Barb Caffrey's Blog

After a horrible August, where zero jobs were created whatsoever in the United States, we know that as of this Labor Day, fewer workers are working than ever before — thus, fewer are “laboring,” which is part of what is keeping the American economy down for the count.

I don’t know what the answers are, but I do know a few things could be instituted right now that would help.

For example, in Betty Jin’s recent article at BusinessInsider.com, she suggested the following:

1) Cut the corporate tax rate by 5%; this may stimulate jobs.  (The risk in doing so is that it would probably increase the deficit in the short-term.)

2) Print more money, and start taxing corporate savings.  This would force companies to invest, but could cause inflation.  The hope here is that the American companies would invest in American workers, which would keep inflation down to a manageable level.

3) Increase “infrastructure” spending — in other words, start building roads, bridges, and other things like rail lines, as this definitely would create jobs.  Also, everyone of every party wants safe roads and bridges — this one seems like a win/win, especially if President Obama stops calling it “infrastructure,” something very few people seem to realize means “roads and bridges,” and starts calling this exactly what it is — putting people back to work doing something that’s vital and necessary.

This last one, to my mind, is the strongest of the 10 things Jin says can be done right now to improve the economy (it’s third on her list; to see the other seven, click on her article) because Dwight D. Eisenhower, a Republican President, was the one who pushed for the Interstate highway system we all take for granted back in the 1950s.  So it would be really hard for the current crop of radical Republicans to say that this is a bad idea, considering it was started by their own party.

Next, there’s the New Republic’s article, written by Jared Bernstein, that’s headline states “Obama’s Got Plenty of Options to Right the Economy — He’s Just Got to Fight for them.”  This article is part of the New Republic’s “Symposium on the Economy” that’s sub-titled, “Is there Anything that can be Done?”  Other articles in this series can be found here.

At any rate, here’s the first few paragraphs from Bernstein’s article:

Here’s the policy reality facing the president: The economy is stuck in the mud and the American people are losing faith that policy makers can do anything about it. As long as GDP growth is persistently below trend—trend being around 2.5 percent—the unemployment rate won’t be going anywhere good anytime soon. Paychecks, meanwhile, are declining in real terms, so we’re stuck in a cycle where the weak job market hurts household budgets, which trims consumption, which discourages investors.

The only games in town are fiscal or monetary stimulus—there, I said the ‘s’ word—but the president is boxed in, it is said, by three forces: First, he’s got no job-creation bullets left; second, even if he did, and American people don’t believe the government can help on the jobs front (a pathetic 26 percent have confidence in Washington’s ability to solve economic problems); and, third, Republicans in Congress will block any idea he proposes anyway. Thankfully, none of these challenges are as insurmountable as they might seem, and pushing relentlessly to overcome them is the president’s best, and only, chance to change the fundamental direction of the debate, find his footing, and create some momentum for the economy and for himself.

Mind you, all of this means one thing: President Obama must lead, and the country must follow wherever the President leads with regards to the economy.  This means a comprehensible strategy must be created, and thus far, I really haven’t seen very much out of the current Administration that leads me to believe there’s much going on there except reactionary spending — that is, Timothy Geithner, current Secretary of the Treasury, and Ben Bernanke, Chairman of the Federal Reserve, have performed well in their jobs but they haven’t really seemed to set policy so much as react to it instead.  This may be an error on my part; I’m no financial wizard by any stretch of the imagination.  But it seems to me that if these two men have a grand, overarching vision, it surely hasn’t been well-explained to the “men (and women) on the street” like me.  And it also seems that if these two men do have a way out of this mess, the President doesn’t seem to know what it is, either — or, perhaps, he’s just not saying because he knows the Republicans in Congress wouldn’t like it and would say so with great vigor and dispatch.

Note that at a Labor Day rally and speech that President Obama gave today in Detroit, Michigan, the President seemed to not only understand the high stakes of this “game” (if he loses public opinion on this issue, any chance he has of a second term will be gone), but understood the need to boldly counterattack the current crop of Republican Presidential candidates including Texas Governor Rick Perry and former Gov. of Massachusetts, Mitt Romney according to today’s AP article listed at Yahoo News.  Obama said:

“I’m going to propose ways to put America back to work that both parties can agree to, because I still believe both parties can work together to solve our problems,” Obama said at an annual Labor Day rally sponsored by the Detroit-area AFL-CIO. “Given the urgency of this moment, given the hardship that many people are facing, folks have got to get together. But we’re not going to wait for them.”

“We’re going to see if we’ve got some straight shooters in Congress. We’re going to see if congressional Republicans will put country before party,” he said.

Now, this sort of rhetoric is exactly what most Democrats and Independents have been waiting for, but until voters see some action beyond the words, it’s unlikely to help overmuch.  Still, this is the right message — people are hurting, and the President seems to “get” that — and one can only hope that the President’s advisors are reading the same articles I am that offer some real possibilities rather than just allowing the economy — and workers — to continue to be flushed down the drain.