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Let’s Make It Official: Obama Is Not Serious About a Real Recovery

A bold jobs plan will have to be pushed from the grassroots

by Roger Bybee

Just over one year ago, Treasury Secretary Tim Geithner wrote a New York Times op-ed titled "Welcome to the Recovery," in which he proudly announced that "a review of recent data on the American economy shows that we are on a path back to growth." 

Members of the nurses union, National Nurses United, and other workers converge on Wall Street to protest against financial intuitions and inequality on June 22, 2011 in New York City. (Photo by Spencer Platt/Getty Images) It was the domestic equivalent of George W. Bush's infamous "Mission Accomplished" banner trumpeting the end of the Iraq War.

Yes, “the devastation wrought by the great recession is still all too real for millions of Americans," Geithner conceded. But despite the fact "we suffered a terrible blow," America was "coming back." 

But a variety of recent data show precisely how delusional Geithner—and his boss in the White House—have been.

President Obama long ago ceased talking about how America’s growing inequality means that working families have lower wages to spend and thus—through their collective consumer spending—cannot induce corporations to hire new workers and invest in new equipment.

Wage gains have actually been lower over the past 10 years than they were during the Great Depression years, as former Labor Secretary Robert Reich points out: 

All told, it’s been the worst decade for American workers in a century. According to Commerce Department data, private-sector wage gains over the last decade have even lagged behind wage gains during the decade of the Great Depression (4 percent over the last ten years, adjusted for inflation, versus 5 percent from 1929 to 1939).

Job growth among big corporations—whose profits climbed 29 percent in 2010 after exploding 243 percent in 2009—is occurring offshore:

Big American corporations are making more money, and creating more jobs, outside the United States than in it. If corporations are people, as the Supreme Court’s twisted logic now insists, most of the big ones headquartered here are rapidly losing their American identity. 

Prominent among these is General Electric, whose CEO Jeffrey Immelt remains as chair of Obama’s Council on Jobs and Competitiveness. GE has been engaging in a wave of domestic plant closings while offshoring more jobs and imposing painful concessions on healthcare that will lower its U.S. workers’ buying power. 

Three economic trends underscore how far the United States remains from a true recovery:

1) JOB GROWTH CONCENTRATED IN LOW-WAGE SECTORS

Fully 75 percent of U.S. job growth in 2010 was from industries that pay an average of under $15 per hour, according to the National Employment Law Project.

2) SPENDING CONCENTRATED AMONG AFFLUENT

Relying on data from Gallup, Don Peck reports in The Atlantic that from May 2009 to May 2011, consumer spending for those making more than $90,000 actually went up 16 percent. However, for the vast majority in the under-$90,000 category, it has remained flat.

"Three years after the crash of 2008, the rich and well educated are putting the recession behind them," Peck writes. "The rest of America is stuck in neutral or reverse."

3) GOVERNMENT JOB LOSSES FEED DOWNWARD CYCLE

“There is no sector showing especially strong growth right now, and with the government shedding 30,000 jobs a month, we will be fortunate if the unemployment rate doesn't rise over the rest of the year," warns economist Dean Baker.

But Obama’s Chief of Staff William Daley and top political advisor David Plouffe believe "It would be political folly to make the argument that government spending equals jobs."  

The Obama team's unwillingness to make the same argument that was so successful for Franklin Delano Roosvelt in the 1930s betrays both cowardice and a misreading of the American people's desperation for jobs. In the end, its overwhelming desire to win over “independent” voters by showing that Obama is tough on deficits will likely prove to be self-defeating.

The loss of jobs—whether in the public or private sectors—will merely continue the cycle of lower spending power and fewer jobs. A continued economic slump is unlikely to win votes from independents, as pollster and analyst Ruy Teixeira convincingly argues. Citing research by John Sides, Teixeira declares, "voting preferences among pure independents are more influenced, not less, by the state of the economy [than by the deficit issue]."

But deficit hawks like Daley and Plouffe have been winning out over economic advisors like Christina Romer and Jared Bernstein, who have departed after failing in their efforts to prioritize job growth, the New York Times recently reported. Romer, now a professor of economics at the University of California, Berkeley, said:

Playing it safe is not going to cut it... Not proposing anything bold and not trying to do something to definitively deal with our problems would mean that we're going to have another year and a half like the last year and a half— and then it's awfully hard to get re-elected.

Yet “playing it safe” seems to be what we are almost certain to see. There is not much for labor to cheer about in the programmatic ideas the White House has floated so far, according to Dean Baker. “The list of remedies [a cut in the payroll tax, an infrastructure bank, and three NAFTA-style “free trade" deals, among others] leaked ahead of time does little to inspire hope,” Baker grimly writes.

America's labor movement must by now recognize that President Obama, for all of his strengths, is unwilling to take the lead in shepherding the nation out of the Great Recession. 

If there is to be any bold jobs program to emerge, it looks like it will have to originate from labor itself, and be backed up by massive grassroots activism. Lobbying the White House has failed.

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