the American worker and the pride all of us have for our country. The drive to have our country produce goods have been to easy to dismiss to China & Mexico and India they have gave them a gift and China is running with it they are more profitable and way ahead of the US with green technology!

[Drdemocrat]

My view is why have a Jobs Summit if it is going to be all talk and no action.

I think $300 for targeted job creation is a great idea.

If Krugman isn't invited that would be fine but more importantly hopefully there is a variety of economists invited who will give a variety of opinions on how to spur job growth.

[xlntcat]

There is no way that Obama could get $300 billion through congress and Krugman when comes down to earth know that it isn't a possibility. However, if he has paid attention at all, he also knows that his recommendations are not new information and the Obama economic team has already looked at both. So far in this crisis, Krugman's gloom and doom have just been wrong. Whereas, he may have been right about the need for a much bigger stimulus, it would have never passed Congress nor would it have been suported by the public. It doesn't much matter if you are correct, if you are proposing that which cannot be enacted. He, also, is alone in ignoring the dangers of our debt and deficit that must be brought down. Of course, job creation automatically decreases the deficit but it would take a far larger GDP than any same person now predicts to cover $300 billion.

[Nargit]

This job summit can and will be empty exercise.

[xlntcat]

How do you know?. Where is your evidence? Were you invited? If not, can we assume that you are not considered one of the best and brightest in business and finance?

[lode runner]

It's gonna have to be government subsidies for jobs. Corporations are just gonna ship our jobs overseas as much as possible right now.

[lode runner]

Doesn't $300B divided by half the number of unemployed and underemployed Americans (12 million) equal $25,000?

So it looks to me that if it's used perfectly efficiently, it should cut unemployment in half for a year, or by a quarter for two? Is that math right?

So I guess let's assume 75% efficiency and say this should reduce unemployment by maybe 3% or so. Not bad. Enough to be better off than the end of Bush's term.

[mawrm]

There are real, lasting rather easy solutions to this economic crisis but the sad fact of the matter is those on the right are going to label them "socialist".
- Problem: Myopic CEOs who look to make the fast buck. Executive compensation is way out of wack which fuels this attitude of showing good numbers at any cost. They outsource everything, reduce worker compensation while pushing up worker hours and collect bonuses for their actions. First, HEAVILY tax the outsourcers (including those that import cheaper tech labor by abusing the H-1 visa process) to discourage the practice.
- Invest in green tech R&D and tax breaks for innovative green tech companies.
- Fix health care. If necessary, have the government fund med school degree programs to bring down the cost of producing doctors, nurses, etc. End the insurance company rip-offs.
- Transportation system reform - curtail urban sprawl with better planning, stop building more roads and start building more railways and mass transit systems.
- Legal reform. Too many lawyers make $$$ producing little but expensive lawsuits, writing jacked up "user agreements" that hurt consumers and artificially raise the cost of products.
- Fix Wall Street and the banking system (bust up the too big to fails) and severely punish wealthy tax evaders and corporate miscreants.

[mikerobjohn]

Obama you might need to listen to him since you have failed to create jobs!

[xlntcat]

Exactly, what job did Krugman ever create that wasn't for himself?

[shivasquest]

Krugman has not yet received his invitation from President Obama to be part of the Job Summit but indicated that it would be "revealing" if he didn't get an invitation.

Yes it would.

[fflambeau]

Don't expect that invite to Obama's summit anytime soon, Professor Krugman. Obama doesn't listen to progressives, he likes the advice that Wall St. insiders like Timothy Geithner and the failed president of Harvard, Larry Summers, give him. Obama has shown nothing for real job creation and no spirit of progressiv­ism-libera­lism at all. He's willing to spend billions more on escalating wars but not a dime for helping America's jobless and underemployed. Goldman Sachs, on the other hand....