What did the President do in response to last week’s horrendous job report — unemployment rising to 9.2 percent in June, with only 18,000 new jobs (125,000 are needed each month just to keep up with the growth in the potential labor force)?
He said the economy continues to be in a deep hole, and he urged Congress to extend the temporary reduction in the employee part of the payroll tax, approve pending free-trade agreements, and pass a measure to streamline patent procedures.
To call this inadequate would be a gross understatement.
Here’s what the President should have said:
This job recession shows no sign of ending. It can no longer be blamed on supply-side disruptions from Japan, Europe’s debt crisis, high oil prices, or bad weather.
We’re in a vicious cycle where consumers won’t buy more because they’re scared of losing their jobs and their pay is dropping. And businesses won’t hire because they don’t have enough customers.
Here in Washington, we’ve been wasting time in a game of chicken over raising the debt ceiling. Republicans want you to believe the deficit is responsible for the bad economy. The truth is that when the private sector cannot and will not spend enough to get the economy going, the public sector must step into the breach. Cutting the deficit now would only create more joblessness.
My first priority is to get Americans back to work. I’m proposing a jobs plan that will do that.
First, we’ll exempt the first $20,000 of income from payroll taxes for the next two years. This will put cash directly into American’s pockets and boost consumer spending. We’ll make up the revenue shortfall by applying Social Security taxes to incomes over $500,000.
Second, we’ll recreate the WPA and Civilian Conservation Corps — two of the most successful job innovations of the New Deal – and put people back to work directly. The long-term unemployed will help rebuild our roads and bridges, ports and levees, and provide needed services in our schools and hospitals. Young people who can’t find jobs will reclaim and improve our national parklands, restore urban parks and public spaces, recycle products and materials, and insulate public buildings and homes.
Third, we’ll enlarge the Earned Income Tax Credit so lower-income Americans have more purchasing power.
Fourth, we’ll lend money to cash-strapped state and local governments so they can rehire teachers, fire fighters, police officers, and others who provide needed public services. This isn’t a bailout. When the economy improves, scheduled federal outlays to these states and locales will drop by an amount necessary to recover the loans.
Fifth, we’ll amend the bankruptcy laws so struggling homeowners can declare bankruptcy on their primary residence. This will give them more bargaining leverage with their lenders to reorganize their mortgage loans. Why should the owners of commercial property and second homes be allowed to include these assets in bankruptcy but not regular home owners?
Sixth, we’ll extend unemployment benefits to millions of Americans who have lost part-time jobs. They’ll get partial benefits proportional to the time they put in on the job.
Yes, most of these measures will require more public spending in the short term. But unless we get this economy moving now, the long-term deficit problem will only grow worse.
Some in Congress will fight against this jobs plan on ideological grounds. They don’t like the idea that government exists to help Americans who need it. And they don’t believe we all benefit when jobs are more plentiful and the economy is growing again.
I am eager to take them on. Average Americans are hurting, and their pain is not going away.
We bailed out Wall Street so that the financial system would not crash. We stimulated the economy so that businesses would not tank. Now we must help ordinary people on the Main Streets of America — for their own sakes, and also so that the real economy can fully mend.
My most important goal is restoring jobs and wages. Those who oppose me must explain why doing nothing is preferable.
This post originally appeared at Robert Reich’s Blog and is reproduced here with permission.
2 Responses to “The President’s Jobs Plan (Not)”
Well, here's my plan to restore jobs and wages: I've written a proposal that describes a mechanism through which we can fund a massive number of new business ventures by tapping the financial power of Wall Street to create jobs on Main Street. This approach ramps up employment quickly and puts money directly into the hands of the people who need it now: the consumers (whose spending represents 70 percent of GDP). This enormous financial turbo-boost to the economy will reinvigorate economic activity and quickly return the eight million jobs lost during the Great Recession. The purpose of this mechanism is to take a private-sector proactive approach to address the expected long-term high unemployment problem.
You can read the proposal ("A Modest Proposal to Save the American Economy: Entrepreneurial Blitzkrieg as Job Creation Vehicle") and its companion piece ("The 75 Percent Solution? A Moral and Economic Imperative to Create Good Jobs NOW!") here: http://jpbulko.newsvine.com/
Joseph Patrick Bulko, MBA
Restoring jobs and underemployment is one thing, but restoring ( increasing ) wages for U.S. workers is a VERY different ( yet somewhat indirectly related issue ). Any U.S. Domestic Jobs Policy initiatives / changes will not, by themselves, have much of an effect on U.S. wages. That is a more global issue and frankly much more complicated involving many more U.S. Domestic Policy issues as well; especially in our current economic and political state of turmoil.
I believe that jobs and wages will likely be on the 'back burner' for at least several weeks, while the EU Debt Crisis, talks of a possible QE3 as well as the U.S. Debt Ceiling are on both of the 'front burners'. Global monetary policy and debt issues must be better coordinated. ( It is usually not safe to cook 3 things on two burners, but necessity dictates it, What can you do ?) Rest assured that the Obama Administration will attempt to tackle unemployment / underemployment / wages. Only so many issues can be taken on at one time unfortunately.
I would personally love to hear more about what is being done by anyone to improve the U.S. residential housing market … So far, I see so viable exit strategies and/or solutions. I believe U.S. residential housing market is still the big white elephant in the room for the U.S. Economy. It was a big reason, among others, why this global financial mess started and I see no comprehensive realistic strategies that are being discussed and/or implemented to improve things. Domestic residential housing still has many, many problems that will by itself, likely have a large negative effect on our U.S. economy for the next 6 months – 2 years. The timeline may depend on how fast we act. We shall see.