海角大神

Time for Obama to be bold

If Friday's dire jobs report doesn't prompt the president to unveil a daring new jobs plan next week, what will?

The Bureau of Labor Statistics reports today no jobs were created in August. Zero. Nada.

Well, not quite. The strike at Verizon reduced the labor force by 45,000. Minnesota government employees returned to work, adding 22,000. So in reality, America added 23,000 jobs. Almost zero.

In reality, worse than zero. We need 125,000 a month merely to keep up with population growth. So the hole continues to deepen.

Since this Depression began at the end of 2007, America鈥檚 potential labor force 鈥� working-age people who want jobs 鈥� has grown by over 7 million. But since then the number of Americans with jobs has shrunk by more than 300,000.

If this doesn鈥檛 prompt President Obama to unveil a bold jobs plan next Thursday, I don鈥檛 know what will.

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

And businesses won鈥檛 hire without more sales.

So we鈥檙e in a vicious cycle.

Republicans continue to claim businesses aren鈥檛 hiring because they鈥檙e uncertain about regulatory costs. Or they can鈥檛 find the skilled workers they need.

Baloney. If these were the reasons businesses weren鈥檛 hiring 鈥� and demand were growing 鈥� you鈥檇 expect companies to make more use of their current employees. The length of the average workweek would be increasing.

But 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 鈥� barely longer than what it was at its shortest point two years ago (33.7 hours in June 2009).

It鈥檚 demand, stupid.

So what does a sane nation do when the consumers and businesses can鈥檛 boost the economy on their own?

Government becomes the purchaser of last resort. It hires directly (a new WPA and Civilian Conservation Corps, for example). It helps states and locales, so they don鈥檛 have to continue to slash payrolls and public services. (The help could be structured as a loan, to be repaid when unemployment drops to, say, 6 percent.)

And it hires indirectly 鈥� contracting with companies to rebuild our crumbling infrastructure, including school buildings, to take another example.

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 鈥� generating more jobs.

Get it? Not exactly rocket science.

So why don鈥檛 Republicans get it? Either they鈥檙e knaves 鈥� they want the economy to stay awful through next Election Day so Obama gets the boot. Or they鈥檙e fools 鈥� they鈥檝e bought the lie that reducing the deficit now creates more jobs.

Every time you hear anyone say we鈥檙e 鈥渂roke鈥� or 鈥渃an鈥檛 afford to spend more,鈥� tell them 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 GDP balloons.

And remind them that the federal government can now borrow at fire-sale rates. Interest on the ten-year Treasury bill is 2 percent.

Do you hear me, Mr. President? Please 鈥� be bold next week. And if, as expected, Republicans refuse to go along, take it to the people. Mobilize the public. Use the bully pulpit. That鈥檚 what you have it for.

One more thing, Mr. President. You also have to tackle inequality. When so much income and wealth continues to flow to the very top, America鈥檚 vast middle class still won鈥檛 have enough purchasing power to boost the economy. Priming the pump is necessary but won鈥檛 be sufficient without enough water in the well.