With unemployment stuck above 9 percent, the U.S. needs all the job-creation expertise it can get. For that reason, President Barack Obama’s choice of Alan Krueger, an eminent labor economist, to head the Council of Economic Advisers is an inspired one.
Krueger, a Princeton University professor, has built his academic career on the study of labor markets, wage structures and long-term unemployment. He also has strong policy-making credentials. During the first two years of the Obama administration, he served as chief economist at the Treasury Department, where he helped devise the first stimulus package, the cash-for-clunkers effort and the Build America Bond program.
Krueger has shown that he understands the need for a strong government role as an anti-recessionary force, especially after a contraction brought on by a severe financial crisis. He also has made clear that there can be no meaningful job recovery if business confidence isn’t restored.
As the president’s top economic adviser, Krueger can draw even more on his background as a labor economist by designing focused programs that will help put millions of people back to work. A successful job-creation initiative will depend on broad-gauge measures, such as extending the payroll tax cut, to make it easier for all businesses to hire. Other initiatives are needed to target specific groups of unemployed.
Applied in concert, such steps can help the U.S. escape a self-fulfilling dynamic in which high unemployment, weak consumer demand and low business confidence combine to weaken the economy.
Obama has announced that he will propose a comprehensive jobs plan next week. He has some powerful tools at his disposal, including five ideas we recently endorsed: stepped-up public-works spending, particularly if the administration is willing to rescind the costly and outdated Davis-Bacon Act that inflates costs; a tax credit for companies creating jobs; income support for new hires; self-employment assistance as a return-to-work option; and an easing of rules that prevent people with minor criminal records from re-entering the workforce.
In an interview with Bloomberg Radio in July, Krueger was on the right track when he called for a fresh round of infrastructure spending and a new tax credit to encourage companies to hire. With the economy weakening since then, we encourage him to think bigger -- and the Senate to act quickly on his nomination.
Immediate action is needed to restore the economy and jobs. Anything less than a speedy confirmation process will come at the expense of the American people, who have already waited too long.
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