06/18/2012 07:21 am ET Updated Aug 18, 2012

Toward Job Creation, Obama Should Emulate LBJ

Much of the handwringing over President Barack Obama's disappointing economic performance centers on his failure to emulate FDR, whose muscular public works spending generated millions of jobs and helped lift the country from the Great Depression. But former Senator Bill Bradley, who has been talking up job creation strategies of late, argues that Obama would do well to channel another former president best known by his initials -- LBJ.

In the face of relentless Republican opposition against any and all efforts to spur economic growth, Bradley argues that the president ought to employ the tactics of the legendary Texas lawmaker Lyndon Johnson and strong-arm opponents into cooperating on a master plan to restore economic vigor via a sustained campaign of shame.

"If I were Obama, I would have names of the 40 Republicans who, by virtue of background, education and reasonableness, know that this total obstruction is counterproductive," Bradley told me last week. "I'd know more about those 40 Republicans than their mothers, and I'd invite them down to the White House and tell them that it's crucial to the country's future that they get with the program. A week or two later, if they still didn't go along, I'd call their mothers and their brothers and their high school history teacher. I'd call their biggest employers and their campaign contributors. I'd call all the people I could appeal to, and I'd appeal to them as Americans."

The question you may well be asking now is, are there still in fact 40 Republicans left in Congress who can be considered reasonable, and who might be open to appeals to the national interest? Most congressional Republicans are little more than obedient apparatchiks to Mitch McConnell and John Boehner, who clearly decided long ago that their party's path back to the White House leads through broad misery for much of the nation. Theirs is a cynical strategy of monkey-wrenching the economy in the hopes that the resulting damage gets blamed on the incumbent, or at least sows enough dismay and disgust to depress voter turnout and make the presidential election close. (When your horse is Mitt Romney, with his propensity for missteps, better that the track be sloppy.)

But putting aside the perpetual complications of American politics, the always-thoughtful Bradley -- a Democrat, but a pragmatist more than a partisan -- is right to channel his impatience with the status quo into a legislative strategy for economic improvement. In his provocative new book, "We Can All Do Better," he maps out a comprehensive plan that, in a reasonable world, might serve as the basis for a serious conversation about how to improve our fortunes.

According to Bradley's diagnosis, our political paralysis stems in part from the fact that efforts to elevate the economy have been so piecemeal that they have invited targeted opposition from the usual interest groups. Keynesian-inclined Democrats proffer stimulus spending in a bid to create jobs, only to confront deficit hawks in both parties who brand such efforts as wasteful and risky. Everyone pays lip service to bringing down long-term budget deficits eventually, while dividing on when and how. Some propose targeted tax cuts for employers as a fillip to hiring. Republicans claim that cutting taxes for rich people will shrink the deficit and boost job growth, an assertion that collides with facts of both the historical and arithmetical variety.

The result of these narrow strategies operating independently is what we have suffered for nearly the entire course of Obama's administration, ever since the passage of his necessary but inadequate stimulus bill: ceaseless bickering, accusations and jockeying across the political aisle, with little in the way of helpful policy, let alone large numbers of new jobs.

In Bradley's view, the only way to get past this swamp is through a kind of uber-Grand Bargain that acknowledges the legitimacy of many of these approaches -- minus the tax cuts for wealthy people -- but only as part of a sprawling package.

He frames the pursuit of this package with a useful question: How do we persuade the chief executives of America's corporations, those outside of finance, who are collectively hoarding some $1.8 trillion in cash and liquid assets on their balance sheets, to put this money toward hiring people?

If CEOs spent a mere one-fifth of those dollars on hiring, handing out paychecks at the median salary of $49,000 a year, that would drop unemployment down to about five percent.

When you ask people running big companies why they are holding cash rather than hiring, they typically respond by citing a pair of worries. First, they speak of fiscal fears, the short-term worry that, absent a deal between the White House and Congress, taxes will go up for everyone next year; and secondly, the longer-term worry that runaway American budget deficits will produce inflation, which makes them reluctant to invest until they see a path back to fiscal soundness. They are also afraid to hire in the face of chronically weak demand for goods and services. When your shop is already devoid of customers and your order book is light, who wants to add to the payroll?

Bradley's thinking centers on how to assuage these two concerns and turn them into fear of not hiring soon enough, lest companies miss out on the fresh profit opportunities of economic growth. He would attack uncertainty with a long-term deficit reduction strategy centered on cutting defense spending and lifting the retirement age for social security benefits by a year or two. He would boost demand through a $1 trillion, five-year infrastructure build-out focused on big-ticket items such as high-speed rail and an upgrade to the nation's air traffic control system.

Then, he would prod the private sector to hire with a federal subsidy that would cover 30 percent of the cost of salaries for new employees, up to a maximum of $25,000 per year. That program would run for two years with a cap of $50 billion. Cognizant of that limit, and mindful that credits would be handed out on a first-come, first-served basis, companies would have an incentive to move fast before the other guys exhaust the available subsidies.

"You don't spend a dollar of taxpayer money unless a job is created," Bradley. "The company has to believe that a worker will produce real value, because they're going to be paying 70 percent of the costs."

These are sensible ideas worthy of serious consideration, yet they confront the same question as ever: Are the people running Congress capable of serious consideration? Or will they hold firm to using joblessness as a campaign strategy?

That's where the LBJ component comes in. Somewhere on the map of congressional districts, the usual blue-red divide must give way to considerations of green. If there is indeed a hidden slice of the Republican ranks comprised of thinking people who can be peeled away from their leadership via a mixture of national concern, shame and constituent pressure, no better time than now to bring them to the fore.