Voters live in the midst of a devastating social calamity: More than 20 million people in need of full-time work, wages falling, insecurity rising, poverty at record levels. The few jobs being created pay less than those that were lost. Suicides are rising. Stunningly, even the life expectancy of lower-educated white men and women is falling.
The chattering classes, largely oblivious to the scope and depths of the misery, are focused instead on the so-called “fiscal cliff,” the automatic spending cuts and tax expirations scheduled to kick in after the elections, unless a lame duck session of Congress acts. Their conversation centers on the terms of austerity. Will Republicans let top end Bush tax cuts expire? Will there be a grand bargain with Medicare and Social Security on the table? The presidential candidates are pressed on their plans to balance the budget, not on their plans to get the economy going.
This has left Ben Bernanke, the conservative Republican who heads the Federal Reserve, virtually alone in issuing ever more pressing alarms.
“The weak job market should concern every American. High unemployment imposes hardship on millions of people and it entails a tremendous waste of human skills and talents,” he said earlier this month. “Five million Americans have been unemployed for more than six months, and millions more have left the labor force, many of them doubtless because they’ve given up on finding suitable work.”
The Federal Reserve has adopted extraordinary measures – committing itself to sustaining low interest rates until the recovery is well in place. It is now considering a “jobs trigger” – announcing that it would continue to act aggressively until unemployment level comes down to 5.5 percent.
But there are limits to monetary policy. Interest rates are already low; companies aren’t hiring because they don’t see demand for their products. They lack customers more than they lack credit.
Thursday, September 27, 2012
Robert Borosage @ Campaign for America's Future: