It’s been four years since Wall Street ruined the economy, we’re nearly nine million jobs behind where we need to be, and for years our politicians have debated how much less – not how much more – they’ll do about it. Now we’re about to be hit with another round of devastating spending cuts, thanks to the so-called “sequester.” Today, let’s rise up and demand action from Congress on our real problems once and for all.
We Americans must be a remarkably patient people. We’ve patiently endured lectures about “tightening our belts” while most Americans watched their wages decline. We’ve stood by as corporate forces manipulated politicians and the press into a manufactured sense of deficit hysteria, watched several rounds of spending cuts make our problems worse and seen their austerity ideologies discredited by events.
And yet there are no uprisings, no mass demonstrations, no demands for jobs now and an end to any further cuts until the economy’s working again.
As we were saying: A remarkably patient people. You could even say too patient.
1. We need nine million jobs.
The Wall Street financial crisis left us with a “jobs deficit” of nearly nine million: 3.2 million jobs lost because of the recession and 5.3 million jobs which haven’t been added as the workforce continues to grow.
This has been especially brutal for young people, minorities, and the long-term unemployed.
2. We’re not creating nearly enough jobs to get us out of the hole.
The revised numbers show that we created an average of 175,000 jobs per month in 2012. That’s better than the 150,000 initially reported, but it’s not nearly enough. As Heidi Shierholz of the Economic Policy Institute notes, we’d need 330,000 per month to achieve acceptable employment by the end of 2015.
January’s jobs report showed 157,000 new jobs. That rate of job creation doesn’t get us to acceptable levels of employment until 2021.
3. Middle-class jobs are disappearing.
A new paper from the National Bureau for Economic Research confirms what many people have long suspected: Middle-class jobs are disappearing. It’s called “polarization” – the hollowing out of middle-income jobs, leaving only low-paying jobs as well as a few very highly paid ones.
The “polarizing” losses have been even more severe as the result of the last recession, and they’re not coming back.
4. Youth unemployment is still at devastating levels – while older Americans can’t retire.
Our leaders lack the political will to create jobs, and that’s become the real “war on the generations.” Youth unemployment remains at extremely high levels, with grave implications for the lifetime earning ability of an entire generation.
Meanwhile, nearly two-thirds of Americans between the ages of 45 and 60 say they expect to be forced to delay their retirements. That number was a sharp increase from the 42 percent who said the same thing only two years ago, and the change was attributed to “financial losses, layoffs and income stagnation.”
5. Meanwhile, nearly half of all American households are teetering on the edge of crisis.
Middle-class households are hanging on by a thread. Laura Clawson reviews a new report and notes that “more than 40 percent of American households are one crisis and less than 90 days from poverty.”
6. Consumer confidence is falling.
With figures like these, it shouldn’t be surprising to see that consumer confidence is down. Despite a surge in the stock market, a study released last week showed that consumer confidence fell to its lowest level in more than a year.
Via Isaiah J. Poole we read this observation from Chad Stone, Chief Economist for the Center for Budget and Policy Priorities: “With enough demand, the economy could be producing a trillion dollars more output and several million more people could be working.”
But the demand’s not there. Consumers aren’t buying. They don’t have the money to spend and they’re fearful for the future.
7. The government is planning for eight more years of misery.
And yet, instead of acting, the government is planning for eight more years of misery. Even December’s jobs number, which was revised upward to 196,000, falls far short of the growth we need.
Even if the government acted swiftly and boldly and doubled this month’s job creation going forward, this would be the longest post-recession unemployment crisis in modern history. This would still have been the longest period of post-recession unemployment in modern history, spanning nearly seven years from the initial collapse to the return of full employment.
We’re not even doing that. We’re not even talking about doing it.
8. Instead, government is cutting jobs instead of creating them.
Shierholz also notes that 645,000 government jobs have been lost since the start of the recovery. While most of these losses were at the state and local level, they can be directly tied to cutbacks in federal aid to the states.
645,000 lost jobs: That canceled out four months of private-sector job growth.
9. We’ve already cut $1.5 trillion in spending.
The Federal government has already cut $1.5 trillion in spending over the next ten years, and we’re seeing the effect of those cuts in lost growth and lost jobs. That brings non-discretionary government spending down to its lowest level on record (as a percentage of GDP).
10. And now the sequester’s coming.
And now comes the sequester. This program of mandatory spending cuts, if not repealed, will cost another 1 million to 1.4 million lost jobs, depending on whether you use the Bipartisan Policy Center’s estimate or the CBO’s.
That’s more than a year’s worth of sluggish job growth, erased. It would also slow economic growth by about three-quarters of a percent – conceivably enough to plunge us back into recession.
11. Deficit hysteria was a hoax … and it’s passing.
Former Tennessee Governor Phil Bredesen, who’s part of the deficit-hawking crowd, gamely acknowledged what we’ve been saying for so long: deficit mania is a calculated hoax. Or, as Bredesen put it, an “artificial crisis.”
For a long time, it worked. Despite all evidence to the contrary, mainstream press outlets have continued to insist that the federal government has a “spending problem” and that our most urgent economic need is to lower the government deficit. This deficit hysteria was the product of a decades-long anti-government and anti-tax jihad financed in large part by billionaire Pete Peterson, which drew in all of the Republican Party, along with leading Democratic luminaries like Bill Clinton.
Now the fever may be breaking. A recent headline in the Los Angeles Times read “U.S. debt woes are not so dire, experts say.” Those experts have been saying that for a long time. It may have finally become permissible to report that fact, just as it finally became permissible to report that the stated reasons for invading Iraq were false.
Not a moment too soon.
12. Spending cuts don’t cure recoveries, they kill them.
The entire premise was flawed from the beginning, and now we have irrefutable evidence. Austerity economics – the thinking behind the deficit craze – has been throughly discredited by the relentless unfolding of reality.
Great Britain’s impending triple-dip recession is the direct result of that country’s deficit-driven austerity policies. Europe’s economic agony is also driven by ill-timed deficit policies. The claim that “businesses won’t hire because of uncertainty about government spending” was disproven by December’s jobs numbers, when hiring actually increased during a time of uncertainty over the “fiscal cliff.”
And inflation, a specter which deficit-mongers have long used to justify their policies, is arguably too low right now.
13. It’s irresponsible for the government not to borrow right now.
As Matt Yglesias notes, the government can actually borrow money right now at negative interest rates. Investors will actually pay the government to keep and use their money for a while. (I disagree with Yglesias when he says we should borrow instead of taxing; we should do both, at least at the highest income levels.)
It’s irresponsible not to borrow that money now, and use it now, to create jobs and growth in the short term. We’ll have a much healthier economy when it’s time to pay it back. And we’ll have more money in the Treasury because we borrowed it.
14. And another Wall Street crisis could come at any time.
Our economy could easily turn out like one of those horror movies where the monster seems dead but reappears in a scream-inducing moment in the final scene. Wall Street’s too-big-to-fail banks are even bigger than they were before the crisis, and they’re still being run irresponsibly. JPMorgan Chase proved that with the “London Whale” scandal, which occurred in a unit reporting directly to media darling and politician favorite Jamie Dimon.
Dimon famously – and arrogantly – claimed he told his seven-year-old daughter that financial crises occur every five to seven years.
They can, and sometimes they do, but not because they’re a phenomenon of nature of an act of God. They happen because they’re built into our financial system’s business model – and by Dimon’s reckoning we’re just about due for the next one.
There are more than 14 reasons to rise up, of course. But you don’t have all day, do you? You have a job to go to – if you’re lucky enough to have a job. Or you have to look for one if you don’t.
Besides, you’ll need some time today to contact your representative, senators, and president (use this page) – and to organize than demonstration you’ve been thinking about. Now would be a very good time to get started.