Why the Government's Unemployment Rate is Dangerously Deceptive -- And the Dark Reality it Hides
Continued from previous page
One unforeseen event away from a deeper employment crisis
Notwithstanding the rosy talk about recovery, this is a disaster for the unemployed and perhaps the rest of us as well. It means we’re just one or two unexpected events away from the job numbers heading south (like maybe a sustained oil spike caused by a civil war in Libya which pushes up gas prices, acts as a counter-stimulus and takes down Italy’s economy as well). It certainly means that cutting public sector spending and jobs is just about the dumbest move politicians can make (second only to giving more tax breaks to the rich). It’s also the reason the Fed is pumping so much cash into the economy (called quantitative easing) without fear of causing inflation. In fact, what the Fed fears most is that the jobs crisis will spiral out of control.
So let’s make a sober assessment of where we’re at. We’re still in the midst of a humongous employment crash caused by Wall Street and no one else. It’s going to take an enormous jobs boom to get us back to full employment and it’s not going to happen anytime soon.
But here’s what should worry us the most: In an industrial economy sustained long-term unemployment is truly corrosive to the human spirit. We can’t go back to the farm to support ourselves. Without work, people become deeply disgruntled and politics can turn ugly in a hurry. (The worldwide Depression in the 1930s and the rise of fascism were more than coincidental.) I’m certain that the prolonged jobs crisis, not health-care reform, was the root cause of the rightward march during the midterms. More divisive politics are sure to come if the jobs crisis doesn’t turn around soon.
Tax Wall Street to create the jobs we need
But there’s absolutely no reason why we should sit around and wait for the private sector, ever so slowly, to create the millions of jobs we need right now. In fact, if we had the political will, we could add a million jobs within two months by providing public funding for private contractors to weatherize every home and business in the country. And we could create another few million in less than a year if we provided free tuition at every public university and college in the country. (The virtuous side effects include reducing global warming emissions, lowering the amount of imported oil and making our job seekers more competitive in this global economy.)
How do we pay for all that job creation? That’s the best part. We’d have to stick it to those who got us here. A 50-percent windfall profits tax on Wall Street’s enormous profits and bonuses (all of which stem directly from taxpayer bailouts) would do the trick. Call me old-fashioned, but I think most Americans would find it more than fair to have Wall Street pay for some of the damage it caused, and then use that money to put our people back to work.
Unfortunately, our political establishment has given up on overt government intervention to solve the jobs crisis. They much prefer to rely on fate –via the invisible hand of the marketplace -- to magically create the millions of new jobs we need. But there is an incalculable hidden risk: once we give up on planned collective action to help shape our destiny, we also become subject to fate's fickleness. So by all means let us hope the jobs crisis soon passes. But if we keep hiding the real unemployment numbers, we shouldn't be surprised if this leads to yet another round of enormous profits for the few, and enormous bailouts from the many.