How to fix the mess we’re in, economic and political. Two policy steps:

[Kurt_and_Hunter]

ONE: Either by contract or direct hiring soak up all low-wage employment demand. Everyone is guaranteed minimum wage work if they want it.

This proposal is widely misunderstood (based on comments when I’ve made similar proposals). The idea is not to tie people to minimum wage jobs. The idea is to put a floor under the entire labor market. If anyone can get minimum wage just for showing up to clean up a park, or whatever, then McDonalds has to pay more than minimum wage for being able to run a cash register, which is a skill not everyone has. And then a fancier retail store has to out-bid McDonalds for cash register plus language skills or familiarity with products, and so on. Trickle-UP works.

In raw bang-for-the-buck terms this is a winner. Not very expensive and, in HCR language, “bends the curve” of wages and employer power in a bad labor market. (It would also be of some real help to everyone who took the jobs... it's voluntary and nobody would line up for a low-wage government make-work job if they had better prospects elsewhere.)


TWO: Buy up one trillion dollars of outstanding consumer debt and refinance it at Prime+2%. One day your credit card statement contains a form to sign if you wish to authorize the new Federal consumer-credit relief corporation to purchase your debt from Citicorp and refinance it at a non-usurious rate. (This would apply only to debt incurred before some date, like three months prior to the bill's passage, not new debt.)

This forces banks to actually compete for consumer credit with lower rates, adds hundreds of dollars to a lot of household monthly balance sheets (lower minimum payments) and generally helps everyone in the whole economy except money-center banks.

The government would not lose a lot of money. Prime+2% probably wouldn’t cover the full cost of defaults going forward but it would cover most costs. Losses would be more than justified by the economic rewards.


Both of these things would 1) help the economy for real in dramatic fashion, and 2) be politically popular if well-sold, well-explained and effectively administered.

The current talk about what we will do for 2010 is so wrong-headed it’s frightening. In our current reality it is impossible—literally impossible—to lower the deficit without hurting the economy. So we cannot win by playing that game.

Since we cannot play the deficit-concern game then spend more money on things that will produce dramatic results, that make people happy, that make people feel connected to government.

[Kurt_and_Hunter]

1. —

[Kurt_and_Hunter]

4. — - —

[fadedrose]

2. ONE seems like a good idea

I like it anyway....

[Kurt_and_Hunter]

3. And already legislatively authorized (though not funded)

The Humphrey-Hawkins Full Employment Act of 1978 gave the executive the power to do that, but nobody ever tried to use the power.

[drm604]

6. According to Wikipedia

that act expired in 2000.

http://en.wikipedia.org/wiki/Humphrey-Hawkins_Full_Employment_Act

Other sources also say the same thing.

http://www.google.com/search?hl=en&hs=Q9i&q=%22Humphrey-Hawkins+Full+Employment+Act%22+expired&aq=f&aql=&aqi=&oq=

[Kurt_and_Hunter]

7. I stand corrected. Thank you.

[drm604]

8. No problem.

That wasn't a slam at you, just pointing out something I noticed. :hi:

[uponit7771]

5. Prime +2 would be a net gain over a decade