“Hands On” Not Hand Outs

“New jobless numbers fuel debate” – That was the headline in the Kansas City Star yesterday.

“The argument over whether more government stimulus is needed to spark the economy intensified Friday with an anemic jobs report. While the unemployment rate fell to 9.5 percent in June from 9.7 percent in May, the decline occurred not because employers added jobs but because a huge number of workers – 650,000 – dropped out of the labor force. Workers not looking for jobs are not counted as employed.

“In all, employers cut 125,000 payroll jobs. About 225,000 temporary U.S. census jobs ended, while private sector employment scored a paltry gain of 83,000 jobs.

“With 14.6 million unemployed workers – 6.8 million of them out of work for six months or more – the pressure intensified on government to do what business hasn’t done: Create jobs.

“President Barak Obama said the report was evidence that economic growth was occurring, but not quickly enough, and he called for expansion of the government’s economic stimulus programs.

“Republican opponents countered that government stimulus efforts so far have failed.

“‘The government cannot orchestrate lasting economic growth,’ said Rep. Sam Graves of Missouri, ranking Republican member of the Committee on Small Business. ‘Propping up our economy with temporary jobs and bailouts fosters an atmosphere of uncertainty, not stability.’

“Many economists were hoping to see more private-sector job growth, which would fuel the economy by boosting consumers’ ability to spend.

“‘It could have been worse, but it wasn’t good,’ said Nigel Gault, chief U.S. economist at IHS Global Insight, an economic forecasting firm. ‘It’s adding to the evidence that growth has slowed.’

“People have left the work force ‘because they think there’s nothing out there,’ he added.

“In a separate report, factory orders fell by 1.4 percent in May, the Commerce Department said. It was the first decline after nine months of gains and the biggest drop since March 2009.

“The reports Friday followed a slew of data and developments that pointed to slower growth in the months ahead. The stock market capped the week with another down day, with the Dow Jones Industrial average on Friday sliding 46.05 percent to 9,686.48.

“The jobs report showed that few industry sectors have ramped up their hiring pace. Private-sector employment has grown by an average of only 98,000 jobs a month since January, but in June it remained 7.9 million jobs below December 2007, when the recession began.

“At that pace, it would take more than six years to return to pre-recession employment levels.

“‘Cautiousness to hire workers at a stronger pace shows that employers believe a self-sustaining economic recovery is not as strong as it was a few months ago,’ said Dave Heuther, chief economist for the National Association of Manufacturers.

“The job numbers kept attention on Congress, which recessed for the Fourth of July holiday without passing another emergency federal extension of unemployment benefits. About 1.3 million laid-off workers have exhausted their eligibility for jobless benefits.

“Democrats have been unable to push through a benefits extension, which, they argue, would provide economic stimulus in this consumer-driven economy by putting money into the hands of the jobless.

“‘We have to put money in the hands of people most likely to spend it,’ said Christine Owens, executive director of the national Employment Law Project. ‘That means continuing effective stimulus provisions like unemployment insurance in order to increase consumer activity, boost local economies, promote job creation and keep the millions of jobless Americans afloat until they can find work again.’

“Republicans have rejected a benefits extension costing about $ 35 billion in favor of limiting growth in the federal deficit.

“Even with government stimulus money for infrastructure projects, construction employment fell to a 14-year low in June, the Associated General Contractors of America said.

“‘The stimulus has helped,’ said Stephen Sandherr, chief executive of the contractors association, ‘but any gains the industry experienced will evaporate unless Congress and the administration enact long-term spending bills for transportation, water, wastewater, rivers and harbors.’

“Diane Furchtgott-Roth, director of the Center for Employment Policy at the Hudson Institute, said: ‘It’s natural that employers are afraid to hire, since their taxes will go up on Jan.1, 2011.’

“She also cited fears about higher energy bills if cap-and-trade legislation passes, concern that future financial regulations might make it more difficult to borrow, and worries about possible future fines for not providing health insurance required by the reform law.

“Even for the majority of Americans who remain unemployed, the June report painted a less-than-satisfactory picture of the economy. “The average workweek slipped by 0.1 hours, meaning slightly less pay for hourly workers.

“Average hourly earnings of all employees in the private non-farm sector fell by 2 cents, or 0.1 percent, to $ 22.53. From June 2009 to June 2010, average hourly earnings have risen 1.7 percent.

“‘Hourly and weekly earnings will improve further only when private sector job creation accelerates,’ said Steven Wood, chief economist with Insight Economics.

“In an essay for Bloomberg Businessweek, Intel founder Andy Grove said job creation will occur when U.S. companies revalue manufacturing and stop ‘commoditizing’ factory work by employing labor overseas.

“Grove suggested that government should levy an extra tax on the products of offshore labor and use the tax receipts specifically to rebuild U.S. industry.” –

One year ago today, Paul Krugman, Princeton University’s Nobel Prize winner in Economics, wrote:
“Unlike the federal government, states are required to run balanced budgets. And faced with a sharp drop in revenue, most states are preparing savage budget cuts, many of them at the expense of the most vulnerable. Aside from creating a great deal of misery, these cuts will depress the economy even further.

“So what do we have to counter this scary prospect? We have the Obama stimulus plan, which aims to create 3.5 million jobs by late next year. That’s much better than nothing, but it’s not remotely enough. And there doesn’t seem to be much else going on. Do you remember the administration’s plan to sharply reduce the rate of foreclosures, or its plan to get the banks lending again by taking toxic assets off their balance sheets? Neither do I.

“All of this is depressingly familiar to anyone who has studied US economic policy in the 1930s. Once again, a Democratic president has pushed through job-creation policies that will mitigate the slump but aren’t aggressive enough to produce a full recovery. Once again, much of the stimulus at the federal level is being undone by budget retrenchment at the state and local level.

“So we have failed to learn from history, and are we, therefore, doomed to repeat it? Not necessarily – but it’s up to the president and his economic team to ensure that things are different this time. President Obama and his officials need to ramp up their efforts …” –

And we agreed. “Indeed, they must ramp up their efforts,” we said. “That above-mentioned Democratic president who pushed through those job-creation policies that ‘weren’t aggressive enough to produce a full recovery’ was FDR. Those who ‘studied US economic policy in the 1930s’, however – really studied it, that is – will remember that it was that same Democratic president who eventually pushed through job-creating policies that dramatically changed not just this nation but the face and the very future of the planet. His three Emergency Shipbuilding Programs that ended the Great Depression, also ended the Great War, created dozens of millions of new jobs and began a half-century of unprecedented economic growth in the U.S. And it took just three ‘strokes of a pen’ – the very same pen in the possession of our current chief executive.”

So today – a full year later – the London Telegraph is reporting a truth that our administration and its controlled media really don’t want Americans to know: “With the US trapped in depression, this is starting to feel like 1932. The US workforce shrank by 652,000 in June, one of the sharpest contractions ever.” [See? Even outsiders know it’s no longer a recession. It’s a depression!]

And Newsweek noted that: “Without a healthy jobs market, the recession-shocked consumer won’t spend. And yet Washington’s response seems to be a collective throwing up of hands.” [Tsk, tsk.]