Top of the News: Many smart people talked about “a lack of imagination” among American leaders in not foreseeing the 9/11 attacks. The same language was used to describe the sleepwalk into the financial crash. It could be applied now to efforts to restart job creation.
The other Washington is apparently mulling a tax credit for employers who will hire. This seems like a bad idea for at least two reasons. First, the jobs would not be related to real demand and would likely not have a future unless the economy rebounded strongly, an unlikely scenario. Second, every tax credit already increases the deficit.
American policymakers seem mired in the past. A federal effort to actually build high-speed train networks would create real jobs, many of them permanent for workers to operate and maintain the system. It would relieve congestion and enhance productivity, as well as better positioning the nation for a high-cost energy future (and helping with carbon emissions).
While America is only studying high-speed rail (and Amtrak still lacks predictable, adequate funding for regular trains), the world is racing ahead of us. Britain, continental Europe, China, India and Saudi Arabia are building and expanding their systems.
Here, another failure of imagination, with more costly consequences.
The Midweek Briefing: More about the “secret” effort to undermine the dollar as the currency of the oil markets. The Oil Drum weighs in with interesting background material. The move away from the dollar may be inevitable, if slow. I’m not sure I buy this, but it’s worth reading.
–Bloomberg reports that for the first time it’s taking the average worker more time to find a job than his or her standard unemployment benefits last. Congress has extended benefits twice — and will probably be forced to do so again.
–At least health care providers are hiring in this dismal job market, right? Not exactly. According to the Harvard Business Review, demand for workers is highly variable. The openings are most likely for the highly trained.
–You know the income inequality issue is real when the Tory Financial Times takes it up. Matthew Slaughter writes that the problem has been overshadowed by the panic, but it will soon “return to center stage” and has grave consequences for the global economy if it’s not addressed.
Today’s Econ Haiku:
Costco took a fall,
Still beat the Street, but gloating
Is not in the bag