Austerity Stalls Recovery

One measure of how much the economy has improved under President Barack Obama is that the March unemployment report, which showed “only” 120,000 new jobs created during that month, was regarded as a disappointment.

The official unemployment rate fell slightly to 8.2%. The broader “U-6” measure of underemployment, which includes people who are working part-time but want full-time jobs, also dropped slightly to 14.5%.

That might be little comfort to the 12.7 million people who are still looking for work. But the country was losing 750,000 jobs a month when Obama took over. And the recovery is occurring in spite of Republicans who have made it plain since January 2009 that their top priority was not to put millions of Americans back to work, but instead to prevent Obama from getting re-elected. They have spent the past three years trying to sabotage the economy. Despite their resistance, the economy has improved, as Obama marked the 25th month of private-sector job growth. Even manufacturing employment rose by 37,000 in March, with gains in motor vehicles and parts (12,000), machinery (7,000), fabricated metals (5,000) and paper manufacturing (3,000). Factory employment has risen by 470,000 since the recent low point in January 2010.

But Mitt Romney continues to insist that Obama made the economy worse. When the recovery became impossible to ignore, Romney credited George W. Bush with saving the economy by bailing out the financial firms that caused the recession on his watch. As the New York Times editorialized (April 9), “He seems to have trouble sticking to one nonsensical explanation at a time.”

But the prize for the most ridiculous spin, the Times noted, goes to a group of freshmen House Republicans who say they are the ones who lowered the unemployment rate and began to restore stability. “If anybody’s going to get a pat on the back for [lower] unemployment and the better economy, it’s House Republicans,” Jeff Landry, a freshman from Louisiana, told The Hill recently.

The Times noted that House Republicans opposed the stimulus bill, which did more than any other piece of legislation to reduce joblessness. “Many continue to denounce the government bailout of the auto industry, which has restored it to strength and is responsible for saving more than a million jobs. And they oppose the very regulations designed to keep a similar recession from recurring,” the Times wrote.

House Republicans also created the debt-ceiling crisis that threatened the federal government’s ability to borrow money to finance the national debt. They tried to kill the payroll tax cut for the middle class. And they demanded big cuts in spending on domestic programs, state aid for job training and jobless benefits that could fuel the nation’s economic engine.

Economists generally agree that the benefits of “free trade” outweigh the costs in manufacturing jobs lost to low-wage countries overseas. But Kevin Drum noted at MotherJones.com (April 9) that “free trade” creates winners and losers. “And I think economists pretty universally agree that workers without college degrees are always net losers from expanded trade,” Drum wrote. “Given that two-thirds of Americans don’t have college degrees, and that promises to help workers displaced by trade agreements are generally worthless, why is it any surprise that most Americans aren’t very keen on trade agreements?”

Despite the assurances that workers who are displaced by trade agreements would not be forgotten, federal funding to retrain American workers for the jobs of the 21st century is drying up. Money to retrain dislocated workers is 18% lower than it was in 2006, even though there are six million more people looking for work now, Motoko Rich reported in the Times (April 9). At the peak in 2000, the federal government was spending more than $2.1 billion a year in today’s dollars for training programs aimed at dislocated workers under the Workforce Investments Act. Stimulus funds added close to $1.5 billion during Obama’s first two years, but with the expiration of those funds under the Republican House, annual spending on training programs has receded to about $1.2 billion.

Atlas Van Lines in Louisville, Ky., wanted to hire more than 100 truck drivers ahead of the summer moving season, Rich reported. But the local job center, could offer little help, because the federal money that local officials had designated to help train drivers was exhausted. Without government assistance, many of those who would be interested in applying for driving jobs could not afford the $4,000 classes to obtain commercial driver’s licenses. Now Atlas is struggling to find eligible drivers.

In Seattle, the region’s seven centers provided training for less than 5% of the 120,000 people who came in last year seeking to burnish their skills. And in Dallas, officials say they have annual funds left to support only 43 people in training programs, nowhere near enough to help the 23,500 people who have lost their jobs in the last 10 weeks alone.

In his latest budget proposal, President Obama requested an additional $2.8 billion a year for job training. But the Republican budget, which passed the House 228-191 on a nearly party-line vote March 29, calls for $3.3 trillion in cuts to programs that help low-income Americans — including job training — while it gives $3 trillion in tax breaks to the wealthy.

The Center on Budget and Policy Priorities found that 62% of the cuts in the budget drafted by House Budget Chair Paul Ryan (R-Wis.) hit the working poor. Ryan is oblivious of the damage the budget does to them. When Ann Curry asked Ryan on the Today Show April 10 if he acknowledged that poor people would suffer under the budget, he responded, “No,” earning the title “zombie-eyed granny-starver” bestowed on him by the estimable Charles P. Pierce of Esquire.com.

Minority Leader Nancy Pelosi noted that the GOP budget, which Romney has endorsed, would raise seniors’ health costs immediately by repealing provisions closing the prescription drug “donut hole” and repealing new free preventive care benefits under Medicare, as well as increasing costs for Medicare beneficiaries.

The budget also slashes $810 billion from Medicaid, two thirds of which covers nursing home care for one million seniors and disabled people as well as benefits that help three million more elderly and disabled individuals to remain in their homes. If you are getting up in years, or if your parents are getting up in years, you should be concerned about who will pay for long-term nursing home care if Republicans are in power.

The GOP budget cuts $133.5 billion from the SNAP food assistance program (formerly known as food stamps). Eighty-five percent of SNAP households are living below the poverty line.

The GOP budget also cuts college aid for more than nine million students, slashes education funding by $115 billion over 10 years, cuts extra reading and math help for low-income children and removes 200,000 children and their families from Head Start in just one year. But the Ryan budget rewards those making over $1 million per year an average tax cut of $394,000.

Rick Santorum’s departure from the presidential race on April 10 clears Romney’s way to the Republican nomination in Tampa. President Obama’s campaign staff has compiled video of Santorum and other Republican challengers attacking Romney’s record as a flip-flopping, job-killing, profiteering vulture capitalist. But Karl Rove’s American Crossroads super PAC in May is expected to start airing ads to scuff up the President over the summer and give Romney cover to clear his Etch-A-Sketch and move back toward the center to appeal to independents.

American Crossroads expects to spend more than $200 million, and it is only one of many super PACs empowered by the Supreme Court’s Citizens United decision in 2010 to use corporate funds to compete for voter attention as the election approaches. A Democratic super PAC, Priorities USA Action, will be supporting Obama, but the election will hinge on whether Obama and the Democrats can remind voters that Republicans are right-wing ideologues who created the economic conditions that threatened the middle class and resisted the recovery. . — JMC

From The Progressive Populist, May 1, 2012


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