How are we going to fix labor given the aftershock that we are in?
It used to be that when profits increased, jobs increased and often wages increased. That is no longer the case. Companies have done things that many of them had been reluctant to do before, and that is really intensively use the Internet and new technologies to outsource abroad and automate many of the jobs held by their U.S. workers.
Do we need a Thirties-like program? Or is the Reich prescription something more modern?
I think the answer is to extend the Bush tax cuts, certainly for everybody who is under $250,000. Secondly, maybe declare a two-year payroll-tax holiday on the first $20,000 of income, because 80 percent of Americans pay more in payroll taxes than they do in income taxes. Maybe thirdly, I would help out state and local governments. They are in terrible shape.
How would you grade the President's economic team?
To the extent that there is a problem, it's communication. I would not say the President or his economic team have done a superb job communicating why the stimulus works and, to the extent it did work, why it needs to be larger, how it can be larger, why we are facing a shortfall between the country's productive capacity and where we are in terms of demand. This is not rocket science. But I am afraid neither the President nor his economic team is able to do it as convincingly as some of the people on the other side are.