海角大神

The have announced a March for Jobs. But I鈥檓 afraid we鈥檒l need more than marches to get jobs back.

Since the start of the Great Recession at the end of 2007, America鈥檚 potential labor force 鈥� that is, working-age people who want jobs - has grown by over 7 million. But since then, the number of Americans who actually have jobs has shrunk by more than 300,000.

In other words, we鈥檙e in a deep hole and the hole is deepening. In August, the .

America鈥檚 ongoing jobs depression - which is what it deserves to be called - is the worst economic calamity to hit this nation since the Great Depression. It鈥檚 also terrible news for President Obama, whose chances for re-election now depend almost entirely on the Republican party putting up someone so vacuous and extremist that the nation rallies to Obama regardless.

The problem is on the demand side. Consumers (whose spending is 70% of the economy) can鈥檛 boost the American economy on their own. They鈥檙e still too burdened by debt, especially on homes that are worth less than their mortgages. In addition, their jobs are disappearing, their pay is dropping, their medical bills are soaring.

Consumer spending slowed again in August as incomes dropped.

Businesses, for their part, won鈥檛 hire without more sales. So we鈥檙e in a vicious cycle. The question is what to do about it.

When consumers and businesses can鈥檛 boost the economy on their own, the responsibility must fall to the purchaser of last resort. As John Maynard Keynes informed us 75 years ago, that purchaser is the government.

Government can hire people directly to maintain the nation鈥檚 parks and playgrounds and to help in schools and hospitals. It can funnel money to help cash-starved states and local government so they don鈥檛 have to continue to slash payrolls and public services. And it can hire indirectly - contracting with companies to build schools, revamp public transportation and rebuild the nation鈥檚 crumbling highways, bridges and ports.

Not only does this create jobs but also puts money in the hands of all the people who get the jobs, so they can turn around and buy the goods and services they need - generating more jobs. Not exactly rocket science.

But congressional Republicans are firmly opposed. Why don鈥檛 Republicans get it? Either they鈥檙e knaves - they want the economy to stay awful through next election day so Obama gets the boot. Or they鈥檙e fools - they鈥檝e bought the lie that reducing the deficit now creates more jobs.

听

Republicans claim businesses aren鈥檛 hiring because they鈥檙e uncertain about regulatory costs, or their taxes are too high, or they can鈥檛 find the skilled workers they need. But if these were the reasons businesses weren鈥檛 hiring - and consumer demand were growing - we鈥檇 expect companies to make more use of their current employees. The average number of hours worked per week by the typical employee would be increasing.

In fact, the length of the average workweek has been dropping. In August, it declined for the third month in a row, to 34.2 hours. That鈥檚 back to where it was at the start of the year - barely longer than what it was at its shortest point two years ago (33.7 hours in June 2009).

Republicans say America can鈥檛 afford to spend more. In truth, we鈥檒l be in worse shape if we don鈥檛. If the economy remains dead in the water, the ratio of public debt to the total economy balloons.

Besides, the United States can now borrow money from the rest of the world at fire-sale rates. Interest on the ten-year Treasury bill is now under 2%. That鈥檚 an almost unprecedented deal. With so many Americans unemployed and so much of our infrastructure in disrepair, this is the ideal time to get on with the work of rebuilding the nation.

But it won鈥檛 be enough for government to become the buyer of last resort 鈥� in Keynes鈥檚 words, to prime the pump. If the economy is to continue to grow and create jobs after the government has stopped the priming, there must be enough water in the well. Yet, now and in the foreseeable future, America鈥檚 vast middle class doesn鈥檛 have the purchasing power to keep the mechanism going.

For more than 30 years, the , adjusted for inflation 鈥� even though the economy is twice as large as it was three decades ago. - especially the top 1%, who now receive over 20% of total income (it was just 10% in 1980).

As long as America鈥檚 vast middle class could continue to borrow on the rising value of their homes, they continued to spend - thereby keeping the economy going. But going deeper into debt is not a sustainable strategy. Now, after the bubble burst, America鈥檚 middle class doesn鈥檛 have enough money to maintain the economy at or near full employment.

Any long-term strategy for rescuing the American economy must therefore seek to reverse the widening gap in income and wealth. One place to start is tax reform. The - a wage subsidy for lower-income workers - should be enlarged and expanded. Taxes on the middle class should be reduced - including social security payroll taxes (80% of Americans pay more in payroll taxes than they do in income taxes).

Taxes on the wealthy, on the other hand, should be increased. The , and to end the tax cut on the rich put in place by George W Bush in 2001 (thereby increasing the top marginal tax rate to what it was under Bill Clinton - 39%).

But the nation should go much further, particularly in light of the large budget deficit projected several years from now. We need more tax brackets at the top, with higher marginal rates. The capital-gains tax (now at 15%) should be raised to match the income tax rate. And a wealth surtax of 2% should be applied to all wealth in excess of $7 million.

Needless to say, Republicans won鈥檛 go along with anything like this. They balk even at the president鈥檚 modest plan.

It would be better for President Obama to assume that he will get no Republican support this year and next, and build his 2012 election campaign around a bold plan to revive jobs and the American middle class 鈥� and end the American Jobs Depression.