“The Great American Job Machine is breaking down, and roadside assistance is not on the horizon.” So says Mort Zuckerman, CEO of Boston Properties and Editor-in-Chief of U.S. News & World Report, in an editorial today.
Mr. Zuckerman went on to say that things are worse than they look and the positive numbers reported by Washington are misleading.
“Part-time jobs outpace full-time additions to the workforce, and more Americans are unemployed than any time since the Great Depression,” he noted.
The blame, he says, falls on Congress and the White House, who have failed to work out solutions for the job shortage. Today’s editorial echoes his statements of a month ago, when he told Bloomberg, “they’re all playing politics with the issue – they’re playing short term politics – and they’re not operating in the long term interests of the country. The fact is, we have to do something about it.”
When Mr. Zuckerman was interviewed late last year by Steve Forbes, he identified missed opportunities to save the foundering job market. “We needed investments into job-multipliers, not job-savers,” he said. A major multi-year program would involve us investing, in one form or another, $ 100 to $ 200 billion a year, he told Forbes, “and that would give confidence to the whole business community that this country’s not going to collapse.”
Until then, Mr. Zuckerman stated in today’s editorial, “The Great Recession has now earned the dubious right of being compared to the Great Depression.” –
Today’s editorial also echoes his thoughts in his June 13, 2009 column. We reprinted those thoughts in our Vol. XX, Art. 11 commentary (July 24, 2009) and here’s some of what he wrote:
“No wonder poll after poll shows a steady erosion of confidence in the stimulus measures. One survey even showed 45 percent believe the limited results suggest they should simply be abandoned midway. The disappointment is understandable – but that would only make things worse. So what kind of second act stimulus should we look for? This time, it should not be an excuse to pass a lot of programs like those in the first stimulus package that do not have the multiplier effect on job creation and economic growth that was intended. In any event, given the trends, it is absolutely critical that the Obama administration not play politics with the issue but really begin to prepare a second stimulus program, so that if the economy does take a major downturn, it will be possible this time to provide much more rapid government support to infrastructure spending that will maximize the creation of jobs. The time to get ready is now …”
… And here’s some of what we added to his thoughtful advice:
– “But unproductive ‘make-work’ programs aren’t the answer, we insisted. The multi-billion dollar burden of a make-work warship building program is proof of that. Rebuilding the American infrastructure would be a must as long as it provided worthwhile employment. There’s no ROI (Return On Investment) when taxpayer money is spent on warships. On the other hand, there’s a considerable ROI when taxpayer money is spent on the construction – and ownership – of merchant ships. Especially container ships.
“Oh, but we can’t compete with overseas shipbuilders without subsidies! … is the cry of the ignorant. Those overseas rulemakers be damned. We’re talking about desperate times … about Americans without jobs and without homes. In World War II, our last legitimate national emergency, very few people were without jobs, and fewer still were without homes, but we rose to the task and dealt with that national emergency. And we made up our own rules, too, because that’s what nations do in times of crisis. Well, we’re worse off now than we were then and desperate times call for desperate measures. It’s time to subsidize the construction of merchant ships rather than warships.” –
“Mr. Zuckerman is one of the few that see the absolute urgency of a ‘multiplier effect’, noting that “… programs like those in the first stimulus package … do not have the multiplier effect on job creation and economic growth …”. Recognizing that ‘shovel ready’ projects are dead end projects because no further profit-generating jobs are created, here’s how we described the multiplier effect in our Vol. XVII, Art. 30 commentary:
“Restoration and revision of 100 U.S. shipyards, at an average cost of $ 100 million per facility, would cost about $ 10 billion. Paying 30,000 U.S. workers at each of these yards to build our patented container ships in each of these yards would cost – at $ 100,000 annually per worker – another $ 300 billion.
“Each of our yards could easily punch out at least two dozen of these unsophisticated, and duplicated, vessels in the course of a year. Those 2,400 vessels – at an overly generous $ 100 million per vessel – would cost $ 240 billion. So for approximately $ 550 billion we could end, for all time, the financial mismanagement that is threatening this nation’s very survival.
“Let’s look at that $ 550 billion expenditure as a ’cause’. Here’s what the ‘effect’ would be. First of all, we’d be creating 30,000 jobs in each of the 100 shipyards we set up. That’s three million purposeful jobs right there. And haven’t economists determined that each shipyard worker requires the support of 16 offsite workers? That brings the total number of created jobs to more than 50 million – and can you just imagine the dramatic ‘effect’ 50 million weekly paychecks will have on our country’s heretofore waning buying power?
“But wait. There’s more. Each of those 2,400 container ships will be purchased by U.S. maritime interests – for at least the $ 100 million spent to build them – and each of those U.S.-owned vessels will generate handsome profits every year for U.S. interests who own, operate and utilize them.
“[How’s that for a ‘multiplier effect’?]”