Friday, August 19, 2011

The U.S. remains in the Great Recession

The U.S. and California are in a recession- a long recession.   Some communities are in a Depression.  Poorly informed  or uniformed writers and talking heads in the media contest- we can not decide if we are entering a new recession.  They arrive at this strange question because they are looking at profits and corporations.
For working people the Great Recession continues.  It is the deepest recession since the Great Depression.
In July the unemployment rate for persons who did not graduate from  high school was %15. For high school graduates it was 9.3%.  For persons with a Bachelor’s degree or higher it was 4.3.
In July   unemployment in the Black community stood at 15.9 %.  For the nation as a whole, unemployment was virtually unchanged at 9.1% in the month of July. Among whites, unemployment was 8.1%; among Latinos, unemployment was 11.3 %.
What are the consequences?  See the above  video by National Nurses United.  

We must fight back.

Why  do we have persistently  high levels of unemployment?
In a recession businesses downsize and create unemployment.  Usually in a recovery, businesses invest, hire more workers, and contribute to the recovery. This time we are stuck with high levels of unemployment.
There has been a huge increase in the number of unemployed, and they are remaining unemployed for a longer period of time.
A no growth economy,
The number of workers who are underemployed, which includes those who are too discouraged to look for work or are working part-time out of economic necessity, worsened.  
One unemployed worker who spent 35 years in the construction trades has this to say:
"I’m 52 years old, and I’ve been kicked to the curb with no job, no insurance and no unemployment left and I could loose my home.  And yet I still believe in this country’s democracy. When will this end?  Hopefully Congress can get off their butts and do something for the working  people of the United States."
Spending additional money to build roads, schools, etc. generates new jobs for millions.  For example, road building requires construction workers, and  grading and paving equipment, gasoline or diesel to run the machines, raw cement, gravel, and asphalt, surveyors to map the site, engineers and site managers, and even accountants to keep track of costs.

One part of a needed jobs plan is public investment. This includes building roads,  bridges, hospitals,  and refurbishing bridges, tunnels, and public facilities.  We also need to expand the number of teachers, nurses, medical workers, elder and child care workers.  These programs should put new people to work or in training programs.
Creating new jobs in construction or in public sector such as teaching, fire and police creates jobs for the presently  unemployed.   This was the basic insight of Keynesian economics.  Creating jobs, even with deficit financing, causes the economy to grow.  These new workers in turn earn incomes and spend their  incomes, creating additional jobs in service industries, sales, and paying additional taxes.
 These new employees will not receive unemployment benefits. Instead they will gain income and pay taxes.  Economic growth comes from people going to work. We are wasting time and resources.  Each month that we fail to create jobs, the economy gets worse for us all.  
Remember, what caused this jobs crisis – it wasn’t the government. First came the housing bubble and the selling of near fraudulent home mortgages by corporations such as Country Wide.  To make a profit major banks and corporations looted the economy creating an international meltdown.  Now, they have been rewarded with bail out money. 
The major bankers, finance capitalists in the U.S. robbed the bank last year  – and the federal treasury.  They took hundreds of billions of dollars.  – Goldman Sachs alone took $10 Billion.  For example,  Ken Lewis of Bank of America received an $ 81 million dollar pension.  They have not even been punished.

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