Frustration – Have you heard the news today, Oh boy
Let’s start with Ezra Klien:
A brutal unemployment report this month. Payrolls dropped by 125,000. In another one of those unwanted lessons in how we calculate unemployment data, the unemployment rate dropped from 9.7 percent to 9.5 percent — but not because people got hired. Instead, 652,000 people gave up and stopped looking for work
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The fact that things are getting better most months, though worse in some months, obscures both how bad the situation is and how rapid our improvement has to be to really make a dent in it. But in the Senate, Republicans and Ben Nelson are objecting to using emergency legislative powers to pass further unemployment benefits, and there seems to be no appetite to try to intervene in this crisis in any further way.
Annie Lowrey over at The Washington Independent has this great article on the GOP’s shenanigans surrounding unemployment insurance (UI), For Senate Advocates of Unemployment Insurance Extension, a Battle to Nowhere. (She talks about it with Chris Hayes here).
Economists insist it should not be like this. Benefits for the jobless remain one of the most effective forms of stimulus. Mark Zandi, chief economist at Moodys.com, estimates that they generate $1.61 of stimulus for every dollar spent. Moreover, expanding unemployment insurance is wildly popular, even among conservatives. Poll after poll shows that a vast majority of Americans support giving aid to the laid-off. And on Capitol Hill, even the most stringent deficit hawks do not object to the unemployment benefits themselves. They object to expanding the deficit to pay for them.
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So, the debate has dragged on. Yesterday evening’s failed cloture vote is just the latest in a long line of disappointments and failures around unemployment insurance, known as UI. For the past nine months, the Senate has devoted hours of floor time and hundreds of hours of behind-the-scenes negotiations to ensuring that the government continues to support those left unemployed by the worst labor-market recession since the Great Depression. And for the past nine months, every bill — every extension, every jobs package — has faced staunch opposition from Republicans. Repeatedly, the Senate has had to turn to short-term stopgap measures rather than more permanent extensions. In the words of one aide, “it is beyond frustrating,” particularly since the measures are so noncontroversial. “Frustrating” has become the touchword for advocates of UI — and particularly for the unemployed.
While it’s likely the case that no two crises are exactly alike, we should, at the least, use the last major crisis for guidance. So let’s assume economically, for sake of argument, that what we’d like to see the United States, and the rest of the world, return to the kind of prosperity we had post World War II. If that’s the case it would makes sense – seems logical – to look back at how we got out of the economic crisis of the Great Depression. And as this DKos diary shows of an David Glenn Cox article, What FDR Gave Us, shows we have to look back at history to see how to get out of this mess. What Cox brings back is just how bad things were for the less fortuante in America before the New Deal:
My father grew up in Springfield, Ohio, which at the time was a mill town. Springfield once had eight iron mills, but during the last Great Depression most all of them faded away. My father was the youngest of seven boys and because of the hard times he was sent away to live with his grandfather on the farm in Ross County. My father never really got over his feeling of abandonment, too young to understand the financial reasons for the separation.
As a teen he ran away from the farm and rode the rails, living his own “Bound for Glory” Woody Guthrie tale. He told me about finding a lost boy of about fourteen who was crying and wanting to go home. So he and another boy promised him they would take him home. In their mind’s eye they saw a grateful, crying mother and a thankful, relived father insisting they take a reward as the mother fed them home cooking. What they got was an unpleasant, “Thanks,” and the door slammed in their faces. Such is the fate sometimes of the well intentioned; the boy was more abandoned than lost and as my father and his friend discussed it they understood why it was that no one was looking for them.
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Before the New Deal, the elderly were the poorest demographic in the country. When you got too old to work, you lived on your savings, and if you didn’t have savings you starved or lived on charity or with your children. America was mainly rural then with most people living on farms, so those elderly worked until the day they died. Healthcare existed only for the rich and hospitals were a cash affair except for the “charity ward”. If you were sick or injured you went home and you either got better or you died. There was no public health service. Hypothermia was the second leading cause of death for the elderly and pneumonia was the first. In Detroit in 1932 two people an hour died of starvation; in Toledo unemployment was at 70%.
The Americans of that generation, like our own, sought change and hope, and in 1932 the Republicans were completely repudiated. Roosevelt reversed the federal government’s position completely with what was called the alphabet soup of government programs. Of course the most obvious is Social Security for the elderly, but there were many other programs that have faded into history and been forgotten.
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The New Deal changed the face of America; it is the seed that modern America was built upon. And it was built without a road map; no administration had ever faced such a situation bordering on a total economic collapse. It should come as no surprise that Roosevelt won four terms in office; he was an American Moses. He led the American people out of the wilderness, and they would have elected him for four more terms if they could.
My own father, who was sent away because his family couldn’t feed him, was able to go home. He finished high school and during WWII he became a Navy pilot. Then after the war he did something that he never dreamed possible. He enrolled at Ohio State University and became a mechanical engineer, thanks to the GI Bill. He went on to become vice president of a mid-sized corporation and then became a professor at a university in Tennessee which didn’t exist before the New Deal.
He never forgot being fifteen and riding the rails and living in hobo jungles with absolutely no opportunities whatsoever. Or to what he became, all thanks to the New Deal and FDR. That’s why it was so important for him to tell his son, “See it!” He’d say, “that’s a WPA Bridge.” Moses wandered for forty years seeking the Promised Land; Roosevelt found it in a little more than twelve. As to the academics, well there are some things that just can’t be quantified or measured by statistics. The things that are made up more of feelings and intentions and in just caring about the people’s suffering, like the difference between the WPA in New Orleans in 1935 and hurricane Katrina in 2005.
It’s important for everyone to understand we’ve been here before and we got out of it. To compare what’s going on now – those in power ignoring what go us out of the Great Depression – is like being on a car trip to somewhere you’ve never been and declining to use a map to guide you there. That’s why the deficit commission, aka the “Catfood Commission”, is such a bad idea.
The job numbers today are bad and There Is No Mystery About Slow Job Growth in a Weak Recovery. Or as Krugman calls them the Myths of Austerity.
For the last few months, I and others have watched, with amazement and horror, the emergence of a consensus in policy circles in favor of immediate fiscal austerity. That is, somehow it has become conventional wisdom that now is the time to slash spending, despite the fact that the world’s major economies remain deeply depressed.
This conventional wisdom isn’t based on either evidence or careful analysis. Instead, it rests on what we might charitably call sheer speculation, and less charitably call figments of the policy elite’s imagination — specifically, on belief in what I’ve come to think of as the invisible bond vigilante and the confidence fairy.
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What’s the evidence for the belief that fiscal contraction is actually expansionary, because it improves confidence? (By the way, this is precisely the doctrine expounded by Herbert Hoover in 1932.) Well, there have been historical cases of spending cuts and tax increases followed by economic growth. But as far as I can tell, every one of those examples proves, on closer examination, to be a case in which the negative effects of austerity were offset by other factors, factors not likely to be relevant today. For example, Ireland’s era of austerity-with-growth in the 1980s depended on a drastic move from trade deficit to trade surplus, which isn’t a strategy everyone can pursue at the same time.
And current examples of austerity are anything but encouraging. Ireland has been a good soldier in this crisis, grimly implementing savage spending cuts. Its reward has been a Depression-level slump — and financial markets continue to treat it as a serious default risk. Other good soldiers, like Latvia and Estonia, have done even worse — and all three nations have, believe it or not, had worse slumps in output and employment than Iceland, which was forced by the sheer scale of its financial crisis to adopt less orthodox policies.
So the next time you hear serious-sounding people explaining the need for fiscal austerity, try to parse their argument. Almost surely, you’ll discover that what sounds like hardheaded realism actually rests on a foundation of fantasy, on the belief that invisible vigilantes will punish us if we’re bad and the confidence fairy will reward us if we’re good. And real-world policy — policy that will blight the lives of millions of working families — is being built on that foundation.
It’s beyond stupid not to use a previous success as a guide to get out of a current predicament. And for many of us that’s why frustration has set in. And the only question left is how bad does it have to get before they give in?
