President Obama did his obligatory speech on jobs-jobs-jobs today and offered mostly the predictable: converting some of the TARP money to spending on public works, some tax breaks for small businesses, rebates to people who weatherize their homes ("cash for caulkers"), and even suspending capital gains taxation for small businesses for a year. In this piece Tyler Cowen (part of a larger NYT "room for debate" feature) makes a strong case that emphasizing infrastructure projects is a lousy way to increase the number of jobs. He doesn't emphasize, as I might, that public-sector jobs all have a parasitic relationship to the real economy, but notes that in our current legalistic climate, projects will take a long time to be approved and will end up employing relatively fewer people at higher wages. Back in the 1930s FDR could hire lots and lots of people quickly at low wages for WPA projects, a few worthy but mostly make-work. Can't happen now. I think he's right.
I am pleased to see Tyler, whom I've known since he started teaching at UCI years ago, included in these debates. Plenty of people think the MSM is so hopeless that it should be boycotted and never taken seriously. There's truth there, but I think the view is shortsighted. For all its many faults the NYT still, for the most part, does the best reporting in the country (perhaps not a high compliment), and it's much better to worm one's way into the paper than to disdain it. Tyler may not be as strong a libertarian as I am -- he doesn't mention the inconvenient and sometimes too harsh to be uttered truth that extending unemployment benefits subsidizes unemployment and reduces the incentive to search hard for another job. It might be that the government has so screwed up the economy that there just won't be jobs to be had for another year or so, however, so subsidizing unemployment may be the lesser of evils.