unemployment

Romney's Perfect Example of the Republican Strategy of Economic Sabotage

Brian Dockstader — Thu, 20 Sep 2012 13:00:18 -0400

For a long time — basically ever since Senate Minority Leader Mitch McConnell infamously stated that the Republican Party's #1 goal was to defeat President Obama — it has been plainly obvious that the Republican Party was committed to a strategy of economic sabotage to further their political ambitions.

The rationale is simple: The worse the state of the economy, the higher the unemployment rate, the worse President Obama's chances for reelection become. Thus their sabotage strategy: Make sure the economy doesn't recover. Make sure the unemployment rate stays high. Oppose all attempts to create jobs. Kill jobs that have already been created. Turn the public against Obama. Win back the White House and Congress.

Like I said, this has been their transparent plan from the very beginning. Anyone who doesn't think this is the game plan is either disingenuous or blind. And in case you had any doubts, the Romney campaign just laid this strategy out in the most blatant way possible.

First, a little background. You've hopefully heard about something called the "wind production tax credit" (PTC) that is going to expire at the end of the year, unless Congress acts. The tax credit is important because it helps level the energy playing field relative to fossil fuels (a game that is stacked greatly against renewable energy, as I noted here). It also helps create market certainty, which stimulates investment, which stimulates the economy, which creates JOBS (to say nothing of the innumerable other other reasons renewable energy is important, including environmental, public health, national security, etc). But let's focus on the jobs, because that's what the Republican Party is against (refer back to the Grand Strategy to Defeat Obama).

So the PTC is set to expire, and the wind industry has warned that this will destroy 37,000 American jobs. Even Republicans in pro-wind states like Iowa have come out in favor of the PTC, because it doesn't help them politically to sabotage their own local economies. At the national level, however, renewable energy is being demonized by the Republican Party, and Mitt Romney has called for the elimination of the PTC (and all renewable energy incentives that might help clean energy compete with fossil fuels--the GOP's big money corporate donors).

Now, the PTC is about to expire. If the PTC expires, 37,000 jobs will be lost. Thus Romney/Republicans oppose the PTC because they believe a bad economy is good politics for them. Now, as predicted, the possible expiration of the PTC is causing market uncertainty and leading to layoffs in the wind industry. Siemens, a wind turbine manufacturer, just announced that they were being forced to cut 38% of their U.S. workforce due to this political stunt over the PTC (and these aren't the first layoffs caused by these political games). Cue Romney's press release (emphasis mine):

Today’s layoffs at Siemens are yet another unfortunate reminder of the Obama Economy where American families have suffered from chronic unemployment, increased poverty and falling incomes. There is a fundamental disconnect between President Obama’s philosophy of the need for redistribution of wealth and the free market economy which our country was founded on. President Obama has focused on attacking the success of others rather than applauding their accomplishments and urging others to strive for similar success. Mitt Romney’s plan for a stronger middle class will foster the dignity of work, champion innovation, generate new wealth, and create 12 million new jobs in his first term alone in a variety of sectors, including wind.

It doesn't get any more simple than that. Romney knows he is advocating a policy that is killing wind jobs (even Republicans have told him this). Then, when these layoffs start happening, he immediately tries to politicize it by attacking President Obama's policies, even though President Obama wants to extend the PTC and create more clean energy jobs.

And there you have it, yet another blatant example of the Republican strategy of economic sabotage in action. Hurt the economy, blame Obama, hope the voters don't notice the sabotage. And why would they? It isn't like the media is going to point out the hypocrisy or the shocking underhandedness of this whole strategy, even though it deserves to be front page news.

It's Not About the Food Stamps; It's About a Job At a Living Wage

Joseph M. Firestone — Sat, 08 Sep 2012 13:44:52 -0400

Got this in an e-mail from my brother, Hal:

“June food stamp Recipients Hit All Time High As Three Times As Many Americans Enter Poverty As Find Jobs, bringing the total to a new all time high of 46.670 million and once again rising fast.”

This headline, circulating via e-mail, seems to be picked up from Zero Hedge by merging the title of one its posts with a phrase from the body of the blog post. The way it's constructed can easily be misinterpreted as suggesting that 46.670 million are now receiving Food Stamp assistance. But actually that's the BLS number for the number of people in poverty. The Food Stamp number is 22.4 million households.

Apart from wondering about the accuracy of the headline being circulated, and noting the sky is falling tone of the whole thing, I had the following brief reaction.

Those Republican bastards want to cut food stamps as part of their continuing program to make the middle class poor and get the poor people to die quickly (h/t Alan Grayson of course).

But, the Government safety net including Food Stamps is the bread and butter of people who have fallen on hard times; and there's only one primary reason for unemployment: there aren't enough jobs.

You want to get rid of unemployment? Then, quit yer complaining about the Food Stamps and make the jobs!

Doesn't matter if they're public or private: who gives a shit besides neo-liberal, Ayn Randian ideologists?

The only thing that matters is that people who want them get jobs at a LIVING wage, which means: Make sure those new jobs aren't at Walmart or McDonald's!

And, yeah, we can afford it!

(Cross-posted from Correntewire.com.)

Things Will Get Worse Before They'll Get Better

Joseph M. Firestone — Sun, 05 Aug 2012 00:57:18 -0400

House leaders have agreed on a compromise continuing spending resolution at the same level as before from October 2012 through March 2013. It's likely now that the President(s?) will probably try to make the money available for deficit spending, as of today, last through the time period of the continuing resolution so that one deal including both the budget and raising the debt limit can be made by March of 2013. According to the August 2, Daily Treasury Statement, there's $528,508,000,000 of deficit spending left until the debt ceiling is reached. In addition, there's an additional 58,993,000,000 available in reserves, for a grand total of $584,501,000,000 available until the debt ceiling is reached. That's an average of $73,062,625,000 deficit spending per month for the next 8 months, ending March 31, 2013.

For the past 10 months, average deficit spending was at $114,802,300,000 Billion per month, and that amount was not enough stimulus for a full recovery. So, the likely 36% reduction in average deficit spending over the next 8 months is unlikely to be any more effective in pulling us out of the extended employment recession we are experiencing, than the deficits in the preceding 10 months were. On the contrary, deficit spending over the next 8 months is unlikely even to allow us to maintain the unemployment levels we have now, provided private sector net spending doesn't increase to compensate for less Government spending. What would have to happen for private sector spending to increase?

That's an easy one to answer. The government deficit for the past 12 months, in rough terms, has been about 8% of GDP. The planned spending would be about 5.5% of expected GDP. If the Government sticks to its deficit spending targets, then the private sector will have to save less and import less, to avoid demand leakage which would place greater fiscal drag on the economy. If imports come in at 3% of GDP, then private sector savings will have to decrease to 2.5% or less of GDP if the economy is to expand faster than it is now, and to create lower unemployment.

This conclusion isn't set in stone because there are distributional effects to consider, but it's also true that private sector attempts to continue to save say 6% of GDP and to import 4% of GDP will cause slower GDP growth, higher unemployment, and more rapid government spending than planned in the shorter run, bringing on the debt ceiling problem sooner than expected, and, in the absence of Congressional, or Executive, action allowing more deficit spending, forcing the Government into surplus, and the economy into even more rapid decline prior to March 31, 2013 due to fiscal drag.

In short, the recent jobs report notwithstanding, looking at the economy from the viewpoint of the sectoral financial balances model, and taking into account the likely spending plans for the next 8 months, the economy looks bleak even if we assume that the Eurozone will hang in there, and avoid a financial crash, forcing us to face, once again, the question of whether the big banks should be bailed out again, or whether this time, they should just be taken into resolution and the TBTF ended.

I don't believe it makes much difference to this prediction of how the economy will go whether President Obama or Romney is elected, as long is there isn't a big change in the Congress, or a big change in the stated views and behavior of whichever candidate is elected; both of which are very unlikely as far as we can see at this point. It's as if we have entered the 1930s with only different versions of Herbert Hoover, without half the integrity and good will old Herbert had, to lead us.

We are nearly four years into the crash now, and real unemployment rates are approaching depression levels. Working Americans could well lose a decade, as Paul Krugman has been warning, before this is over. And if Americans don't rouse themselves to either take over or destroy both these sorry excuses for political parties over the next four years or so, we could be looking at a longer period of blight than that.

(Cross-posted from Correntewire.com.

Mitt Romney Enjoys Your Pain

Leo Gerard — Tue, 05 Jun 2012 09:58:16 -0400

GOP presidential candidate Mitt Romney’s reaction to high unemployment is creepy.

During an interview with CBS reporter Jan Crawford last week, Romney smirked as he mentioned that unemployment has remained above 8 percent for 39 months. Then, as the interview ended, he smirked again after saying President Obama had hoped the Recovery Act would reduce joblessness to 6 percent by now.

Romney is loving high unemployment. Just like the Republican majority in the U.S. House of Representatives that has repeatedly blocked President Obama’s proposals to increase hiring, Romney believes high joblessness is good for the GOP. It’s one thing for a politician to know in his heart of hearts that a calamity for the country may help him achieve his ambitions. It’s another to be so callous as to beam about it on TV.

The nation’s sustained high unemployment disheartens any normal human being. Friday’s report that only 69,000 jobs were created in May was troubling -- that is to anyone who has ever been laid off or had a friend or relative or neighbor who lost a job. They know the feelings of fear, depression and guilt that accompany job loss. They’ve experienced the suffering as job applications are rejected, bills pile up and foreclosure is threatened. Normal people don’t smile about high unemployment; they cringe.

Romney contends he’s the fella to fix those unemployment numbers. But his record as CEO of Bain Capital and governor of Massachusetts provides little evidence of that. The focus of Bain was never job creation. It was money making. And if making money meant destroying jobs, that’s what Bain did.

An analysis by the Wall Street Journal of the companies Bain bought in the 15 years Romney ran it found that 22 percent went bankrupt or closed within eight years. That’s untold thousands of workers who lost their jobs and untold thousands of Bain creditors who endured losses because of bad Bain business practices.

Romney has frequently contended Bain created 100,000 jobs while he led it. The Washington Post fact checker awarded that claim three Pinocchios. After Republican rivals Newt Gingrich and Rick Perry chanted, “show us the jobs,” Romney lowered the number. Kinda significantly. Down to tens of thousands of jobs. Finally, Romney cut the figure even further, releasing a campaign video saying he’d created “thousands of jobs.”

If “thousands” is true, that’s good. But, frankly, “thousands” over 15 years is hardly a bragging point for a candidate who contends his private sector experience will enable him to create the millions of jobs the nation needs.

Romney’s job generation as governor of Massachusetts doesn’t instill much confidence in his ability to perform on the national level either. Massachusetts added 45,800 jobs in the four years he was governor. While that’s positive, it occurred during a time of economic expansion nationally, not during the grave recession President Obama inherited.

In addition, Massachusetts’ net jobs growth declined to 1.4 percent during Romney’s governorship, significantly lower than the 5.8 percent growth in the rest of the nation. In fact, Massachusetts dropped to 47^th for job growth during Romney’s reign, far lower than during his predecessor’s time.

Romney claimed at one point during the campaign that he was unemployed, and laughed about it. But this quarter billionaire doesn’t have a clue what it’s like to really be jobless or desperate. This is the silver-spoon son of a car company executive, a man who attended exclusive private schools, a man who handed his own son $10 million to help start his business, a man who has a car elevator in his $9 million California beach house.

This is a candidate who mocked NASCAR fans for wearing cheap rain slickers while his wife wears $1,000 silk t-shirts. This is owner of three homes valued at a total of $20 million who opposed helping underwater homeowners, saying the foreclosure crisis should “run its course and hit bottom.”

This is a man who actually said he likes to fire people. Not hire people. Fire people. Here’s what he said:

“I like being able to fire people who provide services to me.”

The slow jobs growth in May is not surprising, frankly, considering the economic contraction occurring in Europe and even in China. In the 17-nation EuroZone, unemployment now has risen to a record 11 percent, far higher than in the United States where Obama’s Recovery Act prevented the country from falling off the cliff into another Great Depression.

Unlike the United States and China, both of which invested in stimulus, Europe chose austerity. Greece, Spain, Italy, Ireland and Great Britain now are suffering economic contraction and distress caused by austerity.

That’s what Romney and the Republicans propose for America. Austerity. Job contraction. Recession. Suffering.

It’s not true what Romney says about Americans. They aren’t jealous of his wealth. They don’t care that he and his wife ride $100,000 horses. They just want to be able to afford a rocking horse for their kid. They don’t care about the Romneys’ vacations in France. They just want to be able to save enough to get the kids a season pass to the municipal pool.

They don’t, however, want their country run by a guy who can’t conceive what it’s like to be unemployed and has made no effort to find out. They don’t want to be led by a guy who likes firing people. They don’t want a president who finds enjoyment in high unemployment.

Talking With Krugman: He's Anti-Austerity, Pro-Peter Gabriel, and "Not That Cosmic"

Richard Eskow — Tue, 15 May 2012 11:30:22 -0400

Everybody knows that Paul Krugman is a Nobel Prize-winning economist, a sometimes combative columnist and a liberal lion. But in a conversation which aired this weekend we learned more about his personal response to an ongoing crisis he describes as "really nasty," "very, very severe," and "gratuitious," and which he says "will not go away quickly or necessary at all" unless we do something.

We learned how Krugman trolls for music online, that he still believes that Ben Bernanke has been "assimilated by the Borg," and that despite his fondness for science fiction he describes himself as "not that cosmic."

He may be wrong about that last part.

We interviewed Prof. Krugman for our "Conversations" series on The Breakdown. (Previous guests include Katrina Vanden Heuvel, Thom Hartmann, economics/law professor William K. Black, Jr., and other very interesting folks.) Krugman's on a publicity run to push his new book - and not, we suspect, because he needs the money. The book promotes some policies that he (and we, along with many others) feel are urgently needed. (He's speaking at the American Dream conference next month, too.)

Krugman's book is called End This Depression Now! (exclamation point included). If that sounds like a self-help book - the sequel to Listening to Prozac, maybe, or something by Dr, Wayne Dyer - that's not altogether inappropriate in this age of collective near-despair.

(He could have called it Economy, Interrupted.)

We began by asking Krugman if what we had heard was true: That he became an economist because he loved the Foundation series of science-fiction novels by Isaac Asimov. (I was such an Asimov fan as a kid that I sent him a short story I'd written when I was twelve years old. In return I got a postcard that encouraged me to 'keep writing,' a diplomatic choice of words whose delicacy I failed to appreciate at the time.)

In the Foundation series, the fate of the Galactic Empire is studied and guided by a brilliant team of scientists known as 'psychohistorians,' whose field was invented by a 22nd-century genius named Hari Seldon. Like Krugman, I was fascinated by the idea that you could predict the human future if you just had enough information. Selden designed a handheld computer called the Prime Radiant, which projected its data and equations in the air around him. It all seemed pretty cool to me back then, too. We have a word for kids like that nowadays:

Nerds.

In Asimov's novels the Galactic Empire periodically faced a "Seldon Crisis." These existential dangers were usually navigated with the advice and guidance of the psychohistorians. I asked Krugman if the American empire was facing a "Krugman crisis."

"I'm not that cosmic," Krugman said.

In fact, Krugman was determined to keep the focus on the prosaic, straightforward nature of the problem, the human cost of our inaction, and the fact that its solutions are straightforward and practical. "We know to take textbook economics and apply it to this situation," he saaid, "(but) very few people in positions of influence are willing to listen. That's a horrifying thing, because we're suffering gratuitous economic disaster."

"It's completely unnecessary."

As Krugman put it in our conversation, the hard part is the politics. "(The economic solution) is not mysterious. This is not 'Gosh, what are you people proposing? This was all hashed out in papers a decade ago, many of which were written by Ben Bernanke."

"To the extent that people say the economics is confusing or uncertain," Krugman said, "that's overwhelmingly because people want it to be."

"Benanke knows all about this," Krugman said. That led to a question about the groupthink mentality that's keeping Washington focused on the wrong problem - deficits - in a time of widespread suffering. He spoke of the "turf theory" which says that people "end up defending institutional prerogatives ... we're supposed to fight that. We've had a rather severe shortage of people in positions of power who are willing to fight that."

Krugman's differences with the Administration lay less in what he sees as the President's personal values and more in the White House's perceptions of the political and pragmatic: "I believe that the President hasn't bought into the stigmatization of the people in distress, but what he has done is accepted the notion ... that you should stay within the confines of a conventional wisdom as defined by what amounts to a successful, deceptive propaganda campaign."

"And I'm arguing that's a losing strategy, even politically."

As I write this, the Peter G. Peterson "Fiscal Summit" is taking place in Washington DC. (Sen. Bernie Sanders and a number of other people are gathering outside to protest it, too) There, under the sponsorship of the anti-government billionaire Peterson, political heavyweights will gather to promote two insane ideas: that our most urgent problem is government deficits, not the economic misery of millions, and that the smartest thing we can do right now is pursue the austerity policies that are shattering Europe economically and politically.

This well-financed Washington obsession is the inspiration for Tom Tomorrow's latest cartoon, which gives a sci-fi twist to the economic debate that Krugman should especially appreciate (despite the fact that his own fate in it turns out to be dire.)

Tom Tomorrow's aliens say what all aliens used to say: "Foolish human." And if anything comes through more strongly than ever in the new book (and our conversation), it's Krugman's own humanity.

I asked about the challenge of hearing useful advice go unheeded, or avoiding a breakdown into aggravated despair in clashes like his recent one with Ron Paul, whose views on war and civil liberties add a great deal to our discourse - but whose economic remarks to Krugman were just off the wall. (Paul was saying something at great length about the Greek and Roman empires and the gold standard, as I recall).

"I try to keep the perspective that I'm frustrated because I can't get people to listen to what seems to me to be obviously the right ideas," said Krugman. "The real people who are frustrated are the 59 year olds out there who don't have jobs and may never get another one, or the nineteen year olds coming out of college with no job prospects."

"A sense of humor helps, too."

Krugman's book shows great empathy for the victims of our politically-induced economic malaise, too. He uses the moving Peter Gabriel song "Don't Give Up" to frame a discussion of our current economy's human costs. That led us into a discussion about the Willie Nelson/Sinead O'Connor version of that song, which I encouraged him to check out. (There's a sample of it in the interview), his YouTube habits, and ... well, you just gotta listen.

Krugman's a brilliant guy and excellent writer who I agree with most of the time. He stood up against the near-hegemony of the RIght in the public sphere during the run-up to the invasion of Iraq. That took a lot of courage. He's been taking a lot of bows and arrows ever since. (Rush Limbaugh even interrupted his tirade against me to take a shot at Krugman. I considered the association a compliment.)

Krugman won his Nobel for macroeconomics, which is as close to "cosmic" as it gets in that field. Psychohistory may even have influenced his Nobel-winning work (I wish I'd asked him) in economic geography and economies of scale. (Hari Seldon preferred a sample size of one quintillion people. That's not currently available - not on this planet, anyway.)

Cosmic or not, it was a down-to-earth and compassionate guy who showed up for the interview. He's written an important book that should be read by millions of people around the country - and by a couple hundred or so in Washington, where its message is most urgently needed.

__________________

You can hear the interview here. This weekend's show also included a special report entitled "The Case Against Chase: The Fall of the House of Dimon," and commentary on the - well, the psychohistory - of Mitt Romney's bullying episode. The full episode's podcast is below:

Some of our other conversations can be found on the Breakdown Conversations page. (Sorry about the formatting; we're working on it.)

Want Jobs? Rescue Homeowners - and Spend, Baby, Spend

Richard Eskow — Fri, 06 Apr 2012 12:52:06 -0400

Now we know: The jobs situation is bleak, and it will continue to be bleak until we face up to the fact that we need more stimulus spending - lots more - and we have to relieve millions of homeowners from their indentured servitude to Wall Street so that they can help restore the economy too.

In other words spend, spend, spend - and provide some principal reduction for underwater homeowners.

Bad News

We won't recap all the employment figures in today's jobs report, since they're available elsewhere. We'll stick to the highlights:

A key figure is essentially unchanged: There are 12.7 million unemployed people in this country.

Also unchanged, or only slightly changed: Unemployment rate for adult men is 7.6 percent, for when it's 7.4 percent, for teenagers it's 25 percent, for white people it's 7.3 percent, and for Asian it's 6.2 percent. Hispanics are still suffering with 10.3 percent unemployment, and for African Americans the rate remains a stunningly high 14 percent.

But then, all of these figures are stunningly high.

The crisis in long-term unemployment persists, with 5.3 million people among the long-term jobless. There was a drop in the number of people who want full-time work but can't get it, but it remains extremely high at 8.1 million.

Wait. It Gets Worse

And unemployment isn't our only national burden. Income gains have been very weak, and that segment of the workforce that actually is working is increasingly finding itself in low-paying jobs. And analysts are expect low earnings reports for corporate America, starting next week, as the sluggish economy takes its toll on publicly-traded companies.

Meanwhile banks, high off the settlement deal that protects them from criminal prosecution for illegal foreclosures, are expected to begin another wave of foreclosures that will send housing prices plummeting even further and costing local communities even more in lost revenue.

Experts were stunned by the low figures. The consensus was that 205,000 new jobs would be created this month, but only 120,000 were. Moral #1? Don't trust the consensus. Moral #2? Even 205,000 isn't nearly enough to fix our unemployment problem and get the economy moving again:

It's time to start thinking about real solutions to this problem. There are two:

Spend Spend Spend

The stimulus worked, but it wasn't big enough. Far too much of the package was devoted to nonproductive tax cuts for the wealthy, and far too little on direct spending that creates jobs. So we need more direct spending on infrastructure - and, as Dave Johnson notes, we also need it if we don't want our country to keep falling apart at the seams.

The President recently observed that restoring jobs in construction and in state and local government at the same rate they experienced during previous recessions would reduce the overall unemployment rate to 6 percent, and some economists think that figure is low.

The CBO estimates that the last round of direct stimulus spending of $300 billion created 1.4 million jobs. We need to spend at least that much again, and we need to restore Federal support for state and local budgets.

Underwater Rescue

Another way to get the economy moving is to get financial relief to people who have been financially struggling and have put off needed spending - on vehicles, home improvements, and the like - as well as reasonable amenities.

Homeowners owe $800 billion in "negative equity" to banks for non-existent real estate value. That's an "invisible bailout" funded by the struggling middle class, and delivered by borrowers who were frequently hoodwinked into taking out a mortgage at inflated pricies.

Principal relief of $300 billion or thereabouts would be just, fair -- and would create a lot of jobs.

Action Time

There you have it. So can we stop talking about government deficits until this problem is fixed? Some of us think Simon Johnson's emphasis on government debt is premature - let's get the economy moving and pivot to deficits afterwards - but he's certainly right when he says that "Our modern debt surge is much more about declining federal government revenue than it is about runaway spending."

So let's tax the wealthy, help homeowners, and spend some money to put more people back to work. When that's done we can pivot to deficit reduction - with millions of additional workers able to contribute to that effort with their taxes.

If reports are true that the President's game plan is to make his re-election campaign "all about Republicans," I would respectfully suggest a change of direction. It should be "all about jobs."

So what's keeping you, Washington? Stop the silly talk about "Simpson/Bowles" and "Grand Bargains" and get to work. The nation's unemployed, underemployed, and underpaid have waited long enough.

Stop Blocking Infrastructure Jobs!

Dave Johnson — Fri, 06 Apr 2012 05:38:21 -0400

Whatever the March unemployment numbers are today, they are far, far from robust enough to employ everyone who needs work any time soon. (Please, surprise me!)

There is something that can be done to really improve things. This something also gives Republicans a chance to show they aren't just sabotaging the economy to improve their own election prospects. Let's see if they go along.

When the Labor Department releases its jobs report later this morning, it is expected to show a couple hundred thousand new jobs were created. That's good -- and vastly, vastly better than where things were when President Obama took office. But even these job-creation numbers are still far from enough to put all of the people who lost their jobs as a result of the financial-deregulation crash back to work any time soon. To do that, we need to be creating jobs at a rate of close to 400,000 a month for the next 36 months to get the unemployment rate down to 5 percent by then.

Republicans Intentionally Sabotaging The Economy?

Republicans have been blocking efforts to use government to get the economy creating jobs, as well as efforts to assist the unemployed -- itself an economy-boosting, job-creating measure. They have also been forcing large numbers of layoffs of local, state and federal government workers, saying they don't think government creates real jobs. On top of that, they have been blocking new stimulus efforts as wasteful government spending. They have been blocking job-creating high-speed rail projects. Recently they have been trying to block the Export-Import Bank that helps businesses sell products overseas.

They have been blocking everything that might help improve the economy, claiming that only tax cuts for millionaire "job creators" can do the trick (even though that's what 'W' did, with no resulting growth at all.)

Republicans say they are blocking all of these job-creating and economy-improving efforts because they honestly believe that these things shouldn't be the role of government, that government "takes money out of the economy. That's what they say, in spite of all the historical evidence to the contrary. But some people suspect Republicans have been blocking all these efforts for a different reason: because a bad economy might improve their own election prospects, as less-informed people blame "the people in charge" -- Obama and his party -- and the corporate media fails to inform people that "the people in charge" are being obstructed and filibustered.

Opportunity For Republicans To Demonstrate Good Faith

Here is an opportunity for Republicans to demonstrate that they are not just sabotaging the economy in a cynical political manipulation. Republicans can vote to invest in maintaining and modernizing the country's infrastructure.

Everyone agrees, whether they are Republicans or Democrats, that maintaining and modernizing our country's infrastructure is a proper and essential role for government. Everyone agrees, whether they are Republicans or Democrats, that investing in improving the infrastructure helps businesses and the economy.

Infrastructure

Even the most conservative, anti-government Republicans recognize that an economy depends on its infrastructure. They understand that businesses need good roads, airports, a good energy delivery system and other infrastructure components if they are going to thrive and compete in the world's markets.

Currently our infrastructure is in disrepair, following decades of tax-cut-induced neglect. Other countries are investing massively in modern infrastructure. Our country will be trying to compete with those modernized economies, with our outdated electrical grid, rail system, etc.

The American Society of Civil Engineers earlier this month estimated that the nation needs to spend $1.7 trillion over the next nine years just on its surface transportation network alone—almost double what is currently on the books. Being cheap on this front is costing us plenty: $130 billion in 2010, according to the ASCE, "including approximately $97 billion in vehicle operating costs, $32 billion in delays in travel time, $1.2 billion in safety costs, and $590 million in environmental costs."

In addition, investing in infrastructure costs less than the cost of high levels of unemployment: the lower tax revenues, loss of business activity, and all of the forms of government spending resulting from slow growth and increased joblessness.

Here are a few infrastructure facts:

The American Society of Civil Engineers has graded our infrastructure ‘D,’ estimating that $2.122 trillion must be spent just to bring it up to “satisfactory” condition. [American Society of Civil Engineers]
More than 25% of bridges in the United States need significant repairs and/or are handling more traffic than they were designed to carry. [Christian Science Monitor and U.S. Department of Transportation]
Nearly a third of all highway fatalities are related to substandard road conditions, obsolete road designs, or roadside hazards. [New America Foundation]
A significant water line bursts every two minutes in the United States. [The New York Times]
One in three schools are in bad enough condition “to interfere with the delivery of instruction.” [U.S. Department of Education]
In 2010, deficiencies in America’s roads, bridges, and transit systems cost American households and businesses more than $129 billion. [ASCE]
By 2020 the nation’s deteriorating surface transportation infrastructure will cost the American economy more than 870,000 jobs and suppress the growth of the country’s Gross Domestic Product by $3.1 trillion.” [ASCE ]
The quality of U.S. infrastructure is falling behind competitors like Brazil, China and India. [Urban Land Institute ]
If infrastructure needs are not addressed, within 10 years U.S. businesses will pay an added $430 billion in transportation costs, household incomes will fall by more than $7,000, and U.S. exports will fall by $28 billion. [ASCE]

At the same time as all of this work needs doing, we have millions of people who need work to do. On top of that government is abke to finance projects at a near-zero rate of interest! Yet efforts to maintain and modernize our infrastructure are blocked, and blocked, and obstructed.

Infrastructure Construction Would Knock 1% Off Unemployment Rate

The President said yesterday that unemployment could be lowered by 3% immediately by restoring state and local government hiring, plus spending on maintaining and modernizing our infrastructure, with each accounting for 1%. Republicans do not agree that we should restore state and local government hiring, but Democrats and Republicans both agree that infrastructure is a proper role of government.

So we could knock 1% off of unemployment right now if Republicans would agree to invest in infrastructure projects, thereby putting millions to work, and making our economy that much more efficient and competitive.

CNN Money reports in "Obama: How we could get to 6% unemployment rate,"

"The construction industry and state and local governments are among the biggest drags on the nation's economic recovery, President Obama said ... If these areas were to have a similar rebound now, each one would take a point off of the nation's 8.3 unemployment rate ... Now is an especially good time to revamp the nation's infrastructure, which would boost job growth, Obama said. Interest rates are historically low, construction workers are dying to get back on the job, and contractors are competing for projects, coming in on time and under budget."

Opportunity For Improvement? Or Agenda To Sabotage?

So three key ingredients for immediate economic improvement are in place:

Work that really, really needs doing.

People that really, really need work.

Financing these projects at best terms in history.

If there ever was a role for government, even in the conservative worldview, it is maintaining and modernizing our country's infrastructure. There has never been a time when people are more available to do the work, and when money is cheaper for financing the work.

There is a formula for economic improvement that even the most conservative Republicans would agree is an opportunity -- unless... unless their real agenda is not to improve the economy, but instead to sabotage the economy.

Improve Or Sabotage Economy? Time To Demonstrate Intent

If Republicans are honestly pursuing a conservative vision when they block government hiring and stimulus and other efforts to revive the economy, they will at least agree that we need to do massive infrastructure maintenance and modernization projects. But if they are just out to sabotage the economy and jobs for the purpose of improving election chances, they won't.

This is the opportunity for the public to find out which it is.

Lemmings

Richard Eskow — Mon, 02 Apr 2012 20:38:29 -0400

Europe's in crisis. Unemployment is at a fifteen-year high after climbing for ten straight months, thanks to the austerity measures imposed on it by conservative leaders in France, Germany, and the international financial community.

But if you think things are bad over there, imagine what they'll be like if Republican budget measures are imposed here. The GOP budget makes European austerity look like summer camp.

Ever wonder why lemmings jump off cliffs?

While England Slept

Great Britain blazed the trail for Europe with a series of steep cuts to government spending - and it soon led the continent in economic misfortune. Unemployment skyrocketed, consumer confidence plummeted, and growth stagnated.

That's what austerity economics does to struggling economies. When you ask already-beleaguered middle class and lower-income people to bear the burden for the mistakes that made other rich the results are predictable: real income falls, demand for goods and services drops, and the entire economy drops back into a death spiral.

You'd think that Europe and the world would have learned from Britain's mistakes, but they haven't. In fact, even Britain hasn't learned from its mistakes. As the New York Times reports, the UK is doubling down on the madness.

In its latest round of budget announcements the government announced that it's continuing to push for additional spending reductions but wants to cut taxes for the wealthiest citizens, including those who got rich from the bank speculation that broke the economy! As critics have correctly observed, the UK government is paying for this rich person's tax cut through a 'stealth tax' on low-income retirees.

Britain's misplaced emphasis on reducing government deficits is even backfiring where deficits are concerned. From the Times: "The Office for National Statistics said Wednesday that Britain's budget deficit almost doubled in February, to £15.2 billion, far exceeding economists' expectations of about £8 billion. "

Kamikaze Europe

Now the rest of Europe is following Great Britain's lead. Unemployment is officially 10.8 percent and expected to reach 11 percent soon. Seventeen million people are out of work.

Austerity mania spread through Europe like a plague. Unemployment's now at 23.6 percent in Spain and 21 percent in Greece. How is a country expected to lower its deficits when a quarter of its working population isn't paying taxes and doesn't have disposable income? Apparently the financial geniuses running things there didn't think about that.

Ireland was once touted as austerity's success story. They're not bragging on Old Eire much now that it's officially back in a recession. Spain's problems disprove the theory that government debt is the source of all economic woes since, as Paul Krugman notes, Spain has been a much more thrifty government spender than Germany. Further austerity measures there are going to be disastrous.

Then there's Greece. According to reports, there are no working traffic lights left in the city of Athens. People have taken to bartering for goods and services in a world where many people have little or no sources of currency income while the streets swarm with formerly middle-class Greeks who are now being described as 'the new poor.'

In fact, there are encampments of the working poor throughout Europe. Even the leading European economy, Germany, is losing ground because of Chancellor Merkel's obsession with austerity measures - while France, the other austerity leader, is also struggling.

What do they plan to do, now that they have the benefit of experience? More austerity, according to reports. Merkel even thinks that's the road to her own re-election.

The Home Front

Which gets us to the United States. The Republicans in Congress have just passed a budget that makes Europe's austerity measures seem positively genteel. Rep. Paul Ryan, the Pied Piper of nihilist economics, said when it passed that we're in a "debt-driven crisis, and so we have an obligation -- not just a legal obligation but a moral obligation -- to do something about it."

That budget's "moral obligation" doesn't extend to our military budget, which the Republicans voted to massively expand - or to tax breaks for millionaires and billionaires, whose current historically low tax rates will plunge if their budget ever goes into effect. And, as we now know, the GOP budget would essentially shut down every other function of government that Americans have valued for the last century and a half. 62 percent would come from programs for lower-income people and Pell grants to help young people go to college.

And what a time for austerity: As Matt Stoller notes, one in seven Americans is being pursued by debt collectors. Student loan debt exceeded $1 trillion last year, even as young people face sky-high unemployment. 8.8 percent of student loans defaulted in their first two years of payment last year and more than one-fourth of student loan payments are now delinquent.

Robert Schiller, arguably the world's top economic expert on real estate, says that prices for suburban real estate aren't coming back in our lifetime. Consumer debt is soaring. US growth is expect to turn even more sluggish, which even has Ben Bernanke pushing for more government action.

But while the projected deficit reductions in the GOP budget are a hoax, the cuts to vital programs, including its hidden cuts to Medicare, aren't. As Mike Konczal notes, states like Florida are a preview of a Ryan-budget America. Konczal coauthored an article with Bryce Covert which showed that "Of the eleven states in which Republicans came into power in 2010 -(five) lost more than 2.5 percent of their workforce from December 2010 to December 2011."

Bargain Basement

The budget-cutting rhetoric of the right is too often echoed by Democrats, at a time when they (or someone) should be proposing a more common-sense and more humane approach to the economy. Talking about deficits today is the moral equivalent of lecturing firefighters about water conservation while the town is burning down.

We need to put out the fire first. We urgently need spending to create jobs, especially when the government can borrow money for virtually nothing. Or, to put it another way -

This is your country:

(job recovery after current & previous recessions, United States)

This is your country on austerity:

(Konczal, Covert)

And yet there are still those in the White House and Congress who dream of a "grand bargain" with the Republicans like the one the President nearly finalized last year - the kind of bargain that would send the nation's economy over a cliff.

Lemmings

People used to believe that lemmings committed mass suicide. Scientists now say that they follow migration patterns which sometimes lead them straight into the ocean. Either way, a lot of them drown because they followed the tail of the rodent in front of them.

The US seems determined to cling to Europe's ragged tail as it plunges into the icy waters below. The Republicans would drown our economy in a way that would make Europe's problems seem mild by comparison. (At least they still have working governments over there.) But few Democrats are willing to challenge the austerity fundamentalism that's gripped Washington. Instead they prefer to debate means to an austere end, rather than the end itself.

It's all insane. But this Ryan budget - now the official budget of Republicans in Congress, and warmly embraced by presumptive GOP candidate Mitt Romney - is the biggest sign of insanity yet.

Not that our national leaders are lemmings. Far from it. They're intelligent economic actors behaving in a way that ensures they'll receive future rewards. So if we don't like the way this story ends, we'll have to change it ourselves.

No, politicians aren't the lemmings in this story. Until the time comes when we demand something different from our leaders in Washington ...

... we are.

The Democrats' Jobs Dilemma: Celebration vs. Call to Action

Richard Eskow — Mon, 12 Mar 2012 04:15:22 -0400

Perhaps my reaction to the latest unemployment statistics is colored by the fact that I'm reading them in Africa, far from the comfortable familiarity of Washington, New York, and California. There's nothing like the songs of unfamiliar birds as the sun rises over the hills of Pretoria to accentuate the strangeness of conventional Beltway wisdom.

But no matter where you are, it should always be disorienting to see the the words "8.3 percent unemployment" alongside phrases like "good news" and "economic recovery."

Barack Obama and his fellow Democrats are in an unenviable position: If they celebrate the tepid revival of jobs growth they run the risk of being seen as out of touch with the ongoing pain of many Americans and the reduced prospects for many others. If they acknowledge the ongoing misery that has abandoned millions of Americans to long-term joblessness, and millions of others to wage stagnation, they're giving ammunition to their own opponents.

The President hasn't struck the right balance yet.

"The economy is getting stronger," President Obama said on Friday. "When I come to places like this and I see the work that's being done, it gives me confidence there are better days ahead. I would bet on American workers and American know-how any day of the week."

But the rosy picture is filled with fracture lines: The pace of growth still isn't enough to bring unemployment down to reasonable and historical levels in the next several years. We're not creating the right kind of jobs. Even this tepid recovery is fragile, and could collapse at any moment because of events beyond the President's control.

Let's put the latest employment figures into perspective:

We've had three consecutive months with jobs growth of more than two hundred thousand. That's an improvement, of course, but it still leaves more than twenty million people un- or under-employed. And the fastest growing category of employment is in temp work, followed by health care (mainly low-level caretaker jobs) and "leisure" - which is described as consisting primarily of "food service and drinking places."

If it's "morning again in America," at least we know somebody's been hired to pour the coffee.

But we also know that this is not a sustainable path forward. If you want to revive the economy you need to provide well-paying jobs, which isn't happening. In fact, we're barely denting the long-term unemployment problem.

The Democrats seem to be searching for the formula that will carry them to victory. How about the truth? The truth is this: The stimulus measures worked, but we need more action. Without it the long-term reality for millions of Americans will be one of perpetual economic recession or depression.

The President could say "Our stimulus measures worked, but we compromised with Congress and didn't get enough. That means we need more of the same, because we need to improve on these successes by helping millions of people join in the recovery - which will help all of us."

Is that what he will say? There are no crystal balls in the immediate vicinity, so we don't know. But if he doesn't, he's leaving his fate in the hands of forces beyond his control - and leaving millions of Americans with no one to speak for them.

Obama vs. Obama: One Budget, Two Competing Visions of the Future

Richard Eskow — Tue, 21 Feb 2012 01:22:43 -0500

Today the Western world is divided between two visions of our economic future. One vision is of austerity and the other is of growth. One is of hope and possibility, the other of despair and cynicism. The battle between these two visions has divided the United States and the entire Western world.

And both of them can be found in in President Obama latest budget.

It's almost as if the President decided that if the Republicans can't provide him with a challenger worthy of this debate, he'll conduct it with himself.

Double Vision

In one vision, the excesses and errors of the 1 percent have left the Western world too broke to fulfill its social contract with anyone but the wealthiest among us. Middle class and lower-income citizens must be abandoned to face a future of ever-dwindling resources. Government's only permissible spending is on wasteful military systems that enrich wealthy contractors and their corporations.

In the other vision, government retains its role as an engine of growth and change. It's wise enough to invest in long-term expansion before pivoting to address its deficit problems. It manages its budget, not "like a family," but like a business - one that understands that well-timed investment is the key to continued growth and prosperity, In today's world, that means investing in jobs, research, education, health, and infrastructure.

The President's budget won't pass, of course. The Republicans have made it clear that they would rather reject anything he proposes.At least the President's learning to fail more effectively than he's done in the past. He's finally starting to draw the clear distinction between growth and greed that the left's been advising him to make all along.

But he's still repeating the failed deficit logic of the past, too. Both of these approaches can be found in his budget. Which President will win the day?

Pro-Growth Obama

In this budget the Pro-Growth, Pro-Fairness President commits himself to real spending for jobs, with less of the smoke-and-mirrors pseudo-spending represented by tax cuts and other gimmicks. He commits to $476 billion in transportation spending, $141 billion in research and development, and additional spending on education and other initiatives.

The budget presentation given to the press by Alan Krueger, who chairs the President's Council of Economic Advisors, was as eloquent an explanation of our economic situation as has been given from the White House in many decades.

The Pro-Growth President would end the Bush tax cuts for income over $250,000 (which is not the same as "ending Bush-era tax cuts for families who earn more than $250,000," as the Wall Street Journal should know. A family that earns $250,001 would only lose that tax break for $1 in income. C'mon, guys, get it right.)

The Pro-Growth President also ends the 15 percent cap on dividends for earnings above $250,000 and imposes the "Buffett rule" of a 30 percent minimum tax rate for high earners. And it would collect $61 billion from Wall Street with a "Financial Crisis Responsibility Fee."

Well done, Mr. Pro-Growth President!

Austerity Obama

Unfortunately, with this budget Barack Obama also presents himself as the Austerity President. That's the same President who turned the economic reins over to failed economic thinkers - the kind who bullied down Christina Romer's $1.8 trillion stimulus recommendation, which conceivably could have ended the Great Recession and helped the 23 million Americans who are still un- or under-employed.

The Austerity President once again commits himself to the meaningless - and potentially reckless - goal of reducing the Federal deficit by $4 trillion over the next ten years. Most economic experts agree that a period of pro-growth spending should be followed by a concerted effort to address the Federal deficit. But it's too early to know when and how that should best be done.

By committing to this artificial goal, the President is reinforcing the pro-austerity arguments of his opponents - and of the decision-makers who have gutted Europe's economy and thrown it into another recession.

How badly has austerity wounded Europe? Its economy shrank by 0.3 percent in the last quarter of 2011. The deceleration continued throughout 2011: 0.8 percent growth in the first quarter, 0.2 percent growth in the second quarter, 0.1 percent growth in the third quarter, and -0.3 percent growth in the fourth quarter.

Italy swallowed the recessionary pill forced on it and is now officially in its fourth recession in the last ten years. It's not even really deficit reduction: The more Greece accedes to the demands of the Austerians, the worse its deficit becomes.

Heck of a job, Sarkozy and Merkel-ie! If that's not recession, it's recession's first cousin come for a very long visit.

Weak Tea

The Austerity President is too diffident to propose corporate tax changes that would significantly increase overall collections, even though the real tax rate for US companies is one of the lowest in the developed world. Apparently the fact that corporations are sitting on three trillion dollars in cash isn't enough to convince the White House that our corporate tax structure is seriously askew.

The Austerity President's pro-growth measures are still too small. Even if they were enacted, millions would still go without the work they need and want. $476 billion over six years is less than $80 billion per year. We need a short, sharp infusion of several times that amount to create jobs and restart the economy. We need it for 23 million people who need work, for an entire generation that's beginning its work life under the twin shadows of debt and unemployment, and for especially hard-hit minority workers.

Rebuilding our crumbling infrastructure alone will take an estimated $1.7 trillion, according to the American Society of Civil Engineers, and if it isn't done the entire economy will suffer.

And asking banks to pay $61 billion over ten years for destroying the economy is equally timid. That's $6.1 billion per year, which is a tiny fraction of the $20 billion bankers paid themselves in bonuses in 2010 alone, three years after destroying the economy and being rescued by the same taxpayers they continued to mistreat.

Austerity Cuts

The Austerity President's budget cuts social programs by a devastating 14 percent, after years of skyrocketing poverty and barely-abated widespread unemployment, much of it at historically high long-term levels As Karen Dolan notes, cuts would affect health care services, career opportunities programs for low-income people, Children's mental health services, housing for disabled people and people with HIV/AIDS, Rental Assistance benefits for low-income people, Community Development Block Grants, and programs in the National Park Service.

The Austerity President's budget cuts funding for the Department of Labor by five percent, a reduction that will mean less enforcement of working people's rights - and therefore less financial security for the middle class. As we should have learned by now, the middle class is the engine of economic growth. Anything that cuts into its prosperity hurts the entire economy.

The Austerity President's budget ends Saturday mail delivery, meaning that staffing cuts would presumably follow, and would impose an additional middle-class tax by allowing it to increase postal rates more quickly than the rate of inflation.

The cuts to Medicare place the burden on seniors, not on runaway health profits. They're just tinkering with a broken system. The Austerity President would rather not address the systemic problem that profit-making incentives present to our health economy. Increasing out-of-pocket costs and making overly crude cuts to provider reimbursement aren't the solutions we need.

The Austerity President cuts $33 billion for the Superfund to clean up toxic waste. It cuts $359 in Environmental Protection Agency funds for safe drinking water infrastructure, which is a doubly bad idea since it also costs the economy much-needed jobs. It even cuts $459 million in heating oil assistance for low-income households, which is very badly timed given oil's unexplained price increases lately.

The Austerity President's budget even cuts bacteria testing for produce, a reduction that fits in with the Austerity President's penchant for echoing anti-regulatory rhetoric from the right.

Austerity = Military Spending

Like other so-called austerity thinkers, this Austerity President makes an exception to his anti-spending beliefs when it comes to massive military expenditures. Despite the advertised Pentagon "cuts" - which are really reductions in the rate of growth - the President's budget spends more than half a trillion dollars for military spending in our post-Cold War world in 2013 alone.

$535 billion in spending goes to standard Department of Defense operations, while another $88.5 billion goes to the wars in Iraq and Afghanistan. Homeland Security and the intelligence agencies account for nearly $100 billion in additional spending.

How much is the Administration planning to spend in its much-touted expansion of its investigation into the Wall Street fraud that shattered the economy? $55 million in new spending, That's $55 million in new spending to combat securities and mortgage fraud, versus nearly three quarters of a trillion in national security spending. $55 million is roughly 1/500th of the Justice Department's total budget.

Two Vision, One Budget - and an Election

The President deserves praise for submitting a budget that's much better than those of earlier years. He has clearly learned that progressives have been giving him the right advice all along: Americans want someone who will fight for them, someone who will articulate a vision of government's role in securing a better life for all of us. This budget makes that case. But it also repeats some of the erroneous assumptions and flawed austerity thinking that's been so thoroughly discredited by Europe's recent experience.

Sadly, the negative ideas are still at least as visible in this budget as the newer, more constructive ones. It's not clear what advantage the President and his advisers think he'll gain from amplifying the right's messaging and muddying his own. Do they really think they'll stop calling him a "socialist"?

If the economy is still seen as improving throughout the year - and given the low quality of opponents the Republicans seem determined to send his way - the Two-Vision President could win handily. But if there are more setbacks - a European bank crisis, more oil shocks - the President will need to articulate a clear, unadulterated vision of economic growth. The ambiguity of this budget won't help him do that, and there are land mines that could hurt him with key constituencies.

Last year at this time we were facing a Washington consensus that seemed unaware of the economic reality faced by most people outside the Beltway. This year that's changed. At least there's a raging debate underway between the forces of what the austerity extremists call "creative destruction" - but which is really just destruction - and those who would restore our country to its past prosperity, a task which can and should be done.

It's too bad that both of these forces are led by the same person. The right policies are finally being discussed in Washington. But they're in danger of being drowned out - by the same voice that's articulating them.