Fat Pythons And Hungry Humans: Last Week's Real Economic Story

The government has the right rockets at its disposal. Here are two of the biggest: It can hire more employees, and it can finance more infrastructure work. But our leaders aren't willing to fire those rockets.
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A man who declined to be identified walks past a business with an American flag in the window Tuesday, Jan. 24, 2012, in Moberly, Mo. Many in this small town in central Missouri will watch the State of the Union address closely after struggling to create jobs and suffering from a down economy. (AP Photo/Jeff Roberson)
A man who declined to be identified walks past a business with an American flag in the window Tuesday, Jan. 24, 2012, in Moberly, Mo. Many in this small town in central Missouri will watch the State of the Union address closely after struggling to create jobs and suffering from a down economy. (AP Photo/Jeff Roberson)

Last week the Federal Reserve announced another round of qualitative easing to increase employment. That's like stuffing rats down a python's throat and hoping it excretes enough white meat to feed everybody else. Sure, there'll be a little more food for a minute, but it won't be very appealing. And all you'll get in the end is a lot of fat pythons.

At least the Fed's trying, and it deserves credit for the that. It means that the only powerful people who showed an appropriate level of urgency toward the public's ongoing crisis were, ironically, the only ones who won't have to answer to the public this November. (If you want to know more about quantitative easing, here's a visual representation that should help.)

But the media and the politicians missed the point altogether. Whether they were discussing last week's jobs numbers, this week's census data, or the latest announcement by the Federal Reserve, nobody on the evening news seemed to be addressing the subject that is casting a shadow over 100 million dining room tables: the jobs that can't be found, the pay raises that never come, or the bills that can't be paid.

When you turn on the TV, what you hear isn't nearly as important as what you don't hear.

The Fed did something else right: It said that it will continue to inject money into the system until the job situation improves. It's too bad our elected officials aren't facing the problem the same way: by promising to keep treating the patient until it gets well. The unfortunate downside of their strategy is, as a Bank of England report recently confirmed, that in the long run the wealthy will benefit far more from it than the middle class will.

That's why corporate profits have risen so sharply since the financial crisis, even as most people's income was falling. Mitt Romney says "Corporations are people, my friend." But they're not human - not like the people whose financial fortunes are dying.

The Fed's actions stand in sharp contrast to the White House's increasingly passive posture toward the jobs crisis - which is also a crisis of stagnating middle-class wages. And it's a far cry from the radical disinterest toward middle-class and lower income Americans we've seen from the Republicans.

To be sure, last week we saw the nation's policymakers and newsreaders go through their monthly ritual of reacting to the latest round of employment numbers, which they uniformly described as "disappointing." But here's the point the newshawks and politicos never get around to making: For the great majority of Americans, even a "good" jobs report is pretty lousy.

Meanwhile nobody's talking about the rate of job creation that would be needed to restore the American middle class. It's tragic that only 96,000 private sector jobs were created in August. But even a "better" number, like July's figure of 141,000, is far below the number that's needed to restore a vital economy. And a truly positive number - something, say, in the 400,000 range - is easily achieved. As Paul Krugman's always saying, "This isn't rocket science." We know understand the problem and we know how to fix it.

The government has the right rockets at its disposal. Here are two of the biggest: It can hire more employees, and it can finance more infrastructure work. But our leaders aren't willing to fire those rockets. They'd rather pretend that tax cuts will magically do tomorrow what they haven't done yesterday or today.

Could that be because the wealthiest among us don't want to fix the problem? As a recent poll made clear, very-high-earning individuals place a much higher emphasis and cuts to government spending than they do to job creation. And the wealthy control our political conversation, in the halls of media outlets and inside the walls of government.

That's why all our jobs talk is centered around the level of private employment, and turns a blind eye to the number of people who work in government jobs. That's why leaders of both parties describe "deficit spending" at the government level as our most urgent national crisis, when many (if not most) American families face a budget crisis of their own every day.

We're left with the spectacle of public leaders who ae talking about job creation - that is, when they do talk about it -- while at the same time debating a "Grand Bargain" where their only disagreement about jobs isn't how many workers they're willing to hire, but how many they're willing to fire.

And too many of them -- almost all Republicans, and far too many Democrats -- are using the Chicago teacher's strike as an opportunity to dismiss and demonize even our most respected government employees: the people who teach our kids.

Here's the secret they won't mention: Adding government jobs lead to added private sector jobs. When teachers, police officers and firefighters are hired, they spend money -- and businesses hire more employees to meet the demand.

And when you fire them, businesses lay people off.

It's the same with wages: Raise them for the middle class and they'll spend the money, which increases employment. The competition for workers will cause wages ro rise. But if you let the median income fall with each passing year, jobs and wages will keep withering away.

Why aren't we adding more government jobs? Because the wealthy patrons of our political system don't want to pay more in taxes. That's why the Republicans keep pushing illogical economic crack to an audience of wealthy addicts. And this kind of crack makes other people waste away, while the addicts stay fat and happy.

The President does want to raise taxes on the wealthy, but not to anything near the level they paid during most of the last century. And he accepted his party's nomination for a second term without even mentioning the jobs bill he introduced last year -- a bill which Congress rejected, even though it was watered down with relatively unproductive tax breaks to placate the wealthy.

In our wealth-dominated political discourse neither our leaders, nor our candidates, nor our media had much to say about the latest census figures, either. They tell us that median family income is has fallen roughly 8 percent, or $4,400 per year, since the Great Recession began. And that happenede while, as Jared Bernstein notes, while "the share of income going to the top fifth was the highest on record." (And, as Bernstein explains, that's without counting the capital gains income that contributes significantly to the income of the most wealthy.)

Nothing will change unless the public demands action. If not our leaders will continue to address the concerns of the 1 percent rather than the 99 percent. The pythons will keep getting fatter, and rest of us will have nothing better to do than keep sifting through their crap looking for Rat McNuggets.

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