Geithner's Feckless Jobs Remedy
The Treasury secretary yesterday said government had done enough on jobs. Sir Harry Evans, one of 100-plus leaders who signed a manifesto urging more action, on Geithner’s Hoover impersonation. Plus, read the complete list of historians and economists backing The Daily Beast manifesto for a new stimulus.
I was one of the signatories of the 100-plus economists and historians who in The Daily Beast called for more active measures to get the 14 million unemployed back to work. The consensus statement evoked a number of thoughtful ideas. Congress has finally passed the extension of unemployment benefits we urged, but that is only one small step for mankind.
I emphasize that I am now speaking only for myself when I say none of the commentary since would persuade me to subtract a single syllable of last week’s manifesto.
So many in the financial community who owe their survival to the massive taxpayer bailouts, not only rewarded themselves with absurd bonuses, but now have the gall to sport the plumage of deficit hawks.
On the contrary. First, Fed Chairman Ben Bernanke acknowledged the economic outlook was “unusually uncertain.” He did suggest it would be prudent to avoid fiscal restraint if the recovery continued to hiccup—one in the eye for the deficit hawks—but then we had Treasury Secretary Tim Geithner on David Gregory on Sunday’s Meet the Press. Geithner is an eminently reasonable man (who did much to rescue the financial system). But his utterances on Sunday demonstrated only that his unerring talent for blandness will do little to get America back to work. “Where are the jobs?” said Gregory, displaying a headline from The Week magazine. Yes, murmured Geithner, he would like to see more people back at work sooner but, no, he wouldn’t expect government to do more during this transition from a crisis.
His reassurances that enough stimulus was in the pipeline and it could safely be left to business to pick up the slack reminded me of Herbert Hoover in June 1930. A delegation of bankers and bishops urged the president to expand public works. “Gentlemen,” said Hoover, “you have come 60 days too late. The Depression is over.” Four months later when it was manifestly worse he was unrepentant. He denounced “economic fatalists”—the Depression was being solved by “the genius of modern business,”
I believe in the genius of modern business. Why is it sitting on so much cash and why is it so wearisome for small businesses to get credit? Geithner blamed the searing effect of the shocks of 2007-2009, but the debilitating uncertainty is hardly diminished by the small matter of digesting two major pieces of legislation on health care and finance—and the general chilliness of the administration’s attitude to businesspeople.
As for the banks, one of the obscenities of our time is that so many in the financial community who owe their survival to the massive taxpayer bailouts, not only rewarded themselves with absurd bonuses, but now have the gall to sport the plumage of deficit hawks. The unemployed? Let them eat cake, the day after tomorrow.
101 Economists and Historians Sign The Daily Beast Manifesto
• Mike Pence on The Daily Beast’s ManifestoWe need much more dynamism from the administration and damn the torpedoes. In the '30s, Keynes recognized the risks so paralyzing Public Works Administration Chief Harold Ickes, who rightly worried that a quick public works program invited waste, inefficiency, and corruption. (Of the $3.3 billion authorized, Ickes had invested only $110 million in the first year.) With a hard winter coming in 1933-34, Keynes urged Ickes to balance those risks: “He must get across the crevasses before it is dark.”
Given some of Ickes’ money by an impatient FDR, Harry Hopkins pledged that his Civil Works Administration would put 2 million people to work within 10 days and 2 million more by end of two weeks afterward.
Impossible! He had no blueprints, no staff. So he did it. He hired private contractors who built more than 450 airfields, built or improved half a million miles of city streets and feeder roads, scores of miles of sewers, hundreds of parks and swimming pools. Hopkins subsequently took charge of the Works Progress Administration, a rival to Ickes agency, with a then-massive budget of $5 billion.
His energy and vision left an enduring legacy—650 miles of roads, 78,000 bridges including the mammoth bridges spanning the San Francisco Bay, the Florida Keys, and New York’s East and Harlem Rivers, a host of levees, floodways and dams to harness the Mississippi, the Hoover Dam, the massive Grand Coulee and Bonneville Dams, the electrified Penn railroad, some 40,000 new schools and 2,500 new hospitals. There is not a city in the United States that does not have a landmark of those years.
Altogether Hopkins created more than 8 million jobs; the equivalent today would be more than 20 million jobs. And what will we have to show for three years and more of recession and half-hearted stimuli?
Harold Evans, author of two histories of America, just published his memoir, My Paper Chase. Editor at large of The Week, he was editor of The Sunday Times from 1967-81 and The Times from 1981-82, founding editor of Condé Nast Traveler, and president of Random House Trade Group from 1990-97.