It may seem counterintuitive, but with the government reporting stronger-than-expected economic growth at the end of last year, now is the time to think about renewed recession — and to act to avoid it.
So, what does it take to translate an incipient recovery into a sustained expansion? In a word: jobs. Employment leads to income and to spending. As sales deplete inventories, businesses restock, which creates more jobs and so on in an upward spiral.
Unfortunately, with the economy already some 10 million jobs short, there is no job growth on the horizon robust enough to set that upward spiral in motion. And because the economy is already in such a deep hole, a second leg down would mean ever worsening hardship.
In his State of the Union address, President Obama said that he, too, was worried about the deficit. And as a sign of good faith, he committed to cuts in federal discretionary spending starting in the upcoming budget. The Senate can show its good faith now by passing a jobs bill, ideally this week.
A good final bill would combine the Obama administration’s call for tax credits for hiring and incentives for small-business lending with sound features from the House and Senate versions. It would contain the House’s vital provisions for extending unemployment benefits and providing more aid to states. Without such aid, states will have to make even deeper budget cuts — laying off large numbers of their own work forces and forcing their private sector contractors to do the same.
A final bill should also include provisions from the House and the Senate to create infrastructure jobs and public service jobs. And it should adopt the Senate’s plan to create jobs that foster energy efficiency.
2. Haiti and the Leadership Vacuum
Bill Clinton's appeal to business leaders at the World Economic Forum in Davos yesterday reminded us that Haiti's crisis is far from over. He urged the business community to step up to the challenge of supporting and rebuilding Haiti, where 200,000 are dead and 1.5 million are homeless.
"We need to get a distribution network up to get the food and the water out," Mr Clinton said. "If there's anybody who knows where I can get pick-up trucks or something slightly bigger, I need 100 yesterday."
Clinton's appeal for such basic support was disconcerting. Haiti's humanitarian relief effort had a very shaky start in spite of the rapid and generous response by world governments, charities, and the public. The first problem was the leadership vacuum created when Haiti's government and the U.N. — two bodies that should have co-ordinated the effort — themselves fell victim to the earthquake.
It's a pity that the business community, with its global networks and deep experience in logistics and planning, was unable to contribute more fully to Haiti's relief effort. While many advertise their socially responsible credentials, few have demonstrated real leadership in the field. Ironically, the WEF itself has pioneered a six-year Humanitarian Relief Initiative in partnership with some of the world's leading companies, yet there was little mention of this at Davos yesterday.
Smart strategies, fine words, and analysis are no substitute for action in a crisis. Crises demand leadership and swift, co-ordinated action. Whether it's contributing money, equipment, expertise, or volunteers, what matters is that it is done quickly and in consultation with others. Far better for a company to appoint a crisis response leader or logistics expert who could make a real and immediate contribution in a crisis than a smart postgraduate who can write sparkling reports on CSR strategies.3. Howard Zinn: A Public Intellectual Who Mattered
I'm not going to paste some of this in. But, it's well worth the read.
4. Funniest Thing
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