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Thanks in part to the “Beltway Deficit Feedback Loop,” the jobs crisis is barely even a subject of debate anymore. Paul Krugman reminds folks today, however, that there are options to address the problem that Americans still care about, even if their representatives don’t.
Bear in mind that the unemployed aren’t jobless because they don’t want to work, or because they lack the necessary skills. There’s nothing wrong with our workers — remember, just four years ago the unemployment rate was below 5 percent.
The core of our economic problem is, instead, the debt — mainly mortgage debt — that households ran up during the bubble years of the last decade. Now that the bubble has burst, that debt is acting as a persistent drag on the economy, preventing any real recovery in employment. And once you realize that the overhang of private debt is the problem, you realize that there are a number of things that could be done about it.
For example, we could have W.P.A.-type programs putting the unemployed to work doing useful things like repairing roads — which would also, by raising incomes, make it easier for households to pay down debt. We could have a serious program of mortgage modification, reducing the debts of troubled homeowners. We could try to get inflation back up to the 4 percent rate that prevailed during Ronald Reagan’s second term, which would help to reduce the real burden of debt.
So there are policies we could be pursuing to bring unemployment down. These policies would be unorthodox — but so are the economic problems we face.
If I had to guess, I’d say many White House officials would approve of this kind of approach, but tend not to say so. Why not? Because of political realism — the president and his team don’t see much value in pushing a series of proposals that have no chance of passing Congress. An ambitious approach to lowering unemployment was effectively taken off the table the moment Americans elected a Republican-led House. If voters wanted policymakers to focus on jobs they shouldn’t have backed candidates intent on making unemployment worse.
The administration could still push the issue, even if a jobs agenda can’t pass, but Obama’s team see political risks in such an approach — the more the president sticks his neck out, the more he appears ineffectual when Congress ignores him.
But Krugman urges everyone who still cares about the issue to speak up anyway: “As I see it, policy makers are sinking into a condition of learned helplessness on the jobs issue: the more they fail to do anything about the problem, the more they convince themselves that there’s nothing they could do. And those of us who know better should be doing all we can to break that vicious circle. “
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c u n d gulag on May 30, 2011 10:16 AM:
It would also help if companies would hire those who are unemployed, and have been for awhile.
I see articles almost every day about some company that has told it's HR and recruitment staffs NOT to hire people who are currently unemployed. They prefer hiring people who are currently working somewhere else.
This, of course, makes absolutely no fucking sense - unless you've actually worked at a corporation and seen how stunningly stupid many people in management are.
I've been unemployed 29 out of the last 36 months. When I had a job, I tried like hell to make it work. I was never late, never called in sick, never did anything but my job. Of course, I really sucked as a telemarketer, never having done it before, and got let go - but it wasn't for lack of effort. You try selling research books to school and public libraries in the worst economy since the 1930's. Not only couldn't they afford books, but most were already going to some sort of an computer e-platform and trying to get away from books.
Hey companies, if you hire those of us who are unemployed, you may find that we're not leper's who'll infect the rest of your staff, but that many of us, especially those in our 50's, have great work ethics and will be grateful and loyal and will work like dogs for you.
But you have to have the smarts, or just plain common fucking sense to hire us first. But both of those are lacking in this country at this time.
Bob M on May 30, 2011 10:25 AM:
I don't disagree with Krugman, but he has to be more specific than "repairing roads". Whenever I see roads being repaired, I see huge machines run by very few workers.
SadOldVet on May 30, 2011 10:26 AM:
If you never try, you definitely will NEVER succeed!
Other than the underwhelming stimulus program that Obama let get highjacked by co-presidents Snowe & Collins, there has been no apparent loud coordinated effort from the White House to stress jobs.
It is with sadness that I view c u n d gulag, the many other unemployed, the underemployed, and the workers of our country being sacrificed on the altar of increasing the wealth of the already wealthy.
berttheclock on May 30, 2011 10:26 AM:
"Get inflation back up to 4 percent"
Then, have the administation start including oil and food prices into the equation. The argument that both are seasonal is Bogus! When, oil prices go up, it is, not only at the pump, but, transportation costs increase. Thus, suppliers include the higher transportation costs into their products, which include food. Ever see oil prices drop, but, no such drop ever happens to items on the shelf? Once raise, they never fall. Yet, the government would have you believe such costs are only seasonal. How is food pricing seasonal when ethanol has forced corn feed to sky rocket? Corn feed increases have led to higher meat prices. Even organic farmers have been hit with far higher prices to be able to grow their crops. Those prices are Not Seasonal.
By not tying oil and food prices into the index, the government, for the past two years, has refused to raise COLA for seniors.
No inflation???? Try explaining that to anyone out there today, purchasing any product which has been available for years with no changes. The price for that item will be much higher than in the past. All due to the spike in oil, which is NOT SEASONAL. Just bought a new pair of bibb tan Carharts - Not one change from the past, yet, the price had increased 10 percent. Just bought two bags of Kingsbury briquettes at Costco for the barbie. No change, yet, price increase of over 10 percent. How the hell is that SEASONAL?
berttheclock on May 30, 2011 10:45 AM:
If one travels through much of the West, one will still see the foot print of the WPA and CCC workers. Look closely, at etchings on curbs in San Gabriel and Alhambra, CA and other So Cal places, and you will see WPA stamped. Bridges in Spokane, WA, much of downtown Salt Lake City were built by such crews. The magnificent Timberline Lodge on Mt Hood east of Portland, is a marvelous structure built by craftsmen and artisan workers. I have read of CCC crews working in the beautiful Gifford Pinchot National Forest trying to eradicate mosquitoes. The list is very long, but, thousands of men and women were able to work in both construction and artisan type fields and the work they created still exists today.
flyonthewall on May 30, 2011 10:46 AM:
@berttheclock-don't forget fuel surcharges that never seem to go away and are not counted as "price". Also notice that some products shrink in size and price remains the same.
Jimo on May 30, 2011 10:48 AM:
We see the same pattern repeat over and over for this President -- count the votes, and if they aren't there, then give up.
One valid critique of Obama in the 2008 campaign was his lack of experience. Despite 2 years on the job, Obama still doesn't seem to grasp that a president has the power to influence and focus public opinion, a singular ability to move the center of public attention. Yet, the only subject that I've seen this Administration fight hard for is 'green' technology, an important but relatively minor issue.
You fight on basic principles not because you'll always win but because even a losing fight will reframe the public mind for the next fight. That's a principle the Right figured out long ago and have used to transform what's acceptable in American politics. "Me too but a little less so" is a disastrous place to be stuck in politics.
Win or lose, history will tell that this Presidency almost foundered on the rocks of a disasterous economic decision made in 2009 - to limit the size and scope of the economic recovery plan from one large enough economically to one large enough politically. Obama may find himself in Nov. 2010 learning the hard way what was/wasn't politically(!) possible.
the seal on May 30, 2011 10:52 AM:
Like c u n d gulag I had been out of work over a year, unemployment running out, and took a job as a bill collector. Had an impeccable work ethic and was never late, and did what I had to do, right up until I could not beat up an old man whos wife had died days earlier. I did get a first hand look at how household debt is holding us all down. I dont see how the econmy can start lurching forward until the massive amount of debt we are in gets processed one way or another. The banks dont seem to eager to take a hit on any of it unless pushed. But with no will to push.....well, were screwed.
Darsan54 on May 30, 2011 10:53 AM:
Krugman is right in that we should be investing heavily in infrastructure construction and development. Those jobs will stay here and those wages will help build consumer demand, which in turn will strengthen the private sector. But today's Right and Republicans are willing to throw the entire nation under the bus for the sake of a few. I don't want to climb on a bandwagon, chanting kill the rich,kill the rich. But our spending priorities and tax system are completely out of whack. We need to decide what's needed for the entire nation, not just the top one percent. Only that way will we, as a nation, get ahead.
DAY on May 30, 2011 10:54 AM:
berttheclock on May 30, 2011 10:45 AM:
"If one travels through much of the West, one will still see the foot print of the WPA and CCC workers"
Closer to home- for gulag, at least- is the Merritt Parkway in New York State.
But it wasn't FDR's WPA/CCC/et al that really got us out of the Depression, and into Recovery. That was World War Two, which we honor today with hot dogs and speeches.
Hey! There's an idea- let's have a war- oh, wait, we tried that already. . .
nash rkixted
berttheclock on May 30, 2011 11:02 AM:
Well, Pawlenty is attempting to change things, today, by laying a wreath at the Tomb of the Unknown Politician.
Tom Allen on May 30, 2011 11:16 AM:
You neglect to note that Krugman decries his own capitulation to "political realism":
"political realism is all very well, but I have said far too little about what we really should be doing to deal with our most important problem."
Since this is the crux of the entire article -- our leaders aren't trying because they don't think they can win -- you may not want to use that as a defense of the Administration's not trying because they don't think they can win. But I understand that would deprive you of the only excuse you have for a whole host of Administration and Democratic Party failures.
Thingumbobesquire on May 30, 2011 11:19 AM:
All this earnest seeming palaver of Professor Krugman misses the only real means to tackle the speculative debt that is dragging all the globe's economies into the cesspool. What is required is an end of "too big to fail." And contrary to the blackout by the media there is legislation already introduced in the House of Representatives that would do just that. It is Marcy Kaptur's HR 1489. This would return our nation to the Glass-Staegall principle of separation of commercial banking, which is necessary to sustain the actually productive economy, from investment banking, which is what lead to the lunacy of the speculative bubble of derivative securities like mortgage indexed derivatives. This would mean a return to FDR's virtuous fight against the city of London and Wall Street investment banking houses, instead of the lick-spittle fawning of President Obama's favorite Treasury Secretary Geithner...
bdop4 on May 30, 2011 11:38 AM:
While I understand that WWII was the driving force that brought us out of the Great Depression, why do people conclude that ONLY A WAR will get us out of this mess?
I got new for you, folks: we're in five fucking wars right now and where has that gotten us?
The key was that large segments of industry were taken over in the war effort and the profit motive was subordinated to more important needs. Look at the wage ratios between CEOs and the average worker during that time. What little wealth there was was spread amongst all the classes, and it provided a massive boost to the economy.
The truth is, we need that kind of focus today, but strictly on an economic survival level. Our country has massive deficiencies which cannot be addressed by the current economic inequality and concentration of wealth we have today.
A large majority of voters is going to have to rise up and tell the top 1% that this is STILL a democracy, and right now the will of the majority dictates that they can no longer make obscene profits off the backs of the working class.
The solution is as easy as flipping a light switch, but only if there is an organized majority willing to fight for it. That hasn't happened in a long while and I'm afraid that a lot more pain will need to be felt by a large number of people before it happens again.
AK Liberal on May 30, 2011 11:39 AM:
I think that Steve has it right about the political risks to the President. This strikes me as an area where Congressional leadership would be most welcome. However, the issue has risks for Congressional leaders as well,
How many constituents are pressuring their Reps & Senators to address this? If we had the modern equivalent of the Bonus Army encamped on the Mall the issue would be much harder to ignore.
So what would that look like? Flash mobs at local Congressional offices? I don't know how one organizes such things, but there are organizational tools available for getting people with time on their hands in places where they can be heard. Learned helplessness doesn't just affect our elected leaders.
Alli on May 30, 2011 12:55 PM:
So let me get this straight. The very same crowd who was telling Obama that he shouldn't try to negotiate with Republicans are demanding that he do something, anything knowing full well the bill won't pass. Why? because Dems might start to think they can't do anything? Sorry, that's lame. Congress is not going to lose some kind of 'do something' muscle if they bring up bills that help with jobs.
The only thing Dems can do right now is to stop Republicans from destroying the economy, call them out at every turn, build up a ground game for 2012 and have an agenda/message ready for the 2012 campaign.
There is no logic to many of the comments here. The problem is not bad policy, the problem is a Republican House and a conservative Senate. You cannot demand something from the Dems while telling them they shouldn't compromise. What the heck do you think is going to come out of a compromise jobs bill? When it comes to politics Paul Krugman is clueless or willfully ignorant and the rest of you here seem to be in the same boat.
And ENOUGH WITH THE STIMULUS. IT WORKED!!! EVEN YOUR ECONOMIC GOD PAUL KRUGMAN SAYS HE'S NOT SURE A HIGHER AMOUNT WOULD HAVE PASSED. WHICH IS SOMETHING THE WH HAS SAID SINCE DAY ONE.
AND MAY I REMIND SOME OF YOU THAT THAT TAX DEAL YOU ALL HATED SO MUCH PUT MORE MONEY INTO THE ECONOMY. MONEY IN PEOPLE'S HANDS VIA CREDITS, FOOD STAMPS, UNEMPLOYMENT FUNDS, AND CUTS FOR THE MIDDLE CLASS. YOU KNOW THAT DEAL MOST OF YOU WOULD HAVE TANKED IN FAVOR TO GET bACK AT THE GOP AND THE RICH. 'CAUSE YOU NOT FOOLING ANYONE WITH THAT CONCERN WITH DEFICITS NONSENSE.
AK Liberal on May 30, 2011 1:25 PM:
@Alli: Please don't shout. For my part, I agree that Krugman is tone deaf to politics.
However, something needs to be done to give the issue the visibility that it deserves. There are many unemployed in nearly every congressional district in the country. If there were visible activism on joblessness, it seems to me that it would give politicians the cover they need to make it an issue. Instead, everyone is talking about the deficit.
Quaker in a Basement on May 30, 2011 1:56 PM:
I understand Krugman's argument about a higher inflation rate, but I think he neglects the side effects of such a strategy. While the "real value" of outstanding debt declines, so does the real value of savings. Higher inflation might make an existing mortgage somewhat cheaper in nominal dollars, but it would have the same effect on money socked away for retirement, education, or future purchases.
With very little upward pressure on wages, a higher rate of inflation would amount to a stealth tax on wage earners to pay for the excesses of mortgage lenders.
John Puma on May 30, 2011 2:28 PM:
Here's a good one: "If voters wanted policymakers to focus on jobs they shouldn’t have backed candidates intent on making unemployment worse."
Apparently you can fool enough of the voters much of the time ... by a variety of means like unlimited, corporate-funded media lies and a completely corrupt voting system.
Oh, and don't forget that proud and aggressively ignorant segment of the Americans populace.
Tom Allen on May 30, 2011 2:32 PM:
"demanding that he do something, anything knowing full well the bill won't pass. Why? because Dems might start to think they can't do anything?"
Well, for one thing, there's this election coming up next year. It would probably help Democrats if they had, oh, one or two solid issues on which they could campaign against Republicans. A jobs program, for example. "Democrats aren't quite as bad as Republicans" is the slogan they lost on in 2010. And "Dems might start to think they can't do anything?" That's what you and Steve and half the commenters here are saying. You make excuse after excuse for doing nothing. That's learned helplessness.
But go ahead, ignore Paul Krugman. Ignore the unemployed. Ignore the economy. Capitulate on cutting Medicare. Listen to the same DC campaign advisors who ran the losing 2010 elections. Campaign in 2012 on "Democrats are so impotent they won't fight for you, won't even try to do anything, because Republicans are big meanies."
Alli on May 30, 2011 2:35 PM:
WHAT THIS GUY SAYS:
http://pmcarpenter.blogs.com/p_m_carpenters_commentary/2011/05/krugmans-groveling.html#comments
barkleyg on May 30, 2011 2:43 PM:
I met Paul Krugman in March of 2010 on the Princeton campus.
I had a "new economic" theory that I thought could make the United Sates the CHINA of GREEN TECHNOLOGY; foreign companies, and American companies, could come to America, build their factories on American soil, with American labor, and be able to sell their green technologies to Americans at greatly discounted prices, and to the world without American help.
I don't know if Mr. Krugman read my report( he is a very, very busy man), but he said ONE THING to me that was very prophetic of today.
Mr. Krugman said: " With the dysfunctional congress we currently have, NO economic plan has a chance to pass with Republicans blocking anything meaningful.
One year later, and it is even worse now, with a REPUG House wagging the dog regarding jobs, and their BS assault on the Debt Limit.
Obama got NO chance to help our country as long as Repugs put their party over their country, and enter the 21st century, and not try to go back to the 1950's.
Paul Krugman is a realist in that what you might perceive
as SHRILL is just politely calling a bad economic philosophy what it is, instead of using REAL WORDS to describe the Crap they are trying to put over on the American public, and a stupid public it seems to be!
pluege on May 30, 2011 3:23 PM:
What's changed?
Krugman doesn't say it, but what has changed is democrats giving up on Keynesian economics, i.e., government's role and obligation to stimulate the economy during recessions. While Krugman certainly has promoted this, his comments on the polity giving up on any effort on job creation is implicitly the democrats ceding the job creation discussions to republicans' endless nonsense of giving ever more money to the obscenely rich as the only means of creating jobs despite the fact that 30 years of republican dominance have proven exactly the opposite.
republicans have been perfectly consistent on this for 30 years - enrich the obscenely rich is their only objective. What is new is democrats buying into it or at least not fighting it in any meaningful way.
This is yet another area of the total failure of leadership of obama.
DIMOJABE on May 30, 2011 3:35 PM:
Hmm. I'm the only person here...:))) Well, I'll put it out here that we still have a ton of people unemployed down here in SWFL. I'm sure a lot have left, but at a measureable 11% unemployment since 2009 we're still flatlining on job creation.
After working on my own business now (on the side) what fascinates me is the rationale that employers use to set wages. Many employers in our small biz community use a company called Paychex to process payroll, manage in-house personnel policies, perform local & regional "salary analysis" and legally "lease" the people they hire back to them.
This arrangement creates an "employer's union." Employers no longer legally hire anyone when they use a firm like Paychex, and any unpleasant policy that is detrimental to the employee is attributed to Paychex - not the employer.
Back to what fascinates me. Those salary studies Paychex performs. They answer one question: What is the 'going rate' in an area for a particular job? What do most of the employers pay for a piece of work in that locality?
They don't ask: What is the local cost of living? How much does it cost to rent an apartment? What does it cost the average person to live a reasonably secure life with healthcare, vacations and savings in that area?
I am watching the recession take our local wages back to what they were 16 years ago... but the cost of everything has gone up...and since there are so few jobs here - it isn't as if the free market suppports workers wages.
Tom Allen on May 30, 2011 4:06 PM:
pluege has it right. What infuriates liberals like Krugman and me no end is the way the Obama Administration and the Senate Democrats negotiate.
If you start negotiations in the center and make concessions rightward, you end up with a right-wing agreement. If you started negotiations on the left and made concessions rightward, at least you could hope for something centrist. It's almost a mathematical proof.
Single-payer health insurance? Not even considered. (Even the public option was dealt away early on.) Keynesian deficit-spending to stimulate the economy? Not even considered, not anymore. It's not that we hate compromise -- we understand it will be necessary. It's that we hate having our positions compromised away even before negotiations start.
a on May 30, 2011 4:46 PM:
Borrow even more money and use it to pay people to fill potholes.
Yep, that'll do it.
Vince on May 30, 2011 5:18 PM:
And by not sticking his neck out, Mr. Obama ensures that the entire debate is still centered around Republican ideas. Which means that jobs won't even be discussed. Instead, all we get is a debate over how much to cut spending by. That approach ensures that jobs will never be part of the national political discourse, because you can be damned sure that the Republicans aren't going to address it in any meaningful way. So, if the Democrats aren't even going to articulate an alternative there will be no alternative to spending cuts. Oh, and that shameless approach to leadership relegates millions of people to reduced opportunities, likely for the rest of their lives. Great leadership, Democratic party.
The results of the last election were more the result of liberals being very unenthusiastic about their supposed political allies in Washington, and, therefore, not voting in anywhere near the same numbers they did so in 2008. I believe that SB has made that point, himself. I have said many times, but, apparently, need to do so again: why should rank and file Democrats and liberals, generally, fight for politicians (by volunteering, donating, voting, etc.) if those politicians are too scared to fight for them?
Stop blaming working Americans for their lack of enthusiasm for a pathetic bunch of Democrats that are either too timid or too beholden to the same wealthy interests as the Republicans to fight for working Americans.
Doug on May 30, 2011 7:19 PM:
Where people get the idea that the present administration isn't pushing for job creation, I'll never know. There have been recommendations for work on the nation's infrastructure, loans and grants for green business' start-ups, and, of course, the stimulus itself. However, unless and until a majority of the House of Representatives agrees with the administration, that's ALL that can be done.
Continually harping on plans to create jobs that won't even be sent to a committee in the House would only create the impression that the administration is powerless; something I'm certain the Republican/Teabaggers would love to have happen. Many posters have used the saying by, I believe, Albert Einstein that one definition of insantity is to continue to do the same thing while expecting different results as a sign of the Republican/Teabaggers' failure to recognize reality.
Using the same logic then, President Obama and his administration DO recognize reality and their refusal to bang their collective heads against the stone wall of a Republican-controlled House is a sign of that.
Can't have it both ways, folks...
Tom Allen on May 30, 2011 7:28 PM:
You might start by reading former Obama advisor Jared Bernstein's blog. In his latest entry, he reports:
"There will be no WPA-type programs in our near future. There was no appetite for them in the Obama admin in the midst of the worst recession since the Great Depression and there’s a lot less now."
And if continually pre-compromising with Republicans and capitulating to their demands isn't doing the same thing while expecting different results, well, what is?
Brian Dawson on May 30, 2011 7:36 PM:
I would also add the Trade Deficit. We need to erect a strong tariff. Please don't tell me that we need to recycle our blue collar workers to technological jobs!
Education is NOT the answer when we are off shoring computer programming jobs! What jobs programming jobs remain are being filled by foreign H1-b workers.
Bill Clinton was part of this problem. Several years ago the Wall Street Journal listed the following occupations as being candidates for off shoring:
1. Financial analysts.
2. Marketing
3. Computer programmers ( we know that already)
4. Graphic designers
5. Microbiologists
Also research jobs in the legal profession are departing America. White Collar employees don't have unions. Off shoring is NOT just a blue collar issue.
www.middle-class-populist.com
neil b on May 30, 2011 8:57 PM:
Good points, Brian. Folks, there's another kind of jobs crisis too, the quality of life and rules issue, and Obama isn't always up to par. See for example http://scienceblogs.com/thepumphandle/2011/05/white_house_again_uses_osha_as.php?utm_source=editorspicks
toowearyforoutrage on May 31, 2011 10:09 AM:
Could Obama get these work programs up and running as a supplement to unemployment insurance?
The GOP whines so much about paying for no work. Why not use such sentiment. "Get something for our money!"
How do they refuse? It costs only slightly more, but we get roads and schools and bridges out of it.
You might even get certain GOP presidential candidates to agree that keeping our nation's bridges in good condition can sometimes be a good idea. I can think of Pawlenty of others who'd agree.
toowearyforoutrage on May 31, 2011 10:54 AM:
Yo, C U N D.
Thanks for the encouragement.
I'm building a small business and hiring people like you was my strategy. Good to know I'm on the right track.
Meanwhile. You're smarter than the idiots running companies.
MAKE ONE!
Start a business and hire people like yourself and eat established business' lunch.
Get an LLC together and make a closet into a home office and do what you did and chop the business' profit margin out. (Or do something special no one else is doing, but SHOULD) No one is hiring a health insurance liability of age 50. You have to employ yourself.
CDW on May 31, 2011 11:16 AM:
@AKliberal
I think that Steve has it right about the political risks to the President. This strikes me as an area where Congressional leadership would be most welcome.
I think Obama's sitting on Congressional leadership. I know he has squashed Pelosi a time or two. Emmanuel set the tone in the beginning and that was STFU to anyone who didn't walk Obama's line. Reid is as timid as Obama when it comes to rocking the boat so he's not about to do anything Obama would disapprove of.
It will be interesting to see if Obama is bolder in his second term when he doesn't have to beg for reelection money - assuming he gets a second term. It's unclear to me how concerned he would be about the rest of the Party as long as he gets his. He certainly didn't care in 2010.
James Johnson on May 31, 2011 7:20 PM:
The "learned helplessness" of Congress under the influence of lobbyists serves as a better example than labor bashing. Thanks...