The New York Times is reporting that the economy back home is still a mess.
Now, the unemployment rate is 10.2%. And even though the economy is technically is a “recovery”, the most recent two recoveries were known as jobless ones, because the unemployment rate took years to move of their highs.
So the feeling is that this one will also be like that. Ten percent unemployment for several years.
People are looking to the President and Congress for solutions. But nowadays the game is a silly one. Years ago, when America had a problem, like “people need jobs”, Congress would figure out ways to get people employed.
But since that weirdo right-wing element of the Republicans became prominent around 1978 or so, the debate is instead swirling around the deficit.
The suggestion is that Congress can either figure out a way to make more jobs, or it can cut the deficit.
To me, this isn’t either-or, it’s both-and.
First, they need to throw out the fiction (i.e. lie) that raising taxes on the very wealthy is a bad for the economy. Yes, raising them on the Ordinary Joe means less economic activity. But if you hike them on people making $1,000,000 a year, it won’t hurt the economy at all.
(This is making $1,000,000 a year, not people who “just” have $1,000,000.)
Use this money to provide incentives to business to hire additional people—whether they would have or not anyway. This makes the risk of ramping up employment for the new recovery less risky.
No one knows the exact figures to make such a process work. But this never stopped the Supply Siders and the rest of the 1978 crowd.
The idea is that they must put a process in place. And right now the feeling is, Congress doesn’t have a clue.
President Obama needs to get out in front on this one. Recapture some of that magic, what was the word–hope–that was so often used in the campaign. Start talking about all the different ways that Congress could encourage jobs creation.
The criticism from the blogosphere and progressive Democrats is that the current administration isn’t trying hard enough to “be Democrats”. In some ways, this is true. Traditionally—that is, since the New Deal—people have expected the Democrats to be keen on the issues of everyday people.
But my own feeling, scanning the headlines, is that Nixon and Ford talked up these bread-and-butter issues more than what Obama is doing, from what I remember in my childhood.
I think Nixon even casually referenced economic problems of 1974 about one or two sentences before the part of his speech where he said he would resign.
Back then, people were very honest that the government has a large role to pay in employment. Obama needs to accept that truth, instead of playing the 1978 game. The one that says that “only private industry creates jobs.”
Everyone knows that isn’t true. It’s government incenting private industry to create jobs that works.