Finally, Washington has turned its attention back to jobs.
With President Barack Obama's demand that Congress pass his American Jobs Act and his call on the super committee to push hard on 10-year deficit reduction, a battle has begun that won't be resolved until the 2012 election. If then.
But the haunting reality is that neither side of the debate comes close to addressing the scope of our nation's economic challenge. Washington is fighting over who has the better sand castle -- while ignoring the tidal wave that is coming our way.
The jobs we've been shedding by the millions are solid, middle-class positions -- the kind that could support a family and send children to college. The hard reality is that the relatively few jobs being created are service-related -- disproportionately low-wage and low-skill. The broad middle class -- the triumph and strength of America's democracy -- is sinking. Unless we change course dramatically, we will become even more a nation of haves and have-nots.
The current debate offers clear contrast. Right now, Obama wants to "jolt" a flagging economy, investing in teachers and infrastructure and cutting taxes on workers and small businesses. Over 10 years, he'd get our books in order by combining spending savings -- largely on wars abroad and on Medicare, Medicaid and tax hikes on the wealthy.
Republicans scorn the American Jobs Act but may sign onto extending the payroll tax cut. They push for rolling back regulation, keeping taxes low and passing corporate trade accords. Meanwhile, House Speaker John Boehner (R-Ohio) just reiterated their staunch opposition to any tax hikes on the wealthy and their demand that deficit reduction focus on cuts in Social Security, Medicare and Medicaid. The differences are stark -- so the choice is likely to be left to voters in the 2012 elections.
But both sides fail to address the scope of our challenge. Republicans seem to believe that simply rolling back Obama's reforms and returning to former President George W. Bush's economy will set us straight. But those are the policies that drove us off the cliff. They weren't working for most Americans even when the economy was growing.
Worse, what little lift we had came from a massive housing bubble -- some $8 trillion in exaggerated housing value -- that has burst. We can't go back there and should not want to.
The
president offers more extensive reforms, but he, too, basically seems to
assume that by giving the economy another boost, we can start putting
people to work and generate sustainable growth. He still believes that
the economy, as he said in his State of the Union address, is "poised
for recovery." It's just addled by bad weather, European crisis and the
like.
The reality is far more dire. Forty-six million Americans are living in
poverty -- the highest number since we began keeping track. Incomes are
falling; the median household income is down 6.4 percent since 2007.
And jobs are a calamity. We have fewer payroll jobs now than we did in
2000, but we've added 30 million to our population since then.
Twenty-five million people are in need of full-time work. We've lost
about 10 percent of middle-class jobs since 2000.
And the jobs coming back are disproportionately low-wage and low-skill.
Nearly 20 percent of working adults have jobs that do not pay enough to
lift a family of four out of poverty. Median wages for men ages 30 to 50
have declined by nearly 30 percent since 1969. American companies are
still shipping good jobs abroad, while we borrow more than $1 billion a
day from foreigners to cover our trade deficit.
This economy is not like a new car with a depleted battery, needing only
a jolt to be humming again. It's an old jalopy with a spent
transmission and a broken chassis. We either rebuild it or trade it in.
The president made this case better than anyone during the 2008
campaign, arguing that we couldn't go back to the old economy. We have
to build a new foundation for growth, one in which America makes more
and sells more, invests more and consumes less.
The elements of a serious jobs plan seem clear. We need massive
renovation of the economy, reviving America as a center not just of
innovation but also production. We need to invest in people so Americans
get the education needed for the next economy. Workers must be
empowered to share in the increased profits and productivity, while we
must curb the distorted pay packages that give corporate executives
multimillion-dollar short-term incentives to cook the books -- or plunder
the company.
The core initiatives aren't magic -- but they have to be of a size
commensurate with the challenge. We need a broad and sustained
initiative to rebuild America, to modernize everything from aged sewers
to outmoded transportation systems. These are also just the sort of jobs
that can bolster the broader American middle class.
With the U.S. able to borrow money virtually for free and the
construction industry prostrate, there is no better opportunity for a
massive, sustained investment that will put people to work while making
us far more competitive.
We also need a strong manufacturing strategy to make things in America.
That requires a new trade policy that sets the goal of balancing our
trade and enforces the policies to meet it.
A first step has to be challenging China to adjust its currency and
treating its exports in the same fashion it treats ours. That should
also include a major effort to capture a lead in the green industrial
revolution that will define the markets of the future. China, Germany
and other nations have sensibly set out to dominate the markets for
renewable energy, energy-efficient appliances and transport.
The GOP wants to make Solyndra, the failed solar-power company, a major
scandal. But the scandal allowed China to capture the solar industry
with subsidies and to capture technology -- erasing any possibility for
U.S. companies to compete.
We need expanded
investment in research and development, linked to commitments to develop
products here rather than abroad. We can't continue to rely on military
R&D to drive our innovation.
Most important, we need to invest in people, rebuilding what was long
considered the best education system in the world. Right now, we're not
even doing the basics -- universal preschool, small classes in early
grades, skilled and well-rewarded teachers, comprehensive after-school
programs, affordable advanced training and college.
Instead, we're laying off teachers, cutting back advanced studies and
tutors and pricing college out of reach for more and more students.
We also can't expect schools to educate children scarred by poverty.
Prenatal care, child nutrition, health care and affordable housing are
essential if we want children to have a chance to learn.
All this costs real money. That means new priorities and progressive
taxes. We've got to end the presumption that we are an indispensable
nation that must police the world. Progressive tax reforms -- from hiking
taxes on the wealthy to taxing financial speculation to cracking down
on tax havens -- is long overdue.
As for all the brouhaha about deficits and debt -- the United States is a
rich nation. Our short-term and medium-term deficits are generated
largely by the economic collapse -- and solved largely by returning the
economy to growth and putting people to work. As we have seen from the
brutal layoffs of state workers, austerity -- cuts in spending -- can only
make things worse.
We do have a long-term deficit challenge -- but that is entirely
generated by our broken health care system. Health care costs have gone
from 9.5 percent of personal consumption in 1980 to 16.3 percent today.
Medical bills are now a major factor in 60 percent of all personal
bankruptcies. If health care costs aren't finally brought under control,
they will bankrupt families, businesses and state and federal
governments.
Fixing health care isn't about cutting benefits to the Medicare
recipients; that simply transfers more of the out-of-control costs to
those least able to pay them. Fixing health care requires taking on the
drug companies, the insurance companies, the private hospitals and the
perverted system that they have created that costs twice per capita of
other industrial nations while delivering worse results.
This is the argument we need to have -- and the changes we need to face.
Ironically, Americans get it even if Washington doesn't. Large
majorities want schools, Social Security and Medicare protected; they
want to hike taxes on the rich and invest in areas vital to our future.
They are souring on the endless wars and want the resources and young
men and women brought home. And they want health care costs brought
under control.
If Obama and the Republicans stay their course, we will have a debate in
2012 with stark differences. Americans will choose. And then, we will
still have to summon up the energy to rebuild our economy -- or suffer
far more than one lost decade.
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