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By Zach Carter, Media Consortium Blogger
Unemployment figures in the U.S. are staggering: The official rate stands at 10.2%, the highest in 26 years. A broader measure that includes people who are involuntarily working part-time or who have given up looking for work is at 17.5%. That’s a full-blown economic emergency.
But, as Joshua Holland explains for AlterNet, President Barack Obama’s response to the unemployment crisis has not matched the urgency of his response to the crisis on Wall Street. This isn’t just unfair, it’s bad economics.
"It’s important to understand that the economic crisis in which we find ourselves is not just a function of a shaky financial system but of a crash in consumption that’s come along with the evaporation of $14 trillion worth of the wealth of American families," Holland writes.
Widespread joblessness can be every bit as damaging to the economic structure as a financial crisis. When people are out of work, they buckle down on household expenses. When several million people cut back at the same time, the economic machine grinds to a halt. If people are not buying and selling stuff, the economy isn’t working.
As Mary Kane explains for The Washington Independent, about 40% of families don’t have enough money to cover expenses through a three-month stretch of unemployment—even if one member of the household is receiving unemployment benefits. Kane highlights a Brandeis University study that reveals the haggard state of the American household and the unfair distribution of wealth along racial lines. A full 66% of African-American and Latino families can’t afford three months without work. At a time when 5.6 million workers have been jobless for at least six months, the study highlights just how dire finances have become for many households.
GRITtv’s Laura Flanders discusses potential labor market remedies with economist Dean Baker and The Nation‘s John Nichols. Baker suggests a work-share arrangement, in which employers cut back on their workers’ hours to allow more people to work. To prevent losses for households, the government would step in and pay for the shortfall in hours. Employers would have more part-time jobs available, but the government would make sure everyone was paid as if they were working full-time. Baker also endorses a public jobs program, which he says could be especially useful in cities like Detroit and Cleveland that have been hit particularly hard by the economic downturn.
Nichols highlights the political consequences of failing to fix the unemployment mess. Unemployment directly affects the lives of voters. If widespread joblessness persists through November 2010, Democrats will net huge Congressional losses. If Obama thinks it’s hard to garner bipartisan support for his legislative priorities now, imagine a few dozen more Republican obstructionists.
It’s not that Obama failed to respond to the unemployment crisis. He did. That’s what the stimulus package was all about. Today’s 10.2% unemployment is a catastrophe, but it would be more like 12% without the stimulus package. But, given the seriousness of the issue, Obama is not giving unemployment enough attention.
In fact, Obama’s economic priorities are a mirror-image of his campaign promises, as Robert Scheer argues in both a column for TruthDig and an interview with Amy Goodman on Democracy Now! After talking tough about reining in recklessness on Wall Street and making the financial system more accountable, Obama has hired many of the very policy makers who pushed through the deregulatory agenda back in the 1990s. Top Obama administration officials like Larry Summers, Timothy Geithner, Gary Gensler and Neal Wolin helped make this mess in the first place.
"This is not a minor criticism," Scheer says. "I think the guy is betraying his own presidency."
Obama’s timid efforts to rein in Wall Street and heal the ailing job market are setting the stage for a political disaster. If Obama and Congressional Democrats can’t take strong action to fix the economy, they will find themselves with much narrower majorities next November. The economy, and the public institutions that support it, are supposed to work for everyone, not just the financial elite.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
5 Comments
Thanks for an excellent summary of what should be obvious to our leaders but seemingly isn’t.
I’d add that the crisis is made worse by the fact that it isn’t the first that the current workforce has faced. If I were to lose my job, I’d be pretty well placed to survive three months without income compared to most–we are a two income professional family that has always saved a fair chunk of our income. But our resilience is not what it was. In 2002 I was out of work for 10 months. That ate much of the cushion that we had. Now we are older, have less savings, and have more medical and educational expenses.
The other thing that I’d add is that the 40% that do not have the resources to make it for three months are likely to be at much greater risk of also losing whatever work the family may still have–such as a spouse’s job–and of never returning to the work force. Finding new work is hard if you can’t afford interview clothes, tools, etc. Once you can’t make the car payments, you lose the car. When you can’t pay the mortgage, you lose the house. Once you are homeless and without transportation, keeping a remaining job, looking for work, or even collecting unemployment becomes almost impossible.
Both the electorate and our politicians need to wake up and see that the economy has careened wildly off center at least since the Reagan years. Almost every dilution of New Deal economic policies has been disastrous for the economy. Now half measures won’t do. The status quo is unsustainable even for the richest. We need to go well beyond what the New Deal contemplated and insure an equitable enough distribution of wealth in this country to insure that production, consumption, and trade remain possible.
Neither Obama or the Congress will listen to anyone on how to create jobs.
If they won’t listen, nothing will be done.
OH yes there is talk of a second stmulus, spending more money and creating few jobs.
OH yes there is talk of funding loans to small business which will do little to create jobs, but will again spend lots of money.
OH yes there is no talk of anything that actually would create jobs and put the country back to work.
We don’t need a new deal, a stymulus, or wasted spending.
We need a progam funded to get us off foreign oil, quit burning coal, and fix our infrastructure. Any one of these with seed money put up and a mandate to do it in say two years would would put the country back to work.
All we hear is talk, stupid plans, and more of the same.
I’ve been saying that the problems this country faces on the ground have solutions that are not all that hard. In fact they’re obvious. What IS hard is dealing with this intractable, ossified corporo-government monster that is hanging on to the staus quo of privilege with all its might.
bring that “Army” to a fucking standstill and you got all the funding you want…
If you are implying someone owns the president I would be inclined to agree.