stimulus

What We Want From A White House Jobs Summit

Isaiah J. Poole — Fri, 13 Nov 2009 04:32:13 -0800

President Obama's team made it clear months ago that he will brook no talk of a "second stimulus" at a time when the first stimulus is under significant criticism—from the right, to be sure, but also from the left. Nonetheless, Thursday's announcement of a White House jobs summit offers an opportunity to reset the political conversation on building an enduring recovery for the 17.5 percent of Americans who are unemployed and underemployed.

It matters where that conversation starts. When Obama disclosed news of the summit at White House, Campaign for America's Future co-director Robert Borosage issued this statement:

The jobs summit should consider both immediate and long-term strategies. Next year, the Congress should act to create jobs immediately – creating urban and green jobs corps to put young people to work, aiding states and localities to forestall layoffs of police and teachers, expanding investments in new energy, in retrofitting buildings, in transport and infrastructure to boost economy over the course of the next two years.

At the same time, the president should use the summit to begin defining what the engine of growth will be in the economy that we build out of the ruins of the old. Consumers will not go back to spending more than they earn. With a falling dollar, exports could play a bigger role. But the main engine will be public-investment-led growth, featuring a bold commitment to make the transition to new energy the centerpiece of a long-term economic strategy. This can be deficit-funded while the economy recovers, but should be paid for by progressive taxes over the long-term.

The political right would rather focus the conversation on another number—$12 trillion—which is what the national debt will be by early December. Concern over the deficit constrained the size and ultimate effectiveness of the American Recovery and Reinvestment Act, which has arguably kept unemployment from getting worse but has yet to prove to a lot of people outside the Beltway that it is actually improving the Main Street economy. If anything, our experience with that stimulus plan—split between one-third tax cuts and two-thirds inadequate spending on such items as infrastructure—tells us that our economic malaise needed to be treated like a serious infection: Only a fast, hard and consistent attack works; anything less allows the disease to fester and become harder to treat.

News of the summit comes at a propitious moment. Senate Majority Leader Harry Reid has said that his top priority now, other than getting a health-care reform bill passed, is to get job-creation legislation passed. John Nichols writes in The Nation that Reid and his fellow Democrats can borrow from proposals that are already on the table in the House, including Oregon Democratic Rep. Peter DeFazio's plan to fully fund a surface transportation reauthorization for our highways and mass transit with the aid of a crude-oil transactions tax. (Bill Scher has included links to some other ideas from progressive leaders in today's "Progressive Breakfast.")

The news also hits an American public that is dispirited by the state of the economy—only 39 percent of the people interviewed in a Pew Research Center poll this week see the economy improving next year—and the Wall Street bailouts, which a majority of the people in a CBS News poll saw as solely benefiting the bankers at the expense of the taxpayers.

But President Obama still has significant political capital, and he can use it to build consensus around an investment economy agenda: Rebuild the nation's public commons, fuel the transition to the green economy, restore manufacturing as a critical building block of restoring middle-class prosperity. Those who have reaped he most from our economic policies should be asked to contribute the most to its continued security.

We Need A Jobs Program And Leadership That Will DO It This Time

Dave Johnson — Mon, 05 Oct 2009 08:35:28 -0700

Friday’s jobs report said 263,000 jobs were lost in September.

BUT that is after 571,000 people gave up actively looking for work. The number of jobs lost last month was 263,000 plus 571,000 = 834,000.

The "stimulus plan" is currently creating (and/or saving) between 200,000 and 250,000 jobs a month. Yes, that means the real job loss would have been at least 1,034,000 without the assistance of the stimulus plan.

On top of that the "birth/death" model -- the government's assumption that a number of small businesses are starting up that they are not tracking -- is overestimating job creation, leaving policymakers without needed warning signals. The job loss numbers for the last year are expected to be revised upward by 824,000 early next year as a result.

This is bad. Really bad. We need a real jobs program, and we need it bad.

There is something else we need: we need progressive leadership that understands how important this is to people.

Here is what I mean. I came across a news story from the fight over the stimulus plan earlier this year, that now in light of Friday’s terrible jobs report says a lot more than it said at the time. House Dems Strip Stimulus of $200 Million Provision to Refurbish National Mall,

“The move was made amidst a torrent of GOP criticism about wasteful or non-stimulative spending in the bill, including those two projects, as the president attempts to woo House GOPers.”

Yes, the House gave up this project that would have brought jobs to DC - and fixed up the the National Mall - to try to get Republican votes. How did that work out? How many House GOP votes did they get?

How many people in DC could be employed fixing up the mall and other buildings? The Democrats took out $200 million that was originally in the stimulus without gaining a single vote for the bill for doing it!

Meanwhile, the terrible jobs report showed that state and local governments are shedding jobs,

"Government employment fell by 53,000, with the largest drop—24,000 jobs—in the noneducation component of local governments."

With that in mind, let me remind you of this brilliant negotiating tactic: Senate Stimulus Compromise Deals a Blow to Cash-Strapped States,

... "state stabilization funds" ... were cut back by $40 billion this weekend in the deal cut by Senate centrists.

That's right. The original stimulus plan provided funds to help keep states from laying people off. These funds were cut -- and now states are laying off.

The compromises in the stimulus plan have consequences, and those consequences are people's jobs. The compromises were an experiment in "bipartisanship" that failed. The stimulus package gave up several important things, but how many Republican votes were won over? And as a result real people are losing real jobs.

Making matters worse, unemployment compensation is starting to run out for many people who were laid off when this mess started. AND the COBRA health insurance subsidies are running out soon as well! On top of that, contractors - employees who are not called employees because companies can get away with not paying benefits, stock options, unemployment insurance, etc. - a huge component of the labor force, don't even get unemployment or COBRA in the first place.

We Need Jobs Programs NOW

So here is an idea from outside of Washington: How about our government help our people by putting together some real jobs programs? Put people to work while we figure out how to fix the economic mess that conservative policies created.

It is time to use the power of government to start doing something that helps people, and that is not blocked by a misplaced need to get "centrists" (read: politicians trolling for payments/future jobs from big corporations) to like you or a fear that Rush Limbaugh is going to say something bad about you if you go ahead and do what we elected you to do. Here is a news flash: The market-fundamentalist corporatists are not going to like you, and Rush Limbaugh IS going to say bad things about you. Get a clue, they are not responding to the carrots so start using sticks.

Friday's jobs report says this mess is not going away any time soon. Friday’s jobs report shows that things are too serious and too many Americans are suffering for the administration and congressional leadership to continue playing nice guy and give-in strategies. This is important to too many people. People need to be able to eat and have shelter – never mind the health care fiasco – and they need this now.

And it would be politically popular. Think about this: giving people jobs would be politically popular.

Here are some job ideas:

Why don’t we pay people to start retrofitting homes and buildings today to be energy efficient, for free?

Why don’t we pay people to do thousands of projects in the national and state parks?

Why don't we add a teaching assistant to every classroom> And why don't we hire enough teachers to cut class sizes in half?

Why don't we fix all the roads and bridges that haven't been repaired for decades?

What about direct aid to manufacturers who still cannot get credit?

Here's a big one: why don't we cut the workweek to 30 hours? How many people will that put to work? Do you think people are going to object to having to work 30 hours instead of 40?

Oh, and why don't we fix up the National Mall in Washington DC? It needs it and people in DC need jobs. There is simply no excuse not to do this.

Trade Adjustments and Stimulus Packages in the Global Recession and Recovery

Mike Elk — Mon, 27 Jul 2009 09:09:41 -0700

Fiscal Survey of States

Susan Ozawa — Mon, 23 Feb 2009 11:32:10 -0800

Fiscal 2008 marked a turning point for state finances with a significant increase in states seeing fiscal difficulties, in stark contrast to the preceding several years. As the economy has weakened, so has the state revenue and spending picture. The decline of the housing sector along with a weak manufacturing sector have combined to cause significant declines in revenue for a number of states.

Findings include:

Thirteen states were forced to reduce enacted budgets in fiscal 2008. This is in stark contrast to the three states that had to reduce their enacted budgets in fiscal 2007.
Eighteen states assume negative budget growth for fiscal 2009 governors’ recommended general fund budgets, while four states are estimating negative growth budgets for fiscal 2008.
Medicaid spending from state funds is estimated to increase by 4.4 percent in governors’ recommended budgets for fiscal 2009; more than four times the rate of growth for the overall general fund. This increase in health care spending continues to place pressure on state budgets by exceeding overall spending.
Six states are recommending increases to their fiscal 2009 cash assistance levels under the Temporary Assistance for Needy Families (TANF) program, ranging from 0.1 percent to 30 percent.

Economic Stimulus and Economically Distressed Workers

Susan Ozawa — Mon, 23 Feb 2009 11:26:37 -0800

As the financial crisis on Wall Street unfolds with intense media coverage, we are losing sight of another crisis: more than a million families across the United States will face foreclosure in the next six months as the last of the sub-prime mortgages contracted in 2006 and early 2007 reset. Accelerating job losses and low wages aggravate the lives of tens of millions of families. In the rush to focus on Wall Street, these are the families whose lives must not be forgotten. These are the working people who need attention and help from a new stimulus package as well as structural economic reforms. This study focuses on the needs of these economically distressed workers and proposes economic policies that will improve their lives while strengthening the overall economy.

State Budget Troubles Worsen

Susan Ozawa — Mon, 23 Feb 2009 11:14:59 -0800

At least 39 states faced or are facing shortfalls in their budgets for this and/or next year. Over half the states had already cut spending, used reserves, or raised revenues in order to adopt a balanced budget for the current fiscal year — which started July 1 in most states. Now, their budgets have fallen out of balance again. New gaps have opened up in the budgets of at least 27 states plus the District of Columbia just three months after they struggled to close the largest budget shortfalls seen since the recession of 2001. And these problems are expected to continue into next year.

Economic Stimulus and Economically Distressed Workers

Susan Ozawa — Mon, 23 Feb 2009 10:49:16 -0800

City Recovery Is National Recovery

Isaiah J. Poole — Fri, 12 Dec 2008 07:42:57 -0800

The incoming Obama administration has promised to bring cities out of the federal policy wilderness to which they have been exiled for the past eight years. And, given the scale of the economic crisis facing the country, it must, for the sake of the country.

Mayors have largely had to make do on their own the past eight years with no real support from the conservative ideologues in the Bush administration and Congress. The results have been uneven. For a time, major cities were able to ride the upside of the real estate boom, and a combination of high gasoline prices, demographic changes and local leaders working hard on quality-of-life issues in their communities helped some cities reverse the population declines of previous decades. But working people—including teachers, police officers and the thousands of service workers in central-city hotels and restaurants—who could not afford skyrocketing housing prices were left behind. So was the rickety infrastructure supporting the newly reviving cities, which could not on their own make up for decades of deferred maintenance on public facilities.

PODCAST: Highlights of a conference call with economist James Galbraith, Steelworkers President Leo Gerard and Robert Borosage about the Main Street Recovery Program.

ALSO:

This week the Institute for America's Future is asking public officials and grassroots activists to endorse its Main Street Recovery Program, which calls for a two-year, $900 billion investment program to jump-start the real economy.

Also in the past week, the U.S. Conference of Mayors has issued two reports that offer a window into the unaddressed needs cities have.

On Friday, the organization released its annual survey of hunger and homelessness in 25 major cities. In that survey, 19 of the cities reported an increase in homelessness over the past year, with 12 of those cities tying the increase directly to the foreclosure crisis. Also, 20 of the cities reported an increase in the demand for emergency food assistance over the past year.

Also, the Conference of Mayors issued a list of $71 billion worth of "ready-to-go" projects that would, if fully funded, produce more than 874,000 jobs over the next two years. The projects span several areas that have been neglected during the past eight years, including streets, water mains public housing, schools, public transportation, public safety and intercity rail. Funding for energy conservation and retrofitting for new green technologies is prioritized throughout.

Metropolitan areas account for 86 percent of national employment,, 90 percent of labor income and 90 percent of gross domestic product (GDP), the Conference of Mayors notes. It is obvious that we can't pull the economy out of its current death spiral without a coherent urban revitalization policy. But it is only been since the Obama transition team has taken shape that there have been meaningful moves in that direction, with its announced intention of creating an office of urban policy and, on Saturday, Obama's appointment of Shaun Donovan, New York City's housing commissioner, to run the Department of Housing and Urban Development. In New York, Donovan not only managed the nation's largest affordable housing program but also, as The Washington Monthly notes, had foreseen the looming bursting of the housing bubble as early as 2004.

On Saturday, Obama indicated that he appreciates the urgency of get HUD out of the backwater to which it was relegated under President Bush:

We need to approach the old challenge of affordable housing with new energy, new ideas, and a new, efficient style of leadership. We need to understand that the old ways of looking at our cities just won't do. That means promoting cities as the backbone of regional growth by not only solving the problems in our cities, but seizing the opportunities in our growing suburbs, exurbs, and metropolitan areas.

The Main Street Recovery Program gives the Obama administration an opportunity to address some long-simmering problems highlighted by the Conference of Mayors and other urban organizations. It implicitly adds urgency to the need to reshape the fragmented thicket of housing and community development programs, but in a process driven by making the programs more effective, not solely driven by cost. It encourages job creation though public works projects that will leave cities greener and better positioned to support future growth. It allows for mayors and local elected officials to prioritize the projects that make cities more livable, such as better school facilities and safer streets.

Having a president who cut his political teeth in a big city is in itself a big change from the past. But that president will have to fight against conservatives who kept telling cities to "drop dead." That they have doggedly refused to do so, in spite of the program cuts of the past eight years and the campaign-trail slurs that cities aren't populated by "real Americans," is a testament to the tenacity of hundreds of progressive mayors, local elected officials and activists who have struggled this decade to keep cities viable. Now is the time to build on their struggle with policies that address their needs—and acknowledges than when we help cities, we help the nation.

Updated 7 a.m. December 15 to add Obama's announcement of the Housing and Urban Development appointee and the Conference of Mayors hunger and homelessness report.

How to Make Sure the Stimulus Stimulates Our Economy, Not China's

David Sirota — Tue, 09 Dec 2008 07:28:53 -0800

President-elect Barack Obama and the incoming Congress seem poised to pass a massive economic rescue package filled with the public spending that progressives have been pushing for years. That's great news, and they are going to need all of our help passing the package over the inevitable obstruction efforts by conservatives.

But as the debate over the rescue package begins, I suggest you read Businessweek's cover story this week. It looks at "How much of Obama's mammoth fiscal stimulus will "leak" abroad, creating jobs in China, Germany, or Mexico rather than the U.S?" It's an important read, and a critical issue that explains why progressive trade policies must be part of a broader economic development strategy.

The article implicitly smacks down the right-wing frame that says tax cuts to boost consumer spending is the best way to rescue our economy, noting that the right kind of public spending better ensures the money remains in our country:

What about spending on infrastructure, health-care modernization, and green technology? All these tend to produce less leakage overseas than consumer spending. But even jobs in these areas have a tendency to slip over the border unless carefully constrained. Spending on infrastructure such as rail transit is more likely to create domestic jobs, in part because it is already covered by federal legislation that mandates a certain level of purchases of U.S.-made goods.

For example, new public transit vehicles generally must have 60% domestic content and be assembled in the U.S. Electric streetcars—a mass transit option to cut pollution that's favored by cities such as Denver and Salt Lake City—would likely be imported from other countries if it weren't for the "Buy American" requirements attached to federal funding.

The "Buy American" laws have been around in federal procurement since the Great Depression, and they embody one of the founding principles of the broader trade policy reforms that progressives have been pushing for a while now: Namely, that when our government spends public dollars, we should do our best to make sure those dollars stay in our country.

The first problem is that many of our trade policies have subsequently pre-empted or weakened these key Buy American statutes (for instance, subjecting some of them to court challenges in international tribunals on the grounds that they violate "free trade" principles). The second and even bigger problem is epitomized in the article's note that "Paying someone to better insulate a home will clearly create a domestic job. But how much of the insulation will come from China, a major producer?" That's a good question, and it speaks to a trade policy that has decimated America's core manufacturing capacity.

Our own economic policies have created an incentive for corporations to eliminate manufacturing industries here at home and troll the world for the cheapest labor, worst human rights conditions and most lax environmental laws. Not surprisingly, that race to the bottom has crushed our manufacturing industries - ie. those that make stuff - and therefore it becomes harder and harder to make sure spending on said "stuff" like infrastructure projects stays here.

So, while fixing the NAFTA trade model and reforming the WTO may at first glance seem insignificant, it is anything but - it will be a decisive factor in making sure all of the efforts over the next many years to fix and sustain our economy aren't done in vain.

The good news is that in floating fair-trade advocate Rep. Xavier Becerra (D-CA) for U.S. Trade Representative, the Obama team is suggesting it understands the significance of trade reforms in an overall economic strategy. The more troubling news is highlighted by the Wall Street Journal today, which notes that top experts who study job outsourcing have noted that "Almost every member of the economic advisory board who has worked in business has been involved in significant outsourcing actions." These observers are subsequently voicing "worry that [he] may de-emphasize his commitment to get business to stop sending jobs offshore."

The concerns are certainly valid - personnel always plays some role in policy. But as I wrote in a column a few weeks ago, emergency circumstances can radically change the thinking of even the most Establishment actors, and with Obama pledging to create 2.5 million jobs, he now has a political incentive to use every means at his disposal - including trade policy reform - to reach that promised goal.

The fact is, you can't have an effective industrial policy without a trade policy that supports it. Leveling the trade playing field with better labor/environmental standards, better trade enforcement, and an end to the provisions undermining Buy American laws will in the long run be a major factor determining whether American taxpayer dollars truly rescue our economy, or head overseas.

A Consensus Emerges: Build, and Build Big

Eric Lotke — Wed, 26 Nov 2008 11:19:01 -0800

Everybody is saying the same thing. Stimulus plans don’t mean tax rebates worth a few tanks of gas and a restaurant dinner. Stimulus plans means new roads and bridges, aid to states so they won’t lay off nurses and teaching assistants, and a down payment on a new energy economy with windmills and commuter rail.

Most importantly, people have turned the corner on money. Stimulus will take real money, measured in hundreds of billions of dollars and percents of GDP. Low estimates put the investment at $300 billion. High ones reach $700 billion. Paul Krugman, with his hot new Nobel prize in economics, recommends “figure out how much help [you] think the economy needs, then add 50 percent.”

The former but not future Treasury Secretary Lawrence Summers has changed his tune. No longer should stimulus be “targeted, timely and temporary.” Now it should be “speedy, substantial and sustained.” If he changes the first S to “strategic,” he’ll sound just like the Campaign for America's Future. "Strategic" points towards energy and education, investments that pay back over time.

Increasingly, even the deficit hawks recognize that this is not the time to worry about deficits. This is the time for action. To paraphrase FDR, when the house is burning, you don’t fret about the cost of the hose.

Over the weekend, president-elect Barack Obama started to define what the New York Times labeled a Vast Economic Stimulus Plan.

“We’ll be working out the details in the weeks ahead, but it will be a two-year, nationwide effort to jumpstart job creation in America and lay the foundation for a strong and growing economy. We’ll put people back to work rebuilding our crumbling roads and bridges, modernizing schools that are failing our children, and building wind farms and solar panels, fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead.”

He is exactly right, and he’s been saying this since the campaign.

In June he told the U.S. conference of Mayors:

“Now is not the time for small plans. Now is the time for bold action to rebuild and renew America. We’ve done this before. Two hundred years ago, in 1808, Thomas Jefferson oversaw an infrastructure plan that envisioned the Homestead Act, the transcontinental railroads, and the Erie Canal. One hundred years later, in 1908, Teddy Roosevelt called together leaders from business and government to develop a plan for a 20th century infrastructure. Today, in 2008, it falls on us to take up this call again – to re-imagine America’s landscape and remake America’s future. That is the cause of this campaign, and that will be the cause of my presidency.”

Back then he was estimating expenditures in the $150 billion range – and nowadays that's rounding error. But back then the Dow was at 12,000 and 1.5 million more people had jobs. It’s nice to see him up the ante.

The American people are behind this too. A June survey by Hart Research showed a country that wants more than quick stimulus. Nearly two-thirds (63 percent) of voters think the economy is facing “long-term, structural economic problems.” Only one-third (30 percent) say it is a “short-term economic downturn.”

Investing in physical infrastructure is among the most popular of long-term solutions. A June survey by Rockefeller Foundation found 82 percent support for “increasing government spending on things like public-works projects to help create jobs.” Reconstruction will take time and exceed the limits of a single budget cycle – but for long term solutions to long term problems, you don’t “pay as you go.” You invest over time.

We discussed all of this last week at our conference on Real Investment in America. I wrote all about it in our snazzy new report, The Investment Deficit.

Build, baby, build. The consensus is emerging.