Today’s September jobs report provides a sober corrective to President Obama’s forceful speech on the economy yesterday. The president claims a “new foundation” for growth has been put in place. The jobs numbers report a continued recovery – 248,00 new jobs, with the unemployment rate dropping to 5.9 percent – that still is not reaching the pockets of most Americans.
The president boasts of “the longest uninterrupted stretch of private sector job creation in our history,” producing 10 million jobs over the last four-and-one-half years. The jobs report reveals that nearly 19 million are still in need of full-time work. The percentage of Americans in the workforce was unchanged and remains below pre-recession levels. The percentage of the population that is employed is similarly stagnant. The official unemployment rate is misleading. The Fed should keep its pedal to the floor.
The president boasts of a “revitalized American manufacturing sector,” with over 700,000 manufacturing jobs created since the recession. But America lost six million manufacturing jobs from 1998 to 2010. The September jobs numbers show virtually no change in manufacturing (4,000 added jobs), a rate not close to what’s needed to reach the president’s modest goal of one million new manufacturing jobs in his second term.
Most Americans think we are still in recession. How can the economy continue to grow and Americans not feel it? That’s because in this recovery, the richest 1 percent are pocketing virtually all of the rewards of growth, while the rest of the country can’t get a raise. As the president notes, the typical household is not bringing home “any more than it did in 1997.” The top 10 percent now take home a staggering 50 percent of total income. Household wealth for those beneath the top 1 percent has not recovered from the recession. The heirs to one family – the Waltons – how have as much wealth at 40 percent of Americans.
President Obama acknowledges that “millions of Americans don’t yet feel enough of the benefits of a growing economy where it matters most – and that’s in their own lives.” But the president would like some credit for the progress that has been made. And it is easy to understand his frustration.
He notes rightly that because of health care reform, more Americans have affordable health care, and the reforms have helped slow the growth of costs, saving Americans hundreds of billions from their pockets, and from lower projected government spending. The federal budget deficits that Republicans used to rail about have come down as the economy and tax revenues have recovered. With the spread of fracking, America is on the verge of being energy independent, and has made important – if grossly insufficient – advances in moving towards renewable energy and energy efficiency. Americans are enjoying a break at the gas pump.
And the president surely is right to emphasize the harsh costs of the mindless Republican obstruction that has blocked virtually every effort to lift the economy. At a time of record low-interest rates, they have blocked all measures to rebuild our aged infrastructure and put people to work. They have slashed needed R&D. They have cut investments in education. They blocked the president’s call for expanding preschool for children, in order to protect tax breaks for hedge fund billionaires. They opposed shutting down offshore tax dodges, aiding turncoat corporations that abandon America to avoid paying taxes. They blocked Sen. Elizabeth Warren’s effort to allow those with college debts to refinance at today’s low rates. They block expanded investment in renewable energy and energy efficiency, vital to capturing a lead in the green industrial revolution that will define tomorrow’s markets.
They torpedo all efforts to reform labor laws to revive the right of workers to organize and bargain collectively. They stand in the way of comprehensive immigration reform, which would bring millions out of the shadow economy. They vote down pay equity and paid family leave vital to today’s working parents.
Their passion is to repeal the health care reforms that have provided millions of Americans with affordable insurance and to disembowel the Consumer Financial Protection Agency that already has provided Americans billions in relief against financial fraud and chicanery. It is hard to imagine why any rational voter would want to support this crowd.
But this obstruction and the limits of the president’s own administration’s policies undermine the president’s claim that there is a new foundation for growth. The sad reality is that the old, imbalanced economy has repelled virtually all efforts of structural reform.
America’s imbalanced trade policies are still in place; our continued trade deficits with China remain unprecedented in the history of nations. America remains passive in the face of currency manipulation in China and now the European Union; multinationals continue to rig the rules to help ship good jobs abroad.
America’s financial industry is still bloated; the big banks are bigger and more concentrated than ever. No major bank executive has been prosecuted for the systemic frauds that blew up the economy. The big banks remain too big to fail and the banksters too big to jail.
Our income and wealth disparity is growing worse, not better. The wealthiest 1% has captured virtually all of the rewards of growth. Corporate profits are a record percentage of the national economy; workers wages wallow at record lows. Profits and productivity and CEO bonuses rise; workers do not share in the rewards. Unions remain under fierce attack, with worker rights eroded; multinationals continue to rig global rules to duck taxes and undermine basic regulations.
College debt is getting worse, not better, and more and more students are being priced out of the college education or advanced training they need. In education, we aren’t even doing the basics needed to provide every child with a fair start: prenatal care and infant nutrition, universal pre-k, small classes in early years, after school programs, skilled teachers amply rewarded, affordable college or advanced training. Instead we test schools that are set up to fail and punish their teachers when they do.
We continue to tax the core wealth of middle class families – their homes – each year, but refuse to tax the wealth of the richest families – held largely in stock and bonds. The income of investors is still taxed at lower rates than the income of workers.
Our infrastructure grows ever more decrepit and dangerous, and ever more of an economic burden. We aren’t building the modern infrastructure essential to meeting the economic and climate challenges of this time. From our airports to our water systems, our broadband to our electric grid, our buildings and our transport systems – we are laggards, not leaders in the world.
In his speech, the president celebrated America as the place they call when the “alarms go off.” But the costs of policing the world – and of unending interventions – in lives, resources, attention and liberties continues to grow. The president rightly says our role in the world depends on the strength of our economy and our democracy here at home, but we aren’t coming close to making the public investments necessary for our economy and our politics grows ever more corrupted.
President Obama is right to seek credit for saving an American economy that was in free fall when he took office. He is right to boast of the millions aided by health care reform, although much more needs to be done. But a new foundation for growth? This has been starved at the roots by his obstructionist opposition and by the limits of his administration’s own vision.