economy – Page 6 – Hank Kalet

The long economic slog continues

If this is what recovery looks like, we should stop calling it a recovery.

The good news, as The New York Times reports, is that economy created 103,000 jobs in December; the bad news is that the number is far below what will be needed just to start chipping away at the jobs lost during this long and painful recession. And that does not take into account the reality that the economy needs to create several hundred thousand jobs monthly just to keep up with population growth.

The real problem in the recession, however, is not just unemployment, but long-term unemployment — the folks who not only have lost their jobs but remain out of work for long stretches.

The percentage of the unemployed who have been out of work for 27 weeks or longer edged up last month to 44.3 percent, about the same level as a year ago. Other indicators, such as the length of the average work week, remained stagnant.

All told, one in six Americans is either unemployed (either actively seeking jobs or having given up) under-employed. The brutal reality is everyone knows someone who is out of work, whether it is a former co-worker, a friend, a neighbor or a relative, and most of us know many.

And yet, we are faced with the prospect of a Republican Congress promising to grind government to a halt, ensuring that the only entity with the economic muscle to pump money into the economy — through public works jobs, unemployment insurance, aid to states to keep state and local workers employed — will remain on the sidelines.

President Obama deserves a tremendous amount of blame for this, of course, because of his reluctance to be bold and use the bully pulpit. He allowed the Republicans to gut his stimulus program, back pedaled on bailing out homeowners and has had a surprisingly difficult time explaining himself, given that his greatest strength as a campaigner was his ability to speak to voters.

The economic problems will dog us, with damaging effects throughout different sectors of the economy and the society, without much in the way of a safety net to catch us before we come crashing down. We will be forced to rely on soup kitchens and food pantries, SRO hotels and the like — or many of us will.

We may not end up wearing a barrel or riding the rails to chase migrant work, but we do face a 21st-Century version of these cliches.

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Read poetry at The Subterranean.
Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
Suburban Pastoral, a chapbook by Hank Kalet, available here.

The correct response is ‘Hell no!’

John Nichols, in a useful rejoinder to so much of the economic and political nonsense flying around as the GOP readies to take control of the House, that it is the people who created the mess we are in who should pay to fix it.

Our sputtering economy and exhausted federal budget was not caused by entitlement spending, but by a regulatory climate that turned the financial markets into Atlantic City casinos and two endless wars that are daily sucking the cash from our bank accounts and leaving the blood of soldiers and civilians on both sides to stain the countrysides.

And yet, we still hear from the “Washington elites … that the U.S. had spent itself into a financial mess” and that “it was going to be necessary to put Social Security, Medicare, Medicaid and other social programs at risk to balance the books.”

That is both foolish and immoral.

As Nichols says,

there is a place for fiscal responsibility. But there is also a place for moral responsibility. Those who created the mess should shoulder the burden of cleaning it up. Social Security, Medicare and Medicaid did not create this crisis, war profiteering and Wall Street speculation did. So before any working family sacrifices, the first demand should be that the profiteers and the speculators pay for their crisis.

Send me an e-mail.
Read poetry at The Subterranean.
Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
Suburban Pastoral, a chapbook by Hank Kalet, available here.

Statistics v. reality, a tale of an economy in decline

Two points worth mentioning about this Bob Herbert column (three if you include this one: Right on, Bob!):

The people who report on the state of the economy, as he says, rarely consider the impact of restructuring on actual workers:

There is a fundamental disconnect between economic indicators pointing in a positive direction and the experience of millions of American families fighting desperately to fend off destitution. Some three out of every four Americans have been personally touched by the recession — either they’ve lost a job or a relative or close friend has. And the outlook, despite the spin being put on the latest data, is not promising.

And the restructuring has dimmed the prospects for any kind of real or sustained rebound:

The fact that so many Americans are out of work, or working at jobs that don’t pay well, undermines the prospects for a robust recovery. Jobless people don’t buy a lot of flat-screen TVs. What we’re really seeing is an erosion of standards of living for an enormous portion of the population, including a substantial segment of the once solid middle class.

Of course, that is not on the agenda in Washington, where an insane turn toward austerity has taken hold. The upshot of this is likely to be more pain, and an accelerating descent into a third-world economy for the United States.

Send me an e-mail.
Read poetry at The Subterranean.
Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
Suburban Pastoral, a chapbook by Hank Kalet, available here.

Tax cuts for the rich or food for the poor

Washington debates tax cuts for people making more than $250,000 a year, while far too many struggle at the other end of the economic spectrum. Can you say skewed priorities?

Send me an e-mail.
Read poetry at The Subterranean.
Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
Suburban Pastoral, a chapbook by Hank Kalet, available here.

Bad medicine for a bad economy

The New York Times buys into the nonsense being peddled by the president’s Fiscal Commission, calling their proposal a dose of fiscal reality and shared pain — though sharing the pain is far from what this plan would do.

The plan, the Times says,

frankly acknowledges what most politicians are too cowardly to admit — that deficit reduction will require shared sacrifice.

It lays out sensible principles, prominent among them that deficit reduction should start gradually, beginning in 2012, to avoid disrupting the fragile economic recovery. It also affirms the need to protect the most vulnerable Americans and to invest in education, infrastructure and research and development.

Then it does what any successful deficit reduction plan must do: It puts everything on the table, including tax reform to raise revenue and cuts in spending on health care and defense. It even dares to mention the need to find significant savings in Social Security, Medicare and other mandatory programs.

But Social Security is not the problem (minor fixes will address a potential problem in the retirement program that has been blown out of proportion) and the kind of tax reform being proposed is the kind that the people who run our corporate state will appreciate, but that those of us in the middle class will be none too happy about.

The focus should be on addressing healthcare costs — which the Obama health-care plan is supposed to do, but won’t because it left the contours of the for-profit corporate system in place. A single-payer system is what is needed, with less of a focus on high-end technology and more on preventative medicine. But that is another debate.

The issue here is the plan on the table, which is a right-wing economist’s dream come true. As Jeff Madrick, a senior fellow at the Roosevelt Institute, writes on Huffington Post, the radical reduction in the federal income tax rate (the bulk of which would go to top earners) “is simply right wing ideology at work, and has nothing to do with deficit issues.”

To the contrary, the authors are using deficit alarms to present a new tax agenda. Is Obama really going to stand behind it? There is no commonly accepted evidence that current marginal tax rates, or even higher ones, suppress economic growth.

He also is critical of the arbitrary slashing of federal outlays — to 21 percent from an expected 24 percent (and the current 22 percent) and what he calls Draconian (and unnecessary) cuts in debt levels.

Why the reduction? There is no reason at all to do so, except an ideological one: less government is always better. Again, there is no absolutely commonly accepted evidence that higher levels of government suppress growth. Yet the proposal is willing to make painful cuts in programs to meet this spurious goal. And it will leave no room for more public investment.

Third, the proposal’s goal is to reduce debt levels to 60 percent of GDP and eventually 40 percent. To do so requires a deficit on average of 2.2 percent of GDP. Again, there is no evidence that debt levels of 60 percent are better than levels of 70 percent, for example. Reducing the debt levels to 40 percent is simply Draconian. One argument is to keep them low to be able to respond to emergencies, as the nation just did. It would be far better to devote attention to avoiding the extreme emergencies.

The spending cuts, as Madrick points out, will be counterproductive in this broken economy, making it more difficult to address stagnant employment or help those dislocated by the damage done by the very economic elites likely to benefit from its medicine.

Send me an e-mail.
Read poetry at The Subterranean.
Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
Suburban Pastoral, a chapbook by Hank Kalet, available here.