Leo Hindery on America’s Jobs Quagmire

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Former AT&T Broadband CEO Leo Hindery outlines in this seven minute Fox Business clip the severity of America’s jobs crisis and throws some ideas on to the table on what the country could do — particularly when it comes to US government procurement and US domestic investment incentives.
Particularly true in Hindery’s comment: “We have resuscitated but not reformed Wall Street.”
Leo Hindery also states that he believes that America won’t see any substantial job recovery until the latter part of 2011 under current policy conditions.
Hindery suggests that the US economy needs to figure out how to generate 22 million jobs — an order of magnitude greater than the targets the Obama administration has acknowledged.
— Steve Clemons

Comments

16 comments on “Leo Hindery on America’s Jobs Quagmire

  1. Bart says:

    Jesus to Baldy! Amity Shlaes is no economist. In fact, Wikipedia has her name right there under Revisionist Historian.

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  2. JohnH says:

    It’s not just progressive taxes that Obama is not considering. If he and the Democraps really wanted to show that they are on the side of the people, they would implement a nice little Tobin tax on all financial transactions, including derivatives. Britain has one, and it hasn’t prevented the City from being a preeminent financial player. A Tobin tax would target Wall Street’s casino culture directly and help pay for their reckless behavior. With no Tobin tax, Wall Street gets to play the same old game of privatizing profit and socializing loss. Until Obama addresses this, it’s clear to me that he’s not serious about meaningful reform.

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  3. Dan Kervick says:

    “No one on Obama’s team talks about making the tax code more progressive and a resucitated Wall Street is as arogant as ever. The idea that Obama will ever take Wall Street on is laughable; after all, Obama never takes any of his political adversaries on.”
    The real problem is that Obama doesn’t appear to regard Wall Street as his adversary at all. One of the most depressing phenomena taking place right now is that the Republican Party, of all folks, are the ones on the verge of seizing the mantle of the populist, anti-big bank, anti-Wall Street strain in American politics. While their party is still muddled and confused about its direction, they do seem to be the party that contains most of the descendants of the rural populist, anti-banker crowd that were the core constituency of people like William Jennings Bryan.
    Meanwhile, elite Democratic Party leadership in the contemporary age – though not most rank and file Democracts – seems to have exorcised any trace of populist spirit and class resentment from its makeup. Obama has, like Clinton before him, fully embraced the neoliberal Wall Street investment mega-bank crowd represented by people like Greenspan, Rubin, Geithner, Paulson and Summers, and by the Beltway think-tank bigwigs and foundation brats who helped him pick his team.
    I am struck recently by how similar Obama and Clinton have turned out to be. Both are ambitious men from modest means who pursued educations at elite institutions, and they both show one of the characteristic traits of some men of that type: a drive to obscure their backgrounds by pleasing and winning the approval of their social and economic superiors. Clinton still can’t get enough of hobnobbing with the uber-wealthy, feasting with the richest of the glitterati and impressing the Davos crowd, and still seems convinced that such socio-economic progress as can occur can only be brought about by the philanthropic beneficence of small, elite circles of the well-placed and powerful. Obama, so far, is showing similar tendencies. It’s as though you can see in them the impact of the humiliations inflicted on them as young men by the children of the ruling class at Yale and Harvard, the latter amiably but haughtily rolling their eyes in response to their social naivete, polishing their manners, and squeezing the last coarse blemishes of any populist poor-boy animus from them as they helped transform the two into members of the Best and the Brightest
    The only fearless economic progressives America has seen so far, the only ones willing passionately to embrace deep structural changes in our economic institutions, have been of two types: the first, like Teddy and Franklin Roosevelt, were genuine aristocrats who, knowing the ruling establishment from the inside were too bright and sophisticated to be dazzled by their sets’ self-justifying twaddle about the sublime wisdom of traditional capitalism; the others were labor leaders and rural leaders whose class backgrounds and identities were too fixed to and obvious for them to have any chance of ever winning the approval of the polished set, and who thus had no fear of wearing those backgrounds and loyalties right on their sleeves.
    I still have some hope that this first year in office will prove for Obama to have been a year of lost illusions, and that he now understands that the obstructions to change are not all due merely to miscommunication and misunderstanding among basically well-meaning and reasonable people, but that greed, malevolence, bigotry, aggression and a ruthless determination to hold onto one’s prerogatives play a role as well, and that to be defeated they have to be fought head-on.

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  4. JohnH says:

    Much as I like Krugman and his support for a Keynesian solution, I have one gnawing doubt–that there is nothing to stimulate. Keynesian policies may have worked in the past when America still had a manufacturing industry and when the housing market was not overbuilt. But what now?
    The real solution would be a severe adjustment of the dollar to make American industries competitive again. And that would take time, given that the US has totally forgotten how to mass produce much of anything. Export led growth won’t work this time around, though, because China has its boot firmly on the US’ neck. China has pegged it currency to dominate worldwide manufacturing as a way to solve it own massive unemployment problems, which make the US’ 17.2% unemployment (and underemployment) pale by comparison.
    Unfortunately, this one ain’t going to be pretty…

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  5. Linda says:

    I agree a lot with WigWag that a bolder approach more like FDR was needed from the start, perhaps now need CCC or WPA that is preferable to extending unemployment benefits (humane and necessary) for people who are looking for jobs that don’t exist.
    Many of these unemployed are highly educated and skilled and could do many things we need such as be teacher’s aides. It is demoralizing for people to be on unemployment for 12, 18 months or more. It’s better for them to have some purpose and be out doing something that benefits society.
    It may well be that only WWII really ended the Great Depression, but that’s not an option as we already are in two wars too many.
    I was surprised that Hindery didn’t pick up more on question about the unemployment extension and the new added home buyers’ tax credit for people who already have owned a home and earn up to $125,000 single or I believe $225,000 for a couple.
    That is a totally wasteful program proposed by my GA Republican Senator Johnny Isakson that will add another $10-14 billion to the deficit to give help to people who don’t need it. Obama should have vetoed the bill and insisted that provision be removed. It is a waste of money. Congress would have acted quickly to do that.
    We need a real action plan on jobs—more audacity and not just hope.

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  6. WigWag says:

    “Wigwag, Keynesian economists like Krugman who think the Government can borrow and spend its way to prosperity may have trashed Shlaes, but those who follow Mises and Hayek liked her book.” (Nadine)
    Actually that’s not what Keynesian economists think; it’s an ignorant bastardization of what Keynes said in his seminal work, “The General Theory of Employment, Interest and Money.”
    Keynes’ point was that during times of recession and depression characterized by insufficient aggregate demand caused by insufficient consumer spending and business investment, government, through deficit spending could provide sufficient aggregate demand to end economic contraction. The theory has proven correct again and again and while laws of political economy are never as immutable as the laws of physics I would say that Keynes dictum is about as unassailable as Einstein’s equation, E=MC(2).
    Shales book is laughably ignorant and despite her resume she is dimwitted. She believes that her book is a repudiation of both Roosevelt and Keynes because she suggests that World War II not the New Deal ended the Great Depression.
    What makes Shlaes so dumb is that she doesn’t realize that even if her assertion is true; even if World War II as opposed to the New Deal did end the Great Depression, it still proves that Keynes was right.
    The federal deficit and the federal debt (as a percentage of GDP) were higher during World War II than at any time in American history. In fact, from an economic point of view the only thing that differentiated World War II spending from New Deal spending is that that the Government was willing to take on far higher debt in order to fight World War II.
    Deficit spending during World War II increased aggregate demand sufficiently to make up for depressed consumer spending and business investment and this propelled the United States out of the Great Depression just as Keynes predicted it would.
    The fact that Amity Shlaes and her fellow travelers are too obtuse to understand this tells you all you need to know about their level of expertise.
    You are right about one thing though, political liberals tend to think that Keynes permanently advocated deficit spending; they are certainly wrong about this.
    Keynes was as insistent that the government run a budget surplus during times of economic prosperity as he was that the government run deficits in times of economic downturn.
    No matter how good economic performance is, political liberals always want to spend more money even if they have to run deficits to do it. This is not what Keynes advocated.
    Bill Clinton’s economic team takes alot of heat for the deregulatory fervor that they fell victim to. There is no question that Rubin, Summers, Greenspan and Arthur Levitt made bad decisions on deregulation that subsequently led to the problems we faced last year (and are still facing). But the Clinton team did one thing very right that they never get credit for; once the George H.W. Bush recession ended and the Clinton tax increases on the wealthy (as modest as they were) brought interest rates down; the Clinton team produced budget surplus after budget surplus. Clinton did exactly what Keynes recommended; during times of fiscal expansion he ran surpluses not deficits.
    This produced significant prosperity during the Clinton years with satisfactory economic growth. During Clinton’s term hundreds of billions of dollars of federal debt was retired. Had Gore been elected it is entirely possible that the Clinton budget policies would have continued and it is even conceivable that the federal debt would have been eliminated entirely.
    As you may remember, during the Clinton years the federal debt was drawn down so much that the government actually stopped selling 30 year Treasury Bonds. Alan Greenspan was so alarmed that he suggested that it might be bad if the federal debt was retired altogether.
    The “experts” who destroyed the economy after Clinton left office were of the same ideological ilk as those who like Amity Shales book.
    The truth of the matter is that but for the surpluses run by Bill Clinton, the federal deficits run up by George W. Bush and now Barack Obama would have made the federal debt far worse than it already is.
    Bush, Obama and the American people owe Bill Clinton a debt of gratitude for getting it right by running surpluses when the economy was good.
    But the person who really gets the credit is the great John Maynard Keynes for figuring it all out in the first place.
    As for Amity Shlaes; with all due respect; she’s an idiot.

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  7. Paul Norheim says:

    I think R. Limbaugh and A. Lieberman says a lot about the quality of your ideas.

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  8. nadine says:

    Wigwag, Keynsian economists like Krugman who think the Government can borrow and spend its way to prosperity may have trashed Shlaes, but those who follow Mises and Hayek liked her book.
    What you omit from Roosevelt’s record is that he himself had figured by the late thirties that all his stimulus spending had merely piled up debt but had not cured the Depression. The private sector creates wealth and jobs; government is mostly parasitic on the private sector. You can’t have a real recovery that grows government and shrinks the private sector.
    Obama will find that out.
    Hey Paul, is Hayek also “nasty” and “fanatic” to you? Is this the term you use for anybody who disagrees with you? All this name-calling doesn’t say much for the quality of your ideas.

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  9. Paul Norheim says:

    WigWag,
    during the last 24 hours you`ve written lengthy posts about three American presidents –
    Roosevelt, Clinton, and W. Bush – comparing their achievements with the lack of
    achievements by Obama. Who is next? Neither Carter nor Nixon, if I should guess – but
    perhaps LBJ?
    Of course there is nothing new here: we all know that you think Obama is a moron, and we
    don`t doubt that you are capable of saying this in 100 different ways.
    However, I agree with the poster on another thread that said that your nastier side has
    become more visible recently (regarding the Israel/Palestine conflict). I think he said
    that your tone and attitude have changed, but I prefer to say that certain aspects have
    become “more visible”, because you`ve always expressed a certain contempt for the fate
    of the Palestinian “losers”, and claimed that might is right in this particular context.
    It`s just that this attitude is becoming more and more pronounced in your recent posts.
    Reading Nadine, it has always been clear that her nastiness and fanaticism is just as
    apparent on domestic issues as on foreign policy issues. There is a remarkable
    consistency in her writings. You are different in this regard; to me it looks like there
    are certain social and moral values behind your political views on the domestic front,
    values that are absent as soon as you start talking about Israel and the Palestinians.
    I guess that, given your age, you got this particular form of schizophrenia decades ago,
    and have learned to live with it. I can imagine that this will not be so easy for
    progressive American Jews who get this disease in these days, while the Israeli
    government is getting more and more right wing, fear mongering and arrogant.
    If J Street fails, WigWag, perhaps you could establish some sort of therapy blog, with
    the aim of learning the younger generations of progressive American Jews to cope with
    their schizophrenia?

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  10. WigWag says:

    Speaking of coincidences, here is Paul Krugman’s blog post (“Conscience of a Liberal”) from exactly one year ago today (November 8, 2008) exposing Shlaes book as nonsense,
    November 19, 2008, 3:22 pm Amity Shlaes Strikes Again
    When you hear claims that the New Deal made the depression worse, they often come directly or indirectly from the work of Amity Shlaes, whose misleading statistics have been widely disseminated on the right.
    Now, Ms. Shlaes has found a new target: John Maynard Keynes. There’s a lot to critique in this piece, but this one takes the cake:
    But the most telling fact about the new rush to spend is that its advocates have insisted on invoking the New Deal. They tend to gloss over the period when the phrase, “We are all Keynesians now,” was actually first uttered: the mid-1960s. (Uttered by Friedman, in fact, though he meant only that we all work in the terms of the Keynesian lexicon.)
    The Great Society of that period was the ultimate Keynesian experiment, and it didn’t work very well.
    Grr. Keynesianism says that deficit spending can help create jobs when the economy is depressed. The Great Society wasn’t deficit spending, it wasn’t intended to create jobs, and the economy of the 1960s wasn’t depressed. It was social engineering; we can talk about how well or badly it worked, but it had nothing whatsoever to do with Keynesian economics.
    Now, LBJ did engage in some Keynesian economics: namely, he imposed a contractionary fiscal policy in the form of a tax surcharge in an effort to cool an overheating economy.
    Alas, pretty soon we’ll have all the usual suspects saying that the Great Society proves that Keynesian economics doesn’t work — after all, the “experts” told them so.

    Reply

  11. WigWag says:

    “I’ve always wondered how Amity Shlaes got her presigious perch at the Council on Foreign Relations, since she’s lacking academic qualifications, hasn’t been a senior government official, and doesn’t seem to have any of the other attributes…” (Anonymous Washingtonian)
    It might have something to do with her husband, Seth Lipsky. Lipsky is the former publisher of the now defunct New York Sun. Lipsky had a good relationship with Reagan and Thatcher as well as Milton Friedman.
    Lipsky was a conservative when few journalists were, long before the days of Fox News. Of course, Lipsky also wrote for the Wall Street Journal which is where he met Shales; they married on June 12, 1988.
    Shales and Lipsky are a Washington power couple of the right-wing kind.
    I guess that’s all it takes to attract the notice of the Council on Foreign Relations.
    By the way, her book, “The Forgotten Man” was widely ridiculed by academic economists of all stripes.
    But George Will liked it.

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  12. Anonymous Washingtontonian says:

    I’ve always wondered how Amity Shlaes got her presigious perch at the Council on Foreign Relations, since she’s lacking academic qualifications, hasn’t been a senior government official, and doesn’t seem to have any of the other attributes which tend to get you hired at as a Senior Fellow at CFR.
    Did someone in her family give them a bunch of $$$, or what?

    Reply

  13. WigWag says:

    I’ve read the Amity Shlaes book; it’s hogwash. By the way, she’s not an economist, she’s a journalist and not a very good one at that (her degree is in English). Paul Krugman reviewed her book and ripped it to shreds. I’ll take John Maynard Keynes over Shlaes any day.
    But actually, all of this is besides the point. Regardless of whether you think Roosevelt ended the Great Depression or whether you think World War II ended the Great Depression (or a combination of both), one thing is clear; Roosevelt put millions of unemployed Americans back to work. Not only did they get a paycheck, our nation still benefits tremendously from the projects they undertook.
    Few Presidents stack up well measured against Roosevelt. But Barack Obama assured us during the Campaign that he (unlike Clinton) would transform the nation the way Roosevelt did.
    In this arena as well as the foreign policy arena; Obama is a failure.

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  14. nadine says:

    Wigwag, you’re not still buying the myth that FDR cured the Great Depression, are you? Go read The Forgotten Man by Amity Shlaes! FDR’s policies put the “Great” in the “Great Depression”. Every time business tried to recover, government meddling and high taxes put it down again. Unemployment was still in the teens in 1941. It took WWII to end the Great Depression.

    Reply

  15. WigWag says:

    76 Years Ago Today, Roosevelt Did Something Radical to Fight Unemployment; What Has Obama Done?
    Apropos of my comment on the WPA, it is interesting to note that today is the anniversary of the establishment of the Civil Works Administration. The CWA was established by Franklin Roosevelt on November 8, 1933 with the specific intention of providing temporary employment for millions of Americans who had lost their jobs as a result of the Great Depression. Roosevelt’s intention was not to provide permanent employment through the CWA, but to provide temporary job opportunities for the unemployed until the economy recovered. Roosevelt was mindful of both the tremendous need for jobs as well as the tremendous benefit to the United States that could be gained by putting millions of people to work building infrastructure.
    The CWA’s four million workers laid 12 million feet of sewer pipe and built or made substantial improvements to 255,000 miles of roads, 40,000 schools, 3,700 playgrounds, and nearly 1,000 airports (not to mention 250,000 outhouses still badly needed in rural America).
    The program lasted 18 months and was killed not only because it was too radical for Republicans (like Al Smith who criticized it vehemently and later ran for President) but also because it was too radical for some Democrats, even Democrats who worked for Roosevelt like Howard L. Ickes (Ickes son went on to become Deputy White House Chief of Staff under Bill Clinton).
    It is worth noting that 76 years ago today, faced with a burgeoning unemployment problem, Franklin Roosevelt decided to do something radical.
    What has Barack Obama done other than work to placate the bankers and not antagonize the Republicans?

    Reply

  16. WigWag says:

    During the Presidential campaign Barack Obama went out of his way to denigrate Hillary Clinton by claiming that her husband, Bill Clinton, was not a “transformational” President the way that Roosevelt and Reagan had been.
    Obama’s implication was clear; elect Hillary and you would get more of the same; elect him and you would get someone who would transform the United States.
    How’s that working out?
    Hindrey is right. While the initial stimulus bill was grossly inadequate, it is not politically feasible to pass a second stimulus bill. No one on Obama’s team talks about making the tax code more progressive and a resucitated Wall Street is as arogant as ever. The idea that Obama will ever take Wall Street on is laughable; after all, Obama never takes any of his political adversaries on.
    When Franklin Roosevelt faced massive unemployment he established the WPA which put hundreds of thousands of Americans to work. The infrastructure created by the WPA (as well as the art, literature and music)is still enriching the lives of Americans in almost every state in the union.
    A new WPA is just the ticket to redress the terrible problem of rising unemployment. And paying workers to do these jobs directly is cheaper, less administratively onerous and more effective than subsidizing the private sector to create employment.
    Does anyone think there is any chance that we will see a new WPA under Obama?
    Of course not.
    When business interests criticized Roosevelt’s concern about unemployment and the working poor, this is what Roosevelt said,
    “Here and now I want to make myself clear about those who disparage their fellow citizens on the relief rolls. They say that those on relief are not merely jobless–that they are worthless. Their solution for the relief problem is to end relief–to purge the rolls by starvation. To use the language of the stock broker, our needy unemployed would be cared for when, as, and if some fairy godmother should happen on the scene.
    You and I will continue to refuse to accept that estimate of our unemployed fellow Americans. Your Government is still on the same side of the street with the Good Samaritan and not with those who pass by on the other side.”
    And when Republicans criticized Roosevelt for enacting the WPA and other New Deal programs, this is what Roosevelt said (October 31, 1936, Madison Square Garden, New York City)
    “We have not come this far without a struggle and I assure you we cannot go further without a struggle.
    For twelve years this Nation was afflicted with hear-nothing, see-nothing, do-nothing Government. The Nation looked to Government but the Government looked away . . . Powerful influences strive today to restore that kind of government with its doctrine that that Government is best which is most indifferent . . .
    We had to struggle with the old enemies of peace —business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.
    They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.
    Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me — and I welcome their hatred.”
    Can anyone imagine Barack Obama saying that?
    Does anyone still believe that Barack Obama can be a transformational President?

    Reply

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