Deficit Hysteria Wins: GOP Congress, Obama White House Succeed in Stopping Jobs Growth
The US economy managed to create virtually zero jobs during August, leaving the unemployment rate at 9.1 percent. And revised estimates lowered the number of jobs created in July. With the GOP Congress and the Obama White House still paralyzed by mindless deficit hysteria and unwilling to fund any credible effort to create jobs, the economy is stalled. From The Financial Times :
The unemployment rate remained steady at 9.1 per cent, with 14m American unemployed. Economists had hoped for a 68,000 boost to non-farm payrolls, which was already modest growth from the previous month.
This is the worst non-farm payrolls report since August 2010.
Private sector payrolls added just 17,000 jobs, well below the 95,000 estimate and the manufacturing sector lost 3,000. In the public sector, where budget are being cut, 17,000 jobs were lost last month despite the return of 22,000 workers following a partial government shutdown in Minnesota.
This is exactly what reputable economists have been warning about. With the housing market still declining, consumers still struggling to recover from losing $8 trillion in wealth from the housing bubble crash, and exports hampered in struggling economies oversees, only government can fill the void. But our leaderless government is paralyzed by a preoccupation with deficits, when only deficits are keeping the economy from going under. It is the same in Europe, where incompetent central bankers continue to demand national economies shrink deficit spending in pursuit of fantasy confidence fairies. Krugman sighs:
Too bad there weren’t any prominent economists warning that the obsession with short-term deficits was a terrible mistake, that austerity would undermine hopes of recovery. Oh, wait.
The awful thing is that those of us who warned about all this — based not on some unorthodox doctrine, but on basic textbook macroeconomics — weren’t so much argued down as just ignored. Somehow, those with actual power were convinced that fiscal austerity wasn’t just an option but the only option, and that anyone arguing with that — even people like me and Joe Stiglitz, who had a few easy-to-understand credentials — were just not part of the serious discussion.
Beyond the fraud-riddled banking system and the incompetent Federal Reserve and banking regulators who failed to do their jobs, we know exactly whom to blame for the stalled economy. Deficit hysterics, strangle the government zealots and those dedicated to making Obama a one term President have done everything they could to prevent the federal government from using its spending and monetary powers to boost the economy and create jobs. They’ve been aided and abetted by an incompetent political team at the White House, led by the President’s own debt-focused rhetoric with his Party’s leadership foolishly following. None of them deserves reelection.
“Pivot” is the most misused term in the nation’s capital, where it’s confused with spinning.
There is no shortage of ways to put people to work. doing worthwhile things. There’s no shortage of work that needs to be done, and we have millions of willing and able workers to do the jobs. They need only for Congress to appropriate the money.
With the government’s real borrowing rates effectively at zero, there hasn’t been a better time for the country to invest in its own people, its infrastructure, its future. We are not an impoverished nation; we have enormous wealth, but it’s concentrated and sitting idle, because people with little vision and those with ill will are strangling the economy.
Failure to act when so many are suffering is criminal neglect, but the wrong people are going to jail.
Dean Baker has the details, Zero Job Growth in August . . .
David Dayen, Fitting: Economy Added Exactly Zero Jobs in August
New York Times, Job Growth at Halt in August; Worst Showing in 11 Months