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November 18, 2009

The Problem With A Jobs Bill – And With Everything Else

-- by Dave Johnson

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

The country needs a jobs program and needs it right now. Cash for Caulkers would be a good start. A new Civilian Conservation Corps would be another. But let's not allow a jobs program to cover over the need for real changes in the structure and core principles of our economy.

Yes, an effective jobs program can help people hold out a while longer - until necessary changes are made. It can make the unemployment rate will look better, for a while, and maybe the GDP will climb a little bit. But our low-wage, everything-to-the-top economy is not sustainable and needs to be redesigned and reregulated. The economy has to be changed so that it works for all of us, instead of just a few.

What if the government passes a jobs bill, and these new jobs follow the current American job model of paying too little with no benefits? What if the government uses contractors, as they now do for so many government functions, and the contractors “reduce costs” by paying very low wages and no benefits, sending the rest of the cash to a few at the top? Does it really help the economy and the country to provide a bunch of low-paying jobs with no benefits, and make a few wealthy executives even wealthier? Or suppose the government starts a massive infrastructure modernization project? Does it help the economy if they hire construction firms that pay as little as possible or use Chinese steel?

Even if a government jobs effort provides good-paying jobs with good benefits, this still won’t change the need to restructure the rest of our economy so that it, too, provides good pay and benefits to all of us instead of concentrating all wealth and income at the top.

As long as our economy is structured to pass everything up to a few at the top, stimulus can’t work well, jobs bills can't work well. Either can anything else. In the end things will just revert to the old ways and we'll need more bailouts, stimulus and jobs programs.

The problem is that there are two economies now. There is an economy for the top few and an economy for the rest of us. And this problem is global. The world’s economy is structured to send almost everything to a global top few.

Everything just goes to the top now. Companies are structured that way, jobs are structured that way, taxes are structured that way and now even our government is structured that way. Our economy has been turned into a machine that sends every dollar to an already-wealthy few. So efforts to stimulate economic recovery using traditional methods cannot work. It will just make a few at the top even richer.

We need a jobs bill because the economic system has broken down. We needed a stimulus package because the economic system has broken down. All the bailouts and jobs bills and stimulus are just one more stopgap effort to keep a broken system going, for the continued benfit of the few at the top. Changes must be made.

One barrier to fixing our broken economy problem is the structural corruption of our Congress. Every effort to help the people seems to get hijacked - and never mind working on the needed reregulating and restructuring. The recent extension of unemployment insurance, for example, included only $2.4 billion for the unemployed, but had more than $20 billion tacked on, going directly or indirectly to (owners of) big homebuilding companies. Another example, the health care reform bill is turning into a law ordering people to buy insurance from the big insurance companies. This year’s big stimulus package was watered down with even more tax cuts for the few, like getting rid of the Alternative Minimum Tax.

The biggest example, of course, was last year’s financial sector bailout. Taxpayer dollars saved the asses of the companies that caused the collapse and are now serving up $140 billion for financial-sector bonuses but 10% unemployment for the rest of us!

If we want to get out of this mess we have to restructure and reregulate the whole system. We have to change the structure of our economy so that regular people receive the benefits. It is time. There is no more getting around it.

Next post: some of the structural problems that must be changed.

Posted by Dave Johnson at November 18, 2009 1:32 PM


Comments

"We need a jobs bill because the economic system has broken down. We needed a stimulus package because the economic system has broken down. All the bailouts and jobs bills and stimulus are just one more stopgap effort to keep a broken system going,..."

Whoahhh there. Keynesian spending was supposed to fix all this.

Green shoots:
http://2.bp.blogspot.com/_nSTO-vZpSgc/SwSWx2IcMWI/AAAAAAAAHVw/R0P0RNmO9wk/s1600/housing+starts+2009-11-18.png

UC Berkley assessing new Depression??
http://globaleconomicanalysis.blogspot.com/2009/11/delong-says-odds-of-another-great.html

Wake up Dave..the stimulus is not working, the Bush stimulus did not work, the meager Obama tax cut is not working. VP Biden can't even operate a data base on web page to show us what is going on. Equal treatment under the SEC laws wound have Biden drug before a Federal court for failure of the most basic fiduciary responsibility.

Cut capital gains tax, eliminate the corporate tax, let the companies recycle the profits to investmet or pass it on the shareholder in dividends. Tax the dividends fully at 18% max.

The real green shoots? Health reform and cap and trade are dying.

Posted by: Mace [TypeKey Profile Page] at November 18, 2009 7:16 PM

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