Editor’s Note: This is an updated version of the article that appeared in the July 13, 2009, issue of The Nation.
President Obama just told us that the economic stimulus plan has “already saved or created” 150,000 jobs and that another 450,000 will be “saved or created” by the end of the summer, including 125,000 summer-only jobs for students. It’s hard for us to see how this will be the case–we hope it is–but, more important, there’s a huge difference between a job that is saved and one that is created. Just ask the 30.2 million workers who are already unemployed.
Obama has spoken forcefully about laying a new foundation for the economy, one that creates good jobs and rising incomes and that moves us from an era of borrow-and-spend to one where we save and invest and are able to produce more at home than we consume. And we agree these are the right goals for the nation. However, we do not believe that the policies the administration is pursuing will get us there, nor is the administration’s economic stimulus plan likely to move us toward anything approaching full employment.
By the administration’s own estimate, the stimulus plan will “save or create”–there’s that phrase again–just 3.5 million jobs over the next two years. But this amount represents less than 30 percent of the unprecedented 14.5 million jobs that have been lost since the recession began in December 2007, and it is just 12 percent of the workers already unemployed.
And yet this is only part of the story of the job-creation deficit we face. Just as worrying as the massive jobless numbers is the fact that our economy is bleeding jobs in the very sector that must grow in order for us to move away from debt-financed consumption as the principal engine of economic growth. Since this recession began, manufacturing has lost 13 percent of its workforce, reflecting a further downsizing of our tradable goods economy.
If these conditions continue, we will head not just toward a jobless, and a manufacturing jobs-less, recovery but also toward an even more weakened economic base that is incapable of sustaining a vibrant middle class. And yet the conditions will continue unless the administration addresses two serious shortcomings in its economic program.
First, aside from its emergency restructuring of Chrysler and GM, the administration has not outlined a national manufacturing and industrial policy designed to ensure the competitiveness of US-based businesses.
Second, the administration has yet to begin the promised reform of our trade policies with China and the other economies that do not play by the same rules we do.