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From 2009 to 2011, Jared Bernstein was the chief economist and economic adviser to Vice President Joe Biden and executive director of the White House Task Force on the Middle Class. He now is a senior fellow at the Center on Budget and Policy Priorities. He writes, Daddy, Where Do Jobs Come From?:

What about fiscal policy?  How does that chain work to create jobs and what are the weak links?

Well, though economists tend to discuss fiscal policy as a lump, it actually comes in a lot of different flavors and they’re not all created equal in terms of bang-for-buck job creation.  Basically, the more indirect they are—the more links in the chain between the policy and job creation—the less effective they are.

Jared Bernstein
For example, for a stimulative tax cut to create a job, a) the recipient must spend, not save, the money from the cut, and b) she must spend it on domestic goods (I mean, of course, that’s what has to happen for the tax cut to create a job here as opposed to in China).  Again, if you’re in a deleveraging cycle, step “a” is a problem.  Also, if your tax cuts go to wealthy people who are not income constrained in the first place, don’t expect much in terms of job creation.

Other fiscal measures have more reliable job-creation chains. Increasing unemployment benefits or food stamps helps because those folks typically spend the money. And new infrastructure is a pretty direct way to go. Same with state fiscal relief. I remember during the Recovery Act, mayors cancelling planned layoffs the day they received Recovery Act funds.

The punch line is a simple one, but it’s one that seems to have been forgotten amidst our increasing love affair in America with laissez-faire economics: the more direct the policy measure—i.e., the fewer links in the chain between the policy and the job—the better it will work.

I’ve seen these processes at work close up and I’ve come to view this simple insight as a lot more important than I think most economists realize. Even Keynes had relatively little to say about implementation and the relative effectiveness of different types of stimulus.  He famously quipped that if the government can’t find something useful for people to do, just pay one group to bury bags of money and another group to dig them up.

Ha-Ha.  Very helpful, Sir K. But I actually think the great man was onto something.  The most direct way to create jobs, the only surefire way to be sure that stimulus will work, is direct job creation.  Everything else, including all the Federal Reserve stuff, involves crossing your fingers and hoping the chain holds. [...]

So, the next time we hit a recession, I’m going to be out there advocating for, if not direct jobs in the public service, something as close to that as we can get, like infrastructure, fiscal relief to states, and subsidized jobs for the disadvantaged.

Those direct jobs are what some of us have been pushing for past several years—knowing full well the obstacles in the path of such programs. What's needed is an upgraded version of the New Deal WPA or of the Civilian Conservation Corps, call that aClean Energy Conservation Corps.

Such government direct-hire programs shouldn't be jury-rigged, ad hoc operations set up only when there is an economic downturn. As L. Randall Wray has so wisely advised, they ought to permanent programs, run in good times and bad. In the bad times, they could provide government work plus classroom and on-the-job training for private-sector work, not for dead-end work in dying industries.

Participants would be paid reasonable wages and benefits. In good times, there would be far fewer participants because those who have been trained and gained some experience in their temporary government positions will find it much easier to acquire a good private-sector job.

Blast from the Past. At Daily Kos on this date in 2006Reckless Endangerment:

Last year, in the wake of the government's bungled response to Hurricane Katrina, Minority Leader Nancy Pelosi blasted President Bush, calling him "oblivious, in denial, dangerous." The Republican Party lashed out at Pelosi for her language, and the media gleefully debated back and forth whether such language was hyperbole and un-American.

The events of the last week have made it crystal clear:  it is not just the President, but his entire party that is oblivious, in denial, and dangerous.

We now know that the top GOP leadership was warned about Congressman Foley's inappropriate behavior years ago. Instead of conducting an investigation, instead of demonstrating some semblance of concern over the possibility of criminal and immoral behavior, Speaker Hastert, Congressman Reynolds, Majority Leader Boehner and an untold number of Republican staff members choose to brush the issue aside. They knew Foley was dangerous. Sure, perhaps they didn't know every little detail, but the GOP leadership was cognizant that there was possibly a child predator in their midst. The result? Republican inaction.

Tweet of the Day:

About a billion people go hungry every day. Wish as much attention would be paid to them as the billion milestone on Facebook.
@sree via SocialFlow

Today's Kagro in the Morning (-after-the-debate) show featured an extended discussion of reactions, snap polling, and historical trends with Greg Dworkin. But it wasn't all debate, all the time. We dove into the tax-exempt status of political churches, revisited the below-the-radar problem of "cost-benefit analysis" of agency rules & regulations, and the coming fiasco of their application to regs that stand in the way of the financial services industry bilking you for even more.

High Impact Posts. Top Comments.

Originally posted to Daily Kos on Thu Oct 04, 2012 at 08:30 PM PDT.

Also republished by Money and Public Purpose.

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