Obama, Losing Jobs, Soon to Be Shovel-Ready
Pro-Obama political cartoonists have drawn variations of the same cartoon: the president, in the role of badgered parent on a family trip, is driving a car labeled “The Economy.” The American public, depicted as Uncle Sam or Joe Average, whines: “Are we there yet? Are we there yet? Are we there yet?”
With official unemployment approaching 10 percent and underemployment at 16.5 percent, Americans are running out of money—and patience. Obama’s approval ratings are down between 15 and 20 points, meaning that he has lost one in six Americans. His biggest weakness: the economy.
“I think the public knows three things: We inherited a total mess; we’re working hard on it; and we’re not going to get out of it overnight,” says Chief White House propagandist Rahm Emanuel. That part is true.
The trouble for Obama is that people don’t see any light at the end of the tunnel. “The key to what this year is about is rescuing the economy from falling off the cliff and trying to put in place the building blocks of recovery”—i.e., bailing out the banks, insurers and automakers, says Emanuel. That’s what 2009 has been about for Obama. But for ordinary Americans, 2009 is about keeping or finding a job.
Creating jobs, unfortunately, doesn’t seem to be an Obama Administration priority.
Were the bailouts necessary? Economists won’t know for years. What we do know is that the Administration’s approach won’t give the American people what they want and need more than anything else: jobs.
What’s the point of being patient? Even Obama admits help isn’t on the way.
Obama’s plan is Reaganomics redux. Give trillions of dollars to big corporations, he argues, and they’ll use it to capitalize new ventures, hire workers, and unclog the credit markets. Eventually. “We must let it work the way it’s supposed to, with the understanding that in any recession, unemployment tends to recover more slowly than other measures of economic activity,” he says.
But even Obama admits it won’t unfold “the way it’s supposed to.”
Obama says his plan “was not designed to work in four months. It was designed to work over two years.” But if current trends continue, if everything goes the way he hopes, it will never work. We will have lost 14 million jobs by 2010. That would leave us up 4 million at most—a net loss of 10 million. That’s a disaster.
And that’s why Joe Public is so antsy. “Are we there yet?” isn’t the right question. People think: “We can see how this is going to end: we’ll be upside down in a ditch, plucking safety glass from our scalps.”
Obama’s approach won’t work economically, and it won’t work politically. Setting bailouts aside, what the United States needs right now—what it needed over a year ago—was a ginormous federal jobs program.
What happened to the infrastructure construction projects, like high-speed rail, that attracted so much enthusiasm during the campaign? Right-wing economic czar Lawrence Summers and a bunch of wimpy Democrats trashed them. “Transportation spending was gutted by Republicans who insisted on more tax cuts—none of whom voted for the measure anyway—and by Obama advisers who shifted priorities to advance policy goals,” reported the AP.
Earlier this year the American Society of Civil Engineers said the nation’s long-neglected highways, bridges and tunnels require $2,200 billion in repairs just to get them up to basic safety code—not including high-speed rail. Obama’s stimulus plan included a mere $42 billion (less than two percent). Rail got $2 billion out of a needed $25 billion. Unless Obama does something soon, nothing is going to get built and unemployment will continue to soar.
Now that Wall Street firms like Goldman Sachs are reporting record profits, it’s time to “claw back” the bailouts, pull out of Iraq and Afghanistan, and direct federal dollars where we need them most: jobs. Give tax breaks to employers who add new workers, direct federal agencies to grow in size, and create zero-interest lending programs to laid-off would-be entrepreneurs. And let’s build some friggin’ infrastructure. Every $1 spent on infrastructure generates a $1.59 payback in the form of increased tax revenues—and creates a lasting legacy.
Speaking of cartoons, the Treasury Department’s Bureau of Public Debt recently came under fire for trying to hire a cartoonist to “discuss the power of humor in the workplace [and] the close relationship between humor and stress.” A Democratic Senator nixed the idea.
Too bad: at least Obama could have taken credit for creating one job.
COPYRIGHT 2009 TED RALL
10 Comments.
Another fantastic article.
Here's a cartoon I remember;
Obama is going to the White House and it's a "Horrorshow" with all sorts of graves and ghouls and monsters labeled for all sorts of economic and social and political and international woes the country's going through.
Titled: "The Real October Surprise"…
Can't help thinking of the war criminal with a bogus MBA comfortably retired in Texas, not a care in the world, the mess he and his cohorts created 'out of sight, out of mind,' while Daddy contiues to make news every time he sky-dives well into his 80s.
Its not about creating jobs. Its not about saving Americans. Its not about building a future. Preparing for a future perhaps. A future where there are fewer people (lesser if you look askew). How many readers have moved to one of the "government sanctioned" gated communities?
Tough times ahead. I hope, but facts keep piling up.
Ted,
You are exactly right. As a local economic developer, 20 miles from where a CA High Speed Rail station would be if it got built, infrastructure is key. Aside from that, the banking collapse resulted in a lot of solid businesses losing their lines of credit, or having customers default. I have one business I am trying to help find 1.6 million to manage their cash flow. 9 months ago, they had 1.8 million in revolving credit for cash flow purposes and a promise for 2 million in equipment financing. The company got a deal on the equipment in October, and bought it thinking that the bank had already approved the financing. They went to the bank and said "okay, we need that equipment financing now" and the bank said, "gee, were really sorry we screwed you on this but not only are we not financing your equipment, were taking away your revolving line." These are things that a city or Economic Development Corporation could fix if we had money. Unfortunately, all of California's federal tax dollars go to subsidize Sarah Palin and Jeff Sessions so they can bash California on TV.
And let's build some friggin' infrastructure. Every $1 spent on infrastructure generates a $1.59 payback in the form of increased tax revenues
Because no source was sited for this, I will assume you were quoting a study done by Mark Zandi
Chief Economist Moody's Economy.com
January 21, 2009.
What you left out was the paragraph immediately following your statement above. "The argument against including infrastructure spending as a part of any fiscal stimulus plan is that it takes substantial time for the funds to flow into the broader economy. Infrastructure projects can take years from planning to completion."
You want to boost the economy? Let people keep more of the money they earned and get government out of the way. As for infrastructure, we already pay into the "Highway Trust Fund" with our gasoline taxes. except there is really no trust fund, just like there is no Social Security trust Fund. All the money goes into the general Fund where it is squandered away on projects politicians don't even have the constitutional right to fund.
I came across some old promotional film from the WPA, meant for distribution to the movie theaters, circa 1937.
What was pretty clear is that the jobs programs were intended to, first, train unskilled workers for when the economy recovered, so they'd have some job experience. Second, they created programs out of thin air in the places where unemployment was highest, and then they used those programs to piggyback new jobs programs. For example, one program trained women to do bookbinding, using worn-out books from area libraries as the feedstock for the program. Then, they hired people to run bookmobiles into rural areas to distribute the newly-refurbished books.
Kept the CCC going not just by clearing brush and building roads (most often where there had been none before–it's quite amazing to see the increase in paved roads through the `30s), but fighting fires and building summer camps for kids when the road construction was stalled, or distributing clothes and food to disaster victims (the clothes being produced by unemployed women in sewing programs).
It was all very bottom-up, rather than top-down, and the results were fairly immediate, although, I suspect, not quite as quick as FDR's people would have wanted people to think. Still, it hit the places where poverty was greatest, which might be why the people who got enough to eat because of the WPA and the CCC still think of those programs fondly.
Shady Acres,
Reading into this, you'll realize that the best way to immediately "stimulate the economy" is to give money to poor people. Tax credits, food stamps–straight up redistribution–etc. They'll spend it immediately to buy the necessities of life.
In the current climate of uncertainly, the rich and upper middle class aren't going to be spending or investing any tax cuts they get. They'll just sock it away until the market looks safer. We certainly shouldn't be cutting their taxes (now or ever).
Before Shady feeds us any more of that stale old neo-con "let people keep more of the money they earned" mantra, which we've been force-fed since the Reagan administration without noticable improvement in the status of working people (quite the reverse actually), maybe somebody should point out that the "people" in question are unemployed. They aren't EARNING ANYTHING TO KEEP. Stop the slogans already.
Shady Acres conveniently ignores the huge drop in wages the U.S. worker has suffered over the last few decades — and spreads rhetoric used by the rich to trick the poor into backing more tax breaks for the latter. You'd think this would get tiresome.
Get people jobs, boost their wages, and the economy will improve. Obama isn't here to save the economy — at least, not with such an action's attendant costs.