The Zero Economy from HUFFPOST 2SEP11

WE are at a turning point in this recession (I feel we are still in a recession, do not see huge corporate profits and obscene executive pay and compensation packages proof the recession is over) and the middle class, the working class and the poor are exhausted. We are exhausted by the struggle to hold on to our homes, our jobs, our dreams..and we are exhausted by having to fight tooth and nail politicians on the local, state and federal level who are so incompetent they offer no leadership to help us get through this recession or all too often are nothing more than political whores doing the bidding of the rich and corporate America, their pimps. We had hope for a better nation, for better government, for better lives after the 2008 election, now all we hope for is the strength to hold on. Pres Obama, are you going to give us reason to have faith in your administration again, or are you going to nail the coffin shut and leave the nation to deteriorate further into Third World status? 

The Bureau of Labor Statistics reports today no jobs were created in August. Zero. Nada.
Well, not quite. The strike at Verizon reduced the labor force by 45,000. Minnesota government employees returned to work, adding 22,000. So in reality, America added 23,000 jobs. Almost zero.
In reality, worse than zero. We need 125,000 a month merely to keep up with population growth. So the hole continues to deepen.
Since this Depression began at the end of 2007, America's potential labor force -- working-age people who want jobs -- has grown by over 7 million. But since then the number of Americans with jobs has shrunk by more than 300,000.
If this doesn't prompt President Obama to unveil a bold jobs plan next Thursday, I don't know what will.
The problem is on the demand side. Consumers (whose spending is 70 percent of the economy) can't boost the economy on their own. They're still too burdened by debt, especially on homes that are worth less than their mortgages. Their jobs are disappearing, their pay is dropping, their medical bills are soaring.
And businesses won't hire without more sales.
So we're in a vicious cycle.
Republicans continue to claim businesses aren't hiring because they're uncertain about regulatory costs. Or they can't find the skilled workers they need.
Baloney. If these were the reasons businesses weren't hiring -- and demand were growing -- you'd expect companies to make more use of their current employees. The length of the average workweek would be increasing.
But the length of the average workweek has been dropping. In August it declined for the third month in a row, to 34.2 hours. That's back to where it was at the start of the year - barely longer than what it was at its shortest point two years ago (33.7 hours in June 2009).
It's demand, stupid.
So what does a sane nation do when the consumers and businesses can't boost the economy on their own?
Government becomes the purchaser of last resort. It hires directly (a new WPA and Civilian Conservation Corps, for example). It helps states and locales, so they don't have to continue to slash payrolls and public services. (The help could be structured as a loan, to be repaid when unemployment drops to, say, 6 percent.)
And it hires indirectly -- contracting with companies to rebuild our crumbling infrastructure, including school buildings, to take another example.
Not only does this create jobs but also puts money in the hands of all the people who get the jobs, so they can turn around and buy the goods and services they need -- generating more jobs.
Get it? Not exactly rocket science.
So why don't Republicans get it? Either they're knaves -- they want the economy to stay awful through next Election Day so Obama gets the boot. Or they're fools -- they've bought the lie that reducing the deficit now creates more jobs.
Every time you hear anyone say we're "broke" or "can't afford to spend more," tell them we'll be in worse shape if we don't. If the economy remains dead in the water, the ratio of public debt to GDP balloons.
And remind them that the federal government can now borrow at fire-sale rates. Interest on the ten-year Treasury bill is 2 percent.
Do you hear me, Mr. President? Please -- be bold next week. And if, as expected, Republicans refuse to go along, take it to the people. Mobilize the public. Use the bully pulpit. That's what you have it for.
One more thing, Mr. President. You also have to tackle inequality. When so much income and wealth continues to flow to the very top, America's vast middle class still won't have enough purchasing power to boost the economy. Priming the pump is necessary but won't be sufficient without enough water in the well.

Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.

The President's Bold Jobs Bill (Maybe) from HUFFPOST 17AUG11

GOOD, solid economic advice. The question is, will the President even consider any of it? Maybe, if he hears from enough of us. Let Pres Obama know what you think at http://www.whitehouse.gov/contact 
The president is sounding like a fighter these days. He even says he'll be proposing a jobs bill in September -- and if Republicans don't go along he'll fight for it through Election Day (or beyond).
That's a start. But read the small print and all he's talked about so far is extending the payroll tax cut and unemployment benefits (good, but small potatoes), ratifying the Colombia and South Korea free trade agreements (not necessarily a job-creating move), and creating an infrastructure bank.
An infrastructure bank might be helpful, depending on its size.
Which is the real question hovering over the entire putative jobs bill -- its size.
Some of the president's political advisors have been pushing for small-bore initiatives that they believe might have a chance of getting through the Republican just-say-no House. They also figure policy miniatures won't give aspiring GOP candidates more ammunition to tar Obama as a big-government liberal.
But the president is sounding as if he's rejected their advice.
That's good policy and good politics.
Good policy because any jobs bill has to be big enough to give the economy the boost it needs to get out of the gravitational pull of the Great Recession.
Right now all the old booster rockets are gone. The original stimulus is over. The Fed's "quantitative easing" is over.
Combine the budget cuts state and local governments continue to make with the slowdown in consumer spending, the reluctance of businesses to expand or hire, and the magnitude of unemployment and under-employment, and you need a big new booster rocket. I'd estimate the shortfall in aggregate demand to be $300 billion to $500 billion this year alone.
A bold jobs plan is also good politics. With more than 25 million Americans looking for full-time jobs, the wages of people with jobs falling, and an economy on the verge of a double dip, the President has to come out fighting on the side of average people.
Besides, Republicans won't go along with any jobs initiative he proposes -- even a tiny one. Better they reject one that could make a real difference than one that's pitifully small and symbolic.
If Republicans reject it, Obama can build his 2012 campaign around that fight. Maybe he'll even call Republicans on their big lie that smaller government leads to more jobs.
What would a bold jobs bill look like? Here are the ten components I'd recommend (apologies to those of you who have read some of these before):
1. Exempt first $20K of income from payroll taxes for two years. Make up shortfall by raising ceiling on income subject to payroll taxes.
2. Recreate the WPA and Civilian Conservation Corps to put long-term unemployed directly to work.
3. Create an infrastructure bank authorized to borrow $300 billion a year to repair and upgrade the nation's roads, bridges, ports, airports, school buildings, and water and sewer systems.
4. Amend bankruptcy laws to allow distressed homeowners to declare bankruptcy on their primary residence, so they can reorganize their mortgage loans.
5. Allow distressed homeowners to sell a portion of their mortgages to the FHA, which would take a proportionate share of any upside gains when the homes are sold.
6. Provide tax incentive to employers who create net new jobs ($2,500 deduction for every net new job created).
7. Make low-interest loans to cash-starved states and cities, so they don't have to lay off teachers, fire fighters, police officers, and reduce other critical public services.
8. Provide partial unemployment benefits to people who have lost part-time jobs.
9. Enlarge and expand the Earned Income Tax Credit - a wage subsidy for low-wage work.
10. Impose a "severance fee" on any large business that lays off an American worker and outsources the job abroad.
Some of these won't cost the federal government money. Others will be costly in the short term but lead to faster growth.
Remember: Faster growth means a more manageable debt in the long term. Which means the President could tie this (or any other jobs bill of similar magnitude) to an even more ambitious long-term debt-reduction plan than he's already proposed.
A bold jobs bill is good politics and good policy. Let's wait to see what the President actually proposes.
Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.