This country continues to hemorrhage jobs. The pain is spreading across the country, with young men and minorities taking the biggest hits. Unemployment, now at nearly 10 percent, is still rising. But Washington seems fixated not on the imperative of creating jobs, but on fantasies of a recovery or false fears about future inflation.
More people were employed in February 2001 than are employed now. Since the beginning of the downturn in 2007, 6.5 million jobs have been lost. But with the growth of the population as the largest generation since the baby boom enters the job market, it would take nearly 9 million new jobs simply to get us back to where we were.
Conservative economists are prating about future inflation, but wages are stagnant and headed down. There are five people for every job opening.
States and localities are just beginning what will be brutal job layoffs. Fewer hours worked means lower wages means less consumption. Retail stores are shutting down; malls are boarding up; commercial construction going belly up.
Manufacturing lost another 136,000 jobs in June (a total of 14 percent of all manufacturing jobs have been lost since the beginning of the downturn).
President Obama warned about how harsh the recession he inherited would be. The president pushed for a recovery plan that would create 3.5 million jobs by the end of next year. We’ve lost 6.5 million already.
Then the Congress weakened his plan. Republicans turned to obstruction, not to solution. Conservative Democrats – led by Senators Evan Bayh and Ben Nelson – worked to cut support for the states and localities, to reduce the size of the stimulus, and to add top-end tax cuts that have the least effect in creating jobs.
Now they are warning about the debt we may build up in the future, and pushing for cuts in spending now. This is truly perverse. Obama is fighting off the worst global economic collapse since the Great Depression. This is the time we need to borrow money to put people to work. Once they start working, getting a pay check, gaining confidence, spending money, the economy will start pumping again.
And our long term debt problem is almost entirely caused by the projected soaring costs of health care. Yet these same senators seem intent on eliminating any effective public plan to compete with private insurance companies and hold down costs.
Washington is still blinded by old and failed ideas. Congress is still pouring money into the banks on the theory it will trickle down to those in pain. But people are still being forced out of their homes and are losing their jobs. Trickle down doesn’t work.
We need a second recovery plan, one that puts people directly to work doing work that needs to be done.