Zuckerman is a billionaire business man who owns the NY Daily News as well as U.S.News & World Report. I especially like his FDRish approach to creating jobs.
Please go on and read Mark Helprin's commentary on New York City and the super rich living in the city. Helprin is, in my opinion, one of the finest writers America has ever produced. His book "A Winter's Tale" represents a beautiful use of language and allegory.
Wall Street Journal
OPINIONJANUARY 21, 2010, 7:16 P.M. ET
The Great Recession Continues
Americans haven't been fooled by the Dow's rise. What they see ahead are more taxes.
By MORTIMER ZUCKERMAN
The December jobs report has doused the hope that we were at the beginning of a sustained economic recovery.
The unemployment rate managed to hold at 10% in December only because of an extraordinary shrinkage in the labor force: Some 661,000 gave up looking for a job.
Bureau of Labor Statistics' (BLS) nonfarm payroll data indicate that December job losses totaled 85,000. But the bureau's household survey, a better and more comprehensive measure of both the unemployed and underemployed, indicated a loss of 589,000 jobs. Since the Great Recession began in 2007, some 8.6 million jobs have been lost, according to the bureau; and small businesses, the normal source for new jobs, are still shedding workers. Fewer than 10% added employees, while more than 20% cut back—and the cuts averaged nearly twice as many per firm as the hires at the expanding companies.
Unemployment, in short, has graduated from being a difficulty, a worry. It is now a catastrophe, with some 15.3 million Americans out of work, according to the BLS.
What about the future? The problem in the job market going forward is not so much layoffs in the private sector, which are abating, but a lack of hiring. The federal stimulus program is offset by a 2010 budget shortfall for state, city, county and school districts, which the Center on Budget and Policy Priorities recently estimated will be in the range of an astonishing $200 billion nationally. Since virtually all states and cities have to run balanced budgets, the result will be reduced services, layoffs and tax hikes.
The consequence is that the U.S. economy—for decades the greatest job creation machine in the world—is taking longer and longer to replace the jobs already lost. In the 1970s and 1980s, Jane Sasseen noted in a recent report in BusinessWeek, it took as little as one year from the end of a recession to add back the lost jobs. After the eight-month downturn ending in March of 1991, for example, jobs came back in 23 months. After the downturn from the dot-com bust in 2001, it took 31 months. This time it could take as many as five years or even more to recover all of the eight-plus million jobs lost since March 2007. That's because we would have to create an additional 1.7 million jobs annually beyond those for the 1.3 million new people who enter the work force every year.
Economists may see the recession as being over, but the man on the street does not. Roughly 60% of the public believes the recession still has a way to go, a NBC/Wall Street Journal poll reported last October. Even those who have not suffered know someone—a friend, a neighbor, a family member—who is being hurt. Two in three say the rally in the stock market has not changed their views.
There are sound reasons for this gloom. Consumers have learned a bitter lesson. They understand that increased consumption—private and public—will have to come from income and not borrowing, and income will have to come from employment.
Today, mainstream Americans are going on a financial diet amid deteriorating family finances. They know now that they cannot spend what they don't have, as the painful consequences of spending levels that were artificially pumped up by too much debt have hit home. The top 20% of the nation's households account for 40% of all spending, according to government data reported by Ylan Q. Mui in the Washington Post last September. But these households no longer trust their home equity or rising stock portfolios (up by almost $5 trillion this past year) as a basis for spending in lieu of saving. All they see ahead are taxes, taxes, taxes. So the dollars have not yet started to flow. This is the new normal.
What this means is that larger-than-typical head winds face two of the three normal engines of recovery: consumption and residential investment. Rather than pumping more cash into a fragile economy to make up this difference, the government will have to focus on its next big task: drawing up credible plans for bringing bloated budget deficits under control without triggering another downturn.
The prospect, therefore, is sluggish GDP growth; employment gains that are too slow to prevent further increases in the unemployment rate; and firms still very reluctant to hire vigorously.
How can we accelerate a substantial recovery in job growth that will generate additional labor income? There is no snap answer. But this is no argument for inertia.
We must have programs that create some degree of confidence that America can be rebuilt, and jobs can be created, especially since consumer spending will likely decline as a part of GDP for many years. The unemployed have to be supported. But it would be better if the financial support employed labor in rational, long-term, major infrastructure projects, processed by a newly created National Infrastructure Bank.
These wouldn't be entitlement programs, but regeneration programs. Government spending on infrastructure projects—broadband Internet access across the nation, restoring decaying bridges and canals, building high-speed railways, modern airports, sewage plants, ports—has a high multiplier effect for adding jobs to the economy. And we will be fulfilling a desperate national need.
A second avenue for increasing employment would be to enhance technology, the area of our greatest strength. We are depriving ourselves of productive talent by a fearful attitude toward immigration. We make it hard for bright people to come and we make it hard for them to stay, so once they have graduated from our universities they go home to work for our competitors. This is not the way to run a railroad.
Foreign students are a significant proportion of those with graduate degrees in the hard sciences in American universities. We should restore the quotas for H-1B visas to 195,000 annually (where it was in the early 2000s) from 65,000, where it is now.
This increase has been blocked by shortsighted special-interest groups that fear jobs will be taken from Americans. On the contrary. The kind of people we should be striving to keep are those whose work in technology and engineering provides more than their share of new jobs.
Technology and innovation have long given us our greatest job growth. Just think: In 1800, about three-quarters of the U.S. labor force was devoted to agriculture. Today, it is less than 3%. Manufacturing employed one-third of the work force at the end of World War II. Today, it is down to about one-tenth. Americans are accustomed to economic transformation.
We must follow rational economic policies in the interest of the nation and not in the interest of narrow parochial groups who lobby legislators. Otherwise, as illustrated by the sorry journey of health-care legislation, we will see more of the politics of corruption.
Mr. Zuckerman is chairman and editor in chief of U.S. News & World Report.
OPINIONJANUARY 22, 2010, 10:06 A.M. ET
A Non-Delirious New York
Recovery should not mean a return to the excess that betrayed so many.
By MARK HELPRIN
Midway between the first intoxications of borrowed money that does not exist, and the red-hot bearings of presses that roll to correct such inconsistencies, lies a wonderland in which human nature can become a subsidiary of the making and spending of money. Not steadily and honorably in furtherance of well being, charity, and art, but at the speed of summer lightning and for its own sake.
When pay-out exceeds pay-in, balance is maintained only by the weight of illusion—as in real-estate bubbles, or welfare states in which benefits vastly exceed contributions. Within such failing systems one finds nevertheless highly visible concentrations of wealth, like lumps in tapioca, that persist in setting a tone that has long gone flat.
Take Manhattan, but first take the Hamptons, where symptoms are readily apprehended, just as the pulse at the wrist is a telltale of the heart. Mere multimillionaires cannot afford anymore to go where within living memory actual people made a living from the farms, clam beds, and sword-fishing grounds. Now the potato fields are covered with houses that look like the headquarters of Martian expeditionary forces, ice-cream factories, vacuum cleaners on stilts, the Seagram building on its side, or shingled New England cottages monstrously swollen into something you might see after eating a magic mushroom. In simple and quiet towns that once deferred to the majesty of the ocean, the streets are now clogged with a kabuki theater of Range Rovers and $35,000 handbags.
In Manhattan the knock-the-wind-out-of-you rich used to be a relatively silent freak of nature who could easily be ignored, but of late they are so electrically omnipresent, jumping out of every flat screen and magazine, that they indelibly color the life of the city. Having multiplied like Gucci-clad yeast, they have become objects of impossible envy.
You cannot ignore them as you sit in your $2,000 a month 7 x 10 "efficiency," eating your $5 street pretzel. Or when private schools—where scholarships are reserved for peasants who subsist on $300,000 or less, and where if you haven't been admitted by the time you're an embryo you're toast—have become like the class redoubts of Czarist Russia.
Or when Mayor Michael Bloomberg spends a hundred million of his own money, $175 per vote, to crown himself like Napoleon, perhaps forgoing the purchase of the presidency because at that rate he would have to fork over $22 billion. What if he had spent comparably to his predecessors—Fiorello La Guardia, or even Jimmy Walker, whose corruption when compared to Mr. Bloomberg's well-established honesty seems nonetheless like the innocence of a fawn? (It is possible that he would not have won on his own merits.)
Ostentation has always been a hallmark of mankind, and part of the price of freedom and power in ascendant nations. But the day the baubles shine most brilliantly is the day when the civilization, distracted from what made it, begins to go down the drain. This is not an argument for restricting economic liberties, but rather a lamentation of circumstance and a condemnation of taste. The right may envy by competition and the left by expropriation, but the objects of such envy are not worthy of its ruinous influences, and the city is at its best when the fury of acquisitiveness is least.
Now that New York may be exiting yet another of many eras of irrational exuberance, it presents an opportunity in the midst of defeat, for when it is quiet it is far more lovely and profound than when it is delirious. For a long, clear moment, September 11 blew the dross away and the real city appeared. When such things arrive, as they always have and always will—whether in the form of conquest, riots, depression, epidemics, or war—they and their aftermath should be the cause of reflection.
Whenever New York has endured a blow, its real strengths have emerged. If it is now on the verge of a long-term diminution of wealth, or at least a roughly attained sobriety, all the suffering should not be for nothing. Recovery should mean not just a return to the fascination with excess that betrayed so many. For one, excess is too limited a thing to be genuinely satisfying. Grab the first billionaire you see (it should be easy) and he will tell you that stuff simply doesn't do the trick.
This is why New York has for too long been a city in which even the rich are poor. To the contrary, it should be a place in which even the poor are rich. How to accomplish this is a riddle to which public policy often proves inadequate and is anyway just a distant follower of forces of history that assert themselves as far beyond its control as the weather. As the waves of history sweep through the present what they leave will depend in large part upon how they are perceived and how each individual acts upon his perceptions, which law and regulation follow more than they shape.
How things will turn out is anyone's guess, but it would be nice if, as in the quiet during and after a snow storm, Manhattan would reappear to be appreciated in tranquility; if cops, firemen, nurses, and teachers did not have to live in New Jersey; if students, waitress-actresses, waiter-painters, and dish-washer-writers did not have to board nine to a room or like beagles in their parents' condominia; if the traffic on Park Avenue (as I can personally attest it was in the late 1940s) were sufficiently sparse that you could hear insects in the flower beds; if to balance the frenetic getting and spending, the qualities of reserve and equanimity would retake their once honored places; if celebrity were to be ignored, media switched off, and the stories of ordinary men and women assume their deserved precedence; and if for everyone, like health returning after a long illness, a life of one's own would emerge from an era tragically addicted to quantity and speed.
Mr. Helprin, a senior fellow at the Claremont Institute, is the author of, among other works, "Winter's Tale" (Harcourt), "A Soldier of the Great War" (Harcourt) and, most recently, "Digital Barbarism" (HarperCollins).
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