Stanford Professor Offers an Alternative Stimulus Plan: a Rose on the Gray

Finally, a Light hits the gloom on the Gray in the economic news. The Wednesday, November 18, 2009, Wall Street Journal had an opinion piece by Michael J. Boskin which actually offered the first economic hope I have felt in many months. The drawback is that this theory may not be understood or implemented by policymakers, and in that case, it will remain just HOPE.

The article is entitled "An Alternative Stimulus Plan," and it makes the most sense of any "econo-babble" I have heard lately. He discusses the rising unemployment rates despite the slightly upturning effects of Obama's Stimulus Plan. He presents the arguement that a simple payroll tax cut would increase employment. His figures are endorsed by other experts at Stanford University. He projects an increase in jobs equal to the amount lost since the beginning of Obama's Stimulus Plan, if only half of the amount of Stimulus money were applied in payroll tax cuts. It is amazing, and hopeful. Of course, again, I am hopeful that policymakers are listening.

After all, it doesn't matter much about anything in the economy, if people don't have jobs. My big problem with a lot of the stimulus plan goodies, from cash for clunkers to first time home buyer stimulus tax credits, is that it is targeted to people who have good jobs and good credit. (Not even mentioning the big bail-outs of banks.) Most of my friends here in the depressed South watched the news stories about the Cash for Clunkers program and wished they could have a car as nice as the ones headed for the scrap yard! I saw one just like the one my husband sacrificed and bought me second-hand last spring, which I was thrilled to have. If you don't have a job, it doesn't matter what the economic stimulus is doing. You don't have a job! And, the homeowners benefitting from the Home Stimulus Bill will not be in their home long, if they have no jobs to pay their modified mortgage payment.

President Obama certainly walked into a five-alarm emergency when he took office. I am not an economist, and if it is like anything else, there is probably lots of blame to spread around. However, Mr. Boskin makes a very good point that as they try to fix whatever is wrong, the Hippocratic Oath should be in mind. "Do no harm." Don't add to the already devastating job situation by imposing any environmental legislation that causes more job loss. We can learn some things by looking back to Reagan's Supply Side Economics. Some of it is common sense. If you make it unprofitable on business to operate, they will either close up or move overseas. That is not hard to understand, and the opposite is also true. If you encourage businesses, they hire people and make things. Hopefully, the Obama administration will look toward this avenue to bring some real change in our economic situation, now that they have addressed the immediate things. A payroll tax cut would be a great way to go. They have already invested $787 billion dollars in other directions, so it wouldn't be so radical to try another approach.

Maybe, instead of an overseas junket for the President and Congress, invest some money and send them on a tour of the South. Be sure they don't miss Appalachia, specifically. Talk to people, real people, and see how many have no job, or no decent job. Health care, are you kidding? Look at their teeth. Ask them about mammograms and pap smears. They will laugh at you. They have bill collectors calling where they can't pay the emergency room bill from their child's strep throat visit.

Many, many people are out of work. Many have some kind of part-time employment. Those who still have a job are being asked to take salary and benefit cuts. Companies that once had good benefits are not able to continue them. We have an Ebay store to supplement our once-better income. Many people around here do, judging by the line at the post office mailing packages. This is the modern day equivalent of the flea market or garage sale. However, the bottom has basically dropped out of Ebay. People don't have jobs to buy things on Ebay anymore. We sell collectable toys, and no one has money for anything frivolous.

Yes, Mr. Boskin, I think you are right. What we need are jobs. It seemed like there was no hope. However, this theory is like a rose on the gray. I just hope somebody is listening.

Michael Boskin, An Alternative Stimulus, Wall Street Journal

The phrases, "Rose on the Gray," and "Light hits the gloom on the gray," are from lyrics written and performed by SEAL