Joblessness will be ‘the new normal’ if Americans tune out
It’s hard to tell what’s coming, anarchy or more apathy, but there’s no doubt that things haven’t looked this bleak for the poor and near-poor since the 1930s. (Think Al Jolson, singing “Brother, Can You Spare a Dime?,” adjusted for inflation.)
About 20 percent of American homeowners are underwater, and more and more of the jobless are lining up for free food on Front Street in South Philly and all over the country.
Some economists are calling this situation “the new normal,” but that’s not an expression the out-of-work are likely to use. A rally by the long-term unemployed, to demand help from their vacationing congressional reps, will take place tomorrow on Wall Street, home of the banks that caused the economy to tank.
Anyone who’s paying attention has noticed that a weirdly diverse group of activists, economists and politicos are speaking the same language regarding the Great Recession, or whatever you want to call it. Bill Gross, a free market cheerleader who co-runs the world’s largest bond fund, hopes the government “spends tens of billions on new infrastructure projects to put people to work and stimulate demand.” Glenn Hubbard, an economic advisor to George W. Bush, thinks recovery entails investing large sums in retraining workers whose jobs are gone forever. These guys are not exactly wild-eyed radicals, but they’re on the same page, sometimes, with people like Paul Krugman, Elizabeth Warren and Debbie Stabenow.
Meanwhile, whose page is President Obama on? We are hearing calls for works projects from conservatives but not from the guy who was elected by millions of Democrats and independents to set the economy right. We are hearing his press secretary, Robert Gibbs, railing against Democrats who are pressing Obama to do his job.
I don’t pretend to know Obama’s true feelings about the importance of putting the jobless back to work, or his definition of economic recovery, but his conduct up to now indicates a belief that recovery means providing fiscal stimulus for banks and corporations. His actions are based on the notion that recessions are best gauged by estimating the gross domestic product, not the number of people employed. In other words, a recession is over if the GDP rises to a certain level.
Incredibly, Obama and his math wizards, Timothy Geithner and Laurence Summers, have stuck to this notion, even as millions more people lost their jobs, then their hopes that they can find new ones, and then their belief that Obama knows what he’s doing.
It makes we wonder if the president understands what the New Deal was about. If he did, he would answer the question posed by Robert J. Shiller: “Why not use government policy to directly create jobs — labor-intensive service jobs in education, public health and safety, urban infrastructure maintenance, youth programs, elder care, conservation, arts and letters, and scientific research?”
One might add, why not fight to persuade Congress to reinstate taxes on the rich — taxes scuttled in the obscenely cynical Bush era — and use the resulting revenue to fund the jobs programs?
It might all work out in the end, years from now, with or without a real jobs program. Or we’ll be rocked by social breakdown that’s less dramatic but far more harmful than what happened in the ’30s.