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LBBJ: What factors do you think are responsible for the slow recovery of jobs?
DeLong: One of the primary reasons is poor federal policy. I mean that we have evolved into an anti-business environment. It's very difficult to grow and prosper your business, currently, particularly due to an abundance of regulation . . . [such as with the] financial services industry. . . . For example, while certainly we need an appropriate amount of regulation for the industry, and some could even argue that in recent history that there were portions of the industry that were under-regulated, we have now evolved into an environment where it's extraordinarily difficult for small businesses to get the capital they need to grow and expand their business. And if you can't grow your business, then you can't create jobs. If you can't get capital to start a business, you can't create jobs. It's crippling today.
LBBJ: Outside of regulations, what other factors do you think are in play here?
DeLong: That's the primary one, but government as well, particularly the State of California, which has a well-deserved reputation for being anti-business. When you talk with CEOs across the country, they say California is the last state they want to open or grow their business in. We need to change that.
LBBJ: What steps exactly can the federal government take to spur job growth? To, perhaps, deregulate? Or is it tax policy?
DeLong: It's all of those things. The federal government needs to get out of the way. When I was in the primary and I interviewed 100 different businesses in 100 days, I didn't hear business owners and managers asking for things. What they were doing was telling me how difficult it was to move their business forward in the current environment due to the excessive amount of regulation.
LBBJ: Are debts and deficits, in your opinion, tied to short-term, immediate job growth?
DeLong: I think that they are. People are so concerned about the direction of our economy and the direction of our country, that they are not excited about making additional investments right now, until there's more certainty. When you have a national debt that hit $16, and it's increasing by more than $1 trillion a year, that doesn't give you a good, comfortable feeling to say, "Yes, that's an economy that I would like to invest in."
LBBJ: Do you think Republicans' emphasis on long-term debt and deficits may take away from job creation in the near term? By that, we mean, because those things, debts and deficits, are so complicated.
DeLong: First of all, I don't think it's that complicated. How complicated is it to say that you shouldn't spend more than you make? That doesn't seem like a complicated position, to me. And that's what we do, right? We're spending $1 trillion more than we make. We certainly need to cut expenses. The cost of federal government has increased 100 percent in the last 10 years. Now, that's six and a half years under a Republican administration and three and a half years under a Democrat administration. So the first thing you need to realize is that it's not the other party's fault. . . . Both parties have done this to us together.
LBBJ: So you are accepting some responsibility? You recognize some of the things during the Bush Administration, the big kind of government proposals, the expansion of Medicare . . .
DeLong: Absolutely. The way I look at it is that the Republicans started with a surplus (from Bill Clinton). They started down the wrong path, and then the Obama Administration stepped on the accelerator as we were headed down the wrong direction.
LBBJ: Virtually every Western developed country passed some form of stimulus in the wake of the financial mess of 2008. They all differ in their respects. Do you think it's time for Republicans to reconsider some measure of federal stimulus, particularly in fiscal emergencies?
DeLong: I would look at other alternatives first.
LBBJ: Such as . . .
DeLong: To me, you look at that, that might have some positive short-term impacts, but it has terrible, negative long-term impacts. I mean, look what we are doing to the next generation of Americans? I mean, today, they've created $50,000 of debt for every person in the United States. I think that's wrong. I think it's wrong that we're in the process of passing a country down to the next generation that's in worse financial shape than the one we inherited. We will be the first generation of Americans to do that. I think that's wrong. So if we need to make sacrifices today, and we need to take a little pain today, I would much rather do that then pass the burden on to the next generation – to my kids.
LBBJ: Even if that meant higher unemployment rates currently, right now, because of not having enacted a stimulus, if that were the case?
DeLong: Why? See, I don't think that's the case. I think that we can absolutely put economic growth policies in place that drive unemployment down.
LBBJ: Do you agree that the stimulus helped stave off layoffs, particularly in the public sector, state governments?
DeLong: No, I don't agree with that. And secondly, I think that it's probably appropriate in the public sector that we do downsize. We have more government than we can afford. Why would somebody think that we should borrow money so we can afford the amount of government we have, that it makes economic sense? It certainly doesn't make any sense to me. That would be like a businessperson saying, "I'm running deficits, but you know, if the bank would give me a $1 million loan, then I could afford to pay all my employees." Well, that sounds great this year, but what about next year when you have all of those employees and now you have to pay the $1 million back? You're not in better shape than you were. You're in much worse shape than you were.
LBBJ: Corporate profits have rebounded. They are at all-time highs, yet private sector job growth lags. Do you think the private sector bears any responsibility for the slow recovery in job growth?
DeLong: I don't know if responsibility is the right word. I think that the private sector is looking at the sad state of affairs in Washington, realizing we don't have two parties that have the ability to work together, realizing that the economy is going to continue to stumble along until we can eliminate some of that gridlock, and they're going to sit on the money until that is done.
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