House Speaker Nancy Pelosi scoffs at the idea floated last week by some of her Democratic colleagues that new job creation legislation could be funded by a tax on stock, bond and futures transactions on Wall Street financial markets, and Obama administration officials are equally cool to the idea, though some executive branch officials have spoken favorably in recent days about the desirability of “targeted” proposals for quick new laws to boost American employment. Congressmen Peter DeFazio and Michael Arcuri are circulating a proposal for a financial transaction tax to raise $150 billion every year. Pelosi says such a new tax could drive Wall Street jobs overseas. Treasury Secretary Timothy Geithner echoes that such a tax would be “inappropriate” for the United States.
Vice President Biden’s chief economic adviser Jared Bernstein says, though, that the administration is looking for new ways to make sure the economic recovery is not a jobless one. Bernstein’s suggestions include direct public works programs such as hiring the jobless to board up vacant buildings, help with child care, and paint school buildings.
Meanwhile, at a hearing last Thursday before the House Oversight and Government Reform Committee, Congressmen continue attacking the claim on Recovery.gov that the $787 billion stimulus package has created 640,000 jobs so far. GAO reported at the hearing that the web site was replete with “a range of significant reporting and quality issues,” including 60,000 jobs reported as created without any dollars being spent, and 9,000 reports of money spent with no jobs created. House Oversight and Government Reform Chairman Edolphus Towns said after hearing the GAO testimony, “It is clear that errors found by GAO and others should be corrected immediately, not months later, no matter how difficult.”
Finally, economists are beginning to challenge President Obama’s campaign emphasis on green job creation as a solution to continuing economic growth. Georgia State’s Economic Forecasting Center Director Rajeev Dhawan says green jobs are “not the spark. This is not the solution to the current big unemployment problem.” His sentiments are seconded by Manhattan Institute economist Max Schulz: “For all the talk about green job creation, there’s an unavoidable problem with renewable energy technologies and the policies that promote them: From an economic standpoint, they’re big losers. Renewables can’t produce the large volumes of useful, reliable energy that our economy needs at attractive prices. Government subsidizes renewable because – all things being equal – the free market won’t.”
A recent survey by the Transportation Construction Coalition is also putting a damper on the pet political theory that additional funding for road and bridge projects will be a job saving legislative measure. Despite injecting $27 billion into such projects through the stimulus package, more than a million construction sector jobs have been lost in the past 12 months. Furthermore, this month’s Coalition survey indicates that 44% of road and transit contractors expect to lay off more permanent employees this year, even though they have received stimulus supported contracts.
Comments
Peter Defazio represents Oregon, not New York. He's introduced transaction tax bills in previous sessions of congress and they've always failed. This one will also fail. His proposed number of 0.25% of the total transaction cost is way too large to be taken seriously, and would be virtually impossible to apply to things like futures. For reference, the Tobin Tax being floated around in Europe right now is around 0.05% -- huge difference.
"the $787 billion stimulus package has created 640,000 jobs so far." ------------------- Is that considered a good deal for the taxpayers at a cost of $1.2 Million per temporary job created if there were really any jobs?
Wall Street transaction tax is a tax on Main Street only. The increased costs of firms own transactions will be passed onto us through higher fees and reduced yield. The bailed out firms will not pay a dime. This tax is purely wealth destruction of the middle class. We have no other options to incrementally accumulate a bit of wealth. The cost of the tax itself is a fraction of the total cost. Consider substantially increased spreads. I say spreads will return to the 1980's of $0.53 on average. That would be a 2% loss on the purchase of a $25 stock and again on the sale. Imagine the reduced compounding. Yields will be reduced by 1/3 to 1/2 over a lifetime of long-term investing. A study from the Independent Budget Office of New York City concluded that such a tax
This is horrible of this article to promote false hope. The American worker doesn't expect anything from this President or his Administration regarding jobs. President Obama can't full fill even one campaign promise. These four years with Obama as president will be worse than the eight years ever was with Bush!
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