CNN Money echoed what most news outlets around the world are reporting today: There was a net loss of 125,000 jobs in June. It proves out what many were saying months ago—that the jobs figures Obama boasted about earlier in the year were hype and hope. Several hundred thousand jobs that were being used to prop up a false recovery were Census-based jobs. Many of those were part-time jobs.
So what did the $787 billion stimulus program get us as Americans besides deeper in debt? For most of us, it gave us nothing. And still the hype goes on. We are in the “Summer of Recovery because more than 30,000 miles of highways are being improved, more than 2,800 water projects have been started, and 120,000 homes will be weatherized.” (Source: CNN Money)
But as I mentioned in my post, The Other Street, the flagging economy is not a problem Washington can fix by spending more money. As we’ve seen in Afghanistan ($3 billion) and Iraq ($23 billion), when the US government throws out billions of dollars, billions of dollars go into the personal bank accounts of unscrupulous officials and business owners with few crumbs ever hitting the ground.
The missing piece is that new and sustainable jobs are not being created. Businesses are not being convinced to ramp up production or to open new production facilities due to lack of confidence in consumer demand. Therefore, existing facilities are idled or closed, resulting in the layoffs of thousands of workers (who are ultimately consumers).
Consumer demand is down due to the uncertainty of the job market. Workers are underemployed or unemployed—or facing the prospect of unemployment due to their company’s declining sales and revenue. There is a cycle here that has to be broken in order to fix the problem and Washington either does not realize that or doesn’t know what to do to fix it. Then again, maybe Washington doesn’t want to fix it.
It seems more and more that Congress and the President are more about what keeps their party in power than what fixes the problems we’re facing as a nation. The Democrats are willing to mortgage our futures to give us something today that puts them in our good graces and keeps them in office. The Republicans are willing to stand in the way of us getting those goodies provided it makes the Democrats look ineffective and causes Republicans to gain office.
It was a wise person, Harry Truman, who said “It is amazing what you can accomplish if you do not care who gets the credit.” (Well, I respect him for that thought but cannot hold him up as any sort of hero given that the bombings of Hiroshima and Nagasaki rank on my list of “Worst Acts of Terrorism Ever” as number 2 and 3 respectively.)
Mr Obama clearly does not have a clue as to how to fix the American economy or perhaps he just doesn’t want to—yet.
Here’s a clue, Mr President: You cannot go to the G8 and G20 and tell other governments to spend their way out of a recession, and then come home and tell America that we need to cut spending—and then go to Congress and ask for more money to spend. Then again, I guess you can do that!
If someone really wants to fix our economy, here’s what I think:
Do something that puts spending power back into the hands of consumers. This will drive demand and get the wheels of industry turning again. Once those wheels pick up momentum, jobs will come back, incomes will level off, and creditors will be begging businesses and consumers for their money. The fix starts with the workers of America. That is our strength, and that is our lifeblood as a country.