The last time I looked, the Dow Jones had lost about 300 points today and over 1,100 points in two weeks. The European debt crisis is intensifying; austerity measures are preventing growth; and the stalled U.S. economy is exacerbating global anxiety.
In Washington, of course, Republicans won’t let Congress act and the Fed doesn’t want to act. And what of the Obama White House? The president and his team are not without ideas, and the administration in the process of “exploring new proposals,” which they hope can attract “broad” support.
White House officials are weighing a proposal to offer tax cuts to employers in return for hiring new workers. The administration considered this idea last year, but it gave way to a broader payroll tax deduction for workers in a bipartisan deal in December.
In addition, administration officials are considering proposing new investments in domestic clean energy as well as renewing tax breaks for companies using renewable energy — particularly wind power — that are to expire this year.
Also on the table is an initiative designed to help the ailing housing market without the need for more public spending. Under that proposal, the government-controlled mortgage giants Fannie Mae and Freddie Mac would rent out foreclosed properties that they own rather than try to sell them at depressed prices. That approach could relieve pressure on the housing market, one of the main drags on the economy.
Former administration officials are pushing other initiatives, such as a program to rebuild and rehabilitate schools as a way to improve education and stimulate the economy. A fan of this approach, Jared Bernstein, a former chief economist for Vice President Biden, calls the program “Fix America’s Schools Today.”
Most, if not all, of these ideas have real merit, and it’s encouraging the White House is prepared to make a concerted push on this front.
But we keep running into the same problems. For one thing, regardless of the measures’ value, congressional Republicans will almost certainly reject any ideas that might help the economy. This is partly due to their radical ideology, partly due to their reflexive opposition to anything the president wants, and perhaps motivated by the belief that economic suffering should be encouraged in the hopes that it will make President Obama easier to defeat next November.
For another, even if all of the administration’s measure were somehow adopted immediately, we’re talking about a fairly modest agenda. The size and scope of our economic difficulties are serious and intensifying, and this moderate response is unlikely to make a dramatic impact. Obama could be more ambitious, but he probably realizes by now Republicans hate him far more than they want to help the economy.
Are there alternatives? Jonathan Alter has a creative solution involving allowing states to convert their unemployment insurance payments from checks sent to the jobless into vouchers that can be used by companies to hire workers. Also, Suzy Khimm talked to some economists and policy analysts yesterday, and presented a series of other ideas that used to enjoy bipartisan support before madness overtook the GOP.
One thing is for sure: sitting back and waiting for improvements won’t cut it.