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More Jobs Please

More Jobs Please

One year after President Barack Obama secured passage of his critical economic stimulus package, the U.S. Senate is finally taking anther look at how to create jobs and repair the economy. These issues are more important than ever, but absurd Republican obstructionism and timid Democratic negotiation are once again threatening good public policy.

Not really bipartisan, is it?

As Steve Benen notes for The Washington Monthly, the Senate Finance Committee reached a “bipartisan” agreement to supposedly spur job creation last week. Republicans demanded billions in tax cuts for wealthy people, but kept on caterwauling about the federal budget deficit. In exchange for $80 billion to dedicate to jobs—an extremely modest figure given the state of the labor market—Republicans asked for hundreds of billions in giveaways for the rich. And that’s just to get the bill through the Finance Committee, much less the full Senate.

In a piece for Working In These Times, Michelle Chen notes that Senate Majority Leader Harry Reid pulled the plug on the Finance Committee “compromise,” but stripped out a critical extension of unemployment benefits for laid-off workers in the process.

The Republican uproar over such modest job figures is an economically preposterous political ploy, and Democratic cave-ins to their demands are both bad politics and bad economics. Chen notes that 70% of Americans support a $100 billion jobs bill. And we know what kinds of programs help spur employment—many of them were passed in the stimulus bill last year and have saved millions of jobs.

Stopping the Bleeding

In an interview with Christopher Hayes of The Nation, Economic Policy Institute Fellow Josh Bivens explains that Obama’s economic stimulus package has worked well, effectively stopping the job hemorrhaging that the economy was experiencing immediately before Obama took office. Here’s Bivens:

“We haven’t returned to growth on employment … but the rate of contraction has slowed radically. Immediately before the Recovery Act is passed, we’re losing on the order of 700,000 jobs per month … In the past three months, we’re now down to something like between 50 and 75,000 jobs lost per month, on average … it really is a stark before and after.”

Racial inequality and the recession

The trouble is, the stimulus was only big enough to prevent the economy from getting much worse. It was not large enough to return the economy to serious job growth. And the brutal effects of the recession are not being shouldered equally. As LinkTV’s collaboration with ColorLines illustrates (video below), the Great Recession is hitting people of color much harder, but the story of racial inequality is being lost in stories about statistical economic recovery in the financial sector. The special profiles several families of color struggling to make ends meet in the worst recession since the Great Depression, which features Depression-era unemployment rates for African Americans.

“What we don’t see on TV are the [people] who never had a home or a good job to lose in the first place. These are the millions of poor people whose chance to cross the line into middle class has always been cut short by another kind of line, the color line,” says host Chris Rabb, founder of Afro-Netizen.

Rabb, ColorLines and LinkTV describe a social safety net that has been shredded by opportunistic politicians. Instead of focusing on ways to guarantee good jobs, politicians since the Reagan era have demonized black single mothers by exploiting racist stereotypes in an effort to justify slashing federal supports for the poor and unemployed. The result is a fundamentally unstable economy. Our society has weak demand for goods and services in good times, and that demand completely falls apart when economic conditions deteriorate. And while these socially destructive initiatives have been described as “pro-business,” the truth is, businesses don’t like societies where millions of people are impoverished. They don’t have any customers.

Predatory lending strikes again

The recession hasn’t exactly been a picnic for the middle class, either. In an article for Mother JonesAndy Kroll profiles the mortgage mess that Ocwen Loan Servicing created for borrower Deanna Walters. Unlike millions of other borrowers dealing with mortgage headaches, Walters wasn’t actually behind on her payments. She was making payments regularly, but Ocwen was misplacing them, and charging her thousands of dollars in improper fees. Walters even paid the fees, but Ocwen eventually foreclosed on her home and sold it in an auction without even informing Walters.

As Kroll emphasizes, Ocwen’s antics aren’t unique. There is an entire class of companies known as mortgage servicers that specialize in deceiving and bullying borrowers out of their money. They often use illegal tactics, and as I note for AlterNet, have been systematically exploiting a badly designed foreclosure relief program from the U.S. Treasury Department.

Funding projects that will put people to work

As prominent economist Dean Baker argues for The American Prospect, there are dozens of productive programs that would put millions of people back to work—if they could just get the funding. The government could quickly and easily provide money to improve public transportation, develop open-source software, fund objective clinical drug trials and (my favorite) support writers and artists, whose work would subsequently be available for the public to enjoy for free.

Taxing financial speculation

The federal government can afford these programs right now, especially without any additional tax revenue. But if we’re really worried about the budget deficit, we can always turn to reasonable new sources for taxes. As Sarah Anderson details for Yes!, an obvious place to look is financial speculation. Since excessive and risky trading helped bring down the economy in 2008, a tax discouraging this behavior could make the economy stronger and reap as much as $175 billion a year for the public.

Our economy wouldn’t face troubles of the same order as those it must overcome today if so-called conservatives had not spent decades pursuing a radical agenda to shred the social safety net. The stimulus package has not spurred job growth to date because of cuts demanded by Congressional Republicans, nearly all of whom refused to vote for the bill anyway. Our economy needs a jobs bill now. It’d be nice if Republicans would show some interest in governing, but if they continue to refuse, Democrats must act on their own.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. This is a project of The Media Consortium, a network of leading independent media outlets.

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photo credit: thanks to clementine gallot for the image
Zach Carter, Media Consortium Blogger

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30 comments

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9:59AM PST on Feb 24, 2010

Here is a plan to deal with lost jobs because of corporate abandonment and failing business'.
If the local government cannot find an employer to hire those displaced workers, at comparable wages, the local government and Industrial Development Agency(IDA). should show the displaced workers how to form an employee owned corporation. The local IDA can help the newly formed corporation to find financing. The closed plant could be siezed by right of imminent domain and sold to the employee owned corporation. I realize that this is a radical solution. However, these are extraordinary times and they require a radical solution.
~;^}>

6:52AM PST on Feb 20, 2010

I realize why we are in the fix we're in when I read some of the comments such as I read here.

Too many spout the sound-bite spins and distortions and lies of ommission or commission they hear on TV, and they obviously listen only to the spinners and distorters and liars who say things conforming to what they listened to before.

They fill the threads with regurgitations of the same stuff, sometimes verbatim, sometimes paraphrased, drowning out those who try to comment based on fuller sets of indisputable facts.

The Tea Party people do it a lot, but for reasons I can only conjecture, rarely declare themselves Tea Partiers. Why is that do you think? Influence by stealth?

I see the Tea Party as a dangerous and self-interested force that, despite some well-intentioned people in it, misleads with oversimplified rhetoric and appeals. They espouse a one-paragraph platform that tells you next to nothing of EXACTLY what they would do in power.
I think that as a result of an ideology of minimalist government and regulation, they would deliver us to the hands of the corporate elite and special interests, helping the multinational corporations complete the destruction of our nation that is already underway.

5:44PM PST on Feb 18, 2010

I'm really confused why Americans, who want to be the champions of fascist capitalism, expect the government to provide jobs for them. Shouldn't that be the job of the big businesses who basically want to rule the US? Instead of paying such huge salaries to their CEOs, these US corporations simply need to show a little patriotism and hire more people so the unemployment will be reduced.

12:16PM PST on Feb 18, 2010

I say put green job training facilities and placement centers only in poor communities. I really see how this could solve alot of problems right off the bat. In those communities offer 0% intrest loans to businesses and homes that retrofit for solar technology. WOW what a great idea!

9:28AM PST on Feb 18, 2010

A GOOD, TIMELY ARTICLE! It takes time to repair a damaged economy,( ask Franklin Delano Roosevelt!) and too many people are impatient and just stand around wailing and blaming Obama, when the conditions that set this decline in motion began while he was back in Chicago. Global free trade was supposed to give poor countries a chance to catch up, but instead corporations rushed in to exploit cheap labor and kept these countries poor and overpopulated by slashing funds for birth control, during the Reagan years. Cheaply made merchandise from factories that pay employees five dollars a day is flooding American stores at tremendous profit, monies which are being siphoned OUT of this country. Free trade, my ass! Toyota has been the biggest car seller in America, while Japan prohibits the sale of American cars within its borders. The profiteers won't support any politician who is trying for change. Obama has made a lot of progress, even with constant Republican logjamming. Those elephants CAN'T do any better; look at their ignorant leaders who are just shills for the fossil fuel industries! They wrecked health care reform by hollering accusations of socialism, but this was just a smoke screen to protect the greedy and unjust policies of health insurance companies. Now, they logjam and yell about family values. The only mistake Obama has made is to support special privileges for gays, a political misstep because it plays into the hands of his enemies. YOU can help! BUY AMERICAN!!

7:41AM PST on Feb 18, 2010

thank you

7:40AM PST on Feb 18, 2010

thank you

12:59AM PST on Feb 18, 2010

Actually the bulk of the financial crisis and the housing bubble can be directly tied to Bill Clinton's administration, a democrat. We can blame Bush for a lot but this crisis falls squarely on the shoulders of Clinton.

"The road to hell is paved with good intentions", or so the saying goes and I'm sure that is what Clinton had in mind when he began to pass legislation weakening the requirements for first time home buyers. Major financial institutions were also instructed to abandon the rules and play along with giving mortgage guarantees to less qualified prospects.

why did his administration do this? Why to bring more African-Americans closer to the dream of home ownership!! Good intentions, socialist intentions.

The plan worked amazingly well and there was much prosperity and new hope created as the middle class began to include more minorities. However, this was a false hope built on a weakened foundation and when the bubble burst who were the ones in the position of losing the most? The same minority groups that these programs were designed to help!

The author of this post should do a little more research and turn off her obvious ideological preferences and she will find that her CURE for the problem is actually the DISEASE itself.

Obama's proposals would be nothing more than an illusion and a short term, self serving fix. You cant buy your way out of debt.



6:43PM PST on Feb 17, 2010

The stimulus didn't work, except for growing government, and now Obama wants to double down on it with stimulus 2 which also won't work. Bush cut taxes and had 52 continuous months of growth. Government needs to get out of the way and let the free market do its thing.

6:21PM PST on Feb 17, 2010

OK, please quit blaming Obama for the financial crisis we are in. He did not create it. He is trying to fix it. Bush was given free reign for 8 years to destroy our economy and our country but you want to criticize the man whom has only had 1 year to fix a mountain of issues. Please keep in mind the bible does state," Judge not lest ye be judged/" Obama is not God, he needs more than 7 days.

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