COMMENTARY
 by Robert Reich |
President Obama’s speech to the Democratic National Convention was long on uplifting rhetoric but short on specifics for what he’ll do if reelected to reignite the American economy.
Yet today’s jobs report provides a troubling reminder that the economy is still in bad shape. Employers added only 96,000 nonfarm jobs in August. True, the unemployment rate fell to 8.1% from July’s 8.3%, But the size of the workforce continued to drop, according to a Labor Department report Friday.
Unfortunately for the President — and the rest of us — jobs gains have averaged only 94,000 over the last three months. That’s down from an average of 95,000 in the second quarter. And well below the average gain of 225,000 in the first quarter of the year And compared to last year, the trend is still in the wrong direction: a monthly average gain of 139,000 this year compared to last year’s average monthly gain of 153,000.
Look, I desperately want Obama to win. But the one thing his speech last night lacked was the one thing that was the most important for him to offer — a plan for how to get the economy out of the doldrums.
Last week Mitt Romney offered only the standard Republican bromides: cut taxes on the rich, cut spending on programs everyone else depends on, and deregulate. They didn’t work for George W. Bush and there’s no reason to expect they’ll work again.
But the President could have offered more than the rejoinder he did — suggesting, even in broad strokes, what he’ll do in his second term to get the economy moving again. At least he might have identified the scourge of inequality as a culprit, for example, pointing out, as he did last December, that the economy can’t advance when so much income and wealth are concentrated at the top that the vast middle class doesn’t have the purchasing power to get it back on track.
Undeniably, we have more jobs today than we did at the trough of the Great Recession in 2009. But the recovery has been anemic — and it appears to be slowing. We’re better off than we were then, but we’re not as well off as we need to be by a long shot.
Robert B. Reich, Chancellor’s Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers “Aftershock" and “The Work of Nations." His latest is an e-book, “Beyond Outrage.” He is also a founding editor of the American Prospect magazine and chairman of Common Cause.
This post originally appeared on robertreich.org.
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At least Mr. Reich isn’t sugar coating the latest jobs Report.. It Is Bad Despite the 2/10 reduction. Almost 400.00 people stopped looking for work ... There are Less People in the Work Force now then Over 20 years ago.. Percentages can be Manipulated but Hard Numbers Can't .. I want My children to have a sound Financial Future ..Let’s not Spin the Obvious
The thing Mr. Reich left out is the game the fed and the market are playing against each other. Had the government's figures reached Mr. Obama's expectation, the Fed will not lower lending rates and provide monetary stimulus over the next 2 weeks. Had that occurred, the market would have punished the fed by lowering the dow by as much as 500 points in one day.
Instead, these numbers work quite well for Mr. Obama, because the Fed will now lower rates and provide fiscal stimulus in the next 10-14 days. The apparent signal from Bernanke will be much sooner. This means the final 2 jobs reports before the election will be well above expectations with the added bonus of a much higher market (due to corporations being happy with borrowing rates).
The full reality of this will sink in on October 7, 2012. The public will be gleeful going into November, as will employers. Obama my pay a price right now for the shenanigans between the fed and the market, but he will benefit beyond anyones dreams by the election.
Appreciate the additonal commentary...I hope you are right.
Appreciate the additional commentary ottergo...I hope you are right.
I agree with Mr. reich, that President Obama should have offered, in easy to understand and remember terms, his plan to create jobs and get the economy back on track. He was not bold enough to say, I will call for another stimulus package, he was not bold enough to ask for voters to elect democrats to congress and senate so he can accomplish more for them, he should have spelled out in more detail, instead just saying he will mimick Clinton years.
He could have said something like this - that he will drop middle class tax rate to a low 15-20%, he will increase top tax rate to 39%, increase capital gains tax rate to 20% and for those earning say more than $2 million (figure here is immaterial and open for debate), there will be no deductions after the first 2 billion and they will pay the top 39% regardless how that income was earned - from capital gains or otherwise does not matter.
He could have also offered a tax incentive to companies bringing jobs back home - say a 5% tax credit for first 1,000 new jobs, 7% credit for the next 3,000 jobs and so on. He should have also said that those companies who export jobs, would pay JEP - Job Exporting Penalties - say of $2,000 for every job exported.
I was disappointed that he was not bold enough.
How do the GOP think that they can blackmail us by obstructing passing any jobs bill to help us, then blame Obama because of low job numbers. Pass a bill B!T(#! I'm tired of hearing the same stupid s#!t about all the American people out of work and that s#!t about Obama's failed policies. Pass a bill B!t(#! They won't pass the transportation bill or the jobs bill, blackmailing us for more money. How stupid do they think we are? Congress and the GOP need to check themselves!!!
Obama's deficit is ten times higher as a percentage of GDP than Kennedy's. Mega-doses of Keynesian Demand Management Medicine cannot cure 50 years of Progressive Statist Government Public Policy Imposed Ills. Reich's death by a thousand cuts strategy is coming to fruition and his prescription for more spending, taxes, deficits and regulations will eventually kill the patient. Remember that in 1972 the Cost of a Barrel of Oil was Two Dollars. Starting with Earth Day April 22 1970 the Radical Environmentalist Energy Policies have pushed the price to over One Hundred Dollars a Barrel. My favorite cartoon is two members of the Politburo observing the May Day Parade. One asked why the Economist where marching along with the Intercontinental Nuclear War Head Ballistic Missile Launchers. The other replied, "You would be surprised how much damage those Economists can do!" Being a Progressive means never having to say your sorry for the unnecessary suffering you have caused. Why anybody is giving Robert Reich a forum to give advice on how to create jobs is a mystery to me.