Investor Alert

New York Markets Open in:

Peter Morici Archives | Email alerts

Jan. 27, 2021, 12:09 p.m. EST

Biden needs this bold strategy to reimagine the economy so it can create jobs for everyone

Watchlist Relevance

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    S&P 500 Index (SPX)
  • X
    Dow Jones Industrial Average (DJIA)
  • X
    NASDAQ Composite Index (COMP)

or Cancel Already have a watchlist? Log In

Peter Morici

Thin majorities in Congress offer President Joe Biden the  opportunity to be bold.  He can challenge moderate Republicans with ideas that would boost employment and incomes as the economy recovers and in years to come.

The recent employment reports indicate the need for more stimulus  but another round of checks  for all households that earn less than $150,000 is wrongheaded.

Folks who work from home or whose jobs have been otherwise insulated from shutdowns have  not suffered large income losses . For most, another check would likely be  saved , used to pay down debt or spent, not on necessities, but rather mostly on gadgets and furnishings that are often imported.

Million scrapping by

That doesn’t create enough jobs for the emerging army of 5 million permanently unemployed and the millions more  scrapping along in part-time work .

Those folks are  running out of savingsmaxing out credit cards , and  facing evictions . Targeted aid to those in severe distress—much greater than $2,000 per household—would be spent on food, rent and necessities that create more demand for U.S.-produced goods and services.

Simply, on a dollar-for-dollar basis, assistance for the unemployed and underemployed does more to create jobs and growth than welfare checks for comfortable suburban voters.

The stock market /zigman2/quotes/210599714/realtime SPX +0.33% /zigman2/quotes/210598065/realtime DJIA -0.20% /zigman2/quotes/210598365/realtime COMP +1.05% is hitting new highs because investors recognize most of the economy will recover nicely, but it’s the millions who have lost jobs, mostly in small businesses and downsizing sectors such as airlines, who should be the focus. 

With  work  from  home institutionalizing  and  raising productivity , many urban employment centers need repurposed to be  more mixed residential-commercial use . Workers who sold services to commuters will have to reskill and often relocate but the nation has real opportunities to create less-dense, more-humane patterns of commuting, work and home life.

Rebuilding transportation systems to support redesigned cities, rather than trying to simply rehabilitate failing mass transit and bus systems, should be a central theme in any major infrastructure plan the Biden administration tables.

Green economy will kill jobs

The green economy is a jobs killer, not a jobs creator.  Electric cars contain fewer components than gas-powered vehicles  and  will last longer . Solar fields and windmill farms once commissioned require  many fewer employees  than the supply chains of fracking wells, pipelines and gas-powered turbines those replace.

The green economy is a brutal brigade of virtual robots that will stealthily destroy millions of blue-collar and service jobs and stoke greater alienation among working and middle Americans and urban activists who  stormed the Capitol  and  occupied Seattle .

The primary quality refuge for displaced Manhattan sandwich makers and Detroit assemblers will be in the fast-growing digital economy, but  free tuition  for young folks at state universities, if not skill-focused, would simply create more high-quality unemployment and literate disaffection. We need more university-trained engineering students but also compulsory technical education in high schools.

Four-part strategy

The nation needs a four-part economic strategy.

Immediate aid to the unemployed to pay for rent and necessities: federal subsidies to extend state unemployment benefits to the end of 2021, and boost those with a reasonable federal supplement—perhaps $400 per week—to total no more than  75% of lost wages .

+13.60 +0.33%
Volume: 2.06B
April 13, 2021 5:15p
US : Dow Jones Global
-68.13 -0.20%
Volume: 330.00M
April 13, 2021 5:15p
US : Nasdaq
+146.10 +1.05%
Volume: 3.83M
April 13, 2021 5:16p
1 2
This Story has 0 Comments
Be the first to comment
More News In
Economy & Politics

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.