This Week Economic Panel: It's Not Just An Unemployment Problem, It's An Investment Problem
On This Week with Christiane Amanour, she brings together a panel of economic interests to dicuss the economy -- with each of them, of course, pushing their own agenda. As Laura Tyson points out, the U.S. used to lead the world in education; now we lead in high-school dropouts:
AMANPOUR: Good morning. This was supposed to be the summer of recovery, but the effects of the so-called Great Recession continue to cloud this nation and much of the world. The number of U.S. workers seeking unemployment benefits rose unexpectedly to 484,000. It's the worst in almost six months. And in the housing sector, banks foreclosed on more than 90,000 properties in July, the second-highest total since the crisis began.
And these pictures speak to the desperation this week in Atlanta. Thirty thousand people waited for hours in sweltering heat to apply for 655 available spots of government-subsidized housing.
And I'm joined by four top voices on the economy. From Berkeley, California, member of the president's Economic Recovery Advisory Board Laura Tyson. From Chattanooga, Tennessee, Republican Senator Bob Corker of the Banking Committee. In New York, the former New Jersey governor and CEO of MF Global, Jon Corzine. And joining us here in Washington, chief economist for the U.S. Chamber of Commerce, Martin Regalia.
Thank you all for joining me. You've heard the figures. You've read about the figures. You can also probably palpably feel the concern and worry amongst the American people. And I want to read you something that was written about this joblessness, about the younger generation in the Atlantic recently. Look at what was written about unemployment.
"There is unemployment -- a brief and relatively routine transitional state that results from the rise and fall of companies in any economy, and there is unemployment -- chronic, all-consuming. The former is a necessary lubricant in any engine of economic growth. The latter is a pestilence that slowly eats away at people, families, and, if it spreads widely enough, the fabric of society. Indeed, history suggests that this is perhaps society's most noxious ill."
Let me turn to you right now, Martin Regalia. Do you agree with that? And do you think that that's what this country is in right now?
REGALIA: Well, I agree with it, and I think that is what we're seeing right now. We're seeing an economy that is growing, but growing in a very lackluster way. It's not generating enough demand, and therefore it's not generating enough jobs.
And on top of that, the last three or four recessions have given rise to longer terms of unemployment. More retooling is necessary to bring the displaced workers back into the workforce, and that retooling is taking a lot longer.
AMANPOUR: Let me turn to you, Laura Tyson. You're an adviser to the president right now. A recent Wall Street Journal poll of some 53 economists say they don't see the employment rate coming down below 9 percent, you know, at least until June 2011. What can be done about this?
TYSON: Well, I think that we have to do a number of things. I think we have to worry, first of all, about taking care of the people who are unemployed. And that's why I really have supported the extension of unemployment benefits and the extension of benefits to help people maintain their health insurance if they lose their job, very, very important. You have to deal with the reality that people are long-term unemployed, 7 million people long-term unemployed.
Secondly, we have to continue to do everything we can to stimulate demand in the economy. Let me give you two examples. We do have a payroll tax credit that has been offered to companies that bring on new unemployed workers into the workforce. I think we should continue that.
I think we should continue to look at major spending on infrastructure projects. You know, the good news here about the stimulus, it's said, well, the infrastructure projects haven't come on board yet. They're coming on board now, and they have high job-per-dollar-spent outcomes.
AMANPOUR: All right.
TYSON: And then, finally, we have to worry about the longer-run problem of this structural employment, because I'm going to point out one thing for this discussion. The unemployment problem is primarily a problem for people who have a high school -- who don't have a high school education or just have a high school education.
Unemployment for those with college educations is now 4.5 percent. Unemployment for those with more than a college education, below 4 percent. We have a problem of education in this country, and we have to educate more of our young people fully through college education. Let's take this as an opportunity to do that.
