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It is time to wake up. This country continues to hemorrhage jobs. The pain is spreading across the country, with young men and minorities taking the biggest hits. Unemployment, now at nearly 10 percent, is still rising. But Washington seems fixated not on the imperative of creating jobs, but on fantasies of a recovery or false fears about future inflation. It is time to wake up.
This country has now lost all of the jobs gained during the Bush years. More people were employed in February 2001 than are employed now. Since the beginning of the downturn in 2007, 6.5 million jobs have been lost. But with the growth of the population as the largest generation since the baby boom enters the job market, it would take nearly 9 million new jobs simply to get us back to where we were.
Loss of jobs means lousy wages. Conservative economists are prating about future inflation, but wages are stagnant and headed down. There are five people for every job opening.
And this will get worse. States and localities are just beginning what will be brutal job layoffs. Fewer hours worked means lower wages means less consumption. Retail stores are shutting down; malls are boarding up; commercial construction going belly up.
And the best jobs are getting hit the worst. Manufacturing lost another 136,000 jobs in June (a total of 14 percent of all manufacturing jobs have been lost since the beginning of the downturn). A lot of these jobs are not coming back.
President Obama warned about how harsh the recession he inherited would be. The president pushed for a recovery plan that would create 3.5 million jobs by the end of next year. We've lost 6.5 million already.
Then Congress weakened his plan. Republicans turned to obstruction, not to solution. Conservative Democrats--led by Senators Evan Bayh and Ben Nelson--worked to cut support for the states and localities, to reduce the size of the stimulus and to add top-end tax cuts that have the least effect in creating jobs.
Their cluelessness has gotten worse since then. Now they are warning about the debt we may build up in the future and pushing for cuts in spending now. This is truly perverse. President Obama is fighting off the worst global economic collapse since the Great Depression. This is the time we need to borrow money to put people to work. Once they start working, getting a paycheck, gaining confidence, spending money, the economy will start pumping again. When the economy starts working, deficits will decline as tax revenues will go up and spending on unemployment and the like will go down.
And our long-term debt problem is almost entirely caused by the projected soaring costs of health care. Yet these same senators seem intent on eliminating any effective public plan to compete with private insurance companies and hold down costs.
Washington is still blinded by old and failed ideas. Congress is still pouring money into the banks on the theory it will trickle down to those in pain. But people are still being forced out of their homes and are losing their jobs. Trickle down doesn't work.
Nor does our corporate trade policy. Trade has collapsed across the world, but the U.S. is still running billion-dollar, daily trade deficits. Companies like GM that are dependent on taxpayers are still shipping good jobs abroad. China is subsidizing its export industries, enforcing "buy China" procurement rules and pegging its currency below its value--and Washington snoozes while companies take our jobs abroad. We have to balance our trade and revive our own manufacturing sector.
We need a second recovery plan, one that puts people directly to work doing work that needs to be done. We need a second financial plan providing relief for homeowners and students burdened by staggering loans, not to zombie banks and reckless bankers. And we need action--quickly-- before this gets worse.
In the August recess, every legislator in Washington should pledge no junkets abroad. Go home, stop listening to economists saying the recovery is around the corner, and talk to Americans about the pain that is still spreading. Put aside the false idols of a failed reactionary time. We can avoid a second Great Depression, but only if Washington wakes up.