Finding The Right Employment Formula

President Obama speaks on the jobs report at Lehigh Carbon Community College in Schnecksville, Pa., Friday, Dec. 4, 2009. (AP Photo/Susan Walsh) AP Photo/Susan Walsh

President Obama has always been too scattered and unfocused when it comes to addressing the primary social, economic and political challenge of his presidency: high unemployment.

But he is starting to "get it," as is evidenced by a series of job creation proposals the White House released Tuesday. It is especially significant that he has picked up on the calls by labor unions and grassroots groups for using at least some of the $200 billion in left over Troubled Asset Relief Program (TARP) money to encourage small businesses to expand and to promote hiring.

Obama is not going as far as the unions have asked. He reportedly plans to use $20 billion and $40 billion in unused bailout funds to free up lending to small businesses and perhaps another $30 billion for tax credits designed to encourage the hiring of new workers.

That's an encouraging, if still tepid, intervention.

What's encouraging is that the president is beginning to link his happy talk about the economy to practical initiatives.

Until recently, Obama took most of his advice regarding unemployment concerns from Treasury Secretary Tim Geithner and National Economic Council director Larry Summers, who are about as in touch with the real economy as Marie Antoinette was with the hungry citizens of 18th century Paris. As such, the president kept talking about how things were getting better even as the unemployment rate hit the highest levels in a quarter century - and the real unemployment rate (factoring in those who have given up looking for work and those who the underemployed) compares with Depression-era numbers.

A series of wake-up calls culminating in the confirmation that the country was experiencing double-digit unemployment for the first time since Ronald Reagan's first term got Obama listening to key members of Congress and the more serious members of his Cabinet, such as Labor Secretary Hilda Solis, and, frankly, political aides who are terrified by the prospect of trying to convince voters in the 2010 congressional contests that they should feel good about an economy where one in every ten Americans is jobless.

So Obama is saying - and doing - some of the right things:

But he must step it up if he wants to tackle daunting jobless figures in some parts of New England and the Great Lakes states.

Moving roughly a quarter of the leftover TARP money from Wall Street to Main Street is not going to jumpstart the economy in the most battered regions of the country - regions where, it should be noted, Democrats will be facing some of their toughest fights to defend House and Senate seats in 2010.

Where to begin?

The president has borrowed a good idea (using the remaining TARP funds for job creation) from the AFL-CIO.

He should borrow a few more.

The labor federation continues to press the Obama administration and Congress to move quicky to:

1. Extend the lifeline for jobless workers. Unless Congress acts now, supplemental unemployment benefits, additional food assistance and expansion of COBRA health care benefits will expire at the end of the year. They must be extended for another 12 months to protect working families from bankruptcy, home foreclosure and loss of health care. Extending benefits also will boost personal spending and create jobs throughout the economy.

2. Rebuild America's schools, roads and energy systems. America still has at least $3 trillion in unmet infrastructure needs. We should put people to work to fix our nation's broken-down school buildings and invest in transportation, green technology, energy efficiency and more.

3. Increase aid to state and local governments to maintain vital services. State and local governments and school districts have a $178 billion budget shortfall this year alone--while the recession creates greater need for their services. States and communities must get help to maintain critical frontline services, prevent massive job cuts and avoid deep damage to education just when our children need it most.

4. Fund jobs in our communities. While workers go without jobs, important work is left undone in our communities. We should put people to work restoring our environment, providing child care and tutoring, cleaning up abandoned houses and more. These are not replacements for existing public jobs. They must pay competitive wages and should target distressed communities.

Obama should, as well, move to change policies that are causing unemployment.

To do so, he should act on the restructuring of the auto-industry bailout to prevent plant closures that are taking place as part of the auto-industry bailout and he should adopt a new approach to international trade that addresses outsourcing of jobs and the country's gaping trade deficit. As it happens, a smart initiative on trade, the Trade Reform, Accountability, Development, and Employment Act, was introduced this week in the Senate by Ohio Democrat Sherrod Brown and has attracted more than 125 supporters in the House.

"We want trade and we want more of it. But, we need a new direction," explains Brown. "Done wrong, trade sends our jobs overseas. Done right, trade can foster new business and job growth at home, and can lift up workers in developing nations. The TRADE ACT will help Congress and the White House craft a trade policy that benefits workers, business owners, and our nation."

Obama can be a jobs-jobs-jobs president. But to do so he must make a deeper commitment to job creation while at the same time recognizing that bad bailout and trade policies are critical causes of rising unemployment.


By John Nichols:
Reprinted with permission from The Nation

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