By any measure, the last decade was a rotten one. It started with a stolen election and the worst terrorist attack in American history. It is ending this week with the United States mired in two wars and deep into a catastrophic recession.
It’s hard to imagine that the next decade could be worse, but could it?
There are worrisome signs. An increasing number of economists are saying that without major government intervention, the next ten years could be a “jobless decade.” “It will be the mother of all jobless recoveries,” predicts economic historian John Steel Gordon.
The recession threw 8 million out of work and the losses are slowing, but still piling up. A large percentage of those jobs have simply disappeared, businesses have closed, work has been offshored.
While the stimulus package passed by Congress was big and slowed the pace of job loss, the problem was even bigger. The Economic Policy Institute estimates that the Obama stimulus bill has created or saved between 170,000 and 235,000 jobs per month starting in the second quarter of 2009. Yet, Princeton economist Paul Krugman says that the country would have to produce an additional 300,000 jobs per month for five years to achieve full employment.
Unfortunately, the economy is weak and far from producing such spectacular numbers. Economist David Levy says the country faces a new era of chronically high unemployment, averaging 8 percent or more over the next decade. He calls it the “New Abnormal.”
The situation threatens both Democrats and Republicans. Republicans are all too aware that the economy collapsed on their watch. Years of deregulation and “hands off” enforcement of financial rules created a climate of lawlessness on Wall Street. The Democrats, of course, are now the party in charge. Polls show that Americans are running out of patience with the lack of meaningful relief out of Washington, D.C., and they are starting to blame Obama, not Bush for the state of the economy. The most recent Rasmussen poll taken after the holidays shows that 56 percent of Americans now disapprove of Obama’s performance, reportedly the steepest first year decline in modern history.
Franklin Delano Roosevelt, who took office three years into the Great Depression, understood that there was no “recovery” without jobs and that Democrats couldn’t keep power unless they returned people to work. He quickly started experimenting with new economic policies and programs to address the crisis. While there were better known programs in Roosevelt’s “New Deal,” historian Jason Scott Smith recently documented that two-thirds of emergency spending between 1933 and 1939 actually went to fuel job-creating public works programs.
Many Americans have not forgotten the lessons of this era and are demanding that the administration focus like a laser on job creation, since it will be many years before effects are felt. The newly formed Jobs for America Now coalition is pushing Congress to adopt a five-point plan that goes beyond tax incentives to private industry and calls for direct job creation to help communities meet pressing needs, especially in areas of severe unemployment.
Without a deepening, serious and sustained effort to put people back to work, the coming decade could be even worse than the last, a legacy no Democrat or Republican can afford.