What Can Be Done for Jobs and Recovery?
Wall Street is all giddy about the surge of ‘green shoots’ it’s seeing, including huge bonuses for investment bankers.
But on Main Street most of the ‘green shoots’ we’re seeing are the ones coming up through the floorboards of the foreclosed homes, shuttered factories and abandoned shops and businesses.
After last month’s really bad jobs numbers, which pegged the official unemployment rate at 9.8% and reported the loss of another 263,000 jobs in September, there was renewed talk from the White House and the editorial pages about the need to address the employment crisis.
There has been movement in Congress on extending unemployment benefits for an additional 13 to 20 weeks to help the hundreds of thousands of unemployed Americans on the verge of exhausting their benefits. This should be an emergency safety net no-brainer. But as Sen. Kirsten Gillibrand (D-NY) writes at the Huffington Post Senate Republicans are blocking the measure, as if to show that they have neither hearts nor brains.
The AFL-CIO is calling on the Senate to end the Republican’s obstruction, and is being joined by 14 Senators urging swift action to extend unemployment benefits across the country.
But beyond the obvious necessities to extend jobless benefits, COBRA access and food stamp relief, precious little has been offered thus far to go further in addressing the jobs crisis and the need for a real recovery on Main Street.
One of the clearer voices offering substantive, specific ideas has been former Labor Secretary Robert Reich. Writing on his blog in the wake of last month’s unemployment numbers, he asked, somewhat rhetorically, Specifically, What Should Be Done For Jobs? and outlined these four steps:
(1) Use existing authority under both the stimulus package enacted earlier this year and the nefarious TARP bailout fund — extending and combining them into a fund to make up for state and local cuts in public school budgets, childrens’ health, public health (we need workers to administer swine flu vaccine) and public transportation. Instead of bailing out banks and giant automakers, we should switch to bailing out public services that average people need.
(2) Propose a one-year payroll tax holiday on the first $20,000 of income. Republicans as well as Blue Dog Dems could go along with this, and it would be a highly progressive tax cut since 80 percent of Americans pay more in payroll taxes than they do in income taxes.
(3) Give small businesses a “new jobs tax credit” for every net new job created over the next year. Granted, under normal circumstances this sort of jobs credit doesn’t have much effect, and it’s difficult to separate hires that would have happened anyway from net new ones. But we’re not in normal circumstances; small businesses, which are responsible for most new jobs, still aren’t hiring. They need a boost.
(4) Dramatically expand the Small Business Administration’s lending programs and have the Fed buy up the SBA’s debt. Big banks are not lending to small businesses. TARP has been an utter failure in this regard. The SBA and the Fed should circumvent them and help small businesses get the capital they need, so they can start hiring again.
These steps, Reich writes, would be beneficial and not too tough to do.
With the next unemployment report, for October, scheduled to be released in two weeks, we should be hearing more about specific proposals to support the jobless, create new jobs and generate a real recovery here on Main Street.
Tags: infrastructure, Jobs, labor, recovery, unemployment
What we *need* is more jobs and less offshoring. Too many jobs are going overseas and the companies who send those jobs over are getting tax breaks. They should be getting penalized for every American job lost – to the tune of the Social Security, Medicare and other taxes *lost* at least. We need more businesses staying in the U.S. not fewer. Executives of companies that received bailout money because of poor planning and bad risks should not be getting bonuses or ‘golden parachutes’ when they leave – they shouldn’t even get a pension or at the least it should be reduced to help cover the cost of their mistakes.
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Dear Tilla,
Rome in its history was completely outsourced just before it fell to the German Hordes. What had happened is the weathy class no longer wanted to support the salaries of the craftsman they had created. Thus they moved weapons building, ship building and brought in cheaper labor to perform the work. We in America have witnessed all the same changes as the Romans in the past. If we want to fix the problems in this country then we American’s the true Americans must stop buying the goods of foreign countries. The motto should be America First. None of our politicians even talk about America First. But we as a people should. America First takes the control out of the wealthy hands who have no Sovereignty. We the People must protect our interests from threats Foreign and Domestic. We must support American Businesses first. Only buy the products made here.
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Recovery can be achieved with several small steps. First we have to end equity and debt decoupling and the use of Dividend Recapitalization by private equity firms. Look into the mattress company Simmons. It is a Ponzi Scheme used by private equity firms. I have written to the new Risk Czar Henry Hu with no reply. So the first thing we must do is shut down the mechanism the ultra rich are using to destroy good American Companies. Next we need to create a mandatory feature across all Hedge Funds, Fund of Funds, Private Equity Funds, and other alternative asset groups that they need to not only rely on external sweat shop administrators but should are required to have a separate shadown accounting and operational function. This would put at least a million people back to work in the financial sector which will help create other jobs through the natural spending cycle. If we do not close the Ponzi Scheme loop holes and do not force the receivers of the TARP to re-employ then we as a country are done. Green energy and its related work force requirements will not materialize for another 10 years. Additionally the related jobs have already been shipped to countries that support slave labor. So make these changes listed above and we as an American Economy have a chance to survive.
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Talk about nibbling around the edges! While I agree that the states must be helped out so that they don’t have to cut teachers and increase class sizes and end programs, the economy needs far more than the four “easy” items suggested.
When did “easy” become the watchword for the American politicos? Easy rarely solves anything really important.
We need jobs for far more Americans. We need jobs that put more money in the pockets of Americans. We need those jobs to be in the real, productive economy as opposed to the paper, artificial economy.
The first thing we have to do is break up and re-regulate the banks. They are too big and too tyrannical; they are monopolistic. Investment banking and commercial banking must be separated, and the banks must split off their brokerage and insurance operations.
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thanks for your comment, radwriter. It was not my intention to suggest that just the “easy” stuff would be anywhere near sufficient to address the scale of the problem — only that, after months of nothing other than ‘wait for the stimulus’ we are finally beginning to hear some movement toward new ideas.
And, as I will address in my next post (which I hope you read!) the small steps such as these need to be joined by much bigger, bolder plans.
That’s the subject of my next post.
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We must agressively enforce anti-trust laws. That would create jobs by the bucket full. Consolidation destroys jobs for the benefit stockholder and CEO profit. Nothing new gets created; society is no better off – it is worse off.
Tilla123 is right about offshoring jobs. Any American firm that closes a domestic plant and reopens one abroad to produce substantially the same product for the American market must be prohibitted from bringing those products here. Any company that has moved production abroad in the last 20 years must be required to return production here within, say, five years.
Dancin may be wrong in one aspect. The financial sector is the problem, not the cure. The financial sector is supposed to be a facilitator of real, productive growth. It is not an engine of societal wealth in its own right. Finance employs too few people, and when it starts investing primarily for its own account, it robs the productive economy of needed resources. When it starts investing for its own account, it almost always does so in speculative ventures which are most likely to create bubbles.
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The sources of our current financial meltdown are:
1. Too many being paid too little and too few being paid too much. Income and wealth inequality has probably never been greater in our history. The corp elites have over the last 35 years grabbed all of the productivity gains unto themselves and screwed their employees into the dirt.
2. Far too much production of goods destined for the American market is being sent abroad, which destroys domestic incomes and the middle class and our ability to deal with urgent problems.
3. Far too many firms have become far too few firms. Our commercial landscape is plagued by monopolistic control. Why do I have to use AT&T if I want an iPhone? or Verizon if I want a Blackberry Storm? Why is Microsoft anything the same high price everywhere? Why is my local gas station forced into a different “zone” because it lowered its price and upset the other station owners and the distributor? The examples are far too numerous to mention further.
4. No company or venture may buy another larger than itself. No leveraged buyouts that force the bought to repay the loan.
We must reaffirm the truth that our Founding Fathers and Abrahm Lincoln knew: labor precedes and is superior to capital. Labor should employ capital; capital should not employ labor.
Our model of the corporate model must be reconfigured to return power to the hands of We the People.
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radwriter and Mr Hirsch,
We as Americans have been duped with the rhetoric of both political parties. They all enter office poor and come out rich. They have served their masters well by passing laws that have crippled this nation. We must create jobs in the financial sector first and change the laws that allow our companies to send American Jobs abroad. Get rid of the international trade agreements that were constructed not only to move jobs but to strip the public of the right to sue for product liability. Get rid of the tax incentives that have allowed large companies like Accenture to not pay taxes by domiciling off-shore and still recieve government contracts. Get rid of several of the monopolies supplied to the telecoms and insurance that have been given by the our elected officials. Why is it we are told protectionism is a bad thing ….to protect the jobs of Americans when these industries protect themselves with special favor loaws to protect their profits. In reality we are being fed garbage by the likes of Friedman about the world is flat and how we should embrace outsourcing. Every firm that is making bilions has had laws passed to protect their rights and profits. It is about time we protect the American work …union or not for their well being and profits. The only way we can emphasize what we want as a people which is good paying jobs is to march in peaceful protest by the millions on Washington with a single voice….American’s First and no more laws to protect the corporations who strip America of its treasury
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Several months ago when our government began bailing out banks and auto manufacturers I received an email that I found interesting at the time and haven’t been able to get out of my mind since. I don’t remember the exact wording but the jist of it was something like this:
Offer anyone over the age of 55 early retirement. In exchange for that they would receive 1 million dollars. There are at least 50 million people that would likely go for this. That’s 50 million job openings. Unemployment solved.
As a condition of this deal they must either buy a house or pay off a morgage. Housing crisis solved.
They must also buy an American made car. Auto industry fixed.
I would also add that they not receive SSI benifits until at least age 70.
So with all the billions that are being spent on recovery with no real benifit to people on the street this would solve at least 3 of the biggest economic problems we face for a mere 50 million. I’m not sure how much more would be saved by the newly retired not accepting benifits from SSI until later but it could be substantial.
I see this as the cheapest way to really stimulate the economy from the bottom up and since a lot of these people just lost their 401 savings to bankers bad choices and won’t have enough working years to recoup their loses this seems like a good idea to me.
Some times the simple ideas make the most sense.
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I believe that debt is arguably the biggest financial hindrance anyone can face. People are constantly taking drastic measures to either prevent an economic hardship or control his or her current financial crisis. If you want to relieve yourself of debt, the first thing to do is pay down debt. To pay down debt is in your best interest – the more you pay, the less you owe, and the closer you get to freedom. Here’s a quick way to get on the path towards freedom – first, reign in spending. Then, simplify your living and budgeting. Then start paying down the debts you have, and avoid any new debt. (Avoid it like the plague.) The less debt you have, the more of the fruits of your labors you own. The more you pay down debt, the more debt relief you have, and the closer you are to being free.
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But what the headlines don’t mention is that the underemployment rate is now 17.5%; the highest on record. Just 58.5% of adults are working, the lowest since 1983; and the weekly hours worked measure is at record lows. (meaning even those in work are being forced to social work fewer hours, as employers try to reduce the wage bill.)
What is underemployment? Well, it’s the number that the Bureau of Labor Statistics would rather not highlight.
There are 6 official measures of US unemployment, and the headline number released by the government is always the most politically palatable. It’s the one that tries to remove as many people from the count as possible by applying a very strict definition of what exactly “unemployment” means.
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