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Why Won't Obama Give You a Job?

Wall Street's raking in massive profits and paying its execs and traders record bonuses, thanks in part to government cash. What about ordinary Americans?
 
 
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Working Americans continue to suffer from the worst financial crash since the Great Depression, and Washington has so far offered up only band-aids to help them out -- extended unemployment benefits, small stimulus checks and deeply flawed mortgage relief programs that have done little to stem the tide of foreclosures.

The stimulus plan passed earlier this year appears to have been too modest in scope, as many economists warned at the time. While it helped halt the economy’s free-fall collapse, unemployment still topped 10.2 percent last week, and analysts warn us that “bleak data point to a stark future for job seekers and employers.”

But while caution’s prevailed in Washington when it comes to bailing out “Main Street,” Wall Street’s enjoyed a degree of socialism that would make Hugo Chavez blush. The Obama administration has essentially continued Bush’s policy of loading up dump trucks with tax dollars at the Treasury and dropping them on the banks with little oversight and next to no strings attached.

And it’s had an effect, at least on the banks’ bottom lines. AIG, the insurance giant whose near-collapse last year almost brought down the entire financial system, reported its second consecutive quarterly profit after being rescued by Uncle Sam. Unlike American workers, the company is getting back on its feet after an injection of an almost impossible-to-grasp number of tax-dollars.

AIG’s fortunes are not unique. All of Wall Street’s survivors are raking in massive profits and paying their execs and traders record bonuses.

The disconnect between the banks’ fortunes and those of working Americans makes the question posed by a recent “news analysis” by Washington Post staff writer Alec MacGillis so relevant: “ Why Won’t Obama Give You a Job?

MacGillis writes that while the White House says the stimulus passed earlier in the year “created or saved” 640,000 jobs, the “national unemployment rate has now hit 10.2 percent,” and asks:

Why has a White House that talks so much about boosting employment steered clear of the most direct strategy that could keep Americans on the job?

Since taking office, the Obama administration has studiously avoided paying people to go to work, which could be accomplished by subsidizing workers' private-sector employment or by creating new government-paid jobs. There are programs in a handful of states that financially compensate employees who cut their hours … But the Obama administration has so far opted not to expand this initiative. And aside from a small summer employment program for young people, it has not sought to create jobs on the public payroll, something the country did in the 1930s and 1970s.

MacGillis offers that “engaging in more forthright job creation could invite some political pitfalls (such as those constant accusations of socialism),” and then asks: “but is double-digit unemployment any less a political risk?”

It’s the kind of rationalism that can blind political observers, and ultimately MacGillis leaves the disconnect between policy and politics unaddressed.

There are competing explanations for Democrats’ habitual timidity when they have an opportunity to govern. Take your pick: internal party politics -- skewed Rightwards by the influence of the Blue Dogs -- the Dems’ reliance on fat campaign contributions from Wall Street; an institutional fear of “those constant accusations of socialism”; the organizing skills of their conservative opponents or the fact that the White House policy apparatus is packed with Clinton administration vets, former Wall Streeters and other adherents to classical economic orthodoxy.

Whatever the case, the moves they’ve made to offer relief to ordinary working families haven’t been as bold as their interventions in the financial sector. Not only did many economists view the stimulus package as too small relative to the depth of our economic malaise, but a good chunk of the funds went for tax cuts, and for long-term investments, like “green energy” subsidies, which have limited bang for the buck in terms of generating jobs over the short haul.