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Washington Doesn't Get It: We Need More Jobs

Unemployment

First Posted: 12/02/09 05:12 AM ET Updated: 05/25/11 03:15 PM ET

Nowhere is the massive disconnect between Washington D.C. and the rest of the country more striking than when it comes to the issue of jobs.

Inside Washington, it is almost universally considered a foregone conclusion that unemployment will remain near, at, or even above 10 percent -- not just for months, but for years to come. (The unemployment rate in September, we just found out this morning, ticked up yet again, to 9.8 percent.) As White House economic guru Larry Summers dispassionately told reporters last month (while otherwise taking credit for turning the economy around), "The level of unemployment is unacceptably high and will on all forecasts remain unacceptably high for a number of, for a number of years."

This situation creates no sense of urgency in Washington. Ask Summers what he's going to do about it, for instance, and he hems and haws about recovery act programs that have yet to take full effect. To our political elite, jobs are simply nowhere near as critical an issue as the other economic indicators, the stock market, or the financial health of the nation's top bankers.

Outside the Beltway, however, it's a different story. According to a new poll by Hart Research Associates for the Economic Policy Institute, unemployment and the lack of jobs "remains the dominant problem on the economic agenda for voters across party lines." In fact, it's not even close. Asked to name the most important economic problem facing the country, registered voters cited unemployment twice as often as they mentioned the deficit or even the cost of health care; and four times as much as the housing crisis or problems with the banking system.

A whopping 83 percent see unemployment as either a fairly big or very big problem; and 81 percent say the Obama administration hasn't done enough to deal with it.

And there just aren't a whole lot of things that more than 80 percent of Americans agree about.

Not coincidentally, large majorities of voters also see the government's economic policies as helping banks and Wall Street -- while few see themselves or average working families in general as benefiting.

So why isn't political Washington fully engaged in addressing the unemployment problem? For the same reasons it can't seem to get much of anything done these days: most notably the abject lack of boldness from the Democrats and persistent obstructionism from the Republicans.

Democrats have been particularly terrified for decades now of doing anything that can be said to actually cost the government money. (Republicans, ironically, have no such scruples.) So our modern ruling party has found itself boxed in by its own president's support for "pay-as-you-go budget rules". And the fact is that very serious concern about the deficit -- even now, when it's the least of our troubles -- is considered a hallmark of serious thinking in Washington. Those who don't toe the line are written off as crazy, wild-eyed radicals.

There are, of course, lots of ways Washington could affirmatively and effectively create jobs in short order -- if the political will were there. Direct jobs programs are the most obvious way, but reduced unemployment could also be achieved by increasing pass-through payments to the states, creating new tax incentives for boosting staff, or appropriating more money for infrastructure and environmental programs that would, in turn, lead to private-sector hiring.

New York Times opinion columnist Paul Krugman writes today, warning of Washington complacency:

[A]ll indications are that unless the government does much more than is currently planned to help the economy recover, the job market -- a market in which there are currently six times as many people seeking work as there are jobs on offer -- will remain terrible for years to come.....


[C]an we afford to do more -- to provide more aid to beleaguered state governments and the unemployed, to spend more on infrastructure, to provide tax credits to employers who create jobs?
Yes, we can.

The conventional wisdom is that trying to help the economy now produces short-term gain at the expense of long-term pain. But ... from the point of view of the nation as a whole that's not at all how it works. The slump is doing long-term damage to our economy and society, and mitigating that slump will lead to a better future.

And former Clinton labor secretary Robert Reich is also blunt, writing in his Huffington Post blog:

Who's going to buy the stuff we make or the services we provide, and therefore bring jobs back? There's only one buyer left: The government.


Let me say this as clearly and forcefully as I can: The federal government should be spending even more than it already is on roads and bridges and schools and parks and everything else we need. It should make up for cutbacks at the state level, and then some. This is the only way to put Americans back to work. We did it during the Depression. It was called the WPA.

Yes, I know. Our government is already deep in debt. But let me tell you something: When one out of six Americans is unemployed or underemployed, this is no time to worry about the debt.

But the political will simply doesn't exist. And that's a tragedy. Because the gigantic production shortfall that continues to afflict our nation is not abstract. It is made up of people -- people who are out of work, families who are losing their homes and health insurance, young people who are dropping out of college and children who are going hungry. This is the real drama of modern American life, barely registering in Washington where what matters most is political consequences -- and where the bigger danger, for now, is seen in action than in inaction.

But inaction will have consequences, too, and they could be severe. As Reich astutely warns:

Unemployment of this magnitude and duration also translates into ugly politics, because fear and anxiety are fertile grounds for demagogues wielding the politics of resentment against immigrants, blacks, the poor, government leaders, business leaders, Jews, and other easy targets. It's already started. Next year is a mid-term election. Be prepared for worse.




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