Obama Can Create Jobs By Modeling Two Good Ideas

From Yahoo Opinion.

"On display is an exhibit of New Deal-era paintings that show men building roads, laying pipe, and shoveling snow. The artists were paid by the New Deal to paint these portraits; and the people in them were paid by the New Deal to construct public-works projects and the nation’s infrastructure.

Almost every community in the United States has a park, bridge, or school constructed during the New Deal, built by the calloused hands and strong backs of Americans who were working directly for the government."

...

"Even as US unemployment has more than doubled, in Germany the unemployment rate has hardly increased. Germany was one of the first advanced economies to emerge out of recession and now has a considerably lower unemployment rate than the US, 7.6 percent. The remarkable resilience of the German economy is directly attributable to shrewd policies that have better stimulated its economy.

The most important of these is known as kurzarbeit, which encourages firms that face a temporary decrease in demand for their products or services to avoid laying off employees by trimming the hours of all employees.

Under such so-called work-sharing programs, employers spread the burden, and the government then makes up some, or all, of the workers’ lost wages. This encourages firms to use reductions of hours instead of layoffs."

...

"The German program this year has cost only $2.9 billion. Adjusting for the larger US population, that suggests the US could fully copy the German system for $10.6 billion – about 1/70th the cost of the $750 billion economic stimulus last February, estimates Kevin Hassett, economic analyst at the American Enterprise Institute.

A program based on Germany’s work-share model would be attractive to firms, workers, and taxpayers because it is cheaper than paying unemployment and it keeps more people employed. That in turn would help maintain consumer spending, which is a big driver of the national economy.

Seventeen US states allow this sort of work-sharing, but few companies are participating, mostly because, unlike in Germany, the government’s contribution is not large enough to make work-share attractive. Sen. Jack Reed (D) of Rhode Island and Rep. Rosa DeLauro (D) of Connecticut have proposed bills to expand existing state work-share programs, but the White House is not supporting them."