A few weeks ago, Charlie Rose facilitated a discussion about the perils of the U.S. national debt among a thoughtful, articulate group of one politician, two businessmen, and two economists. Except for a brief discussion of the bond market, I was able to understand the various points of view about how menacing the projected growth of the debt is and the various things we might do about it. Though tilted toward business-class conservatism, Nobel economist Paul Krugman ably presented a progressive view, and I found the conservatives thoughtful and sensible.
I came away from this discussion among what Rose likes to call “the smart people” convinced that we must address our ballooning debt sometime in the next decade or so. I also came away wondering why the smart people are not devoting similar attention to the President’s budget projections that unemployment will remain around 10% (using the official rate) the rest of this year and not drop by much after that. It strikes me that this is like carefully discussing cracks in the foundation while the house is on fire.
It’s not that the panelists were indifferent to unemployment. Continuing high unemployment is one of the major contributors to our growing national debt. When people are out of work, they don’t pay income taxes, reducing government revenues, and they don’t pay Social Security and Medicare taxes, bringing those entitlement programs’ long-term fiscal problems at us sooner rather than later. Likewise, nobody in this group, not even the guy from the often shrilly conservative Peterson Institute, spoke against the need to increase social-safety-net spending such as unemployment insurance and food stamps in order to reduce some of the suffering among the unemployed.
But while not indifferent to unemployment, they conveyed no sense of emergency. They didn’t seem to realize that the house is actually on fire and even if the fire is not spreading as dramatically as it was last year at this time, letting it smolder indefinitely will eventually destroy the house, even if it doesn’t reignite and burn the house to the ground.
This is why a recent story in The Atlantic, “How a New Jobless Era Will Transform America,” is so important. Though much of the information and analysis in the article will not be new to readers of Working-Class Perspectives, it reaches the right audience: Charlie Rose’s “smart people.” The author, deputy managing editor Don Peck, is a certifiably smart person himself who writes in a clear, compelling but relatively understated way. The article has already gained a lot of attention among leading opinion-makers and, therefore, has a shot at generating a sense of urgency about what Peck very convincingly shows is “a slow motion social catastrophe.”
Peck is not predicting a second dip to the Great Recession. He simply accepts White House projections of persistently high joblessness as the economy keeps “recovering.” Rather, he explains what social science investigation over the past half-century shows about the devastating long-term consequences of such sustained unemployment – its impact on individuals (even after they go back to work), on families, communities, and the nation as a whole, even the majority of those who stay employed through it all:
The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults. It will leave an indelible imprint on many blue-collar men. It could cripple marriage as an institution in many communities. It may already be plunging many inner cities into a despair not seen for decades. Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come.
The article is all the more effective, in my view, because it does not lay out its own or report others’ strategies for reducing unemployment. Instead, Peck focuses on convincing us of the depth, extent, and urgency of the problem. It’s like a 9-1-1 call reporting “the house is on fire,” and urging us, in Peck’s concluding words, “to do everything in our power to stop it now, before it gets even worse.”
The American labor movement has been making that 9-1-1 call to the White House for several months now, and not getting through. Unions in coalition with the Center for Community Change and the National Urban League are backing variations of “A Five-Point Plan to Stem the U.S. Jobs Crisis”. The plan would create (or save) more than 4 million jobs. Though it would add $400 billion to the federal government deficit this year, it would be paid for over the next 10 years by a small (1/2 of 1%) tax on stock trades and other financial instruments — a tax initially proposed more than a decade ago to discourage speculative investment of the sort that led to the financial meltdown in 2008. In other words, the tax is probably a good idea anyway, would be paid only by investors, and it would allow job creation now to reduce the national debt in the long run. Economists from the AFL-CIO and its rival Change to Win met with White House economists to advocate for this program about the same time as Don Peck’s article appeared. The response, I’m told, was “politely dismissive.”
As a Chicagoan who roots for our home-town heroes, I’ve been especially forgiving of Barack Obama. Most of his critics seem to me to underestimate the level of difficulty Obama has faced given the character, severity, and timing of the Great Recession, the anti-functional rules of the U.S. Senate, the complexity of health care economics, and many other things. But it is not difficult for a U.S. President to prioritize a house on fire over a crack in the foundation. Part of the President’s job is to set the agenda for what gets public attention. By establishing a bi-partisan commission to address the national debt while presenting a budget that basically says double-digit unemployment is acceptable for the next couple years, the President is making errors of both mind and heart. It also seems like really dumb politics. Pick up the phone, Barack, the house is on fire.
Jack Metzgar, Chicago Center for Working-Class Studies