I keep hearing the Republicans say how the poor economy is the product of Obama's policies. This is a re-post of an blog I posted in February 2008. It proves that the economy was sinking long before any of us even knew who Barack Obama.
* 39 American soldiers killed in Iraq in January 2008
America lost 17,000 jobs in January. This is the first time in five years that we've actually lost jobs. Economists had forecast a gain of 70,000. What is worse about this statistic is that it doesn't even tell the entire story of our economic tailspin because it doesn't factor in which industries gained and which lost and what that means to American workers.
This is the 19th straight month that the manufacturing sector has shed jobs. Meanwhile the construction industry lost 141,000 jobs in 2007. So, where are the gains we've had in the past coming from? Well, one place is the hospitality business (and even they only gained 19,000 in January instead of the forecasted 30,000). Who would you guess, in general, pays the most and offers the most benefits to its workers - manufacturing and construction or hotels and fast food? Yep, you're right, the better-paying jobs tend to be in production and building while the lower paying positions are clustered together in hospitality.
It seemed as if the powers that be weren't even aware that the economy was going south until recently even though those of us in the working classes had been feeling insecure for a while. We noticed that houses were being foreclosed and the ones for sale were sitting on the market longer. We noticed how much more it cost to fill our cars up with gas and how our heating bills had gone up and that the package of chicken breasts that used to cost $3.00 now cost $7.00 instead.
But, you know, the stock market kept going up and that seemed to be the only economic indicator that that registered in the minds of the great economic thinkers. The business shows on television chortled gleefully when the Dow went up and up. I guess if you get the majority of your income from stocks and bonds and interest on your investment you think that as the stock market goes, so goes the economy.
Of course, it isn't true. It is actually - as the consumer goes, so goes the economy. Consumers are us and we were becoming tapped out. For the first time this year, our savings rate actually went into negative territory because we were spending more than we were taking in via credit cards and home equity loans. We cut back on Christmas so holidays sales fell. Naturally, the mortgage crisis played a part in shaking our confidence in our banking institutions. George H W Bush had the savings and loan fiasco. Now young George has the mortgage loan disaster. How is it that we never learn from our mistakes? De-regulation, the mantra of the Republicans, does not work, has never worked. You cannot trust organizations to police themselves because they will always get caught up in greed and over-reach and who pays the price? Why that would be us, the taxpayers.
So now, we are heading into recession and in order to try to avert it, Congress is debating a stimulus package which will be too little, much too late. First, short-term, we aren't even targeting the best way to get this money into the economy so it will be spent quickly. Studies have shown that the two places to put that money to have the desired effect is 1) food stamps and 2) extending unemployment benefits. But, oh no, the president is opposed to that, I guess because he thinks the people who need those two benefits don't "deserve" it and, as usual, the House went right along with his orders. If the House bill goes through, those of us who pay taxes and make under a certain income ($75,000?) will receive checks for $650. And where will we get the money? Why, we'll borrow it from the Chinese just where we've been getting the billions we need to pay for the Iraq War.
And what does giving people a quick fix of a one-time check do in the long-term? Almost nothing. We would be much smarter to take the $150 billion the stimulus package is estimated to cost and pour it into programs to rebuild infrastructure, like the bridges that are in dire straits all across the country. Many of these projects have already been approved and just need the money to proceed. That way, instead of giving folks a one-time shot, you give them a JOB! Reminds me of that old saying, "if you give a man a fish, you feed him for a day but if you teach him to fish, you feed him for life."
That brings us back to where we started. What we need in this country are not checks but jobs. Why is that so hard to figure out?