If future job creation reaches about 208,000 jobs per month, the average monthly job creation for the best year for job creation in the 2000s, it will take almost 140 months (about 11.5 years) to reach pre-recession employment levels. In a more optimistic scenario with 321,000 jobs created per month, the average monthly job creation for the best year in the 1990s, it will take 59 months (almost 5 years).
~Michael Greenstone, Adam Looney The Long Road Back to Full Employment: How the Great Recession Compares to Previous U.S. Recessions, The Brookings Institution
This may be the first time in American history that the super-rich are experiencing an economic boom while the rest of us are coping with serious economic difficulties. Even during the depths of the Great Depression there was some equality of suffering. Of course, the wealthy weren't exactly standing in bread lines wondering if they'd ever work again. But the rich and the poor both felt the crisis. This time around, it's a Tale of Two Cities: the super-rich are doing just fine, thanks to taxpayer largess, even as the rest of us are staggering through the highest sustained unemployment level since 1937.
Our Wall Street billionaires easily weathered the financial storm that they themselves created. It's as if nothing had happened. The financial reforms Congress passed are weak. The biggest banks actually are bigger. And Wall Street profits and bonuses are approaching record highs. That's in stark contrast with the fact that more than 29 million Americans are without work or have been forced into part-time jobs.
With the Republican landslide, the super-rich have nothing to fear from Congress. No need to worry about tax increases or tighter regulations now. The hedge funds will be able to hang on to their 15 percent tax rate (by claiming their earnings as capital gains) while raking in $900,000 an hour (not a typo). Meanwhile the pressure mounts to cut social spending -- because, of course, we've got to combat the large deficits we racked up by giving tax breaks to the rich, bailing out Wall Street, and dealing with the financial crash that Wall Street created. (We get a deficit commission instead of a jobs commission?)
But the real mystery is how quiet progressives are. We seem constitutionally incapable of facing the enormity of the employment crisis.
As far as I can tell, most liberal advocacy groups are carrying on as if the economy hadn't crashed at all. It's like we're all stuck in our remote silos -- each working on our own separate issues. We have no shared vision, shared programs or shared will to tackle the broader unemployment crisis. We hope the economy will somehow resurrect itself so that we can go on fighting for our favorite cause without any further interruptions.
Meanwhile, the right, especially the Tea Party, definitely is in crisis mode, and they have a plan. In my opinion they have misidentified the crisis - big government and debt - and have the wrong plan -- cut taxes and government spending. But they have a vision, they have passion, and they're not afraid to challenge not only the Democrats, but the Republicans. They've hit on a clever theory to explain the jobs crisis, one that can't be disproved by facts: It's caused by big government's interference in the economy. The solution: slice government spending and regulations so that free enterprise can prosper. And if unemployment still remains high after budget cuts--well, then we just didn't cut enough. It's a perfect Catch 22.
And the rest of us are saying... what? What do environmentalists propose to do about the jobs crisis? What is the women's movement's economic program? What do progressives involved in healthcare or education think we should do to create the 22 million new jobs we need to get back to full employment?
Yes, there's a lot of positive discussion about rebuilding our economy through green jobs and renewable energy. But the scale of these proposals is far too small to put much of a dent in the unemployment numbers. Are we all too afraid to say what's really needed?
We need hundreds of billions of dollars of public investment, right now, paid by taxes on the super-rich.
Why are progressives so timid? Part of the answer lies in our permanent attachment to the Democratic Party. It seems that we can't ever imagine a time when it would be appropriate to abandon or at least openly fight with the Dems -- even those who abandoned us long ago. What will we do as the remaining Blue Dogs move even further to the right, joining with the Republicans on deficit reduction, gutting health care reform, outlawing abortions and stonewalling on climate change? One thing is certain -- the Democratic Party is in no mood to lay out a bold national proposal to create the millions of new jobs we need. Most are tacking to the "center" to avoid the fate of Russ Feingold, the very best of the bunch.
What would a massive job creation program look like?
Let's start with a no-brainer: We hire an army of at least one million installers to weatherize every home and business in the country. Hiring all these workers --at decent wages --through tens of thousands of local contractors will probably add another 400,000 jobs (in addition to the original million) as these re-employed workers spend their earnings. Households and businesses will save on their energy bills, and we'll reduce global warming emissions. The budget crisis facing state governments will ease as tax dollars start pouring in and unemployment insurance claims plummet. We'll trigger an economic upswing that's also good for the environment.
Next, we should fund free higher education at all public colleges and universities, a social good that will also open up the job market by drawing people from the workforce into the educational system. A hiring and construction boom on campuses all over the country will generate a flood of jobs for our millions of unemployed construction workers. This is precisely how the GI Bill of Rights averted what could have been a staggering unemployment crisis after WWII -- a time when millions of returning veterans were coming back home in search of work. Through the GI bill, three million instead went to school. Congressional studies show that the GI Bill returned almost $7 dollars of economic growth for every dollar invested -- probably the best investment the federal government ever made.
We should also invest massively in alternative energy research, in rebuilding and enhancing our infrastructure, and in meeting a myriad of other needs in our communities. Ask every town in the country to come up with ten projects that need doing right now, and then have the federal government fund them. The ripple effect would wake up our slumbering economy.
Oh, but won't all this cost a fortune? Aren't we already tapped out from Wall Street bailouts and the half-assed stimulus program (not to mention two wars)?
Good question -- it gets us to the best part of our in-your-face program. We need to make those who crushed our economy, and whom we so generously bailed out, foot the bill. The American people, I believe, would support a windfall tax on financial profits and bonuses and eliminating tax loopholes on hedge funds to fund the jobs we so desperately need.
Time for a Jobs Party?
Will any of this pass in the near future? Of course not. But it'll never happen if we don't propose what is really needed.
We have no prayer of tackling the jobs crisis until we articulate a clear-cut agenda and start pressing for it. And we can't do it alone. We need a sustained, organized voice independent of the Democratic Party that focuses clearly on the jobs crisis. In fact, we should take a cold hard look at creating a Jobs Party. Maybe, one day, it would become a third party that would truly vie for power. But at the very least it could create the same kind of chaos among the Democrats as the Tea Party is creating among the Republicans. Wouldn't it be nice to see Democratic officials, fearing primary fights, tripping all over themselves to proclaim their allegiance to the Jobs Party agenda?
Right now, the only conversation we're hearing on jobs is a boring rerun of failed neo-liberalism - cut taxes on the super-rich, deregulate big business and pray for rain. Instead, we need to force politicians to engage in a much more aggressive national conversation about jobs. How are we are going to create the 22 million new jobs to get us back near full-employment?
Will it really take eleven years or more, as the Brookings Institution study (cited above) suggests, for us to get these jobs back? That's up to us. A Jobs Party with moxie could speed up the timetable during this new era of joblessness.
Maybe all this sound fanciful and unrealistic. But let's remind ourselves of how fast the world is changing. Did anyone believe that President Obama could go from being America's darling to chopped liver in less than two years? Did anyone believe that a Tea Party would become a "credible" force among more than 40 percent of the electorate by pushing an agenda that died with Barry Goldwater a generation ago?
Actually, the most fanciful path of all might be hoping we can muddle through indefinitely with the Democrats while ignoring the employment crisis as we plug away, day after day, inside our issue silos.
Come on -- let's say what we really believe in before we forget how.
Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009. He is currently working on a new book, How to Earn $900,000 an Hour: The Rise of Wall Street Billionaires and the New Class War, (hopefully to be published in 2011).