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Andrea Mitchell’s Lithuanian Plan For Combating Unemployment

Yesterday featured yet another top official in the Obama Administration, this time economic advisor Austan Goolsbee, saying that unemployment is unacceptably high. In this case, he was talking about the minority community. But “unacceptably high” doesn’t make sense unless the Administration is doing whatever possible to drop that number. And what are they doing?

“When you look at construction and manufacturing in particular, those have been very hard hit in this recession,” Goolsbee said. “You’ve seen a lot of what the president’s talking about, be it infrastructure, be it clean energy manufacturing, and be it small business, those are three areas which would disproportionately help groups where the unemployment rates been really high.”

“Talking about,” but not in a way that actually advances any legislation in these areas. There’s a great local jobs bill that the White House has never discussed publicly. Their HomeStar program for energy retrofits hasn’t really gotten out of the box. You could through a series of bills design a stimulus that would approach the annual level of the Recovery Act, and it looked for a moment like this was the plan in Congress, but there’s been little movement and little attention paid to that agenda. And I don’t think a positive jobs report will spur action on that front.

If you look at what Andrea Mitchell says in her question right before Goolsbee talks about employment in the minority community, you can see what a box the White House is in right now. She asks if there’s anything that can be done, given the “fiscal crisis”:

Is there anything that can be targeted, I know that there is one bill, George Miller’s bill in Congress for job training, but is there anything on a broader scale, given the fiscal crisis, that can be done, or is this just going to be the stubborn part of the unemployment rate that you have to deal with on a long-term basis?

That’s a new phrase in the lexicon from Mrs. Greenspan, “fiscal crisis.” Interesting how this “fiscal crisis” just popped up after eight years of unfunded wars and a doubling of the national debt. Suddenly, a Democrat enters the White House and there’s a fiscal crisis and everything has to be paid for, and 16% unemployment in the African-American community is just something you have to “deal with.” And by “deal with,” presumably Mrs. Greenspan means “not attempt to fix in any way, because I have a piano recital to attend with my husband and anyway I’m employed so not my problem.”

The argument that the fiscal scolds are making, that the budget is in “crisis” and you simply have to crack down and “live within your means” during a time of mass unemployment, found purchase in certain parts of Eastern Europe, where they did deal with their “crises” with austere measures and spending slashes. So maybe Mrs. Greenspan and her beau can pop over to Lithuania and ask people how they like how things are going over there.

Faced with rising deficits that threatened to bankrupt the country, Lithuania cut public spending by 30 percent — including slashing public sector wages 20 to 30 percent and reducing pensions by as much as 11 percent. Even the prime minister, Andrius Kubilius, took a pay cut of 45 percent.

And the government didn’t stop there. It raised taxes on a wide variety of goods, like pharmaceutical products and alcohol. Corporate taxes rose to 20 percent, from 15 percent. The value-added tax rose to 21 percent, from 18 percent […]

But austerity has exacted its own price, in social and personal pain.

Pensioners, their benefits cut, swamped soup kitchens. Unemployment jumped to a high of 14 percent, from single digits — and an already wobbly economy shrank 15 percent last year […]

Monika Midveryte, a university student, and her mother are now supporting the family after her father lost his construction job. Now, she said, he sits at home in front of the television drinking his troubles away. “He has no hope.”

The psychological toll has been immense. Suicides have increased in a country where the suicide rate of 35 per 100,000 is already one of the world’s highest, local experts say.

According to figures collected by the Youth Psychological Aid Center, telephone calls to its hot line from people who said they were on the verge of committing suicide nearly doubled last year to 1,400, from 750.

But Moody’s just raised their credit rating, and the international bankers are quite happy, so no harm done.

Incidentally, Lithuania’s economy crashed after a wave of lending to first-time home buyers.

When someone tells you, no doubt with a “Obamunism” sign in their hands, that governments have to run their budget like a family, and we’re placing a massive debt burden on future generations, and the rest of the claptrap, hand them a brochure about Lithuania, and describe in painstaking detail the hell on Earth that exists there. Tell them about how they cut everything to the bone, and all it did was sink the country’s workers into depression. Tell them about how the country has the highest increase of emigration in decades, because there’s nothing for the people there. Tell them about how their austerity model has made things worse.

Come to think of it, tell Mrs. Greenspan, too.

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David Dayen

David Dayen