Robert Pollin is Professor of Economics at the University of Massachusetts in Amherst, and is a founding co-director of the Political Economy Research Institute (PERI). His research centers on macroeconomics, conditions for low-wage workers in the U.S. and globally, the analysis of financial markets, and the economics of building a clean-energy economy in the U.S. His books include A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the US and Contours of Descent: US Economic Fractures and the Landscape of Global Austerity.
In February 2010 Pollin talked with Paul Jay of The Real News Network and during the interview outlined a careful combination of job-generating public investments, incentives to mobilize private investment, and policies that protect economically vulnerable populations that can create the economic, regulatory and policy environment that Obama could have already been using to create 18 million jobs and lower the unemployment rate to only 4 percent by 2012 - a proposal that has never been given any serious consideration by the Obama administration, policy makers, or mainstream media.
Instead the Obama administration chose to continue listening to people like Ben Bernanke whom Obama had re-nominated as Federal Reserve Chairman in August 2009, and who, as the top bank regulator in the country, had played a central role in the creation of the ongoing economic crisis we are experiencing.
In another interview published today, Pollin again talks with Paul Jay discussing Obama's speech the other day in which he made clear that he is more or less taking on the argument that the big problem is the debt and that austerity for the masses is his plan for reducing it, pointing out that Obama is accepting the notion of the debt being a bigger problem that a recession, that Obama's premise is "wrong to begin with", and that:
He's confusing two things.
it's really important to focus on this--there are two separate problems. One is the deficit problem created by the more severe problem, which was the recession created by Wall Street. number one ... we have to move the private financial system into job creation.
tax excess reserves of banks. They will scream bloody murder, but tax them. They've gotten the money for free. And tax them until they start moving credit into the economy. And number two, give them a carrot, which is to say, expand the Small Business Administration loan guarantees, because the argument of the banks is there's too much risk in the economy. So lower the level of risk by giving out loan guarantees that target the guarantees to job-creation activities. This is not that hard to do, it can be done, and, actually, we have the administrative apparatus to do it right now. And that will not be the whole answer
And part two is we've got to stop the cuts to state and local governments, period. I mean, that is pushing the economy back into recession. And there's some interesting research out of the National Bureau of Economic Research which finds that whatever the stimulus has done over the past couple of years--and, again, we can debate how good it was, but whatever it was done is completely counteracted by cuts in state and local governments. So the net impact: we've had no stimulus. The net effect has been zero.
my institution and many other institutions in universities and state and junior colleges just let their budgets expand. That's a direct jobs program. They're there. They're sitting there. They're strapped. Give them the money to grow at a reasonable rate. Direct jobs program. It's an education program. It's a community development program. We can do it tomorrow. But we have to stop talking about the necessity to cut for vital things that go on, for example, at the state and local level.
Real News Network - April 16, 2011
Obama Accepts Debt a Bigger Threat than Recession
Bob Pollin: Obama debt speech avoids recession and need for massive jobs growth
...full transcript here...