The Zero Economy, Robert Reich.org, September 2, 2011, by Robert Reich, used with permission, quoted verbatim:
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 disappearinig, their pay is dropping, their medical bills are soaring.
And businesses won’t hire without more sales.
So we’re in a vicous 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 was the nation’s 22nd Secretary of Labor under Bill Clinton and is Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations. In 2008, Time Magazine named him one of the Ten Most Successful Cabinet Members of the century. He has written eleven books, including “The Work of Nations,” which has been translated into 22 languages. His recent book is “Supercapitalism.” For Professor Reich’s book page for Supercaptialism at Amazon, go here. Reich’s newest book, Aftershock: The Next Economy and America’s Future has been released September 21, and is available for ordering at this link (Amazon.com). The above article is from Reich’s new blog, and can be viewed here.
Robert Reich’s commentaries are available for listening to at Publicradio.com. Watch the video Aftershock: The next economy and America’s future (about his new book). Thanks to Professor Reich for permission to publish his articles on an ongoing basis.
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Abbreviated Pundit Round-up for July 7, 2011
Evans Liberal Politics
July 7, 2011
Abbreviated Pundit Round-up for July 7, 2011
Abbreviated Pundit Round-up, Daily Kos, July 7, 2011, by DemFromCT, used with permission, quoted verbatim:
NY Times:
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Ah, cutting to the chase.
The Hill:
Politico:
Now, that’ll make for some competition for both Romney and Bachmann, even if he doesn’t win. Also-rans Pawlenty and Huntsman will be starved for media oxygen and we might actually see more stories written that their campaigns don’t measure up and they won’t be winning.
This was from Matt Bai last month:
So what’s changed? Nothing. A combo of blind ambition and wariness of Romney will likely prove those predicting a Perry run to be correct. And that Perry might run is more evidence of Romney’s weakness than his fund raising.
NY Times on Rupert Murdoch’s problems in the UK:
Not all the news is bad.
The Onion:
Rumor has it Harry, Ron and Hermione have already destroyed the first three, but the last four will be harder to find.
DemFromCT is a longtime member of the Daily Kos community with interests ranging from polling to Iraq to bird flu, and has graciously agreed to allow us here at Evans Liberal Politics to publish his articles on an ongoing basis. He is a founding editor of Flu Wiki (www.fluwikie.com) and its sister site, the Flu Wiki Forum (www.newfluwiki2.com). Since its inception in June 2005, Flu Wiki has grown into an international clearinghouse of pandemic influenza information and links.
You can view his diaries at Daily Kos, here. DemFromCT is a featured writer at Daily Kos, and you can read more about him here. You are invited to email DemFromCT.
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