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Bill Knight - August 9
Wed August 8, 2012
Plenty of Blame to Go Around for the Jobless Rate
As tempting as it is to blame a U.S. President for insufficient job growth – whether Barack Obama or George W. Bush – jobs come from employers, not politicians. Sure, White House leadership is important, ideas from the executive branch should spur government action to help businesses hire, and a president sets an administration’s tone. But presidents can’t exclusively take the blame – or the credit – for jobs.
Lousy news that joblessness still hovers at 8 percent is not unexpected. The private sector created 84,000 new jobs in May; government at all levels lost 4,000, according to the Bureau of Labor Statistics. The net of 80,000 is less than the 100,000+ jobs per month needed to keep up with population growth.
The employment numbers “mean two things,” according to Heidi Shierholz, chief analyst at the Economic Policy Institute, who said, “We are not in – nor are we slipping into – another recession. But we are also not getting the kind of job growth that will bring the unemployment rate down. “
Predictably, Obama put a positive spin on the gains while acknowledging the work ahead, and Republican candidate Mitt Romney blasted the statistics as evidence that Obama’s plan isn’t working.
Huh? What human being could “create jobs” while the GOP-controlled House and filibuster-happy Senate Republicans sabotage plans to help employers? Congress controls the purse strings, after all.
Who could control the shaky financial situation in Europe or corporations’ profit-taking instead of hiring (despite publicly funded bailouts), much less consumer confidence looking at the possibility that Republican election victories would return us to policies that were previously tried for years and failed, contributing to the country’s economic mess. Further, even these meager job gains are a heckuva lot better than the job losses in the last 12 months of the Bush administration, when between 112,000 and 797,000 jobs were lost each month, averaging 388,500 lost jobs per month.
As critical of Bush as many of us were, neither he, Obama nor any Oval Office occupant can absolutely control growth in the republic. Campaign promises are simplistic and misleading, at best. Presidents can lead, but none can quench the thirst for power that opposition partisans feel so much that they’d rather citizens suffer than have a political foe succeed.
Congress must shoulder some responsibility for inadequate government action to help the economy, according to AFL-CIO president Richard Trumka, who says, “Republicans in Congress have responded to the massive jobs shortage and a weak economy with obstructionism and dishonesty. They have repeatedly blocked public investment that would create jobs and spur growth, including President Obama’s American Jobs Act. They have held up countless necessary bills. The cruel reality is Mitt Romney and his Republican allies in Congress are willing to sabotage the recovery in the hope of scoring political points.”
Past, bipartisan support behind dumb policies contributed to the mess, of course, from the deregulated financial sector’s reckless gambling on complex schemes to inflate value from nothing, to destructive trade agreements and wholesale attacks on labor that stripped workers from what little protection their unions held onto after President Reagan ushered in the union-busting era by firing air traffic controllers in 1981.
The consequences, especially of the 2007 Bush Crash, are profound, according to one unlikely source: the Federal Reserve. Its triennial study, released last month, shows Americans’ financial position has worsened since 2004, particularly since 2007.
The Fed reports, “The decline in median net worth was especially large for families in groups where housing was a larger share of assets. A substantial part of the declines in net worth over 2007–10 can be associated with decreases in the level of unrealized capital gains on families’ assets” such as homes or pensions, because the housing market and stock market declined dramatically after Wall Street shenanigans.
Most troubling, from the start of the Bush Crash in 2007 through 2010, the median net worth of U.S. households declined from $126,000 to $77,000 – a drop of 38 percent.
Progressive economist Dean Baker and conservative economist Kevin Hassett in a co-authored piece in the New York Times said, “Policy makers must come together and recognize that this is an emergency, and fashion a comprehensive re-employment policy that addresses the specific needs of the long-term unemployed. A policy package that as a whole should appeal to the Left and the Right should spend money to help expand public and private training programs with proven track records; expand entrepreneurial opportunities by increasing access to small-business financing; reduce government hurdles to the formation of new businesses; and explore subsidies for private employers who hire the long-term unemployed.”
Bill Knight is a freelance writer. The opinions expressed are not necessarily those of Western Illinois University or Tri States Public Radio.