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Thursday, August 26, 2010

"Find the Unemployed and Hire Them"

It's my understanding that the editors at Bloomberg will not let their columnists say certain things, and that's one of the reasons I stopped, for the most part, sending any traffic in their direction. If the columnist persists and tries to say it anyway, the column is spiked.

I don't know the extent to which Kevin Hassett is constrained by these puppet strings, but it's interesting to hear the change in tone when he is not writing for Bloomberg.

Let's start this with a recent Hassett opinion piece at Bloomberg entitled "Bury Keynesian Voodoo Before It Can Bury Us":

Bury Keynesian Voodoo Before It Can Bury Us All, by Kevin Hassett: Initial claims for unemployment benefits surged to 500,000 in mid-August, a level more typical of a recession than a recovery. ...
In all likelihood, the data will soon be so convincingly bad that we’ll again debate the need for an economic stimulus. Let’s hope that when that begins, all will finally concede that the ideas of John Maynard Keynes are as dead as the man himself, and that Keynesianism is the real voodoo economics.

And here's Kevin Hassett when he's not writing for Bloomberg:

Conservative Economist: 'Find the Unemployed and Hire Them', by Derek Thompson: Let's put this gently: economist Kevin Hassett is no Keynesian.
Hassett, the director of economic-policy studies at the American Enterprise Institute and an economic adviser to Sen. John McCain, recent attacked President Obama's economic plan as "voodoo economics"...
But when I got him on the phone to talk about the unemployment crisis, he struck a different tone. ... The problem, he said, was that Obama's stimulus was not direct enough.
With the Recovery Act, the White House eschewed direct hiring and aimed instead to raise overall economic output in the hope that more activity would lead to more demand...
"My idea is simpler. Find the unemployed and hire them."
If the government had spent the stimulus hiring people directly, we could have supported 23 million jobs, Hassett claimed. Hiring millions of unemployed workers directly into government organizations that already exist -- such as the military and the Army Corps of Engineers -- would be a much more efficient use of government funds.
Hassett defended direct government hiring, which the federal government used en masse during the Great Depression...
"Employers don't want to take a chance on some guy without a job for two years," he said. "The cycle is so long and deep that the cyclical becomes the structural." The easiest way for the government to end somebody's jobless spell is, very simply, to end it by straight-up hiring the worker.
"Since the economy has created this class of long-term jobless, the arguments for government hiring becomes stronger," he said. "If you give the person a job for a while, it helps them get a job later. You remove the stigma."

    Posted by on Thursday, August 26, 2010 at 11:02 AM in Economics, Fiscal Policy, Unemployment | Permalink  Comments (67)


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