Bill Clinton and John Doerr, the venture capitalist, are urging the Obama administration to use unspent TARP funds to stimulate jobs and reduce energy wastage by providing cash to homeowners and businesses for weatherization. It's being sold as a way to counteract our jobless recovery (make that our job-loss recovery). They claim that the two-year $23 billion program will pay for itself in the not-so-long haul because of the obvious energy savings.
To be sure, using TARP money for something other than increasing Wall Street profits and bonuses would be a welcomed change. But it is questionable whether the Cash for Caulkers scheme can stimulate sufficient employment soon enough to help the 30 million who are jobless and the 49 million who are skipping meals.
A more direct approach would be the creation of a national Caulkers Corps, modeled after the New Deal's Works Progress Administration and its Civilian Conservation Corps. Like those programs, the Caulkers Corps would directly hire the unemployed to weatherize homes and businesses coast to coast.
In addition, it needs more funding. The $23 billion estimated for two years won't produce nearly enough jobs to break our jobs depression. We need to put at least $50 billion a year directly into the Caulkers Corps. (That's a million jobs at $50,000 each. The multiplier might add another 500,000 jobs.) Homeowners and businesses could be asked to pay for the cost of supplies so that most of the taxpayers' money could go into wages and benefits.
Weatherization should be the Democrats' (and everyone's!) dream program. In one fell swoop you create jobs, reduce living expenses for homeowners and renters, improve national energy security, enhance business profitability and the competitiveness of exporters, and pluck the lowest-hanging fruit in the effort to confront global warming. And while it requires the up-front investment, it pays for itself through savings in only a few years' time.
Given our employment collapse, this program needs a massive investment to really do the job. When it comes to bailing out Wall Street we empty Fort Knox. But when we talk saving energy and creating jobs, the Clinton plan offers an investment that will be smaller than Goldman Sachs' bonus pool. (In fact, a 90 percent windfall profit tax on the bailout-created profits of the 19 largest banks would be the ideal way to promote a robust caulker jobs program.)
If we really want to get the job done, we should graft this program with the bolder one suggested by finance expert Marshall Auerbach. He makes an excellent case that government should become the employer of last resort (ELR) in order to automatically create sufficient jobs when our system fails to produce enough work for those willing and able to work. If we combine Auerbach's proposed ELR with the Caulkers Corps we get a powerful program that both weatherizes all homes and business over the next decade, and ensures that Americans are back at work.
Opponents instead will say that we must get the government out of the way to make room for entrepreneurial initiative. They insist that the natural forces of the economic cycle will soon right our ship. But even those tossing tea into the harbor must notice that the only ships setting sail are those tax-payer supported yachts on Wall Street. If we don't put our people back to work, we'll all be headed to more troubled waters. A robustly-funded Caulkers Corps could truly make a difference.
Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It, Chelsea Green Publishing, June 2009.
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