As jobs continue to evaporate, pressure is mounting for another shot of fiscal stimulus. But as Paul Krugman points out, the danger is that the Obama administration might "find itself caught in a political-economic trap, in which the very weakness of the economy undermines the administration's ability to respond effectively."
What we need right now is a jobs-creation program that cuts through all the Rube Goldberg-type provisions of the current stimulus bill. Because so many of our political leaders hate the very government they serve, they refuse to move money into immediate government jobs. They are afraid to create New Deal-type WPA programs which immediately would put people to work. Instead, they'd rather shovel money into ineffective tax cuts and questionable "shovel ready" projects that are not coming online fast enough. They also oppose funding cash-starved states which are laying off teachers and social workers, while the stimulus bills attempt to hire more construction workers. This tug of war between public and private employment has blunted the impact of the $787 billion stimulus package. If we weren't so hung up on anti-government ideology, we could have turned that stimulus money into 13 million public sector jobs. (See "The Only Thing we have to Fear is Fear ... of Government."
I'm not so much of a "Third Way" person myself, but desperate times call for creative thinking. The Republicans and blue-dog Democrats are incapable of going with sensible and efficient direct-government hiring. Well, how about utilizing the non-profit sector?
There are approximately 534,000 non-profit public charities under the 501(c)3 tax code. Let's offer each one of them $100,000 (pro-rated in monthy payments), if -- and only if -- they hire two new employees at $40,000 a year each, plus benefits including health care. The catch is that they would have to hire these two new employees within one month of signing up for the funds.
At a maximum cost of $53.6 billion we would generate more than million new jobs. And the chance of failure is minimal since we only would have to pay for jobs that actually were created. (The money could be rapidly transferred monthly through the tax collection mechanisms that each organization already has to pay its payroll taxes.)
This new income would be an enormous shot in the arm for public charities, all of which are in severe financial distress due to the drop in foundation grants, charitable donations and the crash in endowment values caused by the financial meltdown.
It would be very interesting to see conservatives argue that public charities don't deserve the support or that they will squander the money. After all, these organizations fit perfectly into our mainstream mantra: these are our "thousand points of light," designed to address needs that neither the government nor the private sector adequately serves.
The price tag is tiny when compared to what we've poured into Wall Street and into the economy already: It's only 3.6 percent as large as what we've spent on TARP and the last stimulus bill.
Most importantly, non-profits usually are nimble enough, and hungry enough for money, to quickly find new employees. They won't have to file building plans and environmental impact statements to get started on their work. They don't have to worry about whether or not the work performed will turn a profit for the charity. They don't have to worry about large bureaucracies slowing down the hiring process. And usually, they already have plenty of job applicants.
This proposal is no panacea. It doesn't directly attack the problem of rebuilding and greening the manufacturing sector, crippled by 30 years of neglect and financial manipulation. (See The Looting of America). But, music, art, dance and theatre organizations would get an enormous boost. And yes, all manner of conservative, liberal and even radical think tanks would also have more staff with which to spew out contradictory ideas. At the very least, this kind of jobs program would be particularly helpful to younger workers who are having difficulty entering and staying in the workforce.
Come on America. Let's put our people to work. It sure beats waiting around for the miracle of the market to kick in.
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.