What's the single best idea to jumpstart job creation?

When unemployment numbers go up, as they have for the past few months, everyone gets scared. But the problem in this job market is not so much that unemployment is rising, as that it's not falling. Job separations (layoffs, firings, and quits) are actually down substantially from pre-crisis levels. But so is job creation. The result is that people who are thrown out on the job market stay there. And for every month that they languish, their job prospects decrease. Employers would rather hire someone who already has a job, and because so few jobs are being created, they have plenty of those people to choose from. Nor are they entirely irrational. Research shows that long-term unemployment takes a toll on skills, industry knowledge, and psychological well-being--what economists call "human capital".

This makes long-term unemployment our greatest priority; if we do not get those people into work soon, many will never return. When employers do start hiring again, they will look to the sizeable pool of shorter-term unemployed. By the time demand is robust enough for them to dip deep into the reserve army of labor, it may be too late for many of them.

But how to get employers to hire people who have already been out of work for too long? Traditional government solutions like job training have an absolutely dismal record. The only government solution to long-term unemployment we've ever found was to have World War II, and for various reasons, we're probably not going to reauthorize that particular program.