The economy is said to be recovering, but the people are not. The jobs are gone, and haven't started to come back. 25 million people are in need of full time work. Incomes are stagnant; more and more are losing health care. Even the uptick in jobs that will be reported on Friday is misleading, reflecting temporary hiring for the census and recovery from snow bound February.
So what is the strategy? Obama initially got the big things right. A big recovery plan -- featuring deficit financed investment in infrastructure, aid to states and localities, a boost to new energy -- would stem the collapse and put people to work. The bank rescue would get the financial system lending again. Investments in new energy -- and in education, research and development and infrastructure -- would rebuild the economy on a new foundation, while capturing a leading role in the new green industrial revolution.
But as T.S. Eliot wrote, between the vision and the act lies the shadow. The recovery plan was weakened by conservatives in both parties who larded in top end tax cuts and cut out infrastructure spending. People saved the tax cuts that they've forgotten they ever got. And budget cuts and tax hikes in the states and localities -- 50 little Herbert Hoovers Paul Krugman called them -- effectively negated the federal stimulus. The energy money got spent, but most of the jobs, the Apollo Alliance found, were created abroad, where countries from Spain to China had aggressive industrial policies designed to capture the new industries. The start made on new investments in education and infrastructure is now running into the budget freeze, and the premature turn to deficit reduction in Washington.
Americans, not surprisingly, are frustrated and angry. Recent polling by the Democracy Corps shows people are growing more pessimistic about the economy. A growing majority think the country is significantly on the wrong track. Growing numbers disapprove of the president's and the Democratic Congress' performance on the economy. A growing number are ready to punish Democrats at the polls in November in protest. It is time to retool.
Jobs, jobs, jobs
The first order of business is for the president to focus on jobs. He vowed to do so in the State of the Union address and then spent the next months talking about health care. Now the temptation will be to sell the health care triumph, push financial reform, and revive international initiatives from arms control to the Middle East. All vital efforts, but none can get in the way of a concerted focus on jobs.
First, the president needs to explain to Americans where we are. That we can't wait for a recovery to create jobs, because there is no recovery to the old economy. That economy was based on debt financed bubbles that burst. We can't go back there and should not want to.
That requires we dig out of a very deep hole. This will take time. In the short term, the president should get back in front of the jobs debate in Washington. He put some $260 billion in his budget for jobs creation and unemployment support -- but has said little about it since. It is time to champion measures big enough to deal with the scope of the challenge. 105 co-sponsors have joined Rep. George Miller on legislation calling for $100 billion to go to localities and non-profits for jobs. Estimates are that it could save or generate over a million jobs. Conservatives in both parties scorn spending more money on jobs, even as layoffs of teachers and police and fire fighters increase. The president should take this on and champion the bill as one part of the response, calling for paying for it by reviving his tax on the banks to get our money back.
Then the White House should turn tax day, April 15, into trade day. On that date, the Treasury must decide whether to recognize reality and name China, among others, as a country that is manipulating its currency to gain trade advantage. Do it. Speak truth. Enlist allies to join. Declare that the US will no longer simply ignore the reality that some countries are playing by a different set of rules. While the president takes the issue to the G-20, the Congress will start hearing s on tariffs to counter the effect of undervalued currencies. The labor movement could launch a drive across the country to pass buy America standards for public procurement at the state and local level. The common sense proposition - that taxpayer dollars should be spent to create maximum jobs here, not abroad - is popular across the political divides.
The point of all of this is simple and necessary. China and the mercantilist nations have to be confronted with the reality that we are not going back to the old economy -- where the US borrows money to serve as the consumer of last resort to the world and they can depend totally on export led growth. Global companies must be put on notice that they have to make things in America if they expect access to America's markets. And the global community has to find a way to enforce the stated commitment to moving to a more balanced trade system through growth rather than recession.
Then the White House could launch a Rebuild America tour, calling attention to the staggering costs of an investment deficit that results in collapsing sewers, fouled drinking water, clogged roads and slow trains, decrepit schools, an outmoded energy grid and more. Use this to champion a public investment bank, able to mobilize public and private capital to invest in rebuilding America. Invite states and localities to join. Enlist public and private pension funds -- the workers' money - to invest with government guarantees in rebuilding America and putting workers back to work.
The harsh reality is that there are no short term fixes to mass unemployment. As the president has said, we have to rebuild the economy on a new foundation. All that takes time. Americans understand the trouble we're in, but get sensibly angry when they see the big banks handing out million dollar bonuses while their jobs are gone and their incomes flat. They can't figure out why we'd spend taxpayers' money building windmills in China. They'll be patient - if and only if they are convinced that the president has a strategy that makes sense, and that he is focused on pursuing.
Obama is blessed with a conservative opposition that is clueless. They insist on arguing that if we just do more of what drove us into this ditch, we'll surely get out. The president easily wins the argument about why we need a new course. Voters are turning to Republicans not for direction but for protest. Its time for the president to step up, make the argument, define the agenda, and drive the Congress to act. It is long past time to focus on jobs.
Follow Robert L. Borosage on Twitter: www.twitter.com/borosage
Francine Hardaway: Don't Stop Fighting for Finance Reform
Many thousands of five-year adjustable mortgages will reset this year, and 25 percent of homeowners are still underwater in their mortgages even as these resets continue to occur.
The fact that job creation needs funding and funding people as a way to build manufacturing output is not the new way that was and is the way of the past. Now you sit in front of a computer screen and tell people how to risk their hard-earned pay, just to have an investment adviser remove it with the promise of more. So why do the wealthy American senate politicians have to back job creation when they make millions by financial services.
When l started selling money myself so long ago back in the 70` and 80`s little did l know that it would turn into the greed of today. It was then in the UK we had a manufacturing base and people mattered and care existed in employers and they cared for their employees, now nothing but profit matters and the more the better.
America downhill every year since 1980, and I know how it was in the 50's 60's and 70's. Problems? Yes, but we had factories, jobs and even the minimum wage could buy a home. Since Raygun it is all big business and money for tycoons. I have been a member of the "decline to state" party since 1980 the shameful acts of Democrats' and Republicans' greed and avarice, their breaking a sacred fiduciary to We the People. This nation needs 3 or 4 viable political parties and a complete cleansing of the Capitol. Bribes and lobbyists should be banned from Washington. Congress, President and Cabinet should have their finances including "trusts" placed in a blind trust overseen by courts. Politicians should recuse themselves from voting on tax cuts for the rich, if they are rich and so on.
BY THE WAY unemployed folks are in terrible straights and need help, friends and support. Don't turn your back, come see and put on their shoes. They want jobs and dignity, but suffer and go homeless -- even families with small children. Has our love grown so cold that we want our fellow Americans to die and decrease the surplus population? Visit, read, learn, join and help:
http://unemployed-friends.forumotion.com/forum.htm
I am ending my rant sorry...I am angry at both parties. I will now go back to my politician voodoo dolls and keep quiet.
But surely, he fully understands the patience of the middle class on jobs is limited. Jobs, Jobs, Jobs, cannot be emphasized long or hard enough. A rich nation of poverty stricken citizens? Burdened with debt? These ideas/thoughts are not synonomous-- when we think first world and developed.
We need to get the tink-tank, the president's Ecnomic Roundtable Table-- sweating' burning the candle late into the night-- to bring us answers. That's their purpose. The best minds--economists, financiers, human development specialists are needed to do this job. Carrots are dwindling everywhere I look-- time use the 'stick' to dictate results. http://www.youtube.com/watch?v=2BZWyNNckO8
America has been living in a false sense of prosperity for a couple of decades, therefore needing "bubbles" to give the illusion of wealth where none was produced. The Real Estate case was perfect: it felt like everyone was getting ahead due to an asset which appeared to be appreciating with all the promotion from the participating industries benefiting. In fact, as we are still unravelling, it was a mirage, a pyramid scheme, where the last to get on board were left holding the bag. It happened because we were looking for a vehicle to prosperity, anything will do-because real creation of wealth escapes us!
The problem is that Globalization is a scheme which "leveled the playing field", meaning that the workers of China and India have an opportunity to get wealthier while American workers have to get poorer while the "investor class" gets richer whoever they are, that's just the money.
This "leveling" may have its humanitarian benefit of enriching poor nations but we have to face that it is empoverishing America. The globalizers never cared about the simple fact that the American consumer had money to buy stuff because that same consumer was getting paid to make stuff! By bringing the stuff from China, for a while you get the benefit of the lower price but then the consumer is tapped out...
We have to refill the treasure-with maybe a good old fashioned WW 2 type Bond sale rally or by saving or by raising interest rates so high they're irresistible. You cannot spend ,spend ,spend while saving. One of the innovations remember was that little savers didnt matter -they were "squirrels" as Key bank put it. What you wanted as a bank was the big game. "Water Buffalo, Elephants-the hedgefunds. Well nobody re-invented the wheel. If you think what the financial guys are saying is too deep for you-you're being scammed.
He is a Liberal zealot!
He is wrong!
Come on…….. this is economic Armageddon.
People forget you ever read this. Try to purge your mind.
This guy’s conclusions would doom the Nation for decades.
Meanwhile the international monetary financier debt based market system is in an irreversible, accelerating, collapsing operation. Hunger, homelessness, foreclosures, bankruptcies and chronic unemployment show no signs of abatement.
Congress dedicates the nation's financial resources to enemies of the United States. The U.S. is financing its', and your own, indebtedness. Constant demands for your stupidity, a lowered standard of living and citizenship will doom this nation foe centuries.
You want to crack smart.
Notice the “workers of the world unite†implication with the requisite “government guarantees†back-stop.
Fairly regulated capitalism, without the staggering weight of the current federal and state legislation, written by a group of lawyers who by profession, only know how to “take their cut†from others productivity, is not only the answer, it’s the only answer. (80% of Congressmen are lawyers)
Boiling down your solution - protectionism, forcing out global corporations, and igniting a trade war with China. (to name a few)
Those of you with severely limited business acumen (and I’m being generous) should stay out of this debate. You embarrass yourself.
Okay. Good luck with that. Never been tried before.
For many years now, this form of western capitalism has maximized profits by reducing labour costs; and importing cheap products from elsewhere without the social input costs it should have had (ie education etc.) We all knew it was unsustainable. We hoped technology was IT.
CEO didn’t care that we were buying these products with borrowed Chinese money obtained from savings from labour cuts… what irony! They cared that capital was used for concentrating wealth in the hands of the few; this by definition, is enslavement, destructive and for sure un-American. But, in the process they have proven a valuable natural law… Capitalism pushed industrial technology to a point beyond which more advances will lead to further job cuts… the industrial model does not work going forward. Get over it!
Both capitalist and socialist government fail to recognize the limits of the industrial age model and continue pretending that they can save us. Our challenge now is to invent the modern day equivalent of the Magna Carta. No doubt our children will be less inclined to hang on to the capital vs social dogma of the last century and I am hopeful that they too will contribute to improving the human condition in the world.
(Answer: VERY worthless paper.)
Today we have, not only rampant inflation (shades of 1920's Germany ... but you can't burn electronic money in your stove), but bald-faced deliberate securities fraud that is aided and abetted by bribery.
A funny thing happens when you lose another man's Trust: you never get it back. If you are a duplicitous liar, you never again will be regarded as anything else.
1) It is obvious that your business is to get government funding.
2) If you want jobs, get government out of the way.
3) If you want jobs, and you insist on government, focus government on education for the sciences and engineering as well as mathematics.
4) Commit to reducing government period. To survive this committment will need to 50% or greater. If the corporations can do it, you can too.
5) Understand there is no such thing as a "green job".
6) Realize that innovation is Americas last chance. Your people think that social studies and law are the only fields that matter - realize that you are correct - they are the only fields that need to be cut at the 90%-95% .
7) Get out and learn what it takes to build a "world -class" product, a product that has demand from around the world. It is crystal clear to anyone who has, that you haven't. I gaurantee you your view of the world will change.
You forgot tax cuts! The jobs just roll in after we cut taxes for the corporations.
Been there. Recession happened. Consider recent history next time.
Small businesses employ most of you.
It’s not necessarily Repub “talking points….. more to the point, it’s the Dem’s/Lib’s who can’t help but tinker with the tax code, labor laws, fees, charges, in the name of “social engineeringâ€. Remember, “We shouldn’t let a crisis go to wasteâ€.
Another Liberal MBA (Mainly Bureaucratic Annoyances)
Perhaps said better as:
"For where thy treasure is, there shall your heart be also."
THERE IS NO HOPE WE WILL EVER RECOVER FROM THIS TRIPLE WHAMMY.
What Borosage misses is that our 21st century infrastructure project must be a new industry to develop an electric grid and a parallel industry to manufacture wind turbines and solar systems.
That is our "automotive industry" for 21st century...that is our suture on the hemorrhage of dollars going to the Middle East...and that is the only hope to cure the planet's climate fever.
And with those new industries and a realistic and fair tax, we can hire the needed teachers and cops, fix our roads and schools, and maybe fell a few of a few of those dinosaur TVA dams and let the rivers run again.
But just as surely as that strategy will obscure joblessness into the 2090s, just as surely it will not, unless we make certain those jobs remain non-NAFTA'able.