Ongoing Collective Jobs Crisis, Neglected But Not Forgotten

Despite what you may be reading in the papers or seeing on the news, our most persistent present and ongoing economic problem is not our federal deficit, but jobs.

The federal deficit could have easily been cut in half, stabilizing its level for perhaps a decade or more by one simple step: letting the Bush tax cuts expire as planned, and as written into law, by 2010. That simple step alone would have postponed any "emergency."

The natural expiration of these highly inefficient and hugely ineffective and costly tax cuts could have handily paid down a significant part of the deficit. Nationally, unemployment remains stuck at near double digit levels (9 percent) that are clearly unacceptable and taking a continuing crushing toll on families and state and local governments. Here, as we well know, Georgia has fared worse than other states during the recent "Great Recession," and Bartow County and northwest Georgia worse still.   

Strangely however, most of the economic and policy arguments anyone's likely heard over the past few months have to do with the looming deficit that the GOP now loudly insists should take priority in our national debate and consciousness. 

This despite their paradoxical and deeply hypocritical stance of not only creating the bulk of the deficit during the Bush years, but also now amazingly wanting to default on the debt to try and enforce a new round of ill conceived austerity and budget cuts.

This, of course, is a neat trick, to be only now screaming about the need for immediate cost cutting and fiscal responsibility in government when Democrats control the White House, but doing little or nothing about the issue when running up the bills during their tenure. If they truly cared a whit about the deficit, they'd not be constantly braying for ever more unaffordable and unneeded tax breaks for their wealthy plutocratic friends or not creating new unfunded government mandates such as Medicare Part D or actually responsibly paying for the wars they engage us in.

Yet all that constant screaming and whining by the GOP caucus and conservative caterwauling on radio and TV and elsewhere clearly pays off. The mainstream media dutifully played along with the song, and demonstrably, coverage, even in newspapers, began to drop away for any mention of our unemployment crisis. National Journal has the tale of the tape.

Your national elites have hereby declared that deficits now trump concern or mention of our jobs crisis, and by a better than 3-to-1 margin. Most of the news people view have little time for any sort of complex process sorts of stories, and least of all for economics or science. This is also one reason why so much of our lives are seldom accurately reflected on TV.

Not to worry, as economist Dean Baker of the Center for Economic and Policy Research regularly reminds us, these are the very same experts who did not see or contemplate the collapse of largest asset/housing bubble in world history either.

Similarly, the colorful and telegenic dramatics behind the ongoing debt ceiling debate, needlessly complicating what used to be a fairly routine, clean up or down vote, belies the central fact that the U.S. has never defaulted on its debt obligations; not for any war, revolution or depression.

That today's Radical Republicans see fit to contemplate such a catastrophic measure undermining the "full faith and credit of the U.S." is not only wildly irresponsible, it easily amounts to a sort of fiscal treason. Holding the American and indeed the world economies hostage and inviting such incalculable economic damage is something previously only our hardened enemies might consider.

Yet there's not a day that goes by without the radical Republicans blithely and even cheerfully doing so. Even to the consternation of their erstwhile business allies on Wall Street and even the Chamber of Commerce. Ronald Reagan said it best on the topic in 1983: 

"The full consequences of a default — or even the serious prospect of default — by the United States are impossible to predict and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and the value of the dollar in exchange markets. The nation can ill afford to allow such a result. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns."

So despite missing the causes of the last and ongoing economic crisis, and doing little to help correct the problems seen, let alone prosecuting the rampant and obvious criminality seen in the banking sector, our national elites remain seemingly quite satisfied to wait out the current employment crisis.

(See also Barry Ritholtz's testimony to the National Association of Attorneys General on the "10 Major Areas of Banking and Mortgage Fraud" and Calculated Risk's "Employment: A Dirty Little Secret and More Graphs" here.

Moreover, despite the clear evidence from serious economic studies from the National Bureau of Economic Research that government programs and "automatic stabilizers," such as long-term unemployment insurance actually worked to keep one out of every six Americans out of poverty, some 45 mIllion citizens in all, and successfully halving both the poverty and unemployment rates, these are the very same programs now facing draconian budget cuts under the GOP proposals.

With wages stagnant or declining for nearly all sectors of the population for about a decade by now and costs for college, gas, health care and rent skyrocketing, families are under financial strain as never before. The deleterious effects of the "Great Recession" grinds on for all too many, for both the employed and unemployed.

It's about time somebody noticed. As ever, it seems as if our national elites are singularly focused on some of the symptoms of the problem, but not the real economic problems themselves.

Simon Johnson, the eminent MIT economist concurs debts we will always have with us, but our current debt debate mania is deeply and profoundly misleading and ignores basic economic history. 

When today's radical Republicans force a default to enforce their false austerity you can almost hear Reagan ruefully shaking his head and reminding them, "There they go again....," marching in ideological lock step off the cliff of fiscal rationality, once again.