Five Washington Excuses for Ignoring the Jobs Crisis

"Slowly but surely we are moving in the right direction. We're on the right track." ~ Barack Obama, Aug. 18, 2010

President Obama's pollyanish comments coupled with Press Secretary
Robert Gibbs' outburst against "the professional left" reveal just how
out of touch the Obama Administration is with the tens of millions of
everyday Americans who are engulfed by the jobs crisis.

Obama and Gibbs
are miffed at liberal pundits for complaining about the Administration's
concessions on everything from health care and financial reform to jobs
creation. But Obama's real problem isn't Arianna Huffington or Paul
Krugman. For now, liberals have no place else to go--and they'll never
cross over to the Republican Party.

Instead, the Administration should be very worried about the more
than 29 million Americans who have lost their jobs or are forced into
part-time work. Unemployment is stuck at 9.5 percent--and that's just
the narrowest measure of joblessness. The more accurate Bureau of Labor Statistics jobless rate (U6)
is over 16.5 percent. (This includes people who have stopped looking
for jobs and those working part-time involuntarily.) Five workers are
competing for every job opening while the average length of unemployment
is over 35 weeks. If it weren't for unemployment insurance and food
stamps, we'd have Depression era soup kitchen lines going round the
block.

Since the 1930s struggling workers like these have flocked to the
Democratic Party, which they viewed as the party of jobs. Now they're
not so sure, and the party risks losing its mass base

Our current unemployment trough, by far the longest and deepest since
1937, directly violates the social compact that glues together modern
industrial societies -- the tacit commitment that business and
government will produce a full-employment economy. When that promise
goes unmet for long periods, chaos ensues. It is not an accident that
the rise of fascism in Europe during the 1930s corresponded with a
prolonged period of high unemployment. Unfortunately, rearmament and war
also are tools to put people back to work. Our political and business
leaders are playing with fire by failing to seriously address the jobs
crisis.

Wall Street gamblers tore an enormous hole in our economy, destroying
8 million jobs in a matter of months. Those jobs still haven't come
back and may never return. Therefore, it is the fundamental purpose of
government to relentlessly attack the problem, just as we did during the
Depression, with long-term funding to get people into decent,
sustainable jobs. But instead of shouldering this responsibility, far
too many politicians and public officials of both parties hide behind
spurious arguments. Here are a few of the most outrageous:

1. "The unemployed have only themselves to blame": It's
   remarkable how many politicians and pundits argue that joblessness is
   sky-high because unemployed people haven't developed "the skills they
   need to compete successfully in the 21st century." We expect that kind
   of twisted logic from anti-worker conservatives who think that
   unemployment insurance keeps workers from finding jobs (even if there
   are no jobs). But it's downright pathetic when a Democratic
   administration sings from the same hymnal. Here's Treasury Secretary Timothy Geithner at the pulpit:

   "The share of workers who have been unemployed for six
   months or more is at its highest level since 1948, when the data was
   first recorded, and we must do more to ensure that they have the skills
   they need to re-enter the 21st-century economy."

   Dear Tim: Now that your Wall Street buddies have wrecked the economy
   and you've bailed them out, there are no jobs--except maybe for
   derivatives traders. What skills enable people to find nonexistent jobs?

2. "Unemployment is a lagging indicator -- the jobs are coming":
   The Obama Administration and Democratic Party leaders fall prey to
   their own version of trickle down economics when they argue that their
   mammoth Wall Street bailout and puny, short-lived stimulus program will
   bring back jobs for regular Americans (eventually).

   Money was no object when it came to bailing out every bank and
   investment house that could possibly be put on life support. By some
   estimates the financial sector got over10 trillion in bailouts.
   Economists Nouriel Roubini and Stephen Mihm estimate that Goldman
   Sachs alone got60 billion in direct and indirect taxpayer largess. This
   huge cash infusion worked like a charm: Financial elites quickly got
   back to collecting fat bonuses and reopened their casinos, setting the
   stage for Financial Collapse 2. The Administration looked the other way.

   Then came a modest stimulus package designed to prime the pump with
   tax cuts, public works bills and programs to quickly push money into the
   economy. The Administration hoped that this primed pump -- plus a
   resuscitated financial sector -- would bring unemployment down below 8
   percent by the mid-term elections.

   Unfortunately, that part of the plan didn't work: The stimulus was
   far too small and diffuse to restore the millions of jobs that the
   financial gamblers had destroyed. We now need 22 million new jobs to get
   back to 5 percent unemployment. That's a tall order -- the equivalent
   of creating 640 Apple Computer companies, with 34,000 employees each.

3. "We can't afford a job creation program -- it'll increase the deficit": It's
   certainly true that the deficit is growing rapidly as a result of the
   Wall Street crash and bailouts. But if we want the deficit to shrink,
   we'll have to put people back to work so that they start paying taxes
   again. We also need to place a significant windfall profits tax on the
   very financial elites who wrecked the economy. We wouldn't have a
   deficit problem if our politicians had the will to truly tax the
   super-rich -- those earning3 million or more a year. (More on this
   below.)
4. "US workers are overpaid. Cut wages by about 20 percent and the jobs will come back": Apparently
   many officials and business leaders actually believe this. Fed Chief
   Ben Bernanke, for example, argues that during the Great Depression,
   workers' refusal to take more wage cuts during a period of deflation
   kept employers from hiring, driving unemployment to new heights.
   So...now that Wall Street has run off with the taxpayers' money, the
   taxpayers need to live with less so they can have jobs. (Never mind that
   we've already stumbled through decades of stagnant wages.) Wage cuts
   indeed are badly needed -- on Wall Street.
5. "Government interference is creating uncertainty in the private sector and keeping companies from creating new jobs":
   The government haters, reinforced by the know-nothing Tea Partyites,
   really believe that if government would just leave private enterprise
   alone, it would generate jobs for all. Maybe these folks didn't notice
   that the crash we just lived through happened precisely because the
   government let the free market run wild. It's probably impossible to
   convince ideologues that the private sector can't police itself or
   create millions of new jobs all on its own -- even though we've known
   this for more than 80 years.

   The Republican Party, hiding behind this ideology, hopes to see the
   economy collapse again so it can reap the rewards in November. (Might
   the giant Wall Street firms quietly engage in a capital strike to retard
   economic growth and help anti-regulatory Republicans recapture
   Congress? No, they wouldn't do that... Would they?) The Republicans are
   hoping that by the time they take power again, the economy will quickly
   right itself and they can take the credit. That and the Tooth Fairy will
   bring us new jobs. The Republicans are playing a very dangerous game
   that is likely to worsen an already severe jobs crisis and send our
   nation into uncharted and dangerous territory.

We can't tackle the jobs crisis until we're willing to tackle Wall
Street. Both Democrats and Republicans have stood idly by as the wage
gap has turned into a Grand Canyon of inequality. (In 1970, the top 100
CEOs made 45 times more than the average worker; in 2008, they made
1,081 times more. See The Looting of America)
Almost no one in Washington has the nerve to challenge Wall Street's
socially useless and reckless financial games. They're afraid to say
that it's wrong that the top 25 hedge fund managers made as much money
during 2009 as 658,000 teachers -- or that the top ten hedge fund managers "earn" $900,000 an hour.
The money for job creation is right there, in the hands of the elites
who profited so handsomely from the financial meltdown they helped
create.

The American people are hungry for proposals to rectify this
injustice. Why not turn Wall Street's ill-gotten gains into programs
that put our people back to work? Here's a plan we'll probably never
hear from Democrats, Republicans or the Tea Party:

Place a windfall profits tax on the super-rich who profited from our
bailouts to pay for the jobs that these gamblers destroyed.

Call it a windfall profits tax or a financial transaction fee. But
really it's reparations, long overdue. Tens of millions of Americans are
suffering through no fault of their own. These working people didn't
buy houses they couldn't afford. They didn't gamble their life's savings
on derivatives and securitization.. They just went to work one day and
were told their job was gone. They came home to find their neighborhood
disintegrating as the housing bubble burst around them. All thanks to
reckless financial games on Wall Street.

Unless the Obama Administration finally organizes a major assault on
the jobs crisis, there will be no relief for Mr. Gibbs or his boss. Many
angry Americans -- liberals and conservatives -- will turn against the
party in power.

Too bad we no longer have a real Party of Jobs to support.