A net increase of 200,000 jobs like we had in December is good. A net increase of 250,000 jobs like we had in January is better. That’s a recovery. But to really recover we need many months in a row in the 300,000 to 400,000 jobs range. In order to get that, the following things would be helpful:
— An extension of payroll tax cuts.
— Unrestricted revenue sharing with state and local governments to reduce layoffs.
— A clear statement from the Federal Reserve that they will not nip a boom in the bud. The verbiage about expecting conditions to warrant low rates is confusing. What we ideally want is a clear statement like: “The Committee wants to see hundreds of thousands of Americans get jobs each and every month, even if transitioning hundreds of thousands of people from idleness to unemployment causes temporary spikes in the price of gasoline, primary commodities, or rental housing.”
All of those things signal to firms that are cash-rich or creditworthy something like “now would be a good time to take advantage of relatively low prices by hiring workers and committing to fixed investments” rather than “now would be a good time to horde safe liquid financial instruments in case disaster strikes.”