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Yeah, It’s the Economy, Sherlock

Carl Bloice: Any member of Congress who thinks obstructionism is the way to win elections should know that in two years we will be sure that voters will know who stood in the way of jobs. We have an energized membership that’s ready to fight, and we’re going to give it everything we have.
richard trumka

AFL-CIO President Richard Trumka

The bloggers were right, “it was about the jobs, jobs, jobs,” Dave Johnson wrote on the Campaign for America’s Future webpage election day. “For the first half of the year all the progressive bloggers were saying that the November election is going to turn out very, very badly for Democrats if they don't focus on jobs. We said please, please drop this ‘austerity’ nonsense, the only way to cut the deficit is to grow the economy. We were going kind of nuts about it, saying if you don't spend money on jobs the voters will punish you.”

“But the Administration and many in Congress were busy on an ‘austerity’ fad,” continued Johnson. “The ‘centrists’ and the big-media pundits and the rest of the ‘serious people' were saying we needed to do something about the deficits because the markets’ wanted them to. So here we are. The bloggers were right … and the voters are punishing the politicians who listened to the same old DC elite pundits and campaign consultants and party insiders who demanded ‘austerity’ cutbacks for We, the People.”

Of course, we shouldn’t go overboard; the election wasn’t just about jobs. Note has been taken that foreign policy got almost no play in the pre-election campaign. No one seemed to want to talk about it. However, as anticipated, the throngs of young voters who contributed decisively to President Obama’s election didn’t turn out in sizable number this time around; part of the reason is that they thought they were voting to end the foreign wars and two years later the bloodshed rages in Iraq and Afghanistan. There are a lot of cynical 20- and 30-somethings out there.

Turnout was a huge factor in the election outcome; large numbers of young voters and minorities didn’t show up at the polls. While those that did stayed overwhelmingly in the liberal Democratic camp, exit polls showed 41 percent of the voters were conservative, up from 34 percent in the 2008. In the Presidential election 18 percent of the voters were under 29 years old; this time around it was 11 percent. African-American participation fell from 13percent to 10 percent and Hispanics from 9 percent to 8 percent. On the other hand, seniors went from 16 percent in 2008 to 23 percent in 2010. Ezra Klein observed in the Washington Post, “seniors, of course, are the most conservative voters -- they were the only age group to back John McCain in 2008. And young voters are the most liberal. They were the only age group that favored Democrats yesterday.”

And, anyone who thinks that racism, navatism, scapegoating and immigrant-bashing wasn’t a factor in this election should go outback and join the ostriches.

Still, Johnson’s larger point in on time; the economy is on nearly everybody’s mind. Not just those unemployed or feeling the precariousness of their jobs but also the millions of people who have lost their homes during this economic crisis and the millions more facing foreclosures in the months ahead – and their friends and families.

According to CNN’s Rebecca Sinderbrand, “The economy wasn't just the most important issue to voters this year - with unemployment hovering around 9.6 percent, it was roughly twice as important to them as the other top issues of concern combined. Sixty-two percent of voters named the economy as their most important issue this year. Health care ranked a distant second, at 19 percent, with illegal immigration and Afghanistan trailing at 8 and 7 percent.”

Every time the White House speaks light is pointed to at the end of the tunnel but there is very little reason to think the end is near. Working people in Michigan Illinois, Wisconsin, South Carolina, Minnesota, Ohio and Pennsylvania are well aware of both the situation and the prognosis. They know:

  • Some new jobs are being created but not at nearly the pace necessarily to move from the stubborn near 10 percent unemployment rate. The number of people showing up at unemployment offices rose 20,000 last week.
  • Since 2007 over 2 million building trades jobs have disappeared; that’s about one quarter of the total. In September, the construction unemployment rate edged up to 17.2 percent. Almost nearly 1.5 million men and women are looking for work in construction. According to Associated Press economics writer Paul Wiseman, some experts don’t expect the labor market “to recover all the lost jobs until at least 2013. Other economists say it could be 2018 or longer.”
  • According to RealtyTrac, foreclosure filings - default notices, scheduled auctions and bank repossessions - were reported on 930,437 properties in the third quarter, a nearly 4 percent increase from the previous quarter but a 1 percent decrease from the third quarter of 2009. One in every 139 U.S. housing units received a foreclosure filing during the quarter. Foreclosure filings were reported on 347,420 U.S. properties in September, an increase of nearly 3 percent from August and an increase of 1 percent from September 2009. There were 102,134 bank repossessions September – a record for a single month.
  • Meanwhile, gasoline prices have risen over the past year, education costs and healthcare insurance prices continue to rise steeply. Gasoline costs more than it did a year ago.

There is a time to sow and a time to reap, a time to point the finger of blame at whoever caused this mess and a time to spell out what you intend to do about it. We reached the latter point long before last Tuesday when the reaping took place.

The problem is there was very little pre-election debate about policy alternatives, no serious presentation of contending plans and programs, just a lot of slogans and personal attacks. Yes, the major media contribute greatly to this (that’s what they do these days), But the politicians bear the major responsibility. Californians would turn on the tele and there was the outsource queen from Silicon Valley pledging to put the state back to work, followed by Jerry Brown pledging to move power out of Sacramento “down to the local level” without a clue as what the catchy phrase meant.

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A casualty of the campaign period, wrote Edward Luce in the Financial Times as the campaigning wound down, “has been the prospect of any serious debate about America’s future – a year when the country particularly needed to evaluate its narrowing options.”

Nobody “thought it worth raising Barack Obama’s deficit commission, which is due to report on December 1,” observed Luce. “The question of how the US should tackle its mounting national debt has been relegated to a bunch of Punch and Judy bumper stickers that bear as little relation to its fiscal reality as astrology does to astronomy.

“The same applies to infrastructure, education, immigration – pretty much anything that touches on America’s future competitiveness: ‘Literally clueless,’ stands as an apt summary on the hustings.

“Then there is the matter of whether Americans should be fighting and dying in the ‘graveyard of empires’.”

Nothing could better symbolize the disfunctonality of 2010 U.S. politics and the consequent undermining of democratic decision making than the move the Federal Reserve made Wednesday.

The nation needs new efforts to stimulate the economy if we are to do anything about arresting the soaring unemployment rate. However, for months now it has become a media litany that enacting a new stimulus package is politically impossible. Perhaps, but it would have been good to see the Administration take a stab at getting one through Congress. Even though the Democrats have a majority in both houses, the brain-challenged “blue dogs” would have doomed it. With the line-up in the new Congress, forget about it.

Instead, as policy-making we now have an unelected Ben Bernanke and his cohorts at the unelected Federal Reserve making a monumental economic decision that was never debated in the election campaign period and about which few people in the country know anything. It goes by the name “QE2.” That’s short for something called Quantitative Easing which involves creating new money out of whole cloth (“electronic money”) and buying up $ 600 billion worth of government bonds, hoping to lower the cost of borrowing money, and boost consumer spending. It will, in effect, lower the value of the dollar and make things cost more, hoping to lure the capitalists already sitting on pile of cash into investing it in anticipation of potentially higher profits. The hope is that it will get people and companies back into the housing market and the stores and thus spur employment. On Tuesday, the Financial Times editorially called the move “an untried tactic that smacks of desperation.”

“It will mark the next stage of the Japanization of the US economy – the latest move by the Fed to stave off Japan-style deflation,” wrote Edward Luce, the Financial Times’ Washington correspondent, on election day. “Whether quantitative easing works will be central to America’s economic future. No mention has been made of it on the campaign trail.”

In the Guardian (UK) this week, economist Joseph Stiglitz commented, “Political gridlock and soaring debt have stymied an effective second stimulus, and monetary policy has not reignited investment. But weakening the dollar to boost exports is a risky strategy – it could result in exchange rate volatility and protectionism; worse, it invites a response from competitors. In this fragile global economic environment, a currency war will make everybody a loser.”

The reaction to the coming QE2 in the rest of the word is one of alarm. The US is “again engaged in behavior that risks putting global stability in jeopardy,” wrote Stiglitz.

“President Obama has talked about a bold, large scale vision for a new direction for the country, wrote David Johnson. “But Congress and the President are getting trapped in austerity budget thinking that won’t allow them to go in the direction of stimulus and helping regular people. If there is to be no money because of an austerity budget then American competitiveness, the economy and the mood of the public can only get worse. Do the DC elites actually believe the public is going to reward this with votes?

“People care about jobs. They still care about jobs. And politicians who don't care about jobs will lose their jobs, because that is what motivates voters.”

“In order to regain the trust of the majority of voters, Democrats and the president have to lay out a bold plan to get the economy going and fight for it against those standing in the way,” writes Robert Borosage , president of the Institute for America’s Future and co-director of the Campaign for America’s Future. “Joining the Republican embrace of cuts to Social Security and harsh budget austerity would be bad policy and bad politics.

“Joining with the right to raise the retirement age, push through more job-killing trade accords, or extend tax breaks for the wealthy will address neither economic nor political challenges. It would be far better to lay out what the country needs, stand firm against the special interests and make the choices clear.

The election, AFL-CIO President Richard Trumka said Wednesday “was about jobs, plain and simple. It was a mandate to fix the economy and create jobs.” It wasn’t a mandate for the policies most Republicans campaigned on, he said. An election night survey of voters in 100 swing congressional districts, Trumka said, “shows clearly that the election wasn’t an endorsement of tax cuts for the wealthy - or for undermining Social Security or the minimum wage. It wasn’t a rejection of building a middle class economy. And it wasn’t an ideological purge - as many Blue Dogs lost as progressives.”

Trumka called for stepping up efforts to end corporate outsourcing of U.S. jobs, strengthening Social Security and Medicare, fighting to help jobless workers, asking multi-millionaires to pay their fair share in taxes and investing in a 21st infrastructure. “Any member of Congress who thinks obstructionism is the way to win elections should know that in two years we will be sure that voters will know who stood in the way of jobs. We have an energized membership that’s ready to fight, and we’re going to give it everything we have,” he said.

Carl Bloice

Republished with permission from the Black Commentator.