Sunday, June 3, 2012

Robert Reich On Jobs, Jobs, Jobs... Why The News Isn't Good

Three factors, says Robert Reich, contribute to the June 1 jobs report that resulted in a slight uptick in the unemployment rate (now 8.2 percent) for the first time in a year, combined with a devastating plunge in the new-jobs-created number (to 69,000 per month in May, with March and April revisions yielding a three‑month average of 96,000 per month). These are numbers that, if continued without a proactive challenge by the Obama administration, could send Mitt Rmoney [sic] to the White House.
The factors, briefly, are

  • a global recession (Europe, China and India),
  • a reluctance of American corporations to spend money (which they do have, in cash on hand) to hire new workers when demand by American consumers is low, and
  • the inability of American consumers to contribute to an increase in demand because they are worried about being unemployed (me, for example) or have suffered a decline in wages, or at best an average wage increase since last year that is less than the inflation rate.

And that's Reich's summary of why we're in a hole. Now for my "stop digging!" sermon...

The tragedy is that virtually every major power in the world knows how to avoid the descent into economic tragedy, by following the path by which we got out of the Great Depression in the 1930s, by following the proposals of the late John Maynard Keynes: use the government, which can literally create new money, as a consumer of last resort until the economy takes off on its own. It has worked before. It would almost certainly work again, and goodness knows there are infrastructure projects enough and essential public services jobs enough (e.g., avoiding the loss of police, firefighters and teachers in many communities) to kick-start the "virtuous cycle" to the point where the economy can sustain itself. Frankly, the deficit is a problem that can and should wait; employment must take precedence.

Unfortunately, Republicans seem never to have read Keynes (or in any case are prepared to pretend they haven't, as a matter of servicing their wealthy base), and Obama... agreeable to a fault, always willing to give away the store in compromise, unable to fathom economics in terms other than those his bankster handlers tell him... Obama is engineering his own downfall as President, and our nation's as well. "Fasten your seatbelts; it's going to be a bumpy [economic] night."

3 comments:

  1. Constance ReaderJune 3, 2012 at 7:20 PM

    Then there are those who are still securely employed (at least, that we're aware of) at high-paying jobs. And we're spending some of our money but not as much as the economy needs, because we're still getting the shakedown from the shylock...eerrr, albatross....errrr, entitlement program known as "student loans". I've still got 18 months before I'm out from under them.

    ReplyDelete
  2. Constance, as I've often mentioned before, I believe everyone's education should be government-funded, through college at least and possibly through graduate school for those who show talent in their fields. Call me a socialist; I won't contradict you.

    My education was wholly paid for by a very diligent Financial Aid office at Rice University. They found a series of wealthy alumni to pay my tuition, fees and textbook expenses for five years, through a professional Master's. My parents, well-educated but economically lower-class folk, said that it was cheaper to send me to college than to high school. And IMHO that's the way it ought to be: students should NOT be burdened with student loan debt for the first two decades or more of their careers; the fact that they ARE so burdened now is one of the most classist aspects of our increasingly class-stratified society.

    I hope your remaining student debt is alleviated without any great pain on your part. Count me as one who thinks student loans should be forgiven, paid by tax money.

    ReplyDelete
  3. The student loan business is a vicious bank scam industry. I'm with you Steve. Education should be goverment subsidized throughout. When I went through school, I worked part time jobs at the University, got scholarships every year and managed to aquire three MA's and a Doctorate. The money changers would make that impossible today. I grieve for all the students who will be denied a future because of the loan scam. It will also affect the quality of our national life, and not in a good way. The banks should be broken up, the monopolies destroyed and/or nationalized. And yes, I am a hardened socialist, who grows more so with every passing year of the corporatist take over of the country.

    ReplyDelete

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