Polls show that the American Majority is much more concerned about jobs than deficits. So why is DC talking only about deficits instead of jobs, when jobs are the medicine for deficits? And why is DC only talking about budget cuts as a path to fixing the deficits, when the deficits were caused by tax cuts and lack of jobs? In fact most of the "deficit cures" being discussed in DC don't make the deficit better, they make deficits worse because they kill jobs.
Stimulus Ends And Job Growth Ends, Too
Now that the stimulus is running out, so is any sign of a jobs recovery. The stimulus stopped the economic freefall that was occurring under the prior administration, and restored at least some job growth. It worked, but it was not big enough. Much of it was wasted on tax cuts that leave behind only debt, and it is running out. At the same time, state and local government cutbacks are working against any current economic rebound. For the longer term, badly-needed restructuring of trade deals, development of a national industrial policy and removal of the plutocratic tax and regulatory changes that led to intense concentration of wealth have not occurred, keeping the economy from moving forward. See for yourself in the following chart:
Follow the timeline on this chart:
Jobs In The News
Stimulus winding down, state and local governments cutting back, trade deficit increasing again... Which brings us to to this week's economic news. Reuters: Private sector job growth slumps in May,
The ADP report showed private employers added a scant 38,000 jobs last month, falling from a downwardly revised 177,000 in April and well short of expectations for 175,000. It was the lowest level since September 2010.... A separate report showed the number of planned layoffs at U.S. firms rose modestly in May with the government and non-profit sectors making up a large portion of the cuts.
... The housing market, meanwhile, continued to struggle as a report from an industry group showed applications for U.S. home mortgages fell last week, pulled lower by a decline in refinancing demand.
And, Manufacturing growth slowest since September 2009: ISM
The pace of growth in the manufacturing sector tumbled in May, slackening more than expected to its slowest since September 2009, according to an industry report released on Wednesday.... New orders fell to 51.0 from 61.7 in April, the lowest since June 2009. The index for prices paid fell to 76.5 from 85.5, below expectations of 82.0.
Forbes: Double Dip in Housing; Could Double Dip Recession Be Next?
This chart from Business Insider shows what the Standard & Poor's Case-Shiller Index looks like on a graph chart: bad. National home prices are back to their 2002 levels, according to the index data released May 31.... Moreover, consumer confidence unexpectedly declined in May to its lowest level in six months due to the lackluster job market and declining home values.
Austerity Cuts Jobs
But DC is not only not talking about jobs, they are talking about austerity -- cutting the very things that create jobs. History and the experience of other countries as they struggle to crawl out of the economic collapse has shown again and again that government investment in infrastructure and education and scientific research and manufacturing are the path to recovery. England, Greece and others trying austerity are falling back into recession. Meanwhile China is investing hundreds of billion in high-speed rail and other infrastructure. Germany is investing in manufacturing. Others are investing billions more in infrastructure. All are pursuing green energy sources.
Mired in austerity ideology we are doing none of these. For example, on a PBS NewsHour discussion of the House vote rejecting a "clean" debt-ceiling bill Tuesday, Rep. Peter Roskam said,
... any raising of the debt ceiling has to be preconditioned upon cuts that drive towards a real economic recovery and long-term growth and prosperity and job creation.
Rep. Roskam actually claimed that cutting the things that have proven to drive growth and job creation will drive growth and job creation.
Austerity Can't Cut Deficits
The other day I wrote about calculations that shows that cutting budgets does not cut deficits. From See WHY Austerity Can't Reduce The Deficit, (click through to see the calculations that prove austerity can't reduce deficits),
Austerity -- cutting government benefits and services -- is not the path to fixing deficits. In fact, economists warn that trying to fix a sluggish economy by cutting government spending will just make things worse. Worse yet, this approach can have damaging effects that last into the future. This can be easily shown with simple calculations.
Jobs First In Democracy
In a democracy jobs would be the first topic of discussion and the only topic until plenty of good-paying jobs are available. But in a plutocracy -- government by the wealthy -- jobs for regular people would be of little concern. Which are we seeing here?
The American Majority clearly, absolutely, firmly and primarily want jobs as government's -- our -- first priority (click through to see the polling), while our leaders are talking about doing things that cut jobs and cut the thing that We, the People do for each other.
The solution to the huge post-collapse jump in deficits is to restore the jobs. Restoring good-paying jobs starts to restore the tax base and stops the emergency spending on the unemployed. The increased demand as people find work and paychecks revives retail and manufacturing. Housing recovery, for example, depends on more jobs. With more jobs and better pay. Unemployment is high and wages are low, so many people just can't afford to buy -- or keep -- a house.
Just cutting people out of the economy doesn't fix the problem, it shifts the problem and eventually will kill the economy.
Jobs First In Election
One thing is for sure: jobs will be the first concern of voters in the coming 2012 elections. And Republicans understand that making things worse now helps Republicans later. The question is why aren't Democrats and the President focusing on making things better now to help themselves and all of us later?
This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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http://www.associatedcontent.com/article/7824656/uncertainty_and_its_effect_on_the_economy.html?cat=9
Normally, the Dems in power (president and Senate) would risk the lion's share of the blame for the continuing lack of jobs.
But with the Repugs trying to cut medicare, mistreatment of the unemployed, and other anti-worker stunts.....they will be blamed as much (or more) than the Dems.
Yes, the Repugs want to get rid of Obama in 2012.
Yes, they don't want to "create" jobs until after the election (if they can create jobs) so Obama looks bad.
But they are also alienating the very voters (moderates, independents, senior citizens, etc.) that they need to win in 2012.
Why the silence?
Thanks for your columns. I believe we need a new WPA, to put Americans to work, increase consumer demand, increase hope, and fix our infrastructure (among other projects). History shows us that the CCC, PWA, WPA, NYA, and other New Deal programs were great for business (e.g., improved road systems and airports moved goods more efficiently across the country).
Indeed, the state parks that the CCC created still help us today. For example, in western Maryland much of the economy is driven by tourists and vacationers coming to state parks.
But outside of the progressive caucus of Congress, everyone else seems to be a corporate lackey. The GOP/Tea Party/Blue Dog coalition (including Obama) doesn't seem to be losing too much sleep over 25-30 million people who are unemployed or underemployed.
Given this, is there any hope?? We seem to have only two choices: Do-nothing democrats, or Bubblehead Bachmann and her ilk?? This is really depressing.
I really think it is that simple.
Even as greedy as big business is, they still understand they need a consumer class to keep the ball rolling, No jobs, no demand, no spending, no profits.
Obama got his Stimulus a couple of years ago.
It didn't work. It propped up the economy (somewhat) but is now losing the very modest success that it had. Now we're supposed to borrow more money for a similiar lukewarm result?
Get it through your heads.
We're broke.
We've had to resort to printing money to buy our own debt. The Chinese have been selling off our debt for the past 5 months. The Japanese will have to dump over $200 billion to pay for their reconstruction. The debt that we do sell will come at the cost of higher interest rates.
This Administration has no real plan and are cluesless.
I do however expect their loyal friends in the media to push for a new Stimulus in order to pump up Obama's numbers enough to give him a shot at reelection in 2012.
As for private investment, companies are sitting on more cash than ever before. The rich have more money than ever before. So don't tell me about the government squeezing out investment. Please.
"We're broke" -- no, actually the GDP is bigger than ever, but it is all going to a very few, because of the tax cuts and lack of investment in our economy that is the result of the tax cuts.
We had a shot at fixing the economy with Obama's Stimulus but he pissed it away with "Shovel Ready Projects" that didn't exist and buying people cable converter boxes. On the plus side Obama got to pay off a lot of supporters. I suppose that's what it was mainly about anyway.
It's not the job of business to hire unnecessary people in order to make Obama look good. Companies are making more money than ever with fewer people. Sorry but that's their job. They answer to the owners and shareholders instead of "The One."
If Obama wasn't stupid enough to constantly belittle businesses and businessmen then perhaps they would trust him a bit more when he goes begging to them and asking them to invest and hire. Our companies are like most of America. They are afraid to spend too much because there is no faith in the economy.
Maybe if Obama didn't see businesses as his own (or his Party's) personal piggybank then they might have more trust. Of course his pushing for Cap And Trade schemes and Card Check isn't going to build any trust in his plans, his Administration or his economic sense.
An AOL problem, maybe?
Easy answer. It's because almost every one of them is corrupt and/or incompetent (usually both).
This deception has been going on a very long time and is very competently played. Add to it the deliberate failure of our education system and complicity of the media, and the result is a polarized populace - segments of which actually vote against their own self-interests.
The public is propagandized into believing that wide ideological gulfs separate them, when in fact they have far more in common than they're led to believe. Unfortunately most are incapable of critical thought, so they believe what they're told by a media and pundits who cater to fear and prejudice. It's the classic divide and conquer strategy, and it works every time.