Robert Reich: Forget a Double-Dip, We're Still in One Long Big Dipper

[unhappycamper]

Forget a Double-Dip, We're Still in One Long Big Dipper
Robert Reich
Former Secretary of Labor, Professor at Berkeley
Posted: August 14, 2010 05:37 P

It's nonsense to think of the economy heading downward again into a double-dip recession when most Americans never emerged from the first dip. We're still in one long Big Dipper.

More people are out of work today than were last year, counting everyone too discouraged even to look for work. The number of workers filing new claims for jobless benefits rose last week to the highest level since February. Not counting temporary census workers, a total of only 12,000 net new private and public jobs were created in July -- when 125,000 are needed each month just to keep up with growth in the population of people who want and need to work.

~snip~

The central problem is lack of demand -- and that's what has to be tackled.

Three of the four sources of demand have stopped working. (1) Consumers can't and won't buy because they're still under a huge debt load, can't get more credit, are afraid of losing their jobs (or already have), depend on two wage earners, at least one of whom is working part-time and pulling in less, or have to save. (2) Businesses won't invest and spend on creating more jobs if they don't see consumers willing to buy more. (3) Exports are stalled because the dollar is so high they cost too much, much of the rest of the world is still struggling with recession, and American firms can make things for sale abroad more cheaply abroad.

That leaves only one remaining source of demand -- government. We need a giant jobs program to hire people and put money in their pockets that they'll spend and thereby create more jobs. Put ideology aside and recognize this fact. If it makes you more comfortable call it the National Defense Jobs Act. Call it the WPA. Call it Chopped Liver. Whatever, we have to get the great army of the unemployed and underemployed working again.

[xchrom]

1. You'd think it would be an emergency. Nt

[unhappycamper]

2. Wall Street isn't bitching, so I guess all must be OK.

:eyes:

[quaker bill]

3. The level of unrest

is insufficient to bring this about politically. The fact that the Republicans appear poised to make political gains proposing exactly the opposite approach is proof enough. In that they do make any gains at all, this will become completely impossible short of serious unrest in the streets. Even then, it is unclear what level of dischord would cause them to act, my guess would be that they would have to know their backs were against the wall politically.

The point is that we keep taking lower wages, fewer services, and fewer benefits, without protest and seem to reward those behind this as "good stewards" of the economy. Exactly the opposite is true, they are taking us from the ditch and driving to the economic abyss. However, as long as we keep saying "thank you sir may I please have another" there is no lower limit to how far this will go. The race to the bottom will continue and perhaps even pick up pace after November. It is time we said no to this, but I do not think we will.

[MannyGoldstein]

4. Oh screw Robert Reich

As a member of the Professional Left, he can't possibly know what it's like to actually have to work in government.

(:sarcasm:, of course)