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The Vicious Circle of “Job Creation”

February 18, 2010

E.J. Manning

In the opinion of President Obama’s economic advisors, economic growth comes from skills and education. This voices the same, tired rhetoric of the last few decades that have led nowhere but to higher stress and poorer health as Corporate America pumps the ignorant full of packaged food and great expectations. Somehow, college and training is going to save the economy as the corporate elite continues to raise the bar for education requirements. We have become a nation of over-educated sheep that follow the dictates of government and cling to corporate support as our only means of survival.

Another key to economic growth is seen as investment in physical capital, once again seen as investment in education, incentives for investment and financial regulatory reform. In case you were wondering, YOU are that physical capital! None of these political keys actually creates substantial economic growth except that more government jobs will be created.

The Economic Advisors see potential enhancement through productivity gains, mostly through technology. As usual people are expendable and short-term. The system of infrastructure and provision is seen as the strength of the nation, even the world. People are simply the tools to get there. This is a radical and cynical departure from the distant past where business actually concerned itself with people on a basic level instead of numbers and systemic enhancement to prosperity. This view is perhaps the only innovation that has been derived from the last sixty years of politics and corporate collaboration in Washington.

This cynical view is softened by innovation in political programs using concerned political language. “We” must build a system of robust support to ease the hurt in declining economies or wherever jobs are being lost while encouraging support for higher-paying, higher-productivity models. “We” must improve the economy through “progressive taxation, a health care system that provides security and stability, a strong educational system, and a secure social safety net.”

The Great Recession has left America with an uneasy truth.  Politics lives based on your jobs. There is difficulty in generating jobs when employers are worried that they can’t sell what they make or offer.  To close the vicious circle, it’s hard to see how consumers will start spending again until the job market improves. Which comes first, the chicken or the egg? This conundrum has politicians and business alike stymied because of the economic risks that must be faced. Until the reward becomes great enough, there will be little real economic growth. In reality, the system has become a parasite to the process of life and now seeks to control the host.

Of course, we already know that the greed of Wall Street has not been suitably contained. Investment banks that still exist have been converted into regular banks in order to survive the crisis. Once again, the investment world is building itself up by leveraging bets on the market using the same regulations that brought the nation and much of the world to its’ knees. The fundamentals have not changed and as a result there is modest growth in that industry despite a frozen economy otherwise.

The official tally is that the nation has lost 8.4 million jobs. In the Economic Report of the President created by Obama’s Council of Economic Advisers, there is little encouragement. The economy is going to have to create a great deal of steam to rise above the current job crisis. The report predicts 95,000 jobs per months will be created for 2010 with an unemployment rate of 10%. The imaginary presidential scenario shows 190,000 jobs monthly and 250,000 respectively for the years 2011 and 2012. Naturally, the unemployment rate will continue to decrease. This says nothing about those that have become dependent on unemployment benefits. Eventually, benefits will expire and the number of discouraged workers will swell, playing further hell with statistics. This reflects the real plight of the American job force.

Meanwhile, if the new jobs bill actually passes, the following is expected to perk up the economy. There is a $13 billion payroll tax break for employers that hire new workers. $35 million is being allowed for small business depreciation. $2 billion dollars in new bonds will be created allowing the nation to build infrastructure. In addition, the bill proposes another year for the federal highway bill. Neither of these actions is going to solve the economic malaise that plagues the nation. There isn’t enough potential reward for those that have the credit or cash to invest in a future where people simply aren’t buying. While politicos have been playing up gains and improvement in the economy in the hopes that you will believe it, the real numbers and quiet news reports show continued job losses because Corporate America cannot be sustained in this economy.

If you lack something to do, feel free to read the Economic Report of the President. http://www.gpoaccess.gov/eop/2010/2010_erp.pdf This e-book has 451 pages that shed light on what the Obama Administration has for building up the economy in 2010. You can now appreciate why the United States needs immigrants. “We” need some backs, more human capital, to boost national physical capital.

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