The Jobs Babble

Everyone is talking jobs and saying nothing. The inadequate recovery is sputtering and no one is doing anything. In the war on unemployment, no one has picked up a gun. We’re going through the motions, waiting for the misery to ratchet up, the cities to blow, corporate profits to tank before anything is done.

Bill Maher captured the reality when he mused that it wasn’t surprising Republicans thought Democrats had a secret plan if Obama were re-elected, because they hadn’t told anyone about what they planned to do. The Democratic appeal, he suggested, is “vote for us, we’re lame, but the other guys are nuts.” And so they are.

Romney’s campaign, of course, is all about jobs, twenty-four seven. Actually, it is all about the absence of jobs. Romney offers no coherent plan to produce jobs, beyond a generic, “Trust me, I’m the man from Bain.” Good luck with that. House Speaker John Boehner is “on message,” as they say, repeating relentlessly his question: “Where are the jobs?” But Boehner and his Tea Party compatriots have no plan for jobs either. Instead they have a plan for austerity—deep cuts in spending in every government service except the military.

Last weekend, Russ Douthat, one of the few pundits for whom the label “thoughtful conservative” isn’t an oxymoron, tried to imagine a Romney recovery [1]. He used the book by Edward Conard, Romney’s former partner at Bain, to suggest the Bain vision: Greed is good. The Bush economy was humming. More inequality, more financialization, more speculation will renew America. So embrace the current Republican agenda—deregulate Wall Street, cut top-end taxes, slash government spending, and let her rip.

This is, of course, Romney and Boehner’s agenda. Only problem with it is that, as Paul Krugman has noted, we’re already living in a mild version of that policy. Republicans forced Obama to sustain the top-end Bush tax cuts, as a price of getting unemployment insurance and the payroll tax cut for workers. Government spending—state, local and federal—is going down, not up, contrary to right-wing fantasies. Government workers are being laid off, not hired.

We know the result. Sputtering growth, record corporate profits, growing inequality, declining household incomes, mass unemployment. Boehner’s “job creators” aren’t creating jobs. Douthat is smart enough to realize that the Bush economy didn’t work for most Americans even before it blew up. So he invokes a study by a Chicago conservative, Luigi Zingales, who suggests that what ails America is a corrupted crony capitalism similar to what plagues his Italian homeland. Zingales, and Douthat call conservatives to embrace a “free-market populism,” that will roll back the subsidies, tax dodges, and cartels in private and public sector.

But even Douthat couldn’t get himself to believe that Romney, much less Boehner’s Republicans, could summon up the courage for that. These Republicans fight to the death in defense of billion-dollar subsidies to Big Oil and Big Agra and Big Pharma. The Koch brothers aren’t funding “free market populism”; they are expecting a huge return on their investment—and they’ll get it if Romney wins.

But if Republicans have nothing to say about jobs, neither do Democrats. They are terrified by polls that say voters are concerned about deficits. So every jobs program has to be “paid for”—and, almost by definition, small. Obama issues a “to-do list” for Congress that even his aides have a hard time pretending to be excited about.

Ironically, there really isn’t much of a secret about what needs to be done. The only question is how deep the crisis must go, how crippling the pain must be, before it gets done.

Paul Krugman and Joseph Stiglitz have been campaigning for action. But we don’t need to take Nobel Prize winning economists as our guide. This week the sober conservative editors of the Financial Times detailed the common-sense steps [2] that were needed from America.

First, they called on the Federal Reserve to announce another round of qualitative easing. But with interest rates at record lows, there is little scope for monetary policy. With a yield of 1.45 percent, 10-year Treasury bonds are now cheaper than free. (They are earning less than the inflation rate). Investors are essentially paying the U.S. to hold their money in a safe place.

Those same low interest rates offer the U.S. a remarkable opportunity to rebuild the country. There will never be a better time to do the “internal improvements” that we need to make—rebuilding roads, bridges, mass transit, sewers, fast trains, airports, and retrofitting public buildings, building up renewable energy and more.

This is work that must be done. But now we can borrow the money at virtually no cost to finance it, and put to work a construction industry that is now idled, and help get the economy going. As the editors of the Financial Times conclude, “whatever is invested at these rates is likely to pay for itself in higher growth and revenues." This is what most would call a no-brainer.

This isn’t all that should be done. Reviving Richard Nixon’s “revenue sharing” – a tip of the hat to E.J. Dionne – would send money to states and localities to rehire teachers and cops. The President has suggested a jobs corps for veterans, so no one who risks their life in battlefields abroad will be cut down in economic crossfire at home. That could sensibly be expanded with urban and green corps, targeted to areas of obscene levels of youth unemployment, to insure that young people under 25 don’t start their lives in idleness, depression, drugs and despair. And we should start making the long term investments – in world class education from pre-K to college, in research and development, in new energy – vital to our economic future.

These can be paid for by ending the subsidies Republicans protect, shutting down corporate tax havens, and fair taxes on Wall Street speculation and the rich.

Most sensibly, this program for revival and renewal would be accompanied by a hard-knuckled, no-holds-barred, everything-on-the-table drive to get our books in order once the economy recovers. That requires unrelenting focus on the three things that drive our budget out of whack. Not Social Security and Medicare, but the real deal: shackling Wall Street, which just blew up the economy and effectively doubled our debt to GDP; ending our commitment to endless wars and policing the world, which we cannot afford; and fixing our broken health care system, the most corrupted of our crony capitalism, now squandering about twice what other advanced countries spend per capita on health care with worse results.

Everything else—the so called “grand bargain” that would trade cuts in Medicare and Social Security for tax reforms—is simply using the crisis to take another hit out of working families. When the rewards aren’t shared, shared sacrifice is for suckers. When you weren’t invited to the party, you shouldn’t be stuck with the bill.