On Thursday, the weekly jobless claims number ballooned to an unacceptable 385,000. On Friday the monthly jobs report showed a collapse in job creation to an anemic and unacceptable 88,000. The actual unemployment rate went down to 7.6 percent because the labor participation rate collapsed to the lowest level since 1979. Perhaps we can have full employment if every jobless worker gave up and stopped looking for work.
From President Obama’s perspective, the headlines throughout the weekend will highlight the latest jobless pain with his leaked plan to cut Social Security and Medicare. The fact is that since the President began his outreach to Republicans during the last month and job creation tanked, his Gallup poll numbers have tanked with the low job creation.
From the Republican point of view, I would not want to be an incumbent House Republican running against Democratic challengers at a time of high joblessness while they fight for cuts to Medicare and Social Security.
From the American point of view, and the point of view of workers and consumers throughout the world economy, they don’t care about the politics, they care about this:
It’s the jobs, stupid.
It’s the austerity, stupid.
It’s the reactionary notion that at a time of slow growth and few jobs, governments should be imposing austerity and cutting back. History has proven this ancient theory wrong from the moment that Franklin Roosevelt allowed conservatives in Congress to win austerity in 1937, until today, when conservatives and submissive liberals in nations such as Great Britain throughout Europe are imposing austerity, which deepens recession.
It was a draconian mistake for the President to surrender to, and congressional Republicans to claim victory, for the sequester.
The sequester will destroy jobs, and has begun to destroy jobs, as the Congressional Budget Office warned it would destroy perhaps 750,000 jobs this year. Exhibit A: today’s jobless report. Exhibit B: Thursday’s jobless claims report.
I would suggest that former President Clinton and former Secretary of State Hillary Clinton might team up, through the Clinton Global Initiative, to devise proposals for domestic and global job creation. For now:
The sequester should be repealed.
Second, it was a major mistake to increase payroll taxes with the jobless rate so high as this year began. This took money out of the hands of workers and consumers at the worst possible time.
The payroll tax should be cut. Or, in the alternative, the president and Congress should enact a refundable tax credit, or a tax rebate, or some other means of restoring support to workers and consumers.
Third, the president needs to fight for a major jobs bill that would create large numbers of jobs rebuilding America’s roads, ports, bridges and schools.
I emphasize I am not proposing a presidential photo op in front of a bridge, or a news cycle public relations maneuver that is wheeled out with a bad jobs report and returned to the closet after a few news cycles.
Obama needs to contemplate the possibility that his legacy will be “the jobless president.” He should fight to become “the jobs president.”
Republicans need to contemplate whether they want to run for reelection in 2014 and run for president in 2016 as the party that fights to the death against jobs bills and fights to the death to cut Social Security and Medicare.
But above all, government leaders throughout official Washington and in state capitals across the nation need to understand that austerity during high joblessness is economic disaster. It was economic disaster in 1937; it is economic disaster today. It was economic disaster under Sarkozy in France; it is economic disaster under Cameron in Britain; under Merkel in Germany; it is economic disaster for Italy, Spain and Greece.
Yes, there is a deficit problem that must be addressed. The original Simpson-Bowles proposal included stimulus spending for the short term with significant and honest budget-cutting for the medium and long term. This makes eminent sense. Let's do it.
What does not make sense is harsh austerity today with the jobless rate so high and with economic growth so modest.
It’s the jobs, stupid, and it is time to end the policies of stupidity that have caused and now continue the crushing pain of joblessness.
Friday, 5 April 2013