The Bureau of Labor Statistics reports today no jobs were created in August. Zero. Nada.
Well, not quite. The strike at Verizon reduced the labor force by 45,000. Minnesota government employees returned to work, adding 22,000. So in reality, America added 23,000 jobs. Almost zero.
In reality, worse than zero. We need 125,000 a month merely to keep up with population growth. So the hole continues to deepen.
Since this Depression began at the end of 2007, America's potential labor force -- working-age people who want jobs -- has grown by over 7 million. But since then the number of Americans with jobs has shrunk by more than 300,000.
If this doesn't prompt President Obama to unveil a bold jobs plan next Thursday, I don't know what will.
The problem is on the demand side. Consumers (whose spending is 70 percent of the economy) can't boost the economy on their own. They're still too burdened by debt, especially on homes that are worth less than their mortgages. Their jobs are disappearing, their pay is dropping, their medical bills are soaring.
And businesses won't hire without more sales.
So we're in a vicious cycle.
Republicans continue to claim businesses aren't hiring because they're uncertain about regulatory costs. Or they can't find the skilled workers they need.
Baloney. If these were the reasons businesses weren't hiring -- and demand were growing -- you'd expect companies to make more use of their current employees. The length of the average workweek would be increasing.
But the length of the average workweek has been dropping. In August it declined for the third month in a row, to 34.2 hours. That's back to where it was at the start of the year - barely longer than what it was at its shortest point two years ago (33.7 hours in June 2009).
It's demand, stupid.
So what does a sane nation do when the consumers and businesses can't boost the economy on their own?
Government becomes the purchaser of last resort. It hires directly (a new WPA and Civilian Conservation Corps, for example). It helps states and locales, so they don't have to continue to slash payrolls and public services. (The help could be structured as a loan, to be repaid when unemployment drops to, say, 6 percent.)
And it hires indirectly -- contracting with companies to rebuild our crumbling infrastructure, including school buildings, to take another example.
Not only does this create jobs but also puts money in the hands of all the people who get the jobs, so they can turn around and buy the goods and services they need -- generating more jobs.
Get it? Not exactly rocket science.
So why don't Republicans get it? Either they're knaves -- they want the economy to stay awful through next Election Day so Obama gets the boot. Or they're fools -- they've bought the lie that reducing the deficit now creates more jobs.
Every time you hear anyone say we're "broke" or "can't afford to spend more," tell them we'll be in worse shape if we don't. If the economy remains dead in the water, the ratio of public debt to GDP balloons.
And remind them that the federal government can now borrow at fire-sale rates. Interest on the ten-year Treasury bill is 2 percent.
Do you hear me, Mr. President? Please -- be bold next week. And if, as expected, Republicans refuse to go along, take it to the people. Mobilize the public. Use the bully pulpit. That's what you have it for.
One more thing, Mr. President. You also have to tackle inequality. When so much income and wealth continues to flow to the very top, America's vast middle class still won't have enough purchasing power to boost the economy. Priming the pump is necessary but won't be sufficient without enough water in the well.
Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.
Follow Robert Reich on Twitter: www.twitter.com/RBReich
How ironic that this is mentioned, but the implications are not. Two-percent interest on 10-year T-bills should tell you something -- China, etc are about done with financing our standard of living. The world is starting to see that investing in the US and its T-bills (aka debt) is a rotten deal, and getting worse.
Summarizes the Tea Party and covers the manipulative means the Republicans use to advance inequality and gain power for those who are wealthy.
un·cer·tain·ty- Noun
1. The state of not having all laws and taxes unfairly favor the wealthy and corporations over all Americans. “Job Creators aren’t creating jobs because of uncertainty.â€
2. A false claim that can’t be disproved as a cause for corporate economic decisions or that can be claimed no matter how many concessions are made to corporate greed: “We gave them 10 years of Bush Tax Cuts, decades of stagnant employee wages, tax credits for shipping jobs overseas, pork barrel bonanzas, no-bid contracts, trillions of dollars worth of tax loopholes, subsidies to help them pay the expenses of their own billion dollar profits business and cut the deficit as they wanted but the reason corporations aren’t hiring is because of uncertainty.
We're seeing the greatest transfer of wealth in our country's history and it's being taken from the middle class, who cannot afford it. into the eager hands at the top of our economy, who don't actually need it.
Worse, that money is being used to destroy our democracy by buying off our representatives once they are elected and taking away the power of our votes. This happened in France in the sixteen and seventeen hundreds as the government raised money by selling official positions to the wealthy and taxing the peasantry. This should cause concern in America, inasmuch as the experiment in France ended with a very bloody revolution.
By the way. Great rant! totally agree with what you posted on your blog. F&F
Thanks for the great article on the perils of government intervention in markets & the ultimate destruction that it causes. It is good to see that the markets are still working hard to correct decades of malinvestment that has caused a sectoral restructuring of our economy into unsustainable industries, construction, housing, government services, finance, insurance, etc. As such, no amount of Keynesian stimulus work as the free market & capitalist forces battle to correct these decades of government mismanagement. For us to truly grow out of this, we need autonomous real private sector growth, predicated on sound market fundamentals, not government efforts to prop up unsustainable industries with continued borrow-&-spend payola.
You state, ‘If these were the reasons businesses weren't hiring -- & demand were growing -- you'd expect companies to make more use of their current employees.’
Unless uncertainty IS causing demand to drop as what the Republicans are claiming. No company in its right mind hires & expands business if they think the government is going to make adverse decisions that will affect its businesses demand or profitability negatively. Obama’s record has been dismal in this area & all companies are on a hiring strike until they see some greater clarity that he really is PRO-JOBs, PRO-GROWTH, which means being PRO-Business. Instead all they see is more’ tax those making the money & give it to those not making the money’. This is a PRO-EPIC-FAIL policy.
Kai
None the less, this power can be used just as it is used to fund wars and upper class to resist a decline in money due to the recession. (The amount of money is measured in what money buys; so, we have less money when people aren't spending.) The power to produce more money is a resource. Fiscal responsibility will protect that resource, but the point should be to use it when we need it.
You state, ‘It is only logical that any service organizati¬on should so price itself as to cover its costs.’
Sure. Agreed. The government should price itself to fund common services, with these services being defined and limited, specifically to that of protector of property rights and as an unbiased regulator of fair process, not as a subjective distributor of fair outcome (for some at the expense of others) via the distribution of resources and wealth from one group of the population for the other since that goes beyond paying for itself and instead goes toward paying others.
You state, ‘The United States makes its own currency and it can just make whatever it takes to meet expenses but this will devalue the dollar and the complicati¬ons tend to run against the least powerful users of money’
You mean the old and retired and the poor and unemployed? Those powerful groups that either have their retirement money and life savings in fixed income that is destroyed by inflation, or the poor whose subsistence level is stressed by inflation of commodities and cheap imports (the two baskets of goods most susceptible to inflation)? Or do you mean the unemployed who see factors of production go up (oil makes up 60% of our trade deficit) and the economy slow down thereby limiting jobs opportunities for them. Agreed. The government is expropriating their wealth and their life from these powerful users of money.
Kai
You state, ‘None the less, this power can be used just as it is used to fund wars & upper class to resist a decline in money due to the recession.’
Great! Another reason to limit the government’s ability to tax & transfer funds from those who make it to those who do not, the unions, the poor, green energy, cash for clunkers, & even the rich. Thanks for your support.
You state, ‘The amount of money is measured in what money buys; so, we have less money when people aren't spending’
What? We have more savings when we spend less. & savings is used for ‘real investment’ which spurs real autonomous private sector growth & the real jobs that come with it; not this artificial unsustainable Keynesian nonsense that no business in its right mind will use as justification to hire.
You state, ‘The power to produce more money is a resource.’
Agreed.. We need to dial back the pro-union, pro-EPA, pro-regulation, pro-tax forces that are impeding those ‘money producing’ resources, also known as businesses & the wealthy. Thanks again for making my point.
You state, ‘Fiscal responsibi¬lity will protect that resource, but the point should be to use it when we need it.’
Agreed. So let’s get the government out of the way via its waste & regulations, & let thesemoney making resources get to work. We need less regime uncertainty, so businesses will call off their capital & hiring strikes.
Kai
Agree with you that thera are no totally free markets. However, those that are freer are generally more prosperous. America needs to go back to the small government and free market principles that once made us great.
Kai
On the household survey total employed fell by 49,000, while we added 200,000 people to the population. We needed 200,000 new jobs just to absorb the working age population increase and instead we lost 49,000.
So in point of fact, adjusted for workforce population change, we printed a negative 250,000!
LOL. this is Obama we are talking about.
the only reason Obama would pursue a bold jobs plan would be if the GOP decided that was what they wanted and then they once again twisted Obamas arm until he caved in to their demands like he always does.
I failed to mention the money generated from the things I mentioned above would be spent making life better for American workers, growing our economy in the process.â€
Why get over it? Because corporate media refuse to discuss it and the American people are to afraid to discuss it?
Your response is more blather! Not a real response.
'Get over it' is what Justice Scalia said after they gave George W. the Presidency. How'd that work out for US? I'm tired of 'get over it' as an answer. I would like to have a discussion and the best I get is, 'get over it'? Where have all our voices gone? Taken away by an 'American Czar', leading us in an un-just war?
It's easier to 'move us along', when people don't know facts necessary to make educated choices. Hemp's positive history was removed from educational material in America. 'Strategery'?
Hemp is a natural competitor, which grows like a weed and could help the planet if we would only take heed of our needs and stop moving along.
'Get over it'? 'Give it up', we can't do better'? Yes we can!
http://www.mhhe.com/biosci/pae/botany/botany_map/articles/article_10.html In 1998, Phytotech, along with Consolidated Growers and Processors (CGP) and the Ukraine's Institute of Bast Crops, planted industrial hemp, Cannabis sp., for the purpose of removing contaminants near the Chernobyl site. Cannabis is in the Cannabidaceae family and is valuable for its fiber, which is used in ropes and other products. This industrial variety of hemp, incidentally, has only trace amounts of THC, the chemical that produces the "high" in a plant of the same genus commonly known as marijuana.
Overall, phytoremediation has great potential for cleaning up toxic metals, pesticides, solvents, gasoline, and explosives. The U.S. Environmental Protection Agency (EPA) estimates that more than 30,000 sites in the United States alone require hazardous waste treatment. Restoring these areas and their soil, as well as disposing of the wastes, are costly projects, but the costs are expected to be reduced drastically if plants provide the phytoremediation results everyone is hoping for.
The re-introduction of hemp into American culture could be a two for: It could grow our economy and filter our environment. Given the amount of radiation released by the nuclear accident in Japan, which is now circling the globe, it's time to talk about what we can do to counter the radiation we will soon be dealing with.
I don't know if you are trying to insult me with your 'now go enjoy your private stash and sport the hemp necklaces'? But, that's not a conversation, that's just being rude. Any fool can be rude. Are you a fool? Or, can you answer my questions with facts?
If you're referencig cannabis, they couldn't mandate everyone to smoke it. There are some medical conditions, which require people to avoid cannabis. Some heart problems are affected by THC. Even people who support cannabis legalization wouldn't support a mandate.
Just thought I would answer your thingy with my own thingy. :)