Hope & Fear About the Economic Recovery
Changes in the economy are causing a lot of hope, a little fear and a healthy measure of rage.
There’s common-sense optimism in the addition of more than 225,000 private-sector jobs in February – the 17th consecutive month of employment improvement and the third straight month that more than 200,000 jobs were added.
In USA Today, Princeton University economics professor Justin Wolfers said, “To the extent there is a debate, it’s whether the economy is recovering or recovering strongly.”
Other observers agreed. New Yorker magazine business columnist James Surowiecki, who writes “The Financial Page,” said this is no “false spring,” as the uptick in jobs is bolstered by a new demand for cars. In the near future, he adds, better employment for younger workers will translate into higher sales of durable goods like washing machines, plus houses and various “stuff that you put in a house.”
Apart from that optimism, a little faith is required. The jobless rate remains stuck at 8.3 percent, mostly because more people are joining the labor force every month. Also, projections are for a 2 percent growth in Gross Domestic Product (GDP), which is unusual since GDP and job growth usually rise together.
Elsewhere, the divide between the haves and have-nots – the 1 percent and the rest of us – continues. CEO pay for the country’s largest corporations went up 27 percent in 2010 and 2 percent in 2011, while average weekly “earnings for production and nonsupervisory employees on private nonfarm payrolls, seasonally adjusted, fell 1.9 in the last three months, according to the Bureau of Labor Statistics.
There’s also the influence of Big Oil and its profound effects on the economy – and government. For instance, while inflation is very modest (2.8 percent in the Midwest, according to the last Consumer Price Index), gasoline prices have gone up 15.2 percent in the Illinois-Indiana-Wisconsin region. Since February.
Some logic and a reminder of recent history is needed, according to an area lawyer who wrote to ask for a comparison of taxes, spending and joblessness in the last several years.
Well, U.S. Sen. Bernie Sanders, the Vermont Independent, said, “Our Republican friends have a short memory. They forget when Obama took office, we were losing 700,000 jobs a month, that in the last quarter of the Bush administration, GDP declined by over 6 percent, and we lost during the Bush era thousands and thousands of factories and millions of good-paying manufacturing jobs.
“So, my view is, yes, we are making progress under Obama,” Sanders continued. “No question about that. And Republicans have no right to be critical when virtually every day in the United States Senate, they`re busy obstructing any effort that we want to make to create jobs.”
Instead, Republican officeholders from the district level to those aspiring to the Oval Office keep insisting that the economy would recover nicely if only taxes could be cut some more.
Taxes were cut 10 years ago to their lowest level in 60 years, but spending was not trimmed. The nonpartisan Congressional Budget Office (CBO) reported that Bush administration policies account for more than $7 trillion of the national debt; Obama’s policies – including the stimulus program – added $1.4 trillion. Again, a decade ago, the federal government was building surpluses and was looking to pay off its entire debt within several years. But instead, Bush pushed through two huge tax cuts, started two wars costing $1.4 trillion, and expanded other Pentagon and domestic spending, such as a Medicare prescription plan that cost another $300 billion by itself. The claim that taxes are too high is misleading, according to an analysis by the nonprofit investigative journalism group Propublica showing that the percentage of income Americans pay in taxes is the lowest it’s been in decades; corporate tax rates and marginal income tax rates are the lowest they’ve been since World War II (except for a brief time in the ’80s); and taxes as a share of GDP are lower than most developed countries, according to the Organization for Economic Cooperation and Development.
“Are the Republicans prepared to do whatever they can to torpedo the economy in order to defeat Obama?” asked Sanders. “I think the answer is pretty clear. They have shown that time and time again.”
Of course, many Republican politicians have not forgotten the truth; they just hope voters have. That’s why their candidates say they want to help the economy by doing more of the same things that upended it in 2007-08. And that’s why the GOP is doing everything they can to keep a recovery from improving.
Bill Knight is a freelance writer who teaches at Western Illinois University. The opinions expressed are not necessarily those of WIU or Tri States Public Radio