By Lee Harrison, Chairman, Berkshire Brigades and Member, Democratic State Committee
Once again, they’re partying like its 1928 on Wall St. Indeed, three of the banks that took government handouts last year – Goldman, Morgan Stanley, and JPMorgan Chase – had the temerity to announce they’ll be handing out $30 billion in bonuses this year. What a difference a year makes … to some people.
On Main St., however, it’s more like 1932. Average Americans are caught between the hammer of state budget cuts and the anvil of joblessness – and 2010 will be even worse. The state is looking to cut at least $2.6 billion more, taking the budget from seriously lean to outright mean.
What about the federal stimulus? Sure, it saved some jobs and kept the wolf from some doors for a while, but as New York Times Columnist Paul Krugman notes, “The stimulus was far too small given the scale of our economic problems. Unless something changes drastically, we’re looking at many years of high unemployment.”
Berkshire Brigades agrees: If we’re going to break this downward spiral of job losses and budget cuts on Beacon Hill and in city and town halls around the state, we need another federal stimulus package – but it has to be a different kind of stimulus.
“What we’d really like to see isn’t just successful job creation,” adds Krugman. “We’d like to see ‘pump-priming’ or ‘jump-starting’ – that is, we’d like to see stimulus jolting the economy into self-sustaining growth.” But so far, it just isn’t happening. In this altered version of the movie “Ground Hog Day,” most Americans will be stuck reliving 1932 over and over again.
But that was also the year the nation elected Franklin Delano Roosevelt. Guided by Democratic Party values of fairness and economic and social justice – and knowing that investment in infrastructure is never wasted – FDR took on the bankers and started to rebuild America. We really could learn a thing or two from his approach – and his sense of values.
With the winter of 1933-34 approaching – and his Public Works Administration failing to create enough jobs – Roosevelt issued an executive order creating the Civil Works Administration with Harry Hopkins as director. Harry’s task was simply to put people to work, and boy, did he.
Starting in November 1933, Hopkins put 800,000 people to work in just 10 days. (Yes, you read that correctly.) According to FDR biographer Jean Edward Smith, by January the agency had hired four million people – and this is the truly amazing part – during its five-months of operation, the CWA built or repaired 40,000 schools, 500,000 miles of road, 200 swimming pools, and 3,700 playgrounds, while laying 12 million feet of sewer pipe. In addition, says Smith, Hopkins employed 50,000 teachers “to keep rural schools open and to provide adult education in the cities” and hired 3,000 artists and writers. “Hell,” said Hopkins, “they’ve got to eat like other people.”
In less than two months, notes Smith, “Hopkins put people to work in every county and every town in the country,” and less than two percent of his budget went for administrative overhead! But the CWA did more “than provide an overdue cash infusion to the economy,” Smith concludes. “It restored a nation’s self-respect.”
We need to do something similar, and fast. The longer this Great Recession continues, the more corporations scale back investment in plant and equipment, which further slows the economy, making us less competitive as a nation and worsening the toll on young people.
“Young people suffer disproportionately,” says Krugman. Many cannot afford college, while those who do enter the job market often suffer permanent career damage, “never catching up with those who graduated in better times.” Clearly, he adds, “Anyone who really cared about the prospects of young Americans would be pushing for much more job creation.”
Indeed, the same Democratic values of fairness and economic and social justice that guided Roosevelt and Hopkins should guide us today. So, with Christmas signaling the start of the second year of the Great Recession, we say to those Scrooges who decry another stimulus, “Bah, humbug.” If you are really concerned about America’s economic future, learn from the past: It’s the values, stupid.
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But, more to the point, you’re right!
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p>I shudder when people start talking (again) about tax credits or incentives being the way to create jobs. BS! I say. Tax cuts go right into the pockets of the wealthy, who don’t spend them.
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p>The exact same amount of government spending (and don’t be fooled — tax cuts = government spending in the total budget picture) creates the “multiplier effect” that we all learn about in Economics 101.
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p>We need more jobs, NOW! And the way to create jobs is to hire people to do them! All it takes is money, and it seems the federal government is the only one capable of doing that right now.
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p>All you have to do is read the newspapers to know how bad things are. Almost every economic statistic is discouraging. Yet, the stock market continues to rise into lala land because companies are making more money. Sure they are, because they’re reducing expenses like crazy. Their bigest expense? Payroll!
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p>This is the way to prosperity? I don’t think so!