We're not in a double-dip recession yet. We're in a one and a half dip recession.
Consumer confidence is down. Retail sales are down. Home sales are down. Permits for single-family starts are down. The average work week is down. The only things not down are inventories -- unsold stuff is piling up in warehouses and inventories of unsold homes are rising -- and defaults on loans.
The 1.5 dip recession should be causing alarm bells to ring all over official Washington. It should cause deficit hawks to stop squawking about future debt, blue-dog Democrats to stop acting like Republicans, and mainstream Democrats to get some backbone.
The 1.5 dip recession should cause the president to demand a large-scale national jobs program including a new WPA that gets millions of Americans back to work even if government has to pay their wages directly. Included would be zero-interest loans to strapped states and locales, so they didn't have to cut vital services and raise taxes. They could repay when the economy picked up and revenues came in. The national jobs program would also include a one-year payroll tax holiday on the first $20,000 of income.
The president should stop talking and acting on anything else -- not the deficit, not energy, not the environment, not immigration, not implementing the health care law, not education. He should make the whole upcoming mid-term election a national referendum on putting Americans back to work, and his jobs bill. Are you for it or against it?
But none of this is happening. The hawks and blue dogs are still commanding the attention. Herbert Hoover's ghost seems to have captured the nation's capital. We're back to 1932 (or 1937) and the prevailing sentiment is government can't and mustn't do anything but aim to reduce the deficit, even though the economy is going down.
It looks like there'll be an extension of unemployment benefits. (If it weren't for the human suffering involved, I wish the Republicans had been forced to filibuster that bill all summer and show the nation just how much they care about people without jobs.) But the fiscal stimulus resulting from this will be tiny. Jobless benefits are humane but they alone don't get jobs back.
And what about the Fed? It's the last game in town. The 1.5 dip recession should cause Ben Bernanke to revert to buying mortgage-backed securities, buying Treasury bills, buying anything that will get more money into circulation.
But the Fed chair continues to talk about pulling money out of the system and raising short-term rates as the economy improves. During Wednesday's appearance before Congress he made it clear monetary policy won't be loosened; it just won't be tightened for a while. And he reiterated that deficits were "unsustainable."
He admitted unemployment would probably remain high for a long time, and the likelihood of growth was "weighted to the downside," which in Fed-Speak means we're still in trouble. And he said the Fed still has the tools to do what's needed if the economy needs more help.
But would he use the tools now? No. "We need to look at them carefully to make sure we're comfortable with any steps that we take." This is like the captain of the Titanic looking carefully at his lifeboats to make sure he's comfortable with using them as the ship starts sinking.
This post originally appeared at RobertReich.org.
I thought the Prez was a student of history. I also thought he was bright and concerned. Apparently I was wrong. Of course a lot of the problem is those he has around him, and those in Congress. DC is totally out of touch and so in love with itself and its greed it will never change. Govt enslaves People. Always has. Always will. In some countries they just don't admit it.
I MEANT to say unemployment in the Depression was about 25%. I think I said 50%. It was not 50%-- I erred! (first time ever, I swear! hehe)
Democrats and Republicans don't even make a pretense anymore that they are doing the people's work. They openly pour our nation's money and future down the rat hole of military imperialism. They just do it and the public be damned.
But Robert Reich, I love you and your columns! They just don't care any more.... I believe we've lost our democracy to the corporations long since ;-/
We already found out dollars to corporations and the rich haven't created any new jobs. The Repubs gave them $700 billion in TARP, the Federal Reserve bought their bad assets, Obama gave tax cuts and stimulus to small business, the stock market has doubled in Obama's 1.5 years and they haven't created any jobs; so there is no point in throwing money (corporate welfare and tax cuts) to the corporations and rich since they just hoard it or chase paper investments rather than create jobs.
But we're getting there. And we just spent another $59 billion on Afghanistan, a war ONLY big business, which owns the Govt, wants.
If we want to beat this it is to equate the war with the dismal economy. Wonder if that will happen.
Also, this president assumes the "Progressives have no place to go." We do. We don't have to vote. I have ALWAYS voted (and figure if you don't you have no right to complain), but if the Dems implode, if the Repubs who are openly for the rich vs. the poor, well, as a third world nation maybe one day there will be a revolution. Of course by then climate change will have baked us to a potato chip so who cares.
Sorry if this sounds a bit overboard.... it's been a bad day ;-/
That is another thing that has bled the border states... welfare to illegals. I am not saying it is the whole problem; obviously these folks are not the Banksters. Yet, with the drain on schools, hospitals, drs., food stamps and social programs, I'm sure the CA economy would be 25% better without millions of folks and their children and children's childrens soaking up benefits that no other country gives illegals.
Gibbs came out last week rattling off all the things this administration has done since taking office. Reality 5,000 or more are losing their homes everyday, and thousands are hitting the 99 week mark on their unemployment, millions are looking for work. And, 60 million or 20% of the american population is experiencing extreme hardship. But help is on the way.
The 1.5 dip recession should be causing alarm bells to ring all over official Washington. It should cause deficit hawks to stop squawking about future debt, blue-dog Democrats to stop acting like Republicans, and mainstream Democrats to get some backbone.
MOSTLY THEY NEED TO GET BACK IN TOUCH WITH REALITY.
the next world war is unfolding just as she predicted
between the haves..and the have nots...
i mean the 'have brains' and the 'do not have brains'