Saturday, July 30, 2011

"Where Are The Jobs?"

By Mary Claire Kendall

Unemployed men queued outside a Depression soup kitchen opened in Chicago
by Al Capone, in an effort to clean up his public image.  The storefront sign
 reads: "Free Soup, Coffee and Doughnuts for the Unemployed."   
February 1931. 306-NT-165.319c. (american_cities_129.jpg
Credit: Unknown. Source: American Archives.

This column, originally published on July 16, is as relevant as ever.  The situation continues to deteriorate, with "zero" jobs reported in August, a number not seen since 1945; while Obama is still talking about infrastructure projects and job-creation tax credits as the road to recovery. Now packaged as "The American Jobs Act,"  he announced it to great fanfare at a Joint Session of Congress on September 8. Unfortunately, as employers, Americans at large, Republicans and even Democrats, are signaling, his vague plan, costing $447 billion - paid for by small-business-choking tax hikes - fails to revive the private sector's job creating engine. Mitt Romney, on the other hand, has a detailed plan, released September 6, which focuses squarely on the private sector's central role in creating jobs. House Speaker John Boehner (R-OH), likewise, spoke to Obama's government-as-prime-mover myopia in remarks to the Economic Club of Washington today. "The president's proposals," he said, "are a poor substitute for the pro-growth policies that are needed to remove barriers to job creation in America."  

Washington, DC, July 16, 2011“Where are the jobs?,” House Speaker John Boehner tweeted in the recent “twitter town hall” hosted by President Barack Obama.

It's a fair question.

Two days later, the government reported the unemployment rate edged up to 9.2% in June, from 9.1%, while “real unemployment” was 16.2%. Just 18,000 jobs were added to the U.S. economy—far less than expected, dashing hopes of a fast rebound.

As George Will recently wrote, “Is this the best we can do?”

Obama, in typical fashion, answered Boehner by blaming Republicans—this time for not supporting big “infrastructure and public works programs” to create jobs, the need for which he reiterated in Rose Garden remarks following the dismal jobs report.

Of course, no one argues against the need for repair and construction of roads, railways, bridges, tunnels, sewers, etc.

But, clearly we can do better at reversing the downward trajectory in which over 40 million Americans don’t have a job (14.1 million) or sufficient employment (over 26 million), according to the Bureau of Labor Statistics—as housing gets weaker, Case Shiller Index recently confirming a double dip in prices.

Long line snaking around building for jobs fair in Atlanta in August 2011.
Credit: Bob Andres/Atlanta Journal & Constitution, via Associated Press.

The first order of business would be to realize that, in Calvin Coolidge’s famous words, “The business of America is business.”

Or, to put it in modern parlance, “It's the private sector, stupid!”

But, the overriding fact is Obama believes government, not the private sector, should be the main jobs engine and solution to the interlocking housing crisis. This, in spite of the fact that the private sector is generating what growth there is. The payroll processing firm ADP reported that 157,000 jobs were created in the private sector in June—still a long way to go before closing the yawning 40,000,000 jobs gap.

Admittedly, some of Obama’s rhetoric is starting to give the nod to the private sector:

“Government,” he said in last weekend’s radio address, “has to start living within its means, just like families do. We have to cut the spending we can't afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”

Unfortunately for him and the rest of the country, it’s a little late; besides which, such rhetoric turns off his liberal base.

It’s an unenviable position to be in.

As Karl Rove summed it up in “Why Obama Is Likely to Lose in 2012”: “…he faces four serious threats. The economy is very weak and unlikely to experience a robust recovery by Election Day. Key voter groups have soured on him. He's defending unpopular policies. And he's made bad strategic decisions.”

A line outside the State Temporary Relief Administration in New York City
 on November 24, 1933.  Credit: Associated Press.
During the Great Depression, national unemployment rate reached 25 percent, 
13 million people were unemployed and 100,000 businesses failed.  
Now the effective unemployment rate is approaching 20% 
and some 40 million have insufficient or no employment.
Like Herbert Hoover, heedless of the Great Depression’s economic reality, Obama, until recently, was telling Americans prosperity is just around the corner; albeit now he’s signaling we've got a long way to go before we turn that corner. Indeed we do. As Martin Feldstein, Harvard Economics Professor, Chairman of President Ronald Reagan's Council of Economic Advisers and former President of National Bureau for Economic Research, recently wrote, the economy’s near-term outlook is “weak at best.” Yet, “fundamental policy changes will probably have to wait until after the presidential and congressional elections in November 2012.”

Ironically, Hoover could not see his way clearly to supporting direct cash assistance to starving, jobless Americans, when there was none; whereas, Obama cannot see his way clearly to unleashing definitively private sector job-creating energies, when there's an abundance—even though it would stimulate a tax revenue gusher to melt the debt and fund his cherished infrastructure projects.

One of the only small businesses in America
not burdened by the heavy hand of Washington regulation, 

albeit  Montgomery County, MD could be more biz-friendly.
Hoover was resoundingly defeated in 1932—one of 10 incumbents, out of 31, who have lost re-election since our nation's founding.

Obama is on track to become #11.

His only hope, it seems—absent a miracle—is that Republicans, like Democrats in 2008, will nominate someone who is charismatic and inexperienced. Unfortunately for him, however, the Obama “experiment,” as Republican presidential frontrunner Mitt Romney calls it, has inoculated even Republican primary voters against that possibility, as a recent Iowa poll demonstrated.

Voters clearly want out of this Great Recession.

"The line of 4,000 hopefuls stretched from a fifth-floor hotel ballroom
 to the cold street below, snaking around the block."
 New York Daily News,  March 6, 2009Credit: Watts/News.
 How many of these folks are still unemployed or underemployed,  
or, discouraged,  have simply dropped out of the labor market, their  
99 week unemployment benefits  having long ago run out?

"The number of U.S. workers filing new claims for unemployment 
benefits earlier this month jumped to a 26-year high.  And by the looks 
of these lines at job fairs  across the country, who knows when it will  get better."   
 New York Daily News,  March 6, 2009,  Credits: Sullivan/Getty.  
Of course, as we now know from the perspective of almost three years
 under Obama's leadership,  it's not gotten better, it's gotten worse - much worse.

Published for the first time on American Politics and Policy, Wednesday, September 15, 2011.

Hooverville, 1932.  Credit: Unknown.

Originally published in AND Magazine, 7/16/11.

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