Why The Democrats Deserve To Lose: Unemployment, Unemployment, Unemployment

Let me begin by saying that although Democrats deserve to lose, Republicans certainly don’t deserve to win.

1) The economy is in terrible shape. Unemployment is dismal. Long-term unemployment in particular is dramatically worse than it’s ever been.

The long-term unemployment situation continued to deteriorate in May, as an additional 47,000 unemployed workers crossed the six-months-unemployed threshold. There are now 6.8 million workers who have been unemployed for longer than six months, which is unsurprising given that there are now well over five unemployed workers per job opening. The median, or typical, unemployment spell was 23.2 weeks (5.4 months), and nearly half (46.0%) of all unemployed workers had been unemployed for over six months, both record highs.

Click through and scroll down to look at the graph, which is one of the more scary-ass trend lines I’ve ever seen.

2) We know how to fix the economy; what’s needed is a truly gigantic, short-term injection of stimulus from the government, to get the economy moving and people working. Unfortunately, there has not been any net fiscal stimulus.

The proper measure for fiscal stimulus is not spending by the federal government; it is spending by all levels of governmeTnt. And when you look at the contributions to US GDP growth (Table 1.1.2 at the BEA site), total government spending has been a drag on growth over the past two quarters. The increases at the federal level have not been enough to compensate for the spending cuts at the local and state levels.

3) The long-term damage caused by high levels of unemployment will be a drag on the US economy (and on Americans individually) for many years to come, maybe decades.

Taken as a whole, the results suggest that the labor market consequences of graduating from college in a bad economy are large, negative, and persistent. [...] There is a growing body of evidence on the deleterious effects of long-term unemployment on individual well-being, including lowered earnings, which can persist for many years after re-employment, as well as increased mortality, poorer health outcomes, greater probability of depression and other mental health issues, and marital instability.

4) Many Americans seem to believe that we can address the long-term deficit problem, or we can address unemployment, but we can’t address both. That’s not true.

If we spend an extra $1 trillion over the next three years in unemployment-reducing stimulative fiscal policies, we raise–at current interest rates–real government debt service in 2030 by $7 billion a year. [...] Whatever we do (defined as spending up to an extra $1 trillion) in the short run (defined as the next three years or so) is rounding error in the context of our long-run fiscal stability problems. [...]

Think of it this way: our natural gas pipes are corroding, and there is a good chance that tomorrow ten years from now we will have a gas leak and if we do not fix it the house will explode. And Henry Blodget is using that danger to argue that we shouldn’t turn on the heat tonight even though it is snowing outside…

In fact, unaddressed long-term unemployment makes it harder to deal with the deficit.

In the US, there are two political parties that matter. Republicans are obviously hopeless on this issue; the average Republican Senator is considerably more likely to pound iron nails into Superman’s skull using only a hammer made of cotton balls, than to support a really good fiscal stimulus bill.

What’s horrible is that the Democrats have been only marginally better. I don’t think the Democrats are saints — far from it — but I would have imagined, once, that self-interest would motivate the Democrats in Congress and in the White House to do everything they possibly can to bring unemployment numbers down, because that is the single factor that will make the most difference in the next election. But instead, Democrats have continually settled for quarter-measures and half-measures.

I think the Democrats will pay for their tepid response to unemployment in November — and they’ll deserve to lose. A majority party that doesn’t treat our current levels of unemployment as an urgent crisis does not deserve to retain power. Unfortunately, the Democrats losing equals Republicans winning, and they don’t deserve to win, either.

This entry posted in Class, poverty, labor, & related issues, Economics and the like, Elections and politics. Bookmark the permalink. 

26 Responses to Why The Democrats Deserve To Lose: Unemployment, Unemployment, Unemployment

  1. 1
    shaun says:

    Yes, let’s punish the Democrats. It’s so simple that way, no deep thinking is required.

    Let’s punish the Democrats for a half-decent health-care reform bill, for a not-big-enough stimulus package that has made the different between catastrophe and survival in many communities, for genuine education reforms, for rallying behind two woman Supreme Court nominees who are and will be counterbalances to the Roberts corporatocracy.

    Yes, punishing is so simple. Don’t like this comment? Punish Shaun by deleting it. (I dare you).

    But you may be interested to know that most of those jobs went away when the Republicans were in charge and most of them were not coming back no matter who was in charge. This is what is known as a long-term economic trend. I quite agree that the only way to create jobs is with ever larger stimulus packages, although that would only help some.

    But like it or not, there are not going to be ever larger stimulus packages. That is a political reality, and to reflexively want to punish the Democrats — knowing full well what the Republicans would bring — is not solution to anything. It is making matters worse.

  2. 2
    Dan Hicks says:

    I agree with all four of your points — policy-wise, we should be implementing massive fiscal stimulus. But I don’t see how you get from there to the conclusion that, if there isn’t massive fiscal stimulus, voters will punish Democrats in November. First, voters might look at the actual achievements of this Congress — moderate health care reform, hopefully moderate financial regulatory reform, maybe even some sort of bill that allows the EPA to treat greenhouse gasses as pollutants — and decide that, even if they royally screwed up on the economic front, they did a good job making progress on some highly controversial and long-term-important issues. Second, to the extent that the Tea Party Movement has a coherent public policy platform, opposition to fiscal stimulus is a central plank. In highly contested districts — the only ones where voters will really have the opportunity to punish Democrats — support for fiscal stimulus could attract the ire of the Tea Party. For all the policy sense stimulus funding makes, it might be very dangerous for a legislator’s political career. The Democratic leadership might legitimately believe that another round of stimulus money would threaten their majorities even more than letting the economy continue to languish. (That’s not to say that they’re right to treat their majorities as more important than passing the right public policies.)

  3. 3
    Robert says:

    Huge fiscal stimulus isn’t possible anymore, if it ever was. The people who will end up paying the taxes to pay the bill downstream know it; they won’t expand their spending today, they’ll contract it. The multiplier isn’t even 1.

  4. 4
    Fred says:

    I pretty much agree with this, and I’m glad someone wrote it.

    Honestly, these days (more so than ever thanks to the activist Supreme Court! – oh, wait, there’s not such thing as conservative activism) I tend to divide law-makers (independent of party) into three categories: definitely bought, probably bought, and possibly not bought. Since the third category is restricted to the independently wealthy who vote against their short-term economic interests and will therefor never be large or powerful enough to challenge the first, which will never willingly enact reform of the sort I like, I figure we’re all screwed.

    My dad says I’m too much of a cynic when I say this, but I point out that having been born to Regan, come of age politically to Monica Lewinsky, had my first and second elections stolen from me, and finally managed to elect a moderate who turned out to be a… moderate, it’s not surprising that I’m bitter.

  5. 5
    Kevin Moore says:

    One thing Democrats in Congress have in common with their Republican colleagues: they don’t give a crap about us.

  6. 6
    RRCH says:

    Have a question here -

    Why cannot the unemployed, at least the ones that live along our coast lines, be hired (at saying about $25.00 to $30.00 per hour), to clean up the oil spill mess along the eastern coast lines and have that money billed to BP?

    I realize that handling that stuff is unhealthy but workers could be give protective clothing and special masks to keep their exposure down to a minimum. This would help businesses along the coast that depend on tourist trade and would also be hiring some of the unemployed (possibly by the thousands), so why cannot that be done? BP has promised to repay all business loss, why not make them also pay for the RECOVERY of our coastlines?

  7. 7
    Silenced is Foo says:

    The stimulus was a fine size. It was just misspent. Far too much of it ended up vanishing into office buildings instead of actual hands-on work. The kind of work where you have something concrete (literally) to show for it.

  8. 8
    nobody.really says:

    Huge fiscal stimulus isn’t possible anymore, if it ever was. The people who will end up paying the taxes to pay the bill downstream know it; they won’t expand their spending today, they’ll contract it. The multiplier isn’t even 1.

    Where was Robert during the debate of the Bush “tax cuts”? If you believe that the multiplier for any policy that requires future tax increases will be less than 1, then such policies were suicide. Indeed, if you really believe what you’ve said, then you’d favor balancing the budget immediately, even if it requires tax increases, because the economic harm of the tax increases today would be less than the harm of the tax increases tomorrow.

    I’m looking forward to reading a post on Robert’s blog favoring repeal of the Bush tax cuts, among other revenue enhancements.

  9. 9
    Ampersand says:

    Robert, I must agree with N.R.. Conservative objections to deficit spending seem opportunistic, not based in any actual principle that applies when Republicans are in power.

    As for the idea that receivers of stimulus funds will inevitably put the money in savings rather than spending it, that’s why no one (other than Republicans) advocates just giving more money directly to rich people. There are all sorts of policies — temporary cuts in payroll taxes, increasing unemployment benefits, grants to states with spending strings attached, etc — which will not lead to the problem you describe.

    This is really another case of conservatives being unwilling to acknowledge reality. “Stimulus can’t reduce unemployment” belongs on the same page as “human-driven climate change is a myth” and “evolution is a lie.”

  10. 10
    Ampersand says:

    Shaun, I don’t think you read my post very fairly. I acknowledged that Republicans are even worse than Democrats, and by and large I will be advocating that people vote for Democrats in November.

    But although I don’t call for the Democrats to lose in November (I very much hope they do well), I nonetheless think they will lose in November. And when that (probably) happens, it’ll be justified.

    In a democracy, I think it’s reasonable for citizens to be angry at a ruling party that not only isn’t capable of addressing sky-high unemployment, but also gives very little sign of being passionately committed to doing all they can to reduce unemployment. To say otherwise is to say that citizens of a democracy shouldn’t hold politicians accountable for results.

    I quite agree that the only way to create jobs is with ever larger stimulus packages, although that would only help some.

    But like it or not, there are not going to be ever larger stimulus packages. That is a political reality, and to reflexively want to punish the Democrats — knowing full well what the Republicans would bring — is not solution to anything.

    I hate this sort of passive construction. It is a political reality that there will not be a large stimulus package. But one reason this is a political reality is that Democrats are not fighting for a large stimulus. I’m all for acknowledging political realities — but not to the extent of pretending that politicians and political parties shouldn’t be criticized for the policy positions they hold.

    Don’t like this comment? Punish Shaun by deleting it. (I dare you).

    I see by your website that you’re a professional writer and editor. Shouldn’t using a cliche this old embarrass you?

  11. 11
    RonF says:

    Let me begin by saying that although Democrats deserve to lose, Republicans certainly don’t deserve to win.

    Hear, hear. And within the minds of tens of millions of people who feel the same – although likely for reasons other than yours – lies the genesis of the Tea Party Movement.

    Robert, I must agree with N.R.. Conservative objections to deficit spending seem opportunistic, not based in any actual principle that applies when Republicans are in power.

  12. 12
    RonF says:

    Hm. Can’t edit my previous comment. So, to add:

    That’s an example of a common mistake; conflating “conservatives” and “Republicans”. Consider how disappointed you all are with the Democrats. You’ll vote for them, but you don’t consider that they are truly following either the principles they are reputed to embrace nor the commitments they made in the last election. Would you call the Democrats “liberal”?

    So, then. Conservatives tend to vote for the Republicans in elections. But just because the Republicans may be in power at any given time doesn’t mean that conservatives are. If they had been then you wouldn’t have seen the tax-and-spend practices of the Bush administations, you’d have seen immigration law reformed and enforced, etc., etc.

  13. 13
    RonF says:

    The increases at the federal level have not been enough to compensate for the spending cuts at the local and state levels.

    The states can’t print money. They have less ability to borrow it. And their elected officials are a lot closer to the electorate than Federal officials are and are thus less likely to flout their will in borrowing money they can’t readily pay back or in raising taxes. That whole “officials closer to the people are less likely to disobey the will of the people, so let’s put as little power in the hands of the Feds and as much as we can in the hands of the States” is a founding principle of Federalism. It’s not a bug. It’s a feature, and one of the main ones.

    Here in Illinois we are in debt up to our eyeballs. We are #2 behind California. We can’t even make payments on the (grossly inflated) pension funds for public employees and to State creditors. But the people are adamantly against increasing our debt. Thank God. I don’t see how we can pay back what we already owe, never mind taking on more debt.

  14. 14
    RonF says:

    First, voters might look at the actual achievements of this Congress — moderate health care reform, hopefully moderate financial regulatory reform, maybe even some sort of bill that allows the EPA to treat greenhouse gasses as pollutants — and decide that, even if they royally screwed up on the economic front, they did a good job making progress on some highly controversial and long-term-important issues.

    Please, please, please – let the Democrats run on having pushed through the healthcare bill and would allow the EPA to regulate Americans’ use of energy, etc. on the basis of CO2 production. If they do that I’ll revise my estimate that the GOP will not take over the House and Senate in 2010.

  15. 15
    RonF says:

    Shaun, I don’t think you read my post very fairly. I acknowledged that Republicans are even worse than Democrats, and by and large I will be advocating that people vote for Democrats in November.

    But although I don’t call for the Democrats to lose in November (I very much hope they do well), I nonetheless think they will lose in November. And when that (probably) happens, it’ll be justified.

    I was on blogs in September of 2008 that were saying almost the same thing. By “almost”, I mean the same thing except with the word “Republicans” and “Democrats” reversed. But then there were other blogs that said similar things but that they were going to sit the election out – vote for no one rather than vote for a Republican. I don’t hear nearly as much of the latter in this cycle. Is there much “I’m going to sit this one out rather than vote for a Democrat” in the left blogosphere these days?

    The demographic is a bit different. President Obama got a lot of new voters out, many of them young ones. Will they return to the polls? Especially in an off-year election with no charismatic history-maker leading a ticket. You know the Republican demographic will turn out. They always do.

  16. 16
    RonF says:

    What kind of jobs will a stimulus package create? And what is the long-term outlook for those jobs once the stimulus package money is spent?

  17. 17
    RonF says:

    Far too much of it ended up vanishing into office buildings instead of actual hands-on work. The kind of work where you have something concrete (literally) to show for it.

    When the whole stimulus package debate was going on I said that I had no problem with spending money on things like building roads, fixing bridges, etc., etc. There’s enough work there to spend money on for 10 years.

  18. 18
    Jake Squid says:

    When the whole stimulus package debate was going on I said that I had no problem with spending money on things like building roads, fixing bridges, etc., etc. There’s enough work there to spend money on for 10 years.

    Another point of agreement between us? Yeah, there’s a ton to be done on infrastructure – roads & bridges, electrical grid, water system and so on. Not only would big government spending on these things provide jobs, but it would also make other economic activities easier for business in the future as well as possibly creating new businesses around new technologies for infrastructure.

    It’ll never happen, though. Each of those systems would have to virtually cease functioning to see spending there, apparently.

  19. 19
    GallingGalla says:

    Unfortunately, the Democrats losing equals Republicans winning, and they don’t deserve to win, either.

    There are more choices than this. Really, you’re presenting a choice between a party of blatant open fascism (the Repubs) and fascism with a velvet glove over the iron fist.

    Another choice: General strike. At some point, there won’t be anything else to lose. A nationwide, economy-wide general strike by 90% of the population – basically everybody but the fat-cats that pay the bills of both parties – will wake politicians up.

  20. 20
    La Lubu says:

    Those “grossly inflated pensions” RonF talks about in Illinois? Well, the majority of pension payments are under $25,000 per year. One percent of Illinois pensioners receive over $100,000 per year. Illinois pensions are 27% behind the national average.

    Just to bring some perspective. RonF is talking about all those grossly overcompensated retired teachers with $30,000 pensions (and no Social Security). That sort of thing.

  21. 21
    GallingGalla says:

    La Lubu – I don’t understand why the retired teachers would not get social security? Did they not pay into the system?

    Not that adding in soc sec changes your main point. $25K – $30K plus soc sec is not a lot to live on, especially if you’re talking about a couple where the other partner only gets soc sec, or maybe has a miserable 401K that yields $10K.

  22. 22
    Robert says:

    As for the idea that receivers of stimulus funds will inevitably put the money in savings rather than spending it, that’s why no one (other than Republicans) advocates just giving more money directly to rich people. There are all sorts of policies — temporary cuts in payroll taxes, increasing unemployment benefits, grants to states with spending strings attached, etc — which will not lead to the problem you describe.

    Sure. Although, you must admit that cuts in payroll taxes were pretty much the opposite type of stimulus policy than what’s been implemented.

    But even if you do it that way, the point isn’t that the government gives Richie Rich a million dollars in stimulus, hoping that he’ll spend it, but really he banks it and so it doesn’t work. Rather, the government gives a bunch of people money, people who don’t pay taxes by and large, and they go out and spend it, and thus stimulus.

    My point is that Richie Rich is still the guy paying taxes, and he still realizes “crap, I’ve got a bunch of taxes to pay coming up”, and so he cuts back on his spending. It doesn’t matter that his money doesn’t come from the government; he’s still cutting back, and contracting the economy. Stimulus only works if, for whatever reason, the people with money don’t connect the stimulus with a future tax bill.

  23. 23
    Joe says:

    I don’t think there’s much chance of a general strike in the US. Especially not for the bottom 90% of the income distribution. That would be all households with an income under 125,000$. The national household median is 45k

    This isn’t perfect data. But I don’t think most american’s think we have a fascist state that needs to be brought down.

  24. 24
    Thene says:

    RonF:

    Hear, hear. And within the minds of tens of millions of people who feel the same – although likely for reasons other than yours – lies the genesis of the Tea Party Movement.

    From here: Approximately three-quarters of those who identify themselves as members of the tea party national movement are either registered Republicans or lean toward the GOP. A whopping 77 percent of them voted for John McCain in the November 2008 presidential elections, says the new poll conducted by Quinnipiac University, Conn.

    So yes, the Tea Party do want the Republicans to win elections. They did then, and they do now. Please stop lying in Alas threads, Ron. It’s rude, because it forces the rest of us to take the time to show you the data to rebut your very obvious lies when what we’d rather be doing is talking seriously about unemployment. You’re a derail-happy troll.

  25. 25
    RonF says:

    Thene, I don’t see how anything you presented in that post is contradictory to my point. I would not be surprised to see that it’s true that about 3/4 of people who consider themselves Tea Party Movement members or sympathizers are Republican voters. The reason that the Tea Party Movement has come about is that they’re not happy about voting Republican. They’re not satisified with the Republican party. They think that it has departed from principles that they feel it should hold or that it once did hold or that it has claimed to hold – which is very similar to what many people feel about the Democratic party.

    They’ve voted for it’s candidates because to them it’s the lesser of two evils, again just as many people who vote Democratic feel about the Democratic party. They don’t want the Republican to win as much as they want the Democrat to lose. Here in Illinois we have an excellent example of this in the Senate Race. The Republican candidate to replace Sen. Burris (who was appointed to replace Barak Obama) is widely viewed as liberal by conservatives because he’s favored cap and trade and gun ownership restrictions and opposes Arizona’s new immigration laws. But they’ll vote for him, because he’s less liberal than his Democratic opponent. A couple of conservative candidates are vying to get support, but the conservatives fear that if they split their vote they’ll get another Democratic senator who would be even worse than Kirk. They’re not so much voting for the Republican as they are voting against the Democrat. It’s a binary solution set, unfortunately.

    If you want to talk about unemployment, then go ahead and do so. You can start by responding to my #16.

  26. 26
    RonF says:

    Jake – yeah, water systems. My God, every so often when they dig up either water supply or sewage pipes in Chicago they dig out wooden pipes – which actually hold up well as long as they’re buried well and aren’t exposed to oxygen, but after 100+ years they’ve about had it. The city finds out about this when a street collapses, usually right downtown in the oldest part of the city.

    Chicago’s water supply comes from Lake Michigan. Water pumping stations that are about 4 miles out into the lake (gotta stay away from pollutants coming off the shore or from overflow from the Chicago River) supply drinking water to the city via brick tunnels that, again, were built 100+ years ago. One collapsed last year where it ran underneath Lake Shore Drive (a main traffic artery in Chicago that runs where you think it would). It turned out that they couldn’t fix it because it is so old and fragile that it would just keep collapsing. How many of the others are like that? How close is Chicago to losing an adequate supply of drinking water?

    That’s where to put money. I cannot imagine that Chicago is unique in this regard. Boston, Baltimore, New York; any city over 100 years old are all likely having such problems. You could take every dime of stimulus money and put it into infrastructure improvements. Chicago is in decent shape when it comes to liquid waste managment, but I imagine that there are incipient crises in many cities when it comes to sewage with collapsing pipes and systems that mix rain runoff with sewage (the problem is that floods can then flood you with sewage).

    Floods! Flood management. Another problem in Chicago, which was built on a swamp and the confluence of the two biggest hydrological systems in North America (the Great Lakes and the Mississippi). Nashville, New Orleans, who else was in the news lately because of flooding? There’s an opportunity to spend some stimulus funds.

    And that money would cycle through companies buying raw materials and tools and industrial supplies and workers consuming goods and services, etc., etc. It would also enable the employment of people with relatively low levels of formal education. And at the end of the day you’d have things that maintain or improve people’s quality of life. Democrats, Republicans, Socialists, Libertarians, liberals and conservatives can pretty much all agree that government has to maintain roads and bridges and water and sewage systems. It’s not being done, at least based on what I’m looking at and driving on.