You might not know it, but I’m a regular on Sean Hannity’s radio show. Don’t believe me? I don’t really care. The point is, this is personal in a way. Hannity is honest, devoted, and loves his country. He doesn’t lie; and if he ever makes a mistake (HA) what does he do? He corrects it. He a man of good character. So, why does the BHussein Admin want to silence him? Because he’s great at exposing them for what they are. Scum.

Cass Sunstein: Censor Hannity, right-wing rumors
Cites websites for ‘absurd’ reports of Obama’s ties to Ayers
Article: World Net Daily

Websites should be obliged to remove “false rumors” while libel laws should be altered to make it easier to sue for spreading such “rumors,” argued Cass Sunstein, Obama’s regulatory czar.

In his recently released book, “On Rumors,” Sunstein specifically cited as a primary example of “absurd” and “hateful” remarks, reports by “right-wing websites” alleging an association between President Obama and Weatherman terrorist Bill Ayers.

First of all, Cass… Can I ask what a “false rumor” is? No, really. Is that like… True Truths? Also; check this: First Amendment of the United Stated Constitution. Don’t feel like it? Here, let me educate you: FREEDOM OF SPEECH. OOOOOHHHH SNAP. Whatcha gonna do sissy boy? Also; It’s NOOOOOOO secret that BHussein is butt buddies with Bill Ayers. Why try to cover it now? It’s been common knowledge for almost three years on a national scale now, so what’s your fucking problem? Also, how is it hateful to state something that is completely true? Sorry, carry on:

He also singled out radio talker Sean Hannity for “attacking” Obama regarding the president’s “alleged associations.”

Ayers became a name in last year’s presidential campaign when it was disclosed the radical worked closely with Obama for years. Obama also was said to have launched his political career at a 1995 fundraiser in Ayers’ apartment.

As WND reported, Obama and Ayers sat together on the board of a Chicago nonprofit, the Woods Fund. Ayers also was a founder of the Chicago Annenberg Challenge, where Obama was appointed as its first chairman in 1995.

Ayers reportedly was involved in hiring Obama for the CAC – a job the future president later touted as qualifying him to run for public office.

WND columnist Jack Cashill has produced a series of persuasive arguments that it was Ayers who ghostwrote Obama’s award-winning autobiography “Dreams from My Father.”

However, such reports were characterized by Sunstein as “absurd” charges for which corrective measures can be taken.

Sunstein’s book – reviewed by WND – was released in September, after he was already installed as the administrator of the White House Office of Information and Regulatory Affairs.

“In the era of the Internet, it has become easy to spread false or misleading rumors about almost anyone,” Sunstein writes.

“Some right-wing websites liked to make absurd and hateful remarks about the alleged relationship between Barack Obama and the former radical Bill Ayers; one of the websites’ goals was undoubtedly to attract more viewers,” he writes.

Oh? So you don’t like it when “right-wing” websites make hateful remarks about BHussein and his relationship with Bill Ayers? Well how’s THIS one, CASSIEPOO? Barack Hussein Obama admires Bill Ayers because HE is a homegrown unrepentant terrorist who carried out acts of terrorism AGAINST the government. BHussein Obama LOVES and admires terrorists; although Ayers isn’t BHussein’s favourite “flavour” of terrorist. It’s no secret that BHussein favours the radical Islamist and Muslim terrorists; but he’ll take what he can get. Don’t like it? Suck a fat one, queerboy. I hear BHussein likes to get blowjobs if you give him a line of coke. THAT’S RIGHT, I SAID IT.

Sunstein continues: “On the Internet as well as on talk radio, altruistic propagators are easy to find; they play an especially large role in the political domain. When Sean Hannity, the television talk show host, attacked Barack Obama because of his alleged associations, one of his goals might have been to promote values and causes that he cherishes.”

Sunstein presents multiple new measures he argues can be used to stop the spread of “rumors.”

He contends “freedom usually works, but in some contexts, it is an incomplete corrective.”

Wrong you fuckface sack of shitballs. FREEDOM ALWAYS WORKS.

Sunstein proposes the imposition of a “chilling effect” on “damaging rumors” – or the use of strong “corrective” measures to deter future rumormongers.

For websites, Sunstein suggests a “right to notice and take down” in which “those who run websites would be obliged to take down falsehoods upon notice.”

WROOOOOOOOOOOONG. You want to have ME delete ANYTHING from my site; you’ll have to do it over my dead body. And based on the rising Obama Body count; I don’t think he’d have a problem with it. Besides, how “damaging” were these rumors statements? BHussein got his foot in the door. He’s living in the White House. No, he’s not acting like a PRESIDENT, but he’s living in the White House. So, damaging? PLZ ‘SPLAIN.

Sunstein also argues for the “right to demand a retraction after a clear demonstration that a statement is both false and damaging.” But he does not explain which agency would determine whether any statement is false and damaging.

Sunstein further pushes for “deterrence” through making libel lawsuits easier to bring.

Bring your goddamned lawsuits. You don’t own me. You can’t control me. I’m not scared of ANY of you. Not even close. Most of us patriots will continue to spread the truth; because the mainstream media has failed us. They turned their backs on their duties and they decided to follow along mindlessly slobbing any Obama knob they can. That’s right.

Sunstein drafted ‘New Deal Fairness Doctrine’

Sunstein’s proposals outlined in his book “On Rumors” were not the first of his writings to recommend regulating talk radio or the news media.

WND previously reported Sunstein drew up a “First Amendment New Deal” – a new “Fairness Doctrine” that would include the establishment of a panel of “nonpartisan experts” to ensure “diversity of view” on the airwaves.

Then it has to be enforced across the board. I want MSNBC and CNN… Larry King, Chris Matthews, KEITH OLBERMANN, Katie Couric to get off their high horses and treat OUR side with some goddamned respect. Did Sarah Palin get the same respect? No. Were her children needlessly attacked? Absolutely. Was President Bush given any respect from these doucheass low-rating shitstains? Nope. Why? To brighten the tarnished image that IS Barack Hussein Obama. Also, you have no right to change ANYTHING about the United Stated Constitution in order to make Barack Hussein look like a savory character. That’s not how it works. It’s up to HIM and HIM ALONE to make his image. Not you. Not me. Not the media.

Sunstein compared the need for the government to regulate broadcasting to the moral obligation of the U.S. to impose new rules that outlawed segregation.

Sunstein’s radical proposal, set forth in his 1993 book “The Partial Constitution,” received no news media attention and scant scrutiny until the WND report.

In the book, Sunstein outwardly favors and promotes the “Fairness Doctrine,” the abolished FCC policy that required holders of broadcast licenses to present controversial issues of public importance in a manner the government deemed “equitable and balanced.”

Sunstein introduces what he terms his “First Amendment New Deal” to regulate broadcasting in the U.S.

His proposal, which focuses largely on television, includes a government requirement that “purely commercial stations provide financial subsidies to public television or to commercial stations that agree to provide less profitable but high-quality programming.”

Sunstein wrote it is “worthwhile to consider more dramatic approaches as well.”

He proposes “compulsory public-affairs programming, right of reply, content review by nonpartisan experts or guidelines to encourage attention to public issues and diversity of view.”

The Obama czar argues his regulation proposals for broadcasting are actually presented within the spirit of the Constitution.

“It seems quite possible that a law that contained regulatory remedies would promote rather than undermine the ‘freedom of speech,’” he writes.

Sunstein compares the need for the government to regulate broadcasting to the moral obligation of the government stepping in to end segregation.

Writes Sunstein: “The idea that government should be neutral among all forms of speech seems right in the abstract, but as frequently applied it is no more plausible than the idea that it should be neutral between the associational interests of blacks and those of whites under conditions of segregation.“

Sunstein contends the landmark case that brought about the Fairness Doctrine, Red Lion Broadcasting Co. v. Federal Communications Commission, “stresses not the autonomy of broadcasters (made possible only by current ownership rights), but instead the need to promote democratic self-government by ensuring that people are presented with a broad range of views about public issues.“

He continues: “In a market system, this goal may be compromised. It is hardly clear that ‘the freedom of speech’ is promoted by a regime in which people are permitted to speak only if other people are willing to pay enough to allow them to be heard.“

In his book, Sunstein slams the U.S. courts’ unwillingness to “require something like a Fairness Doctrine” to be a result of “the judiciary’s lack of democratic pedigree, lack of fact-finding powers and limited remedial authority.”

He clarifies he is not arguing the government should be free to regulate broadcasting however it chooses.

“Regulation designed to eliminate a particular viewpoint would of course be out of bounds. All viewpoint discrimination would be banned,” Sunstein writes.

But, he says, “at the very least, regulative ‘fairness doctrines’ would raise no real doubts” constitutionally.

Fuck you, Cass Sunstein. You’re a fucking faggot. That’s fucking right. Am I offending you? DRY YOUR GODDAMNED VAGINA AND GET THE FUCK OVER IT.

For decades they were sitting pretty at the bottom of stiff cartons d’invitation. Good, old fashioned smart dress codes. Smart like in Cary Grant. Smart ass!

Then came management by objectives and project management science. MBO. PM. And other acronyms. Such as S.M.A.R.T. objectives. Challenging…

The brain child of a car- and a watch-maker. Colorful and small, they colonized Rome and other maze-like Italian cities. Not so sure about the rest of the world. They were not made of chocolate, but they could be parked like thrash bins. They took up roughly the same size. Smart Mercedes Benz cars. Wow!

Then also cars became obsolete. Enter the smart cards. We can now check-in with them and unblock ubiquitous car-sharing vehicles. Cool.

Yes, you can liaise with the office from home, and the office liaises with you just everywhere else. Smartphones. Multitasking. (Or the end of cool).

Since a couple of years we’re reading more and more about them. Now we’re understanding better what they are. MeinMann is working now on their costs/benefits, who still protect their mystery fiercely, though. Smart grids are coming. They are the future. Awesome.

De Mazière, the new Interior Minister of the Merkel government, said stop to Aufbau-Ost. He said now innovation is needed. And growth. Guess what? A smart one. Ach so…

Suzy Menkes in Berlin, Techno Luxury Conference. Guess what the bikers-cum-entrepreneurs guys from Vexed talked about. Injury protection and moisture management. Smart materials. Urban.

Well. There has been a moment for all thing new. New Look. New Deal. New Romantic. New Economy. New Town. For thing high. High Tea. High rise. High Fliers. High Fidelity. High Octane. Highway. High protein. High yield. High Net Worth Individuals. And also things low had their heyday. Low Carbs. Low Fat. Low Cholesterol. Low Calories. Low Income. Low cost.

Now it’s the time for things smart. It ain’t be particularly strong or heroic. Nor depressive and minimalist. It has to have a good return on capital. Not maximising. Second-best maybe. Moderate investment, acceptable return. Low risk. No weigh restriction – within reason – must fit in 20×30x50. Like easyjet luggage.

Welcome to the new thrifty, also known as “smart”.

Photo: The Guardian

Well, it’s all off the Flexible New Deal. Contrary to what I was led to believe by other people, it is TNG that I have to report to.

The New Deal Scandal site, and others, have  already shared their knowledge and experience of this “provider” (for example here)

I wonder if any of this relates to the contents of the Jobcentreplus Flexible New Deal document, “What you can expect and what we can expect from you.” (FNDI 10/09).

It begin with  two pages explaining what the FND is.

One page on what we can expect from you. That is  responsibilities we owe to the DWP and the ‘Provider’.

Then “What happens if you don’t meet your responsibilities”?”

Answer: Sanctions. Seven pages  ( Page 7 to 13), from a total of 14,  about them.

Ends with “How to make a complaint.”

On Page 2 there is some stuff about ’service standards’.

It would have been more useful if they explained how the Flexible New Deal is going to be delivered, what is consists of, and what responsibilities the ‘provider’ TNG, has towards its clients.

But of this, nothing. 

For a lengthy period, the $300 million mail-order house, Montgomery Ward & Company was beset by disputes between labor and management. The economy of the entire Midwest was affected by these disputes and this being the wartime, a presidential decree was issued for the government take over of Montgomery Ward.

On April 26th 1944, Sewell L. Avery, the company’s chairman, was notified. Avery was a prominent figure in right-wing, anti-New Deal efforts and was a scion of a powerful lumber family, and thus he refused to move out and went to work the next day as usual. The U.S. Army was prepared to enforced the Department of Commence’s seizure of the plant–they lifted Avery bodily and carried him down on the elevator.

Many photographers–William Pauer of Chicago Times, Ed Geisse of Chicago Tribune–were there to capture the moment, but the photo of the day was made by Harry Hall for AP. For more than anything, Hall had to thank the AP for his photo becoming the photo du jour: the AP was the first to transmit the paper, and it was a major news ‘beat’. It caused a sensation in all the newspapers it appeared.

Hall remembered the day when Avery made a courageous and defiant stand: “I had my Speed Graphic ready and was just waiting around, when all of a sudden the front door opened and two soldiers came out carrying Sewell Avery. I made a long shot and then several others, following the three men down the street. They stopped in front of Avery’s chauffeur-driven car, and let him down. He was smiling as he jumped into the auto and I made some more photos”.

There’s not going to be an LIGFY next week, so you better make this one last.

New blood first:

Chic Noir gives surprising accurate dating rules for men.

Michael Wears a Hat states the benefits men get from cradle robbing.

Thras critiques Half Sigma’s opinion on abortion.

Also check out J R’s and DaveinHackensack’s blogs.

And the rest of you grinders:

Prime analyzes It’s Always Sunny in Philadelphia from the viewpoint of game.

Chuck reports on a beta supreme who’s wife is obsessed with Twilight.

Dave from Hawaii analyzes the wretched wrongness of the American diet.

Roissy takes on a story about cuckolded men.

Obsidian reveals why most women are incapable of addressing the realities of the sexual marketplace.

Zdeno writes at 2 Blowhards on the nature of nightclubs.

Bhanu Prasad writes on the women who have lost out in the sexual revolution.

Al Fin states that Obama is bringing slavery back to the world and reports on a new aphrodisiac for women.

11minutes gives the reason why women believe in the myth of inner beauty.

Master Dogen mocks the androgyny of today’s youngsters.

Alex Birch remarks on the paradox of liberalism.

Martin Regnen reminds us why nerds and smart people deserve to be picked on.

Max critiques hard determinism.

From Girl Game: LILGRL has two great potato recipes, and Aoefe debunks the “soulmate” myth.

Hunter is annoyed by his beta friends.

The Kap’n explains why he hates the homeless.

Kamal S writes a two-part essay on truth, privilege, and oppression.

MarkyMark notes that Western women have difficulty dating overseas.

691 writes on the value of mentors for a young man.

OneSTDV states that the Internet has ended the concept of the sweetheart.

Professor Hale outlines a plan to reform how graves work.

Roosh goes on a dune buggy adventure.

Talleyrand demolishes the notion that women select the “best” men.

Sofia thinks people over 30 are BO-RING.

Sparks123 takes a balanced look at evolutionary psychology.

Mark Baachman offers a New Deal for women.

Ben Leonard reports on the addictiveness of junk food.

Genius says why it’s not easy being hung like a horse.

J reports on the reasons for CUNY’s decline.

Robert Stacy McCain has fun with a troll.

Gerard O’Neill blames feminism for the debt epidemic among the Irish.

T. aka Ricky Raw posts Part 2 of his review of Precious.

Guy White develops a method for distinguishing race.

Jeff Riggenbach claims there never was an Old Right.

Agnostic writes on when it’s a good idea to fight for a good-looking older woman.

William Lind states that political correctness is cultural Marxism.

Daniel Larison explains how, despite the fantasies of conservatives, Sarah Palin is almost identical to John McCain.

Srdja Trifkovic analyzes the self-destruction of Catholicism and Protestantism.

John Robb writes on how to smash an insurgency.

Joe Bageant states that there’s no difference between the Democrats and Republicans.

Mike Payne reports on the fall of Playboy.

Mencius Moldbug lays out his plan to conquer America.

Razib Khan writes on the silent secularization of the U.S.

FDR. USA. Works Progress Administration Art. 1935-1943.

Everyone knows about the New Deal. FDR’s a hero of the people.
But who knew that the WPA (the largest New Deal agency) made such great art? Not me apparently.
Terrific posters on everything from work, to venereal disease, to war-time propagandizing. Check out a great set of these WPA posters here.

“A camera is a tool for learning how

to see without a camera.”

Dorothea Lange, Photographer

1895-1965

“White Angel Breadline”
By Dorothea Lange, San Francisco, California, 1933
National Archives and Records Administration, Records of the Social Security Administration

Here we have ol’ Orrie firing on all pistons, at the top of his A-game.  While the usual elements are here — the heel juggling three dames, salesmanship and making money — the premise is not only unlike any other Hitt novel, but pretty damn unique. It’s not a sex or sleaze novel, not a crime novel…a con man novel?  A novel about a heel, about jealousy and revenge?

Danny Fulton heads up what is a borderline scam…they do offer a service, he and his team are not up-and-up about it and what kind of profit they actually make.  The game is the seedy side of publishing — offering up slapped-together books that cover the history of small towns or the police and fire departments in various towns, to be used as fund-raising means.  Danny and his cohorts play on the egos of people, their sense of place in history, and the notion that the “profits” will be used for charitable means, either for the fire department, the city’s social services, or churches.

This is what they do: they get an organization, such as the fire or police departments or a 4-H club or anything, really, to put up initial funds to get the book started.  Then Danny sells “ads” for the book for more income.  The people think he’s hard at work researching the history and doing a good academic job at it, but really he has one of his women — Madeline — in the town library, pulling out two decades old manuscripts commissioned through Roosevelt’s New Deal Work Project Administration, the Federal Writer’s Project.  That project, during the Depression, was designed to provide work for writers and academics during the Great Depression.

Established July 27, 1935 by President Franklin Delano Roosevelt, the Federal Writers’ Project (FWP) operated under journalist and theatrical producer Henry Alsberg, and later John D. Newsome, compiling local histories, oral histories, ethnographies, children’s books and other works. The most well-known of these publications were the 48 state guides to America (plus Alaska Territory, Puerto Rico and Washington, D.C.) known as the American Guide Series. The American Guide Series books were compiled by the FWP, but printed by individual states, and contained detailed histories of each state with descriptions of every city and town. The format was uniform, comprising essays on the state’s history and culture, descriptions of its major cities, automobile tours of important attractions, and a portfolio of photographs. The Federal Writers Project was funded and put to work, as a Public Works in and around the west coast, through Washington, Oregon and California.

FWP was charged with employing writers, editors, historians, researchers, art critics, archaeologists, geologists and cartographers. Some 6,600 individuals were employed by the FWP. In each state a Writer’s Project non-relief staff of editors was formed, along with a much larger group of field workers drawn from local unemployment rolls. Many of these had never graduated high school, but most had formerly held white collar jobs of some sort. Most of the Writer’s Project employees were relatively young in age, and many came from working-class backgrounds.

Basically what Danny and Madeline do is re-type the manuscripts they find through the local project archives, send them to a printer to reduce the type and print off 1500-2000 copies of the book, which they hand over to the benefactor organization to sell for $2.00, making around a fifty cent-to-one dollar profit.

What they don’t know is the actual price of the printing — Danny has jacked it up so he has a profit — and that Danny prints a thousand or more copies than told.  Before the organizations can go out and sell their copies, Danny and his crew quickly hits the streets or phones and sell the books to the town citizens and take off with what they make — maybe a few grand, but that went a long way in the 1950s.  Thus, when the organizations try to sell their copies, they’ll have a hard time because a lot of people already have the book…

A very strange and original con, indeed, and makes one wonder if Hitt was involved in something like that. Such a con is not the sort of thing a writer makes up out of the blue; and since Hitt always writes about rackets he had personal experience in (resort hotels, insurance, door to door sales, radio advertising), this one sounds like a playbook out of Orrie’s past work history.

The novel opens with Danny and crew wrapping up their latest con in Waverly, NY (a town that shows up in various Hitt stories, like Affair with Lucy) and deciding he’s going to get out of the game.  He’s made good money and thinks he’ll head for sunny pastures, Florida or California, and find some other racket.

He also knows it’s only a matter of time before word gets around New York State how he has conned people, and no one will fall for it again, or he might even get arrested for fraud and tax evasion.

But his scouter has secured a huge job — the history of Port Jessup, NY, funding through all churches there for their benefit.  Port Jessup is no small town, has half a million, so they could possibly sell 10,000 copies and make a mint. One problem: Port Jessup is Danny’s hometown where he pulled his first book con with the police department, with a woman he had an affair with, Gloria.  When Gloria went on a trip to see a dying aunt, Danny skipped out on her.

It’s tricky, but Danny can’t pass up this last job that is sure to give him a nice nest egg to take off.  Gloria is married with a child now, too.

The third woman is Sally, a wealthy red-head who is steering the churches for this project.  She has heard a few rumors about Danny and his game, but goes along with it — right there, we have to wonder if Sally isn’t running her own con.  The question arises: who is the pushover?  Danny’s suckers, his women, or him?

James Reasoner, last March, reviewed Pushover at his blog and makes a few keen observations:

Hitt does a remarkable job of capturing the grubby desperation of these people, especially Danny and his two partners, one a young, beautiful blonde who’s separated from her husband, the other an advance man and salesman who misses his wife and family. All of them seem to be teetering on an emotional brink, and so do most of the people they encounter.

This is certainly true for many Hitt novels, especially the ones that deal with fast-talk salesmanship, people living day-by-day from the money they make that day (e.g., Diploma Dolls, Shabby Street, Two of a Kind, The Cheaters, Bad Wife, etc.); the same is true for Hitt’s books about young women falling into the sex trade (Three Strange Women, Sin Doll, Burlesque Girl, Run for Cover, etc.): everyone is desperate to fight off poverty and starvation, as they seek out love, family, and meaning in their often meaningless life.

And that’s what we get from Danny here: his life has to meaning, purpose. He’s tired of the con, tired of sleeping with women he doesn’t love but makes them think he does.  Sure enough, he’s a goddamn heel, and he hates it.  Reasoner mentions that whenever Danny does something good for someone, he’s surprised himself at how of character that is for Danny Fulton, selfish money grubber crook.

Reasoner also notes that the novel has little action, which is also true for many Hitt books.  For instance, in Add Flesh t the Fire, the story centers on gun running to Cuba, but we never see the actual gun running or Cuba, it’s only talked about or “happened last night.”  Hitt focuses on dialogue and relationships — real people, essentially.

Danny’s womanizing backfires on him…first, Gloria confesses to him that her child is his, and she made a deal with a man to be her husband so she would not be shamed.  But that’s not the case at all.  And then he convinces Madeline that they have a future — her husband is back from his Navy tour in Korea and wants her to move to San Diego with him, where he’s based.  But she asks for a divorce to be with Danny; only, Danny wants her to stay to finish the book project — he needs her more than he can admit: while everyone thinks he’s the writer of these books, she’s the one who does all the research and typing, formatting copy for the printer on a high-end IBM typewriter that justifies right margins.

But Danny has a fling with Sandy, and she professes love, and he is surprised to discover that he’s in love with her, and not because she’s worth half a million.  They plan a marriage after the book comes out.  When Madeline finds out, of course she feels betrayed.

The blow up ending is obvious but Danny is too much a conceited fool to see that his betrayal has infused a need for revenge in Madeline, to destroy him and his wedding to a rich lady…

The ending is a little strange…he winds up with the woman you don’t think he will, as Hitt heroes do.  It almost seems anti-climatic.  But it is different, like the whole book, from other Hitts.

On the Hitt scale, this is a 9.

Introduction:

In previous installments of the Job Insurance series, I’ve used a simple $20 a month premium, split 50/50 between workers and their employers, to give a rough idea about how a Job Insurance program could be financed as a significant new social insurance program, without creating a heavy fiscal burden.

However, there are important alternatives for financing a Job Insurance program that should be considered – especially as we think of how to construct a jobs bill without triggering an internal struggle with our party’s “deficit hawks.”

Why Social Insurance:

In my segment on jobs for youth, a commenter asked why people in need of work should have to pay a premium to be eligible. This is a very fair question, and the answer largely boils down to a mix of politics and policy. Politically, social insurance programs are much harder to attack than non-contributory social programs. The usual methods of de-legitimization don’t work – beneficiaries are workers, not an easily stigmatized group of unemployed poor; the benefits they receive aren’t “government handouts” but “getting their money back” and the program tends to be more universally open (at least in the sense that everyone will eventually gain access), as opposed to “giving your tax dollars away to [insert minority here].” In the minds of voters, they feel that their contributions gave them an “earned right” to their benefits, and that this makes the program inherently more “fair” than a non-contributory program; voters are also more likely to identify themselves with beneficiaries, rather than viewing them as some disliked “other.” That’s why Social Security and Medicare are politically untouchable, to the point where conservatives have essentially had to give up on trying to eliminate them, and now try to use them to block health care reform.

Policy-wise, the advantage of designing a social policy as social insurance is that it creates a certain element of independence from the party in power. Programs that are funded through general taxation and the regular budgetary process can be de-funded the moment that one party loses their majority and is replaced by the opposition, and this is just as true of social policy as any other. When a conservative majority gradually formed in Congress between 1938 and the 1940s, FDR saw many of his New Deal spending programs phased out – with the significant exception of the Social Security system, which didn’t need Congressional appropriations thanks to its payroll tax-driven Trust Fund. Similarly, much of LBJ’s Great Society and War on Poverty programs were eliminated between the end of his presidency and the rise of Reagan – again, because many of those programs depended on Congressional appropriations for survival.

A premium-financed Job Insurance program would thus be constantly generating revenue (at about $37 billion a year), allowing it to fund jobs programs without having to go hat-in-hand to a potentially hostile Congress. At the same time, creating an enormous constituency of 150-odd million workers who’ve paid their dues and expect to get a job when they get laid off, as well as a smaller but significant constituency of Job Insurance alumni who have positive memories of the program would make it much harder for even a conservative Congress to repeal Job Insurance once enacted.

How to Finance:

However, it is also true that a flat premium – just like the FICA tax that funds Social Security and Medicare or the FUTA/SUTA tax that funds Unemployment Insurance – is just one option, and that there are other funding mechanisms than a $20/month premium.

1% Payroll Tax – in many ways, a 1% payroll tax would simply be an extension of the $20 premium, but it illustrates why historically we’ve turned to payroll taxes to fund some of our largest social policy programs – they can raise an enormous amount of money, especially if you’re dealing with a periodic event like a recession and can build up a reserve in the meantime. Given an average weekly earnings of $619, a 1% payroll tax (average of $25 a month, split to $12.50/$12.50) would generate $46.2 billion a year. This level of revenue would allow for a 5 million job reserve within four years, enabling the Job Insurance system to cope with even quite severe recessions.

On the other hand, a flat payroll tax is rather regressive in nature. Just as it would be possible to make our existing payroll tax progressive, it would also be possible to make the Job Insurance premium more progressive. It would probably be possible to, say, levy a .25% payroll tax on workers making $25k or less a year, .5% on workers making between $25k-50k a year, 1% on workers making between $50-75k, 1.5% on workers making between $75-100k, 2% on workers making $100-150k, and so on up the income scale and generate enough revenue to operate a robust Job Insurance system.

Tobin Tax – another revenue option that has increasingly been suggested since the financial crisis (it’s prominently mentioned in regards to the jobs bill, for example) is a Tobin Tax. A Tobin Tax, for those unfamiliar with the term, is a small tax on financial transactions (buying and selling stocks, bonds, currency, futures, derivatives, etc.), usually anywhere between .1 to .25% of volume (or in other words, a 10-25 cent tax per transaction). Because of the enormous volume of financial transactions that happen every second of every day, such a tax would generate about $100-150 billion per year, and would have a beneficial side-effect of decreasing market volatility by making rapid, short-term speculative transactions (also known as “churn”) more expensive.

Half of a Tobin Tax’s revenues could easily create a robust Job Insurance system with a 5 million job reserve inside of four years. The remainder of the revenues could be tasked to any other purpose – funding health care reform, reducing the deficit and national debt, funding a multi-year project to restore America’s infrastructure, and so on.

Income Tax Surcharge – one of the smaller lessons learned from the health care reform debate is the sheer amount of of money that can be raised from a surcharge on the richest Americans. In the House’s bill, one of the ways that the bill is paid for is a surcharge of “1 percent of income between $280,000 and $400,000; 1.5 percent of income between $400,000 and $800,000; and 5.4 percent of income in excess of $800,000″ for individuals and “1 percent of income between $350,000 and $500,000; 1.5 percent of income between $500,000 and $1 million; and 5.4 percent of income in excess of $1 million” for couples filing jointly. Keep in mind that we’re talking about only 1.2% of American taxpayers, and an average rate increase of about 3%. And yet, this surcharge will likely generate $55 billion a year.

This should suggest two things. First, conservative arguments that our tax system is too progressive and that we simply can’t solve our problems by raising taxes on the rich are disingenuous at best. If a mere 3% increase can generate $55 billion a year, then returning to the 50% top bracket that the rich enjoyed in the notoriously liberal years of 1982-1986, could easily generate enough revenue to put a massive dent in our fiscal problems. Second, an income tax surcharge could easily finance a robust Job Insurance system with a 5 million job reserve in about three years.

The point here is that there isn’t necessarily one right way to raise tax revenue – you can generate $50 billion a year in many different ways; the question then becomes one of the  relative merit of the different options.

Supercharging Job Insurance:

Before I evaluate the merits of the different options, I do want to discuss a point that has come up in some of my previous discussions regarding the Federal Reserve and central banking. Namely, that the Federal Reserve has an enormous power in its role as a “lender of last resort” that we have for some inexplicable reason decided can only be used to assist the financial sector and not the public sector, or even the public at large. The relevance here is that, while with a revenue stream of about $50 billion a year you can create an effective Job Insurance system, if the Job Insurance system is allowed to use its revenues as collateral for a loan from the Federal Reserve, the potential for public action on a grand scale becomes immense.

First, enabling the Job Insurance system to borrow from the Fed would allow the system to punch way above its weight. Instead of having to build up reserves for multiple years in order to respond to recession-driven mass layoffs, the Job Insurance program could easily take out a loan for $175 billion, put 5 million people back to work, halting the recession in its tracks, and pay back the loan within 3 years. Even in a catastrophic depression, a Job Insurance system could borrow enough to put 10 or 20 million people to work (dropping the unemployment rate by 6.5 and 13 percentage points respectively), and pay back the loan in 6 to 12 years. Looked at another way, if the Job Insurance system only had to build up enough reserves to take out and pay for a loan from the Fed, instead of paying 100% of the costs of creating millions of jobs up front, you could drop the social insurance premiums down to $10 a month (split $5/$5).

Second, such a system would be good for the Fed. As we can see from the current political discourse, the Federal Reserve currently has both an image problem in that it’s viewed as being interested only in the well-being of the financial industry and not that of the people from whom it borrows the inherently public monetary powers that give it force, and a policy problem in that has much less in the way of tools to deal with the “maximum employment” part of its mission than it does with the “price stability” part of its mission. At the moment, because the Federal Reserve works on the economy primarily by influencing interest rates, the Federal Reserve’s ability to actually achieve “maximum employment” is something akin to the captain of a giant ocean liner trying to turn the ship – it can be done, but it takes a huge amount of effort (in terms of pushing interest rates), and the ship is slow to respond. Lowering interest rates will generally boost economic growth and employment, but it takes several quarters, if not years to generate job growth. By acting as “lender of last resort” to the “employer of last resort,” the Federal Reserve would be able to create millions of jobs in a few months, giving it a degree of control over the unemployment rate equivalent to its control over interest rates.

Conclusion:

While bringing the power of the Fed to bear on the jobs crisis is alluring, there’s still the question of how we raise the revenue. As I suggested above, each model has different attributes. For example, each way of financing Job Insurance has different economic effects: payroll taxes make employment marginally more expensive, Tobin taxes decrease the volatility in our financial markets, and an income tax surcharge would modestly redistribute wealth from the richest to the poorest.

However, it’s also my firm belief, based on my understanding of policy history, that public policy is as much (if not more) about political ideology and culture as it is about technocratic details. Each tax tells a different story and makes a different argument about how and why we want to do things. A payroll tax, as was the case with Social Security and Medicare, evokes the idea of an earned right to public benefit, but it also makes a case for understanding social insurance as a collective responsibility shared by the state and citizens, between citizens and citizens, and between workers and their employers. A Tobin Tax suggests instead the idea of a systemic imperative; fluctuations in the financial markets can have ruinous consequences in the real economy, so we must reduce volatility and ensure that financial activity contributes towards the stability of the labor market. A surcharge on the rich expresses an egalitarian principle: concentrations of great wealth are bad for the health of the economy, because they reduce the ability of the masses to consume and concentrate income among the speculating classes; by redistributing income from those who will never miss it to those who need to work to survive, we create a more equal and humane society.

What principle would you enshrine in the heart of Job Insurance?

The threat of imminent economic collapse ushered in the $700 billion bank bailout just in time for Christmas bonuses and an executive day at the spa. Now, with the economy officially collapsed, President Barack Obama pushes forward his $838 billion dollar new New Deal, and average Americans are left wondering if they’re getting another raw deal.

The stimulus package includes funding for infrastructure, school improvements, and the “modernization” of America, but more importantly, it represents a substantial increase of our government. Mr. Obama has been quick to deny allegations that he’s using the economic crisis to achieve so-called socialist goals, but the sheer size of the package has turned the public into skeptics. The package, as proposed, would be the equivalent of the world’s 19^th largest economy – larger even than Australia’s. That’s the GDP equivalent of all the Gulf countries borrowed, or as John McCain says, “robbed,” from future generations.

Ideologically, it appears Democrats and Mr. Obama are okay with that. In fact, such a future would promote their policies. They’ve already convinced the American public that the financial crisis wasn’t caused by the artificially low interest rates, a tax code which subsidizes housing, and sub-prime mortgages backed by government guarantees. No, they say, the crisis is from the failures of capitalism and corporate greed, and our only solution is more regulation.

Questions of whether the stimulus package will work aside, this debt will eventually need to be paid or at least reduced. That likely means more taxes – not just on the principle and interest, but also on the expanded health care and educational programs which by then will be considered entitlements and as fundamental as Roosevelt’s Social Security.

With increased taxes limiting economic growth and cutting into wages, Americans won’t be eager to give up their “free health care” and other social programs regardless of how ineffective and expensive they are. This plays well for Democrats. In the 2005 showdown over Social Security reform, Democrats showed how hard they’ll fight to maintain an institution which delivers votes.

The debate on the stimulus package isn’t just about emergency spending. It’s about how we see our government, ourselves, and whether we want to be indebted to the former.

A clip from a short government film about the the Works Progress Administration, one of the New Deal programs started during the Great Depression.

Uploaded by YouTube user: FasttrackHistory, 30 January 2009

Introduction:

Up until a week ago, the prospects for a second round of economic stimulus looked bleak; an ominous coalition of Senate moderates (the same folks who shrank the stimulus and cut out Pelosi’s teacher preservation program, and who’ve tried their level best to stop the health care reform effort in its tracks) threatened to force the U.S government into default unless Congress agreed to a deficit-reduction committee with authority over Social Security and Medicare, and President Obama responded by talking up deficit reduction in his next budget.

And then the October jobs report came out, showing unemployment rising over the magical 10% level that signals political disaster in a midterm election. Suddenly, President Obama began to talk up a December “jobs summit,” and Senator Reid announced that he’s pulling together a pre-election jobs bill.

This sudden momentum is welcome, but if we want to significantly reduce unemployment, and thereby protect our Democratic Congress at the same time, we need to be very careful about what goes into this jobs bill.

Evaluating Options:

To begin with, let’s start by analyzing the policy options that have been widely discussed in the media – a new jobs tax credit for employers, a payroll tax holiday, and a package of infrastructure public works projects.

New Jobs Tax Credit: one of the elements that the Obama administration has repeatedly mentioned, which was initially proposed but eliminated from the stimulus bill back in January, is a tax credit of $3,000 per new worker hired. Economists tend to be rather skeptical of such tax breaks: given that the average total compensation per worker is about $50,000 a year, they argue, $3,000 is unlikely to make much of a difference in hiring decisions.

The historical evidence suggests more of a mixed bag. During the Nixon Administration, a New Jobs Tax Credit was established, providing a 50% subsidy on the first $10,000 in wages (or about $5,000 per head). Taking the average of three different studies’ estimates, the New Jobs Tax Credit created about 468,000 jobs, at a cost of $6,480-$58,000 per job (in 2008 dollars).

While this suggests that a new jobs credit could conceivably create some jobs, given that the current proposal is quite a bit less, we might only see 280,000 jobs for $840 million. While that isn’t bad on a per-dollar basis, it’s still only a .18% drop in the bucket – not even enough to bring us down to 10% even.

(Note: to be completely fair, I should note that Timothy Bartik and John Bishop of the Economic Policy Institute, who have more expertise in these kinds of calculators than I do, estimate that a properly-designed New Job Tax Credit of 10-15% could create 2.8 million jobs in the first year, at a gross cost of $80 billion (net cost of $27 billion. This would give us an unemployment rate of 8.1%, which is pretty good for $27 billion.)

Payroll Tax Holiday: one idea that has an unusual amount of bi-partisan support from progressive economists like L. Randall Wray and conservative anti-taxers is a payroll tax holiday for employers. The strange thing about it is that, when you think about what it does, a payroll tax holiday only differs from Obama’s new jobs credit in terms of scale, not kind, coming out to a $2,500 credit for employers and a $2,500 credit for employees.

This comes out roughly equivalent in scale to the New Jobs Tax Credit of the 1970s, suggesting a potential direct effect of somewhere around 468,000 jobs, which is good, but would only drop the unemployment rate from 10.2% to 9.87%. On the other hand, as Wray and others have pointed out, a payroll tax credit – since it also results in increased take-home pay for workers – would provide additional stimulus of about $685 billion, which might increase the overall effect (if we take the stimulus’ 3.3 million for $787 billion) to 3.339 million jobs. This would bring unemployment down to 8%, which is a significant improvement. (Note: the Center for Budget and Policy priorities is rather more skeptical of the idea.)

The downside of the payroll tax holiday is twofold: first, politically, a $685 billion price tag would be extremely hard to swallow, even in the context of 10% unemployment. Second, there is the issue of timing. As we have seen, the stimulus has shown significant results in terms of turning economic growth around and at least stemming layoffs – but it’s taken 8-9 months, and we still haven’t gotten to the point of substantial jobs growth. It is unlikely that the electorate would see enough in the way of results before November to make this effort worth the political effort.

Public Works/ Stimulus:

Another option that has been discussed, especially since the stimulus package only ended up containing about $275 billion in public works (another $288 billion went to tax cuts and $224 billion to entitlement programs like UI and Food Stamps), is a second round of stimulus. Ideas for said stimulus have been varied – Lawrence Mishel and Ross Eisenbray have recommended $160 billion in aid to the states and another $10 billion in school repair and maintenance, L. Randall Wray has called for $400 billion split between Unemployment Insurance and aid to states, others have called for more money for a “smart” energy grid and other green projects, and so on.

What we have learned from the current stimulus is that your bog-standard Keynesian stimulus does work. Despite being split into tax cuts, entitlements, and public works, and despite the fact that only 58% of moneys have been awarded, and only 13% received (according to recovery.org), we’ve still created or saved 685,000 jobs and created about 2.3% in additional GDP growth. At this rate, we’re on track to hit 3.3 million jobs created or saved overall, which should mean an additional 2.7 million jobs once the public works contracts are fully let and the crews are hired. However, what we have learned is that it takes time. We very likely won’t see the stimulus take its full effect for at least a year.

A new stimulus package would undoubtedly have a significant economic impact; what is more doubtful is how quickly traditional public works and/or stimulus could take effect.

Direct Job Creation:

As I have discussed in my Job Insurance series, the direct creation of jobs is a potentially powerful vehicle for creating a large number of jobs for a relatively low amount of money (compared to traditional aggregate stimulus) quickly.

A youth jobs program, as discussed here, could create jobs at about $22 billion for every million jobs created. An adult jobs program, that seeks to provide a wage that could keep a family of four out of poverty, could create jobs at the rate of about $35 billion per million jobs created. The direct job creation route has certain advantages over the options discussed before: unlike a new jobs tax cut or a payroll tax holiday, direct job creation does not depend on the uncertain reaction of employers in what is a very dicey market. As we have seen, despite the marked improvement in terms of economic growth, employers have been rather hesitant to add employees, and have turned instead to getting more out of their existing workforce – even as average hours worked per week has dropped to about 32, output per hour has risen by 9.7% in the third quarter of 2009. Secondly, direct job creation can be extremely fast (in part because it doesn’t have to wait for the effects of stimulus to percolate throughout the economy) – the Civil Works Administration in 1933 was able to put 4.27 million people to work in three months. A direct jobs creation program would produce visible results well in advance of the 2010 midterm elections.

One of the most positive signs that I have seen recently is that the idea of direct job creation, which wasn’t even mentioned during the stimulus debates, has started to make its way back into the discourse. Both Mishel and Eisenbray call for a “public service employment” program (i.e, a jobs program where workers are tasked to providing public services instead of constructing public goods) of at least $40 billion. It’ somewhat hard to calculate how many jobs that works out to (given that Mishel and Eisenbray call for such jobs to pay the prevailing wage, which varies from state to state), but if we take an extremely rough estimate of $15 an hour, that would come out to at least a million jobs per $40 billion.

Getting Where We Need to Go:

So the question is, how do we build a jobs bill from this range of options? The trick here is to balance our objective of making a significant and fast dent in our U3 unemployment rate of 10.2% and our political constraints here regarding the budget deficit.

Wray and the other progressive economists, as is the wise political move, are arguing for the largest possible package, to push the “Overton window” of this debate as far as it will go, which is why Wray is calling for $400 billion just in aid to the states, and Mishel/Eisenbray call for a package to roughly works out to $293 billion (including $160 billion in aid to states, $40 billion in direct job creation, $80 billion for a new jobs credit, and $13 billion for school repair/maintenance). My guess would be that at the very most, we’re talking about anywhere from $100-300 billion. I certainly don’t think anything larger than that will fly at the moment. Granted, this effort becomes much easier if the jobs bill can be made to be deficit-neutral by raising some revenue. Mishel and Eisenbray’s suggestion for a Tobin tax to generate about $100-150 billion a year is a good one, allowing potentially a quite strong package to be funded without much difficulty.

Taking Mishel/Eisenbray’s $293 billion package as a rough guideline, I think we could create a package that created 8.8 million jobs if we combined a strong direct jobs creation package of 2.25 million jobs for youth (price tag = $49.5 billion) and 3.75 million jobs for adults (price tag = $131.25 billion) with Bartik/Bishop’s version of the New Jobs Tax Credit (price tag = $80 billion), coming in at $281 billion. This would drop unemployment down to 4%, and it would do it well within a year, creating a drastic sea-change in both the larger economy and in the public eye.

Making the package deficit neutral isn’t particularly easy, but it is possible – the suggested Tobin Tax would make it deficit-neutral within 3 years; establishing the youth and adult jobs programs as social insurance would generate enough revenue to pay back the initial cost within 7 years. And as I’ll discuss in my next section, this is only scratching the surface of potential revenue mechanisms.

Conclusion:

Back in January when the stimulus was being debated, a jobs bill was but one element among many, and the political winds favored tax cuts and traditional public works (and let’s not forget, a smaller package than initially proposed).

Now a jobs bill has become a matter of political survival. And this is by no means a bad thing. Because it is when politicians most fear defeat that their traditional fear of the new and the untried becomes weakest. We should take advantage of this sudden change in the winds; it might not come again.

From The Progressive, posted 27 October 2009, by Julianne Malveaux:

[snip]

By [1932] the Great Depression was raging, with unemployment rates rising to 25 percent.

To combat unemployment and alleviate poverty, the federal government engaged in a massive public works and jobs program through the Works Progress Administration (WPA).

Private markets weren’t about to create jobs, and the public sector became the employer of last resort. The job creation from the WPA provided survival and sustenance for millions of American families. Where is the contemporary WPA?

Absent public job creation, it is likely that the economy will not fully recover…

Read More ~  Digg it

Related on Past in Print:

Hey Obama, while you’re at it, bring back the CCC

Former President Bill Clinton recently weighed in on the current proposal for health care reform. I’d like to break down his statement and point out some of the more glaring fundamental flaws in his thought process.

I basically said that I think it’s an economic imperative. We’re in an economic crisis, we’re trying to bring America back, and I have always been concerned that, you know, 16 percent of our people don’t have health insurance and 30 percent are without it at any given time during the year.

Our current economic predicament was caused by the thinking that “economic imperatives” exist for government. In order to bring America back, government needs to stand aside and do absolutely nothing. As for the figures regarding percentage of citizens without health insurance, I would like to point out two things. One: health insurance is not the same as health care. Two: even if some citizens lack health care, that does not create a moral imperative on the part of others to provide that care for them.

But the main thing, since we’re focused on the economy, is that we are spending 16.5 percent of our income on health care. The next most expensive country is Switzerland at 11.5. The next most expensive is Canada at 10.5. All of our competitors are between 9 and 10 percent. That means every year, it’s like we write a check to all of our economic competitors for $800 or $900 million. And they cover everybody — we only cover 84 percent, and we don’t get better outcomes. We get worse outcomes.

This would make sense, if a government-run health care system would decrease costs and increase quality of care. Unfortunately, there is no evidence that socialist health care systems maximize utility. It is also worth noting that this talk of writing checks to trading partners is evidence of a zero-sum economic mentality of the type that fosters protectionist policies.

So the point I tried to make is that this is an economic imperative. To just give you one example, before the economic collapse of Sept. 15, 2008, with the Lehman Brothers failure, median income after inflation in our country was $2,000 lower than it was the day I left office in 2001 — that’s back in the dark ages. I mean, we went through all those years, and one big reason is, after inflation, health care costs doubled.

Inflation: another problem caused primarily by government intervention in the economy.

So my argument was, this is an economic imperative as well as a health care imperative. Second thing is that on the policy, there is no perfect bill, because there are always unintended consequences. So there will be amendments to this effort, whatever they pass, next year and the year after and the year after. And there should be. It’s a big, complex, organic thing.

If a bill is not perfect in that it violates individual rights and involves government stepping outside its proper bounds, then it should never be passed. No societal progress is worth the cost of even one violation of individual freedom. It is “big, complex, organic” legislation (such as the programs of the New Deal) that shackle our economy and stunt our growth.

But the worst thing to do is nothing. That was my argument on the economics and on health care.

This single statement sums up the liberal/Keynesian economic philosophy. But no political rhetoric can change the fact that the very best thing a government can do for an economy is nothing.

            I missed the opening of the Smithsonian American Art Museum’s “1934: A New Deal for Artists,” which displays art made with the first tranche of money directed at artists under President Franklin Delano Roosevelt’s short-lived Public Works of Art Project. When I finally made it to the show last month, I was struck by comments in the visitor’s log book, many of them evincing a powerful nostalgia for government supported art. After reading Morris Dickstein’s book on art during the Great Depression, and looking through another volume, “When Art Worked: The New Deal, Art, and Democracy” by Roger Kennedy, I ruminated on some of the issues involved with public funding for the arts then and now. The story appeared in last Sunday’s Post.

Bypass the Benefit Delay Scandal

Jobcentre Plus gets correspondence sent to the below published address for the Suffolk (?) area:

Bury St Edmunds BDC
Thorpe Road
Norwich
NR99 1AD

It actually then gets redirected to:

Bury St Edmunds BDC
St Andrews St North
Bury St Edmunds
IP33 1TT

This is intentional to delay your appeal and your correspondence going to a decision maker.

Post a letter today to the actual Bury St Edmunds BDC Address via first class Royal Mail service it should arrive tomorrow or the following day.

Send it to the Norwich address (notice the NR99 postcode, this is a special postcode it doesn’t really exist) it can take up to a month for anyone from the BDC to process it (I have seen a document I sent to the BDC with a stamp confirming this).

Appealing?

Next time use the actual physical address not the Norwich processing centre address and they should be able to process it within a week.

Hope this helps.

Introduction:

Peter Coy’s article, “The Lost Generation – Bright, Eager, and Unwanted” drew much-needed attention to the disastrous impact of the current recession on the young. Unemployment rates for those under 24 are nearly twice the national average, and the trajectory for youth employment is not heartening. As young people, many of whom have sunk themselves deep into debt for college educations that were sold to them as tickets into the middle class, face years of empty spaces on their resumes and lost wage income and promotions they will begin to fall further and further back from their potential and become a truly lost generation.

Something needs to be done to save a generation from a blighted economic life, and to recover untold amounts of potential labor power that will go unused in the interim. Luckily, history gives us a perfect example of how to save this generation in the youth policies of the New Deal.

The Civilian Conservation Corps and the National Youth Administration – Learning the Right Lessons:

When pundits today talk about how to deal with the plight of young workers drowning in today’s labor market, they often bring up the Civilian Conservation Corps as an example of how to tackle the crisis. The CCC is a favorite New Deal program for pundits because it brings up a whole host of romantic associations – the great outdoors and the positive environmental policy associated with reforestation and anti-erosion work, shirtless young men swinging pick-axes, the military discipline instilled by the U.S Army, which managed the CCC’s 250,000 strong workforce (the CCC would serve about 3 million young men in its 10 year operation), and so on.

The problem is that people’s romanticism gets in the way – they can’t see the workers for the trees, as it were. Because they focus on the moral virtue of physical labor in a wilderness environment, they de-emphasize what should be the point: the CCC was supposed to take young people out of an overcrowded labor market (just as Social Security was supposed to take old people out of the labor market) and give them work. When LBJ tried to replicate the program in the Great Society through his Jobs Corps which was supposed to “save” young people from the negative environment of their neighborhoods that had created a “culture of poverty” by setting up job training camps in rural and wilderness areas, it was something of a disaster. Only 10,000 openings were created (versus 300,000 applicants), the program offered job training as opposed to real jobs, and city kids hated the rural camps. As a result, about 2/3rds of enrollees dropped out, and the program showed no positive effects on wages.

It’s not enough to dump young people in the forest, hand them a pickaxe and a minimum wage, and trust in the healing power of nature.

This is why I thin the National Youth Administration is actually a superior model for our current problem. Designed as an adjunct to the Works Progress Administration, the NYA employed 500,000 young people at a time (the CCC peaked at 500,000, and usually employed about 250,000), and helped far more young people than the CCC (4.7 million over nine years versus 3 million over ten). The NYA especially understood the need for a flexible approach to work with a diverse population – the NYA included both part-time work-study jobs for students (all the way from high school to graduate school) with full-time jobs for young workers that provided on-the-job training in a number of professions. Unlike the CCC, which was restricted to young men, the NYA provided assistance to men and women. The point here is that the NYA treated young people as workers and students who needed help, not as a moral problem to be solved.

Thus, as we move forward in adapting the New Deal’s solutions to our own times, we must resist our romantic impulses and treat young people seriously. We are not out to “rescue” lost children, and we are not trying to instill a rugged outdoors spirit. What we need is to construct a social insurance system for the young that parallels the Social Security system for the old; just as Social Security helps to ensure that the elderly can retire with dignity and security, a system is needed to help young workers “launch” themselves into their adult lives with some kind of economic security and protection against their own particular risks (high debt levels, lack of built-up assets that could protect them in sudden down-turns, etc.). In short, we need to recognize that youth policy has to be about more than just education.

Job Insurance For the Young:

Currently, the unemployment rate for young people between 16-24 is about 18%. Given that many young people in that age group are still in school (only about 52% of people aged 16-24 were in the workforce prior to the recession), what we’re really looking at here is a decline in employment of 6 percentage points, or roughly 2.25 million jobs lost or never created.

In order to get back to pre-recession levels, we need to re-create those 2.25 million jobs. In my series on Job Insurance, I’ve laid out the mechanisms for creating a large number of jobs, and what kind of resources we need to make a jobs program work. In some respects, creating a job insurance program for the young is easier than for their older peers. Because younger workers are less likely to have dependents,  the poverty line that you need to clear is much lower. Similarly, since many younger workers need part-time jobs to help them pay their way through college as opposed to full-time jobs, that also brings down the cost of employment.

In the past, I’ve assumed that, at $24k a year, plus FICA contributions and 30% non-labor costs, it costs about $36-40 billion dollars per million jobs created. Given an average of $15k a year for a Youth Job Insurance job (averaging out part-time and full-time and a lower poverty line bar), a million jobs for the young should only cost $22 billion. A comprehensive 2.25 million youth jobs package, which would bring youth employment rates back to their pre-recession levels, would cost a shade under $50 billion. At such a low price tag and a very high number of definite jobs created, a jobs program for the young should be a winning candidate for a second round of economic stimulus.

If established as a social insurance program, a modest $10/month premium from all 16-24 year olds would result in $4.5 billion in yearly revenues. After 5 years, such a program could build up reserves of $22.5 billion, enough to create a million jobs without additional funding from Congress, or two million jobs with a simple 50/50 split between the Youth Job Insurance fund and Congress, which should be enough to compensate for a severe recession like the current recession.

Conclusion:

The question might be asked, why not try some of the other options suggested in Peter Coy’s article, like a lower minimum wage for the young, or job training?

To begin with, lowering the minimum wage for the young is a bad idea. It does enormous damage to people who are already trying to hold on to their jobs amid declining hours and stagnant wages, including the 46% of 16-24 year olds who are working right now, by creating a huge incentive for employers to fire their existing workers and replace them with cheaper, younger alternatives. We already have 13 job applicants for every job opening; why increase that number? Furthermore, given that the current minimum wage of $7.25 an hour is just barely enough to keep a single adult out of poverty, if you can get and keep 40 hours a week, cutting the minimum wage for young workers will result in a mass of working poor, which is hardly an improvement.

Job training is part of the problem, not part of the solution. Our labor market policy towards the young has been entirely directed at labor supply – pushing college as a way to become a skilled worker who is more attractive to employers. In the current circumstances, we’ve got many more skilled workers than there is demand on the part of employers. Without doing something to increase labor demand, job training will continue to be a runaround.

If we’re going to save the young, it’s got to be jobs, not jobs-light.