There's a near universal consensus that we have a massive systemic employment crisis in America. Economists agree, the American people agree and even policymakers agree (though they seem paralyzed against taking bold action).
The problem is clear: America's engine of job creation is breaking down. The private sector plainly isn't creating enough jobs. The solution to this must come on two fronts. Most importantly, government has to step in as it has done during other major recessions and depressions to fill in the gap with direct job creation. Unemployment has created a massive hole in the economy. Only the government has the resources and tools to create the jobs we need, thus priming the pump to get the private sector job creation engine running again. I've written about that here and here.
The second front requires our nation to ask and expect more from the private sector itself -- particularly from large corporations that should invest resources back into the communities that sustain them by creating quality jobs. When the financial markets crashed in 2008, the American people, acting together in the common interest, bailed out some of America's biggest corporations. We put $23 trillion on the line to save the "too big to fail" corporations that irresponsibly got us in this economic mess. There was and remains considerable controversy over whether this was the right thing to do. We'll never know if the bold intervention by the U.S. government truly stopped a massive economic collapse on the scale of the Great Depression or whether we were merely duped into helping rich CEOs keep their huge bonuses. What we do know is this -- government (Republicans and Democrats together) acted boldly because they believed a threat to us all required collective action to benefit the entire American community.
How have the corporate interests repaid America for this? In many enraging ways: by lobbying against affordable health insurance for ordinary Americans, fighting against regulations which would prevent another financial collapse, and blocking spending that would help create jobs on Main Street. All of these are hugely disappointing and hypocritical responses, but the concern I wish to focus on at the moment is even more fundamental. Corporate America isn't doing their share to get us out of this crisis. They aren't creating jobs. Quite to the contrary, during the last economic quarter, corporations reported "near-historic" profits, largely by cutting costs, laying off employees and streamlining operations.
Basically, after being bailed out by taxpayers and with nearly unlimited access to cheap money (courtesy of tax payer backed government intervention), corporate America is again getting super rich by firing workers, outsourcing labor and shutting down less profitable divisions. Right now corporations are richer than they have been in more than five decades. Taken together, American corporations have $1.6 trillion in cash on hand, and those reserves represent the highest percentage of assets since 1964.
Given this unprecedented greed, our economy faces a catch-22. Companies won't spend and invest in America until our economy gets back on its feet. Unfortunately, the American economy can't get back on track until companies start spending rather than hoarding money or the government institutes a truly bold direct job creation program (something that's being blocked by Republicans and their corporate lobbyists).
Adding further to this depressing reality is that the massive cash reserves of corporate America, even in the best of times, are far more likely to be used buying new factories and facilities abroad in places like China, Brazil and India, investing in new labor-saving technologies here in America and, of course, for mergers and acquisitions (which nearly always cost jobs and concentrate more wealth at the top).
All this disinvestment in American communities is done in the name of the free market and the supposed laws of economic growth. The problem is that most of these laws are myths. Prosperity is not generated by a small class of bankers and CEOs. Prosperity is created by all of us -- workers, managers, teachers, parents, public servants and everyone else who contributes something of value to the community. Nations that invest wisely in the real needs of people -- education, health care, a safe environment, a secure income -- are not just happier, but more prosperous than those that foster great private accumulations of wealth. No economy can grow strong when most people are insecure and living on the edge. We tried that, and it didn't work.
Corporations owe the American community quality jobs, not because of the laws of the free market but because their success is built on the success of all of us. Corporate wealth is built on a huge number of public subsidies, not the least of which is public education from kindergarten through to America's top universities. Corporate markets around the world thrive under the protection of America's armed forces. Even basic infrastructure from roads and air corridors to basic science research funded from the public coffers to the internet itself (the product of a government research project) form part of an intricate web that ties corporate wealth to all our communities. Literally, we are all part of this extraordinary wealth generation.
Creating a different kind of economy means returning to the values of mutual security, equity and interdependence. This economy would be organized around four core action principles:
- Full employment with a living wage for all of those who want to work
- Public and private investment in industries that offer long-term growth potential while meeting essential human needs (e.g. clean energy, efficient transportation, preventative health care, healthy food, early childhood education, elder care)
- Community planning to focus local creativity, leadership and resources on sustainable economic development
- Reconstruction of the financial and corporate governance systems to foster these goals
America can't succeed as an idea or as an economy unless we all do our part to contribute to our mutually-shared future. Right now, corporate America isn't doing enough, and that must end.
To let corporate America know that you demand more from them,
text CHANGE to 69866.
Follow Deepak Bhargava on Twitter: www.twitter.com/changenation