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The real job creators

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The real job creators

Consumers, not the wealthy, are the key to an economic rebound, and GOP austerity is shackling themJob seekers attend the Dr. Martin Luther King Jr. career fair in New York City on April 12. (Credit: Reuters/Lucas Jackson)

Republicans have made it official: “The wealthy” must be called “the job creators” in any debate about tax policy. Democrats are playing their own word games: Centrists insist the 2012 campaign shouldn’t focus on “income inequality,” or whether the worst concentration of riches since the Great Depression might have to do with what Paul Krugman has taken to calling the Lesser Depression. “Income inequality” is a downer, the centrists say; better to talk about “growth” and “prosperity.”

But it’s becoming increasingly clear that growth and prosperity are threatened by the declining share of income going to the non-wealthy over the last 35 years.

Friday’s disappointing jobs report confirms that “the job creators” should be fired, since they only created 115,000 new jobs in April, which isn’t even enough to employ new entrants to the workforce. And while the unemployment rate ticked down from 8.2 to 8.1 percent, that’s only because more unemployed people gave up and left the labor market entirely. Romney advisor Eric Fehrnstrom (Mr. Etch-A-Sketch) blames President Obama, and he even pretends his candidate cares that “people are so discouraged they are dropping out of the workforce all together.”

Let’s get one thing straight: Even with this anemic recovery, the economy under Obama has replaced all of the jobs lost under the Bush administration. NBC’s Chuck Todd deserves kudos for noting to Fehrnstrom Friday that British austerity policies have sent that nation into a double-dip recession – and that Mitt Romney supports the same policies. Fehrnstrom performed the standard Romney pivot – whatever you’re asked, insist on talking about the U.S. economy only – brushing off Todd’s question about how Romney would improve the economy more than Obama has, with his “cut, cap and balance” austerity policies that have failed elsewhere.

But the stalling economy is not good news for Obama-Biden 2012. I’ve said before that I think the debate over whether the Democrats’ campaign message should highlight income inequality vs. growth, opportunity and prosperity presents a false choice: The president is a skilled enough communicator to explain how they’re linked. But he’s really got to find a way to turn around the debate and make clear that consumers, not the wealthy, are the real “job creators.” Until we figure out a way to get people employed and almost as important, get incomes rising again (for more than just the folks at the top) our economic troubles will stay with us.

Paul Krugman is making the rounds talking about his new book “End This Depression Now!” which puts in one place the arguments he’s been making since at least 2009: The Lesser Depression is more a political problem, at this point, than an economic problem, since the GOP is implacably opposed to the government spending that has traditionally goosed the economy out of its doldrums. Right on time, McCain economic advisor Doug Holtz-Eakin is out with a piece that doesn’t challenge Krugman by name but argues that all the stimulus of the last decade – from Bush tax cuts through the 2009 Recovery Act and mini-stims like the payroll tax cut – haven’t helped the economy, because this hasn’t been a “demand recession” but a structural “asset-driven recession,” due to the bursting of first the dot-com bubble and then the much more serious housing sector and banking collapse.

I’m not qualified to get into the weeds with either of these two economists, but we should remember two things about the ’80s recovery that Holtz-Eakin says was a strong one. First, few Republicans ever acknowledge that Ronald Reagan became a stealth military Keynesian mid-term, letting Paul Volcker loosen up the money supply while presiding over a defense buildup that was also a stimulus package.  The Reagan years also saw the beginning of household debt beginning to balloon, while household savings declined – a result of the flattening of wages taking place especially for the working class. Holtz-Eakin ignores the extent to which the banking collapse itself took demand out of the economy, and money out of consumers’ hands – money they’d been taking out of their homes or their credit cards, at least partly because they weren’t getting it in their paychecks.

And the Recovery Act that the former McCain advisor terms a failure was hailed as a success by another McCain economic advisor, Moody’s Mark Zandi, who is on record saying it stemmed job losses and probably kept us out of a real depression. Its problem was that it didn’t pump enough money into the economy, not that it pumped it wastefully. All we really know is that stimulus via tax cuts, the great Bush experiment, didn’t work at all; they helped wreck the economy.

What does Holtz-Eakin recommend instead? “Pro-growth tax reform” – he doesn’t say what that involves – and “fundamental entitlement reform that eliminates the debt threat.” Of course, fundamental entitlement reform, which normally involves proposals to raise the eligibility age for Social Security and Medicare and/or cut benefits, would take money out of the hands of senior citizens who need it, to eliminate the supposed “debt threat” that’s only a threat when a Democrat is in the White House, by the way. “Reagan proved deficits didn’t matter,” Dick Cheney told Treasury Secretary Paul O’Neill in 2002, a month before he fired him. The GOP really needs to get its story straight on this one.

But so do Democrats. I’m anxious about reports that Democrats are willing to vote for the Simpson-Bowles deficit reduction package, even if they oppose its program cuts, because they know Republicans will oppose its tax increases and they’ll get to proclaim themselves the party of deficit reduction. They need to become the party of jobs, not deficit reduction.

The White House reportedly considers Krugman a bit of a scold and tunes him out; the same with Robert Reich, who makes similar points on his blog today. But let’s hope they find time to read Krugman’s essay in the New York Review of Books, which goes into the weeds on the way government spending boosts employment and deficit reduction does not. President Obama’s approval ratings have climbed since he began touting job creation, and as Krugman observes:

The experience of Obama’s first term suggests that not talking about jobs simply because you don’t think you can pass job-creation legislation doesn’t work even as a political strategy. On the other hand, hammering on the need for job creation can be good politics, and it can put enough pressure on the other side to bring about better policy too.

Or to put it more simply, there is no reason not to tell the truth about this depression.

Put even more simply, Democrats need to make the case that consumers are the real job creators. Unless we can get them employed and with higher wages, this Lesser Depression will persist.

by on May. 4, 2012 at 5:34 PM
Replies (21-26):
Citygirlk
by on May. 6, 2012 at 8:55 PM

i used to be a job creator then i became a person creator lol.

sarebear31976
by on May. 6, 2012 at 9:31 PM


Quoting ExecutiveChick:

There are so many things about this article, I could go on for hours...

So I will start here, if the consumer is the ultimate authority/job creator and we should respect the consumer as such, then why do we allow, even encourage the government to interfere with oil companies? Hasn't the consumer spoken, chosen oil as the preferred source of fuel? Why do so many of the people who support this theory support the government subsidizing (and I mean real subsidies, not tax breaks like oil companies use) energy sources like wind and solar, electric cars and such when the all mighty consumer has spoken and said with a resounding majority, we do not want these things. We will not purchase these products, we do not want to create those jobs. We want to create jobs in oil, in coal, in the manufacturing of big gas guzzling SUV's

I'm not sure the consumer is really "choosing" oil as the preferred source of fuel.  For decades we have had no choice.  Imagine if the car was invented today.  Would we really want to invent something that runs on a finite resource that pollutes the environment ?  Probably not.  But it's what we are stuck with until alternate sources become affordable.  

Sarah




Be who you are and say what you feel, because those who mind don't matter, and those who matter don't mind."

-Dr. Seuss

Carpy
by Platinum Member on May. 6, 2012 at 9:44 PM
1 mom liked this

Cash to be able to start up is a problem for many, then they want fees every time you turn around, the expense of meeting regulations etc..  We have over two million invested just to open the doors for one store and we have several stores.  Then there was the expense of getting product into the store.  then tons of simple things that add up, like a three hundred dollar bill to the township just for them to tell you that you can open.  Why the hell would a town want you to pay them just to open the doors?  In this economy they should welcome you with open arms.

Quoting matreshka:

I'm interested to know what are the setbacks and pitfalls for starting up a local business in America and if they are the same everywhere in this nation.  Here there are many local businesses and a "localvore" movement.  A friend of mine had a relatively easy time setting up her own brick and mortar shop after developing her business online.

I still think the number one pitfall is hard cash to spend.  If people who are cash strapped can get dishware at walmart cheaper than a local store, they are going to do it.  Isn't the big box stores like walmart and target also part of the problem of setting up shop in America?

The local businesses I see succeeding are more boutiqish in nature, specialty soaps and body care, jewelry, coffee shops, etc.

Quoting Carpy:

Consumers can not consume when small business can not afford the massive amount of money required to start up.  The last few months, I have had a real eye opener to why people do not want to start businesses in the US.



ExecutiveChick
by Silver Member on May. 6, 2012 at 9:59 PM

While I understand that you and many others may like to believe that, it's just simply not true. Electric cars were built in the 70's and nobody wanted to buy them. Hybrids have been around for over 12 years and their sales don't even come close to the sales of SUV's and full size trucks. Not even close.Solar has been around for decades and still hasn't been accepted by mainstream consumers. 

So, I have to conclude from the numbers that the consumers, when presented with alternatives, have spoken loudly and clearly with their dollars and made a clear choice. Large fossil fuel powered vehicles win out every single time so far.

There is also diesel, another loser.

And for the record, hybrids and electric cars are far worse for the environment than fossil fuel powered vehicles. Those batteries, made from ore that has to be strip mined from the earth by gas powered machines. The batteries when they are used and no longer viable, are deadly toxic and difficult to dispose of.

Quoting sarebear31976:


Quoting ExecutiveChick:

There are so many things about this article, I could go on for hours...

So I will start here, if the consumer is the ultimate authority/job creator and we should respect the consumer as such, then why do we allow, even encourage the government to interfere with oil companies? Hasn't the consumer spoken, chosen oil as the preferred source of fuel? Why do so many of the people who support this theory support the government subsidizing (and I mean real subsidies, not tax breaks like oil companies use) energy sources like wind and solar, electric cars and such when the all mighty consumer has spoken and said with a resounding majority, we do not want these things. We will not purchase these products, we do not want to create those jobs. We want to create jobs in oil, in coal, in the manufacturing of big gas guzzling SUV's

I'm not sure the consumer is really "choosing" oil as the preferred source of fuel.  For decades we have had no choice.  Imagine if the car was invented today.  Would we really want to invent something that runs on a finite resource that pollutes the environment ?  Probably not.  But it's what we are stuck with until alternate sources become affordable.  


Jambo4
by Gold Member on May. 6, 2012 at 10:06 PM
1 mom liked this


Quoting sarebear31976:


Quoting ExecutiveChick:

There are so many things about this article, I could go on for hours...

So I will start here, if the consumer is the ultimate authority/job creator and we should respect the consumer as such, then why do we allow, even encourage the government to interfere with oil companies? Hasn't the consumer spoken, chosen oil as the preferred source of fuel? Why do so many of the people who support this theory support the government subsidizing (and I mean real subsidies, not tax breaks like oil companies use) energy sources like wind and solar, electric cars and such when the all mighty consumer has spoken and said with a resounding majority, we do not want these things. We will not purchase these products, we do not want to create those jobs. We want to create jobs in oil, in coal, in the manufacturing of big gas guzzling SUV's

I'm not sure the consumer is really "choosing" oil as the preferred source of fuel.  For decades we have had no choice.  Imagine if the car was invented today.  Would we really want to invent something that runs on a finite resource that pollutes the environment ?  Probably not.  But it's what we are stuck with until alternate sources become affordable.  

The red part is what I am addressing.  I agree, it's not a choice but it is the ONLY source that can get the job done presently.  Think of jet planes.  It takes huge amount of fuel just to get it off the ground.  Nothing can match that right now.  The technology just isn't there yet that we can walk away from oil.
 

sarebear31976
by on May. 7, 2012 at 6:53 AM


Quoting Jambo4:


Quoting sarebear31976:


Quoting ExecutiveChick:

There are so many things about this article, I could go on for hours...

So I will start here, if the consumer is the ultimate authority/job creator and we should respect the consumer as such, then why do we allow, even encourage the government to interfere with oil companies? Hasn't the consumer spoken, chosen oil as the preferred source of fuel? Why do so many of the people who support this theory support the government subsidizing (and I mean real subsidies, not tax breaks like oil companies use) energy sources like wind and solar, electric cars and such when the all mighty consumer has spoken and said with a resounding majority, we do not want these things. We will not purchase these products, we do not want to create those jobs. We want to create jobs in oil, in coal, in the manufacturing of big gas guzzling SUV's

I'm not sure the consumer is really "choosing" oil as the preferred source of fuel.  For decades we have had no choice.  Imagine if the car was invented today.  Would we really want to invent something that runs on a finite resource that pollutes the environment ?  Probably not.  But it's what we are stuck with until alternate sources become affordable.  

The red part is what I am addressing.  I agree, it's not a choice but it is the ONLY source that can get the job done presently.  Think of jet planes.  It takes huge amount of fuel just to get it off the ground.  Nothing can match that right now.  The technology just isn't there yet that we can walk away from oil.
 

Thank you!  That is what I was trying to get across.  Other energies are available but not affordable.  I was thinking of how much it costs to put solar panels on a house, or buy an electric car.  I doubt the average family could afford it.  I didn't even think of there not even being a viable alternate for things like airplanes.  

Sarah




Be who you are and say what you feel, because those who mind don't matter, and those who matter don't mind."

-Dr. Seuss

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