Once Again on the President, the Congress, and the Jobless

JoblessColumnist Paul Krugman has a problem. Well, not really. It’s us who have the problem. He just has a provocative way of highlighting it. He’s said it before and he repeated it again last week: What we ought to do, we probably cannot do because it’s not in the political cards.

Why? Because while we may have a progressive majority in the country and the more liberal of the two major parties controls both houses of Congress, the political initiative is in the hands the right wing. Not that they can enact anything they want, or even have a program any reasonable person would consider viable, but because they can sabotage, obstruct or, at least, dilute any really constructive proposals.

“Here in America, the philosophy behind jobs policy can be summarized as ‘if you grow it, they will come’,” Krugman wrote last week in the New York Times. “That is, we don’t really have a jobs policy: we have a G.D.P. [gross domestic product] policy. The theory is that by stimulating overall spending we can make G.D.P. grow faster, and this will induce companies to stop firing and resume hiring.”

“The alternative would be policies that address the job issue more directly,” Krugman went on. “We could, for example, have New-Deal-style employment programs. Perhaps such a thing is politically impossible now – Glenn Beck would describe anything like the Works Progress Administration as a plan to recruit pro-Obama brownshirts – but we should note, for the record, that at their peak, the W.P.A. and the Civilian Conservation Corps employed millions of Americans, at relatively low cost to the budget.” Later in the column, he says “a large enough conventional stimulus would do the trick. But since that doesn’t seem to be in the cards, we need to talk about cheaper alternatives that address the job problem directly.”

Of course, he knows that even the less effective alternatives will bring out the teabaggers and charges of – horror upon horrors – “a government-run jobs program.” Maybe the question we ought to be asking right now is: do we really have to settle for the cheaper stuff?

Krugman notes that “these aren’t normal times. Right now, workers who lose their jobs aren’t moving to the jobs of the future; they’re entering the ranks of the unemployed and staying there. Long-term unemployment is already at its highest levels since the 1930s, and it’s still on the rise.

“And long-term unemployment inflicts long-term damage. Workers who have been out of a job for too long often find it hard to get back into the labor market even when conditions improve. And there are hidden costs, too – not least for children, who suffer physically and emotionally when their parents spend months or years unemployed.”

This is not meant as criticism of the Nobel prize-winning economist. He has been one of a handful of liberals in the media crying out, Jeremiah-like, about the employment crisis facing the country’s working people, like University of California professor and former Labor Secretary Robert Reich and fellow Times columnist Bob Herbert. But obviously all the columnists in the world do not a movement make. And unless an effective movement unfolds nothing really effective is going to be done.

The same day Krugman’s let-set-our-sights-a little-lower column appeared, a similar view was expressed by Krishna Guha U.S. economics editor for the Financial Times. In a column titled, “Is this the Best Recovery that Policy Can Buy?,” he observes that, “The US – and the world – has escaped a second Great Depression, in large part because of extraordinary actions from the monetary and fiscal authorities. But the US outlook is still pretty grim, with an anemic recovery and unemployment – now 10.2 per cent – expected to still be around 8 per cent two years from now.”

“The Obama administration is penned in by the need to avoid a bond and currency market revolt against giant budget deficits,” Guha. “The idea of trading off long-term savings through entitlement reform against short-term deficits – eminently sensible in theory – has run into political limits with healthcare reform.”

“This is not a counsel of despair,” writes Guha. “Extra efforts to boost small business finance could meet the test. A jobs or investment tax credit is at least worth debating seriously, as is an infrastructure development bank. But the greatest payoff could lie in efforts to deal with long-term unemployment – now, before it is too late.”

One of the problems we face is the kind of leadership we get from the executive branch of the government. Before he left on his Asian tour, President Obama indicated he is aware of the situation and plans to come up with some proposals to do something about it. He’s even planning one of his summits to talk about it. We can only hope that its purpose is not to just lay out how bad things are but to propose bold action. However, one of the problems is who he’s taking advice from. It’s seems clear that from Afghanistan to Honduras everybody in this administration is not of like mind. In fact, they sometimes seem to be working at cross purposes. American Prospect co-editor Robert Kuttner maintains that “officials such as White House Chief of Staff Rahm Emanuel and Office of Management and Budget Chief Peter Orszag are more concerned with cutting the deficit than spending more money to reduce joblessness.”

“President Obama’s team made it clear months ago that he will brook no talk of a ‘second stimulus’ at a time when the first stimulus is under significant criticism – from the right, to be sure, but also from the left,” wrote Isaiah Poole on the Campaign for America’s Future website November 13. Nonetheless, the coming White House jobs summit “offers an opportunity to reset the political conversation on building an enduring recovery for the 17.5 percent of Americans who are unemployed and underemployed.”

Krugman agrees. In a November 12 interview with Alison van Diggelen on Fresh Dialogues, he said, “This jobs summit can’t be an empty exercise” and that Obama “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 job proposal… 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.”

“The political right would rather focus the conversation on another number – $12 trillion – which is what the national debt will be by early December,” writes Poole. “Concern over the deficit constrained the size and ultimate effectiveness of the American Recovery and Reinvestment Act, which has arguably kept unemployment from getting worse but has yet to prove to a lot of people outside the Beltway that it is actually improving the Main Street economy. If anything, our experience with that stimulus plan – split between one-third tax cuts and two-thirds inadequate spending on such items as infrastructure – tells us that our economic malaise needed to be treated like a serious infection: Only a fast, hard and consistent attack works; anything less allows the disease to fester and become harder to treat.”

Hopefully we won’t hear much more about Obama trying to do too much at once. Even some liberals have repeated the notion that both time and political capital have been wasted on the healthcare debate. Yes, employment has to move to first place on the legislative priority list but that doesn’t mean the need for labor law reform or climate change action should be set aside. As former Montana Governor Brian Schweitzer put it to John King on CNN last Sunday, if the current members of congress can’t work on more than one problem at one time we need some new members of Congress.

Because of rising joblessness the holiday season is going to be bleak for millions of people across the land. I must admit that writing about it week after week is depressing; I feel like I’m saying the same thing over and over again. As we note, the heightened attention to the crisis, and hopefully proposals for Congressional action, the alarming jobless figures will be repeated over and over. The employment situation is dire and from all indications it is going to get worse.

Yes, we need a jobs program, but that’s the easy part. The President, writes Poole, “ still has significant political capital, and he can use it to build consensus around an investment economy agenda: Rebuild the nation’s public commons, fuel the transition to the green economy, restore manufacturing as a critical building block of restoring middle-class prosperity. Those who have reaped the most from our economic policies should be asked to contribute the most to its continued security.”

The problem now is to make sure the ditherers in Washington get the message.

Carl Bloice

Republished with permission from The BlackCommentator.

Comments

  1. x apsperated says

    The US did not have any debt in 1930. That allowed the government to increase the debt to almost 100% of GDP for the progams and in 1938, the jobless rate was 18%. We are on the verge of bankruptcy and can’t afford any more public works. Don’t you live in Las Angeles? The city is broke and furloughing workers?
    WWII was the reason for the rebuilding of the American economy. NAFTA and free trade (globalism) has been the ruin or did you miss Greenspan’s testimony earlier this week?
    If you want to write about things you never studied in school..like ethnic diversity and social justice in the zimbabwe..please do some reasearch first

  2. says

    We’ve become a low wage service sector nation. The perfect compliment to consumer imports. A retail sector, a quick and easy way out of de-industrialization, the fine finance lead economy where our stores employed clerks and our jails stored those who were deemed criminal. For years the State Department and the Corporations and especially the Oil Giants had a global vision the kept hollowing out our manufacturing sector. Now what’s left?
    The FDR C.C.C. project was genius.Young men got room and board and were paid $30 a month $25 of which the sent home(meals in town were $.25)The restored farms and built our National Parks and help reduce our unemployment.
    How about a project to restore our cities?

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