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Saturday, October 1, 2016

To Solve The Jobs Emergency, Put Government To Work For Us

To Solve The Jobs Emergency, Put Government To Work For Us

As part of the series “A Rooseveltian Second-Term Agenda,” a reminder that creating more good jobs must be the president’s top priority.

The presidential victory of Barack Obama was an important vindication for the uses of government. The small-government ideologues were defeated, but now the nation must go farther and recognize government is indeed a job creator.

Let’s begin with the harsh facts: Neither policymakers nor the media fully understand or communicate that America has a jobs emergency. In his victory speech on election night, President Obama did not even cite job creation as one of his four main goals for the new term. Not only is unemployment high, but wages are stagnant and poverty is rising in an economic recovery. The evidence on the creation of low-wage jobs rather than high-wage jobs is almost frightening; the Roosevelt Institute’s own Annette Bernhardt has been a leader on this.

Our mainstream economists are not of much help. Many, though not all, are loath to blame globalization for low wages in America. We hear almost nothing from them regarding Wall Street’s role in wage suppression, although American business was obsessed with creating rising short-term profits to appease Wall Street, which rewarded such consistency with high stock prices. Add to this the pressures of LBOs, privatizations, and hostile takeover threats. Little is discussed of the role of the Federal Reserve in maintaining a tight monetary policy until the late 1990s, in my view suppressing wages as an objective. Finally, almost nothing is heard of the benefits of adequate demand, except in the current crisis, in creating productivity growth over the long run, even as China and Japan have clearly suffered secularly from a lack of demand.

All of these mainstream economists warmly support the view that skill-biased technology is the main cause of stagnating wages. But such technologies cannot explain the runaway of incomes at the top. Nor can they explain the lesser inequality in Europe, a place also subject to technological change.

In my view, we need a very aggressive, jobs-related agenda. This includes aggressive fiscal stimulus over the next two years amounting to as much as $500 billion and focused on infrastructure, aid to the states, and extending unemployment insurance. These will meet dire needs and also will have the most GDP bang for the buck.

The minimum wage should be raised to end poverty for all those who work full-time, and a living wage, or something close to it, should be demanded for all federal contracts.

Industrial policies to target critical new technologies should be aggressively pursued, which might require infant industry protection.

Policies to help our trading partners develop a progressive revolution, including higher wages, the right to labor organizing, and decent labor conditions should be emphasized. As reflected in the Trans-Pacific Partnership, the opposite is occurring. All emphasis is on protecting investors, very little on workers. This would also go some way to creating a more level playing field in trade.

  • nobsartist

    What we need is a jobs program like FDR put together. Our entire infrastructure needs to be replaced. Why not hire EVERYBODY unemployed to start replacing it?

    If we could invade Iraq, why cant we pay for high speed and up dated rail? Why are our bridges and roads crumbling and why do we have a power grid that is 100 years old?

    a large national re-construction plan could erase unemployment within 1 year of implementation.

    • We Need To Get Rid Of Stripper And Shipper Like Romney So Call Business Man Asses They Do More Harm Than They Do Good!!!

  • Mimi2kool

    I agree that these are important tasks before us. They may not be popular with some. But then again, FDR was not universally loved in his day, even as he worked to create the programs that became our social safety net. Though he got America through some of the toughest times it had experienced up to that point, and in retrospect is seen as one of the greats, the fat cats of his day were very much against his policies and programs. Sound familiar?

    • Ed

      Actually he was publically called “A Traitor to his class!”. His wife was called a heck of a lot worse.

  • dmikee

    A focused WPA, CCC, and CETA program would go a long way. The cost of infrastructure investments with those programs is chump change compared to the obscene amounts spent on military adventures. $100 billion would jumpstart our economy everywhere. And it would challenge businesses to compete with living wages and benefit packages. That is the real stumbling block – WalMart part time, minimum wage, no benefit, no pension employment. And it would save billions in food stamps, unemployment compensation, child care subsidies and health costs.

  • ObozoMustGo

    Jeff Madrick, you have now placed yourself not only amongst the useful idiot club (we all knew you were there in the first place), but also amongst the most absolutely stupid and foolish morons that is allowed to use a keyboard. Where did you learn econ? The Communist Manifesto? What kind of idiot actually believes that more government jobs is good for our economy?

    Question: Where does the money come from that pays government workers?

    Awaiting your response I remain…

    Have a nice day!

    “Socialism is a philosophy of failure,
    the creed of ignorance, and the gospel of envy,
    its inherent virtue is the equal sharing of misery..”
    — Winston Churchill

    “Some people regard private enterprise as a predatory tiger to be shot. Others look on it as a cow they can milk. Not enough people see it as a healthy horse, pulling a sturdy wagon.” – Winston Churchill

    “You cannot make the poor man rich by making the rich man poor.” – Winston Churchill

    • Sand_Cat

      Thanks for the laugh! And don’t deceive yourself by thinking I even read your latest fact-free diarrhea of the pen; your earlier posts make clear what this one contains.
      Keep it up, but please, most of all, have a nice day!

    • Ed

      Yeah, Try this one. “I did not become Prime Minister to officiate over the dissolution of the Empire”. BUT HE DID!

    • IThinkthereforeIVoteMHO

      Hey … YouMust Go … Have a nice … FOUR MORE YEARS … FOUR MORE YEARS … FOUR MORE YEARS … FOUR MORE YEARS … FOUR MOER YEARS … FOUR MORE YEARS … FOUR MORE YEARS …

    • Bozo Nice to see you back with your idiotic statements. You do realize that showing quotes doesn’t mean anything. You must be one of the most ignorant people I have ever heard of. This is the moron that claimed that President Obama wasn’t helping the “white people” in areas of NY that were hit by Sandy, you know areas like Coney Island, Long Island those bastions of white people. He obviously has no idea of the racial makeup of NYC and surronding areas. Bozo you forgot the area of Far Rockaway. His other great claim to the idiots hall of fame was predicting a election landslide for Romney. So far the Bozo the Idiot has done one thing, he finds quotes and uses them as some sort of a statement.

      Bozo you may also want to look at how well the Scanadinavian countries are doing and the use a number of socialistic principles. Why do all of you right wing kool aid drinkers denigrate Socialism without even understanding it.

      Oh yeah Have a nice day

      • ObozoMustGo

        billy boy… you are definitely one of the biggest morons on this site. For anyone to defend socialism requires a stunning lack of ability to learn from current events and history. Socialism is a one way track to bankruptcy in EVERY SINGLE CASE. It does not work now, nor has it ever worked. The panaceas of Scandanavia that you cite are following the same financial track that the PIIGS are which is the same financial track that America is on. There is no example of success where government has ever confiscated the fruits on one man’s labor and given it to another that has not earned it. It goes against human nature. Socialism is denigrated because it should be denigrated as the failed ideology that it is. Only morons like you have faith in politicians to be the masterminds over human events and relations.

        Go back to your crack pipe, you loser.

        Have a nice day!

        “We have elected some very intelligent people to administer our government… ..WHY do they (all elected government officials at all levels; National, State, & Local) not understand that we cannot continue to SPEND more than we take in indefinitely without end … … .????? Have we all gone nuts????… ..Eventually, income MUST equal or exceed spending; it’s just plain common sense, not rocket science… … !!!” – Anonymous

  • The easiest and quickest way to solve our unemployment problem, which is now at a manegable level, is to invest and since the private sector remains reluctant to do so the only option is for the public sector to step in to get things moving. An infrastructure bill is the best way to achieve that goal, not only to reduce unemployment and help stimulate the economy, but at the same time take care of national priorities that have been neglected for years while we don’t hesitate to spend billions in crusades and nation building in countries where we are not welcomed.
    Our infrastructure, which is not limited to roads and bridges, is far behind other industrialized nations. Our levies are an embarrassment when compared to those in countries like the Netherlands, our power grid is antiquated and inefficient. Our ports and airports are in desperate need of improvement. Last, but not least, we must improve in education. Our children are our future, and anyone that continues to ignore our record at an international level is either myopic or a masochist. We rank 37th and 38th in the world in math and science, behind not only most European countries, many Asian countries, Australia, but even several Latin American countries. This is an embarrassment and a major threat to our future.
    Sustainable growth and prosperity depends on a robust and prosperous private sector, but at time of crisis such as this there is a role for government intervention, in fact, there is an obligation to do so.

  • commserver

    There is very little incentive to hire. I understand that the companies are profitable but don’t want to higher.

    Another problem is that too many companies want to higher either temps or part-timers. These are the people who are the most vulnerable.

    Several years ago NYC hired cops as part of a program to get more of them on the streets. Once the money dried up so did the number of cops on the streets.

    I think that maybe there should be tax incentives to hire workers and keep them.

  • quasm

    Mr. Madrick;

    Raising the minimum wage will increase the income disparity. While some will have higher wages, many more will be put out of work. Those employers who can, will find ways to replace the labor of low productive workers by other means. Those who who cannot will go out of business because they will not be able to make a profit putting more out of work. The minimum wage is a poverty producer.

    Dik Thurston;
    Colorado Springs

    • ObozoMustGo

      Dick, such common sense is NOT welcome in this sea of leftist insanity called “The Memo”. If these people understood this most basic concept, well, they wouldn’t be leftist freaks, now would they?

      Have a nice day!

      “You can only confiscate the wealth that exists at a given moment. You cannot confiscate future wealth — and that future wealth is less likely to be produced when people see that it is going to be confiscated.” – Thomas Sowell

  • lana ward

    Red rag doesn’t want to create jobs. If he did we’d have them NOW!! Romney would have had our economy thriving, but you fools believed the “fraud” again. You just keep waiting for those jobs!LOL

    • Sand_Cat

      Yet another moronic case of sour grapes! LOL!

  • William Deutschlander

    INFASTRUCTURE INVESTMENT by the U S Government!

    Puts people to work, results in paychecks, results in spending for goods & services, results in revenue (tax) which supports local, state and federal government, results in GDP growth ultimately improving the economy.

    Equaly important it provides a foundation of confidence for the U S citizens.

    • Dukester

      You forgot to mention that it can’t be done in India & China.

  • We should be able to get more jobs now that the election is over. Sandy will bring more jobs to the ease coast and President Obama didn’t bring this storm as some dumb people have been saying.
    American can again be great if company’s will open their bank accounts and get going. “Stop the hate and let’s get Great”.

  • Ed

    Look, the repubs know that the government can create jobs. The true reason they hated the stimulus is that it worked for Roosevelt and they hope never again to allow the government provide jobs. They are hell bent on privatising everything, including the military.

  • lana ward

    Jobs report for Ohio-6,450 new claims for unemployment. Penn-7,766 new claims for unemployment. Are we having fun yet!! The Red rag is, purposely destroying our economy. All you fools that voted for him, enjoy, it’s gonna get worse!!

    • ObozoMustGo

      lana… the leftist freak turds floating around in this septic tank called “The Memo” will never understand or admit to the negative consequences of their socialist ideas. Not gonna happen. When their ideas and programs cause destruction, their ideas for solutions are more programs to correct the problems their prior programs exacerbated. And on and on and on.

      Remember, liberalism is the disease that presents itself as it’s own cure.

      Have a nice day!

      “Rule of thumb… never trust what comes from the mouth of a socialist politician. They are only lying to you so they can spend other people’s money to build up their own power base and bureaucracy.” – ObozoMustGo

  • g89dsw

    We have an unprecedent number of college graduates entering the labor market and an equal number of high school grads entering the work force as well. That coupled with an official unemployment rate of 8.1% which does not include those who have exhausted their benefits an are no longer included in that 8%. One can correctly extrapolate from that data an unemployment rate that is approaching 29 to 25 percent. All while the so-called job creators are sitting on cash or moving jobs to China and Mexico for cheap labor. The manufactoring base in this country is all but gone to the aforementioned. If the so-called job creators cannot or will not live up to their responsibility and I mean just that, than it is up to the President and the appropriate branches to declare this a national emergency and take appropriate steps to deal with this jobs emergency. One can care less about the cliff and so-called deficit as this deficit was not mentioned the previous eight years of Bush, which is indicative of the farce that the argument is. All most all the previous presidents i.e., Kennedy, Johnson Nixon, Carter, and to a lesser extent, Reagan, all have jobs programs. If the so-called jobs creators cannot do it than the tax payers, (government) shoud step in to stimulate the economy in every category, public works, emergency jobs, etc..

  • I realize a lot of you are feeling a lot of pain. The morons on Wall Street have created their own problem, but this really goes back to the borrow and spend policies of Ronald Reagan. The leverage from borrowed federal spending resulted in artificially inflated asset values, economic growth and increasing difficulty in increasing revenues for finanacial institutions and manufacturers. Accompanying this was the shrinking of the American manufacturing base as first the Japanese and Koreans, and now the Chinese use lower labor costs or better techniques and technology to render us less competitive.
    Job creation has little to do with the tax rate. Cut taxes for research and development and business will spend in these areas because WE absorb a part of the risk. Otherwise business expands and spends and hires based entirely on demand for product. Employees are added when the cost of the employee is recoverable from increased sales. Economics 101. Our legislators need to go back to school and take basic economics. It has been often stated in the media, even the financial media that small businesses are the primary job creators. This is factually incorrect. The primary source of new jobs is NEW small businesses. The main reason jobs have been lacking in this recovery is the slow formation of new small businesses. I submit for comment the following: Small business formation has been impacted due to lack of capital. This lack results from two sources. 1. Bank lending restrictions subsequent to Lehman’s bankruptcy have reduced the available capital that can be borrowed. 2. The collapse of housing prices has reduced the primary capital source of the middle class. I also submit that Federal Reserve policy has been primarily focused on maintaining or raising housing prices and therefore should be encouraged to continue despite inflation risks, which currently are near normal FED target levels.