So what would Obama be proposing if he actually made reducing unemployment a priority? Michael Strain, an economist at the American Enterprise Institute, has a great set of suggestions, many of which (perhaps surprisingly for an AEI guy) involve new government spending programs:
• "Offering relocation vouchers to the long-term unemployed in high-unemployment areas"
• "Allowing firms to hire the long-term unemployed at less than the current minimum wage and supplementing their income with an EITC-like payment"
• "Reforming our disability insurance program so that it doesn't serve as a permanent exit from the labor market"
• "Publicizing and encouraging worksharing as an alternative to layoffs"
• "Getting the government off the backs of entrepreneurs"
• "Encouraging domestic energy production"
"Some of these suggestions involve more government action," Strain notes. "Some involve the government getting out of the way; all should be considered." Indeed. Also worth looking at is the proposal of Kevin Hassett, another AEI economist, to have the government engage in direct hiring of unemployed people.