By Katrina vanden Heuvel
Tuesday, May 18, 2010;
Why isn't our government doing more to put people back to work?
Mass unemployment is a human and national calamity. It destroys families, crushes hopes. The longer it lasts, the more it cripples economic recovery and undermines democracy. Nearly 27 million Americans are unemployed or can't find more than part-time work. Yet legislators are reacting to this reality somewhat like the proverbial deer in the headlights, frozen, hoping not to get run over.
Maybe there's a sense that they've already taken care of the problem. Indeed, in a speech in economically beleaguered Buffalo last week, President Obama came close to declaring victory. Beyond giving a perfunctory nod to Americans who are still hurting ("I won't stand here and pretend that we've climbed all the way out of the hole") and talking a bit about small business loans, Obama wanted to celebrate: "We can say beyond a shadow of a doubt, today we are headed in the right direction. . . . All those tough steps we took, they're working. Despite all the naysayers who were predicting failure a year ago, our economy is growing again. Last month we had the strongest job growth that we'd seen in years. . . . Next month is going to be stronger than this month. And next year is going to be better than this year."
It's true that the president's recovery plan successfully stopped the economic free fall he inherited. The economy has started to grow again, and that growth is beginning to produce some jobs, with more added last month than expected.
But the hole is deep. At the current rate, it would take five years to return to pre-recession rates of employment. And there's real doubt as to whether the current growth will continue. The Recovery Act and the extraordinary intervention of the Federal Reserve have given the economy its greatest lift. Yet Recovery Act spending peaks this fall, and brutal cuts at the state and local levels are already negating its effects. Meanwhile, the Fed is slowly beginning to unravel its emergency subsidies, but zombie banks still aren't doing much lending. And, of course, no one knows how far the economic turmoil in Europe will spread.
It would seem that new action by Congress to create jobs is more than justified. Yet there wasn't much in the president's Buffalo speech that would make a compelling argument for acting now on jobs.
Also standing in the way of government action is the increasingly loud conversation about the coming debt crisis. The president's bipartisan deficit commission, stacked with deficit hawks, has prematurely launched a debate about U.S. austerity.
It doesn't help that some voters, especially independents, are starting to tell pollsters that they're concerned about deficits and suspicious of spending.
But deficits, for all the scare stories, are not an immediate emergency. We still need to put people to work. And we should be prepared to see deficits increase in the short term in the interest of creating jobs that will sustain the economy in the long term.
Yet without a strong argument from the White House, and with a consensus building around the idea that deficit and spending cuts should be the priority, too little is happening on jobs. Last December, the House passed a $150 billion jobs bill. It can't get a hearing in the Senate. This year, Rep. George Miller (D-Calif.) introduced a $100 billion bill for state, local and public service hiring. It hasn't gotten a vote in the House. Even an extension of unemployment insurance and health-care protection through the end of the year faces conservative obstruction. Republicans tend to line up against any new jobs agenda. And when Blue Dog Democrats, worried about deficits, join them, there's not much hope. In fact, what is needed is something far bolder. The AFL-CIO has detailed a $400 billion plan that would put people to work. This would have a negligible effect on long-term debt projections, which primarily reflect soaring health-care costs. And a jobs agenda could be paid for once the economy got going. The AFL-CIO suggests passing a financial-speculation tax and a tax on banks that kicks in a couple years from now. That at least would send the bill for the crisis to those who caused it.
Compare Obama's words with the straight talk of Rich Trumka, the new president of the AFL-CIO: "When it comes to creating jobs, some in Washington say: 'Go slow, take half steps, don't spend real money.' Those voices are harming millions of unemployed Americans and their families -- and they are jeopardizing our economic recovery. It is responsible to have a plan for paying for job creation over time. But it is bad economics and suicidal politics not to aggressively address the job crisis at a time of stubbornly high unemployment."
Bad economics and suicidal politics. He got that right. Unemployed workers can't help the economy grow. And while economists may chatter about recovery, voters won't believe the economy is on the mend until people are back at work, and the outcome of the November elections will hinge on that perception. It would be smart economics and smart politics to summon the will to take action on jobs. A nation that ignores the calamity of joblessness is a nation at risk.
Katrina vanden Heuvel is editor and publisher of The Nation and writes a weekly column for The Post.