Posted on 10/03/2009 8:51:18 AM PDT by SeekAndFind
Unemployment will almost certainly in double-digits next year — and may remain there for some time. And for every person who shows up as unemployed in the Bureau of Labor Statistics’ household survey, you can bet there’s another either too discouraged to look for work or working part time who’d rather have a full-time job or else taking home less pay than before (I’m in the last category, now that the University of California has instituted pay cuts). And there’s yet another person who’s more fearful that he or she will be next to lose a job.
In other words, ten percent unemployment really means twenty percent underemployment or anxious employment. All of which translates directly into late payments on mortgages, credit cards, auto and student loans, and loss of health insurance. It also means sleeplessness for tens of millions of Americans. And, of course, fewer purchases (more on this in a moment).
Unemployment of this magnitude and duration also translates into ugly politics, because fear and anxiety are fertile grounds for demagogues weilding the politics of resentment against immigrants, blacks, the poor, government leaders, business leaders, Jews, and other easy targets. It’s already started. Next year is a mid-term election. Be prepared for worse.
So why is unemployment and underemployment so high, and why is it likely to remain high for some time? Because, as noted, people who are worried about their jobs or have no jobs, and who are also trying to get out from under a pile of debt, are not going do a lot of shopping. And businesses that don’t have customers aren’t going do a lot of new investing. And foreign nations also suffering high unemployment aren’t going to buy a lot of our goods and services.
And without customers, companies won’t hire. They’ll cut payrolls instead.
Which brings us to the obvious question: Who’s going to buy the stuff we make or the services we provide, and therefore bring jobs back? There’s only one buyer left: The government.
Let me say this as clearly and forcefully as I can: The federal government should be spending even more than it already is on roads and bridges and schools and parks and everything else we need. It should make up for cutbacks at the state level, and then some. This is the only way to put Americans back to work. We did it during the Depression. It was called the WPA.
Yes, I know. Our government is already deep in debt. But let me tell you something: When one out of six Americans is unemployed or underemployed, this is no time to worry about the debt.
When I was a small boy my father told me that I and my kids and my grand-kids would be paying down the debt created by Franklin D. Roosevelt during the Depression and World War II. I didn’t even know what a debt was, but it kept me up at night.
My father was right about a lot of things, but he was wrong about this. America paid down FDR’s debt in the 1950s, when Americans went back to work, when the economy was growing again, and when our incomes grew, too. We paid taxes, and in a few years that FDR debt had shrunk to almost nothing.
You see? The most important thing right now is getting the jobs back, and getting the economy growing again.
People who now obsess about government debt have it backwards. The problem isn’t the debt. The problem is just the opposite. It’s that at a time like this, when consumers and businesses and exports can’t do it, government has to spend more to get Americans back to work and recharge the economy. Then – after people are working and the economy is growing – we can pay down that debt.
But if government doesn’t spend more right now and get Americans back to work, we could be out of work for years. And the debt will be with us even longer. And politics could get much uglier.
“The UI will be extended, and extended — for just that reason.”
It will morph into a new entitlement.
Don't get too excited. If you notice his prescription is more of the same, i.e. government spending, don't worry about the debt etc. This is exactly wrong as Reagan proved in the 80s. Cut taxes, cut government spending and put the money back in the private sector's hands. Remember every job the government creates is a net money loser. If you're let's say a carpenter, your company pays you a salary, but the product you produce is worth more than your salary so the company makes a profit, and in turn uses that profit to hire more people, buy tools or whatever. A government salary must be paid out of taxes, which come from people paying who in turn have less to spend elsewhere.At least that's my simplistic way of understanding it.
Robert Reich is a liberal and as with any liberal every problem has a government solution. Seems to me you put more money into peoples pockets on an ongoing basis, as opposed to a one shot stimulus check, then after they catch up with all their bills they'll start spending. It's never been known to fail.
And a dwarf to boot.
And that was largely true because the productive capacity of Europe and Asia was totally destroyed -- only the U.S. infrastructure was untouched. That's why we had such demand and manufacturing supremacy in the 50s.
And how long did the Great Depression drag on under Hoover's and Roosevelt's interventionist policies? Without government and the Federal Reserve screwing things up, we would probably remember the 1929 crash and recovery rather than the Great Depression.
My father was right about a lot of things, but he was wrong about this. America paid down FDR’s debt in the 1950s, when Americans went back to work, when the economy was growing again, and when our incomes grew, too. We paid taxes, and in a few years that FDR debt had shrunk to almost nothing.
So the national debt was almost zero by 1960? BS! If some chump on the street said that I would call him a fool. Reich is an economist so I will call him a liar.
Robert Reich, you’re an idiot......still.
The problem we’re having with unemployment is CAUSED by big government, ie your dumb@ss socialist DemocRat buds.
Their tax the rich, tax corporations and make them pay for EVERYONE’S healthcare or else and tax small business ssdd bs is what is causing the problem. To simply say all government has to do is spend MORE is not merely asinine...
it’s just more typical leftist stupidity.
So these people are not in the stats as unemployed.
I am one of them, kind of. They closed my department the month I turned 62. I had a small business I was growing on the side for years, so I Shrugged, and have been working for myself since. The benfits are not great and the boss is a b@st@rd, but I should have done it twenty years sooner.
At least self-respect and being in charge of my own prosperity makes the Kraft Dinner taste better.
Mr Reich, you’re wrong. The goal is to get the private sector re-investing in the economy; free up the cash and assets sitting waiting to see what happens. The solution is to do the following:
1. Permanently repeal the capital gains tax. Do not penalize those who risk their funds when growing the economy.
2. Permanently repeal the corporate income tax. Do not penalize companies from succeeding, or give a disincentive from saving profits year-over-year for larger investments and purchases.
Mr. Reich, what will get the economy flowing is to get the trillions of dollars sitting on the sidelines, waiting for signs of stability. Rather, encourage those dollars to become used and active right now by telling the owners of those dollars that the US Federal Government will not penalize success, will not punish rewards from risk.
I’m just hoping and praying that we can survive until 2010 under this terrorist-appeasing moron in the WH. If we don’t get nuked before then, we might just have a chance.
Why would we need roads and bridges? Cap and Tax will make it unaffordable to drive anywhere. We're supposed to live in communes supplied by locally produced goods and only the elite will be permitted to travel on junkets to global climate change conferences.
What are the schools for? Is everyone going to be educated so that they can graduate to unemployment? Who is going to buy what they're selling? Or maybe we just need more indoctrination centers to tell us how we need to live more sustainable lives.
I can see a use for parks. At least it will give a place for all of the homeless to sleep.
Good luck with your new life and freedom. Some of my wife’s patients who have gone the way you have re the 62 and SS are trying to start their own small businesses or expanding what they had going on the side.
Some are working as interns to learn new skills and set up new networks to help them.
Of course, that was the era when our factories were humming and the industrial engine was pulling the economy. Now we are importing what we are consuming. We are relying on shopping centers for consumers and the 'information economy' to pull the economic engine.
So the seed corn exporting economy starting under Clinton and magnified under Bush has left us with a job creation void. A situation where the government steps into the vacuum. This makes Democrats happy and Republicans mystified and paralyzed wondering how they can speed up the magic of the market 'long run' which will right everything.
Meanwhile the international corporation sees themselves as citizens of the world with no unique allegiance to US citizens. Their bottom line is profit and opportunity is elsewhere. In their mind, the USA must compete or perish.
Now that IS a propaganda piece!
Oh, cry me a river, Mr. Reich. Perhaps if you had the skills to do a job worth something....
Hey Reich, how about cutting some stimulus and programs and enacting one year without payroll taxes. EVER THOUGHT ABOUT THAT?
I guess I shouldn’t be surprised that someone with Robert Reich’s academic background demonstrates here that he fundamentally misunderstands what the WPA was all about or that the economic dominance of the 50’s had more to do with our industrial plant NOT having been devastated by WWII than by anything the New Deal did.
If simply printing up money could prevent economic downturns, there wouldn’t have ever been a recession or depression in the history of the world!
We have a media, academia, and a government that publicly:
1) frowns on the pursuit of wealth
2) Punish those who privately create wealth
3) seeks to redistribute wealth on the basis of equal economic outcome
4) Actually believes Americans should be poorer for the sake of the environment
5) Have never created ANYTHING that works
If you read the article, he’s still big on Obama’s policies.
He’s just calling for more of the same.
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