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Mr. Boehner (and Mr. Obama), where are the jobs?

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88 comments

Mr. Boehner (and Mr. Obama), where are the jobs?

POSTED: Wednesday, June 1, 2011, 10:22 PM

Maybe somebody should do something?

The recovery has stalled. It is unlikely that America will find itself back in recession but the possibility of a double dip cannot be dismissed. The problem is not on the supply side of the ledger. Corporate profits are still healthy. Big companies continue to sit on a cash hoard. Large and middle-sized companies can easily borrow more, at low rates. The problem is on the demand side. American consumers, who constitute 70 per cent of the total economy, cannot and will not buy enough to get it moving. They justifiably worry that they will not be able to pay their bills, or afford to send their children to college, or to retire. Banks, with equal justification, are reluctant to lend to them. But as long as consumers hold back, companies remain reluctant to hire new workers or raise the wages of current ones, feeding the vicious cycle.

There are things that could be done!

Under normal circumstances, this would be the time for the federal government to take bold action to ward off a double dip. For example, it could put more cash in peoples’ pockets while giving employers an extra incentive to hire by exempting the first $20,000 of earnings from payroll taxes, for a year or two. It could lend money to state and local governments. It could launch a new Work Projects Administration (modelled after its antecedent during the Great Depression) to put the long-term unemployed to work on public projects. It could amend the bankruptcy law to allow people to include their prime residences in personal bankruptcy, thereby giving homeowners more leverage to get mortgage lenders to mitigate the terms of their loans.

But these are not normal circumstances.

No, they're not. People need to realize that the rules have changed. Republican policy is that by continually cutting taxes (and doing nothing else), happy and profitable businesses would use that excess cash to hire people. And once upon a time, the more workers you hired, the more money you could make, but that's not true anymore. Today, companies with excess cash -- which is the current situation, by the way -- could use that money to hire American workers, or they could buy rows and rows of dill pickles. Both are about as critical to their main mission of making as much money as possible for their shareholders -- now that they can replace workers with automation or with much cheaper labor abroad. Getting millions of Americans back to work is only of interest to the public -- you and me and the officials we elect -- and not to the private sector.

So there needs to be public solutions, like the ideas mentioned above.

It's just common sense.

But these are not normal circumstances.

Will Bunch @ 10:22 PM Permalink | 88 comments

88 comments

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Comments (89)

0 like this / 0 don't • Posted 10:00 AM, 06/02/2011

There was a pretty simple way to handle this whole "create jobs" problem that the government could have done, and still could do... create a real energy policy and mandate. The workforce required to manufacter, construct, and operate various wind, nuclear, waste to energy and other renewable/clean enery facilities would be enormous if put into place on a national scale. And energy, like roads, is an essential infrastructure, so having the government play a direct role (in this case by mandating companies have a certain percentage of power from these sources) is a legit action in my view as a conservative that is not government over stepping its authority. Does it result in temporarily higher energy prices? Yes, but in the longer term it stablizes rates when your fuel stocks are suddenly free and/or abundant.

— Greg S

0 like this / 0 don't • Posted 10:07 AM, 06/02/2011

I typically just read the comments on here, mostly in disgust, and do not post but I needed to add my monies worth. It is widely known and a fact, something a liberal does not know, that if you taxed all people over $250,000 at 100% and confiscated all of their wealth it would not even close the gap on the 2011 budget. Once you have done that, then what? You will no longer have anything or anyone to tax because the people that make less than $250,000 rely on the rich for their jobs and if the rich are gone so are the rest of the people. Get rid of the tax cuts? Why, would the government actually pay down the debt, no they would spend it and no pay anything down. So why not let the US people keep their money that they earned, not given to them by a government entitlement. So what does that leave? How about cutting spending!!!! Paul Ryan put a plan out there that is a start and all the left does is bash him for trying to save an entitlement that in 15 years will be completely broke and gone for everyone. And his plan does not affect anyone over 55 years old, contrary to what you hear in the media. This PBO admin has been a complete and utter failure and he has nothing to run on in 2012. The things he promised the liberals he would do, he has actually done the exact opposite, shutting down Gitmo, immigration reform, ending ware while getting us into a completely illegal war, and the lies he told to sound conservative, cut the deficit in half in his 1st term, have been exposed. His voting record / agenda has been exposed and it is not what the majority of Americans want. So I am pulling for a Palin / Bachman tickets because no matter who the GOP elects, they are going to defeat PBO and if it is that ticket, the main stream media may just explode!!!

— phlfan

0 like this / 0 don't • Posted 10:12 AM, 06/02/2011

RG you continue to confound with your inability to be precise. I wonder if one could quantify the opportunity cost of the JGTRRA and EGTRRA tax cuts? I wonder if the 1.5T projection would be the same number to then equate the increased revenue number to? But you're right, in essence, not having extended the tax cuts would not have closed the gap entirely - but the debt sure would be lower. So I guess your point is --- because they don't close the gap entirely they should be extended forever? Anyway, stimulating aggregate demand is paramount right now but of course with all of the shouts of 'were broke', 'can't afford it', Washington, knowing that direct spending must be considered, can't do anything -- and I place quite a bit of blame on the Obama administration for not having the cajones to stomp on the House.

— Murrayman

0 like this / 0 don't • Posted 10:13 AM, 06/02/2011

People here are crying about anti-business when corporate profits are at an ALL-TIME HIGH. Why don't you knock it off and stop blaming the President of the United States for the failures of your party?

— HandNik

0 like this / 0 don't • Posted 10:20 AM, 06/02/2011

And corporate taxes are as low as they have been in 40 years.

— Les Ismore

0 like this / 0 don't • Posted 10:19 AM, 06/02/2011

What Republicans, teabaKKKers and wingnuts fail to understand is that jobs are driven by demand, not some magical "job creator" that springs into action our of the kindness of their hearts.

Repubelicans have made it clear, there will be no jobs bills until the black guy is gone. McConnell made it crystal clear that his top priority is not the American economy, it is not getting Americans back to work. His top priority is making sure the black guy is not re-elected. Period.

— Les Ismore

0 like this / 0 don't • Posted 10:26 AM, 06/02/2011

phlfan I laugh at you - what arrogance. Every time the ineffectiveness of the JGTRRA and EGTRRA extension is noted (without citing studies), one can expect a Conservative to dash into the foray with an argument along the lines of, “oh, taxing at 100% or taxing into oblivion…). A bit extreme but that is par for the course. The more reasonable suggestion, of course, is allowing them to expire, pushing the rates back to Clinton years (I won’t suggest that only the top marginal rates are affected). Of course this will increase revenue. Regardless, stimulating demand is an absolute must right now regardless of the short-run effects of the deficit. “Ryan put a plan out there that is a start” – lol – a start. Ryan’s plan ends Medicare, hands out coupons, does nothing to address the driver of excess cost growth in healthcare spending, and cuts spending to Coolidge-era levels. Then, it supposes that supply side tax cuts increased tax revenue, which begs the question how many more studies need to be conducted to show this is a total farce? It’s not a start – it’s DOA. Your new doyen of Conservative values is a charlatan. He’s a crank. “15 years (Medicare) will be broke” – in order to justify the savagery the Conservative must lie. Lol – Palin/Bachmann would be the greatest thing to happen to those seeking entertainment in politics in the history of elections. I would love that – just love it. Bachmann is perhaps the most crazed politician in the country

— Murrayman

0 like this / 0 don't • Posted 10:32 AM, 06/02/2011

"Maybe Richard Maddow will break the story. "... Juvenile and old - but still funny every time I see it.

— phillyjeffsr

0 like this / 0 don't • Posted 10:49 AM, 06/02/2011

Letting people keep the money they earned is "ineffective"? I've now heard it all. And consumer demand is the problem, so the answer must be to tax the consumer more. Brilliant! And for the umpteenth time, we've tried direct spending, so has Japan. It is not working.

— RG

0 like this / 0 don't • Posted 10:58 AM, 06/02/2011

Gotta love Les's solution: have the government buy more stuff with borrowed money. Apparently the $4 tril worth of stuff they buy now isnt enough "demand".

— RG

0 like this / 0 don't • Posted 10:59 AM, 06/02/2011

Murrayman ... You may call me arrogant but it is better than being ignorant like yourself. Yes taxing at 100% and confiscating wealth is extreme and I used that as a way to get my point across .... YOU CAN NOT TAX YOUR WAY OUT OF THIS MESS!! And who needs a study when basic math gets that point across, oh that's because Dems want more money wasted on useless studies that they can bend and twist and feed to the media to feed to the sheep who eat it up and spit it out to the rest of the sheep. Common sense tells you that when you are broke as the US is, you need to cut spending and the biggest of them all is entitlements. If we don't change them now, they will be gone in the future because they are unsustainable. Yes, Paul Ryan did a start which is more than anyone in the White House has done, unless you call lying and demogaging something. And the last time I checked, Paul Ryan's budget got many votes in the house, unlike PBO's whose got 0 because of all the spending it in, so I guess the dems in the house are stupid like the rest of us? As a conservative, I would love the ticket to be any of these 3 mentioned ... Allen West, Herman Cain, Marco Rubio ... but only Cain has declared so a Huntsman / Cain ticket would destory Obama!

— phlfan

0 like this / 0 don't • Posted 11:03 AM, 06/02/2011

Yeah, "ineffective", which part are you unclear about? Strangely the tapped out consumer appears to continue hoarding the increased income, or lo and behold pays down debt. So when they hoard, they don't spend --. Leave it to a conservative, of a simpler, salt of the earth variety, to just state "well, it didn't work in Japan so..." in order to justify the ability of the government to pick up the slack in AD. Of course a dollar spent by the government is different --- somehow. "It is not working" - well, not now it isn't it has primarily been spent and those tax cuts as part of the bill --- not a great result from those beloved tax cuts. Of course there is plenty out there on what Elmendorf thought about the reasonably effective results (relative to size) of the stimulus -- AND it's ineffctiveness at crowding out private investment! So, RG, we can expect a retort 'besmirching' Elmendorf's record when? Don't worry in my fight against the scourge that is Conservatism I've seen it all and read it all so keep lining them up...

— Murrayman

0 like this / 0 don't • Posted 11:11 AM, 06/02/2011

Awww, murray whats the matter those darn consumers not doing what you want them to? I guess the govt should force them to spend by raising taxes and spending the additional revenue (which by the way would not lower the deficit). Or they could borrow more $, leaving a bigger debt to future generations. But clearly, I'm not as advanced as you, your theories work well in textbooks whereas I demand real life proof.

— RG

0 like this / 0 don't • Posted 11:14 AM, 06/02/2011

No one is suggesting that we can tax our way out of "this mess" (mess being threat of continued Minor DepressIon). Long run there is a solvency problem, no doubt (it's not close to being 15 yrs away, as you suggest). But Obama's ARRA plan took on the driver of excess cost growth - procedures and reimbursement. Ryan's plan is a Ben Tre event - in order to save it we need to destroy it. Solvency is achieved not through increased efficiency, but rather on the backs of a future generation of seniors. Of course one of the recurring themes of the totally whacked out Conservative method is the notion that the US is broke. Just a cursory glance at the yield curve tells you what you need to know. Strangely, long dates are low, and really haven't budged. What would happen, dare I ask, to the long dated if the US was bankrupt? In other words, the free market has determined that the US isn't broke, and that has infinite more weight than what has become a completely delusional political group ("Keep your government hands of my Medicare!"). BTW - the studies I was thinking of came from the private sector, mainly academia. But of course the CBO is part of that "Dems want more money wasted on useless studies" nonsense.

— Murrayman

0 like this / 0 don't • Posted 11:18 AM, 06/02/2011

Of course all reasonably effective stimulus lead to jobless recoveries, additional debt, and sub 2% growth. It was so effective that two yrs later, you're back crying for more money. I guess we should also ignore the bailouts and Fed actions as additional attempts to help the economy. Gov spending works gosh darn it!

— RG

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