Unemployment went up again. This caused Obama's popularity to go down again.
Pretty simple equation right? If Obama can bring the jobless rate down, he will get re-elected. Obviously the Democrats are going to do everything they can to bring that number down.
The Republicans are overjoyed at the jobless rate, and are doing everything they can to slow down the economy. Their solution to reducing joblessness are just about opposite what the Democrats think needs to be done.
Who is right? What can really be done about joblessness?
The first thing we need to consider is where did all of the jobs go? Jobs and hiring are driven by three basic factors.
Number one is Globalization. It used to be true that what was good for GM was good for America. That is why Obama saved Detroit. Giving tax breaks to corporations provided incentives for those corporations to hire more Americans to work in those American factories.
That doesn't really work anymore because the corporations are international, and they take those tax breaks and move production overseas where they can hire workers at half the cost. If we give tax breaks they should only be given if the corporations provide American Jobs. Many of these factory jobs are never coming back.
To compensate for those lost jobs we need to provide more jobs in innovation, but to do that means a massive investment in research and development and education.
Number Two is productivity and efficiency. Today corporations are producing just as much as they created before the economic meltdown. The problem is this efficiency was created by buying robots and through automation. They are creating just as much now with 7 million fewer workers. The corporations will not sell their robots so many of those jobs will not be coming back. When people lost their jobs they were getting $45 per hr. now only service jobs are available at $12 per hour.
The third factor is consumer confidence and demand. If people have jobs, and think they can keep them, if they are confident the economy is improving, they will go out and buy stuff. If consumers buy stuff, factories will expand to meet that demand. Today's economy is demand driven. Supply side economics no longer works. The corporations don't need more tax breaks. Already 2/3rds of the corporations pay no taxes at all. The corporations are sitting on trillions of dollars of cash reserves. Corporations are making record profits, but they won't hire more workers until the demand improves.
The economy is demand driven. To get the economy going we need to get money to the people so they can spend more. We need to build up their confidence.
The Republicans are doing the opposite. Their austerity programs take money away from the people and loose jobs. They are threatening not to extend the debt ceiling unless they get their way and kill Medicare and instate even more radical austerity measures which will slow down the economy further and reduce consumer confidence more. The threat to default on our debt for the first time in history is freaking out the financial markets.
Most of our economy is driven by housing. Today housing is at record lows. There are a record number of foreclosures on the market. There are a record number of vacancies so no one wants to buy a new house so builders are out of work. Those that supply the builders are hurting. Everything snowballs.
On the housing front, the banks are not doing their jobs. They are making it difficult for homeowners to hang onto their homes by making refinancing harder. They are not lending to new start up corporations. Obama has moved to punish the banks for not helping consumers.
http://www.huffingtonpost.com/2011/06/09...Consumer confidence is at record lows. There are about 20 million people out of work. These people are not buying stuff, so none of the factories want to expand. There is no demand.
http://www.toledoblade.com/Editorials/20...The jobless rates for women, blacks and other minorities, and the young, are often double what the national average is. These people who have been out of work for more than six months are becoming chronically unemployed. No one wants to hire them because their job skills are deteriorating. The free market conservatives have no solutions for the chronically unemployed, The markets have written them off, and the last of the extended unemployment benefits will be gone in December.
If there is nothing business will do for the 20 million out of work, that leaves the government. Our infrastructure is still crumbling and fixing that would create millions of jobs, but those workers hired would be the experienced ones. What can we do with the ones lacking in experience or job skills?
It is time to reinstate the WPA or CCC. We could expand the Job Corps program which would educate and give the unemployed job skills and experience.
http://www.rantrave.com/Rant/Bring-Back-...If the economy is demand driven how will austerity measures effect the economy? We have already had a taste of that. The state governments have been taken over by Republicans and they have pushed budget cuts and austerity programs. Teachers and other government workers have been fired. The result is the economy slowed, confidence went down the tubes, the stock market stalled, and the unemployment went up.
The exact opposite needs to be done. We need more stimulus not austerity. But how do you pay for it?
What Europe is considering is a financial speculation tax which would discourage the short-term speculative activities that dominate and distort financial markets, and caused the economic meltdown. This is one of the "Good Taxes" which doesn't slow down the economy because it only discourages bad behavior. A simple transaction tax of 0.2% would raise billions of dollars and would force speculators to put some "Skin in the Game". England's Gordon Brown has asked us to instate a speculative transaction tax. French President Nicolas Sarkozy has announced plans to launch a "coalition of pioneers" with German Chancellor Angela Merkel and others at the November G-20 leaders meeting. Obama should join them because it will be much more effective if many countries have the same tax.
http://www.commondreams.org/view/2011/06...So what about the deficit? Won't additional spending increase our already worrisome debt? Not if the stimulus creates jobs. With more people working there will be less dependant on government programs, and there will be more paying taxes. If the economy speeds up the deficit shrinks. If the economy stalls the deficit grows. So it makes sense to invest in stimulating the economy.
http://www.time.com/time/magazine/articl...