Economics
Run-It-Hot Wins Argument Over How to Get Americans Back to Work
- Fed supports shift toward bigger role for government spending
- ‘Skills gap’ view of unemployment disproven, says Biden aide
Photographer: Tim Boyle/Getty Images
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Behind President-elect Joe Biden’s plans to drive the U.S. back to full employment after the coronavirus slump lies a long-lost idea: The unemployed need jobs, not skills.
That “run it hot” recipe for recovery is back in favor among policy makers -– including, crucially, at the Federal Reserve. The argument is that the government should juice the economy by any means necessary so demand is strong enough to pull people into work.
It contrasts with the “skills gap” thesis that prevailed after recent recessions. The view then was that large numbers of Americans who’d been thrown out of work wouldn’t be re-employable unless they took it upon themselves to develop new skills.