Silicon Valley -- Paul Krugman shared some wisdom last night about the White House Job Summit, which President Obama announced earlier in the day. The Nobel Prize winner for Economics was in Silicon Valley as part of the Foothill College Celebrity Forum Lecture Series. In an exclusive interview, he was forceful in his view that "the jobs summit cannot be an empty exercise."
In particular, he said that the Obama administration ought to use a combination of tax credits for jobs added, and subsidies to encourage companies to retain their employees. He pointed to Germany as a country that has largely contained the extent of its job losses despite the Great Recession, thanks to job conservation measures.
"He can't come out with a proposal for $10 or $20 billion of stuff because people will view that as a joke. There has to be a significant proposal," said Krugman. "If I had my druthers, if there were no limits politically, I'd say let's just have a really massive second stimulus plan to get the economy going, but since that's not going to happen, we need some measures that are cheaper, don't maybe do as much for GDP but create a lot of jobs."
When asked if he has a minimum spending level in mind, Krugman was clear, "There's no hard and fast number, but if it isn't several hundred billion dollars... OK, probably it's not going to be as big as the first stimulus bill and not going to be as big as I think it should be. But I have in mind something like $300 Billion, you could do quite a lot that's actually targeted on jobs."
Krugman has not yet received his invitation from President Obama to be part of the Job Summit but indicated that it would be "revealing" if he didn't get an invitation. The full five minute interview is featured at FreshDialogues.com, along with a transcript.