Saturday, October 21, 2006

Why the Republicans Can’t Create Jobs

If like me, you’re wondering where the jobs are going or if your retirement savings will inevitably dwindle down to nothing, you must be concerned about our country’s economic guidance. It’s really not my desire to engage in partisanship, so let me offer this as a question: Is it possible that Republican values are simply unable to solve our current economic downturn? (And remember, when one says ‘economy’ one usually means “Do I have a job?”) I see five reasons why this may be the case.

Reason #1. War is now much, much smaller than our economy. President Bush, in thinking that the best defense is a good offense, is also hoping that war is good… financially, that is. Wrong. War, at least the kind we have now, is so much smaller than the current American economy that it barely makes a dent. The Second World War might have been big enough at its time, but things are very different now. To start with, we already have the machinery of the next war built, probably three times over. And no significant growth of the research-and-development world will be spurred by any upcoming war. Yes, many new military inventions may have money heaped upon them, but the logistics will hardly fuel our economy.

Which brings us to Reason #2: the age of resource consumption is over. The military buildup of previous wars involved huge physical generation of materials—metal, ore, chemicals, and so on. Yes, war and other commerce still takes plenty of natural resources, but our economy—job growth—is no longer driven by the amount of material we harvest and move. Job creation now is more closely tied to creative and commercial activities than material-intensive industries. The administration’s strategy of unfettered corporate access to natural resources might lead to some jobs but not to meaningful or stable economic growth. Even while we seemingly still have natural resources to plunder in the name of jobs, there is a reason that it doesn’t translate well to jobs.

And that is Reason #3, automation. In the 70’s we all wondered if automation would sweep away jobs in huge, painful swaths. The answer now is clear. No, the phenomenon will occur surreptitiously with each downturn in the economy, so we won’t even notice the relationship to automation. The telecommunications collapse is a good example. (If you aren’t aware, telecommunication workers describe their industry as an employment catastrophe.) The economic crest of the Internet boom enabled huge ranks of workers to temporarily join a service industry that has very little true need for labor. When the dollars of the boom years disappeared, countless thousands became unemployed. Our economy as a whole absorbs the shock, but not so for the individuals.

The Republican value that “what’s good for business is good for the economy” won’t help a lot of those unemployed individuals because of Reason #4: business is no longer busy-ness. The strength of our commerce is solving problems by creating goods and services, and there’s still more of that going on here than anywhere but China. But, left entirely to its own machinations, as Republican values seem to espouse, American business is increasingly focused on mergers and monetary manipulations. From Enron to Worldcom there’s pressure on all businesses to concentrate less on creating productive activity—busy-ness—than playing the money game. The rules are so lax and our values are so skewed to short-term “paper results” that we can barely detect where the manipulation has occurred. We need to force business back to basics… that’s neither liberal nor conservative, socialist nor capitalist, it’s just good business.

And finally, Reason #5 is that the Republicans, despite chest-thumping “we’re pro-business,” don’t believe in the biggest business on the face of the planet. It’s the most accomplished organization civilized society has ever seen, having created more jobs, provided more services, and fostered more health than any other business. It’s the American Government, and however much we all love to bash its red tape and bureaucracy, you can’t deny its record. The first stated purpose our Constitution’s is to “create a more perfect union,” and the fifth is to “promote the general Welfare” but the current administration wants to dismantle 200 years of gains in the public sector. This is ostensibly in the name of efficiency but really from a philosophical aversion to federalism… this after the most affluent 15 years in American history. Like it or not, the government is our largest job engine, not just for its direct payroll but for the money it disperses more widely than the free market alone would do. Yes, every few years we need a belt-tightening—not just in the private sector but the public sector—to weed out waste, but the current diet is seeing the patient wither away. Simply pushing all social responsibility to the states destroys the gains that have been made and squanders our country’s greatest advantage against all opponents, social or political… economy of scale. We’re throwing out the baby with the bath water.

Getting to the true root cause of job creation ultimately boils down to two items: creating wealth and spreading it around. With each passing day it seems, less and less of our financial news centers around creating wealth. Instead we suffer endless circular news about the value of the dollar or investor confidence. These are results of wealth, not the causes. For causes, look to technology, alternate energy, health improvement, education, environment-saving, and peace-making! As for spreading the wealth around, this gets to the taboo “S-word,” socialism. As we tighten our economic belt we are increasing the gap between the haves and have-nots. It is a purely political choice how wide we want the gap to be, generally driven by whether “I” have a job, how strongly one supports the fifth purpose of the Constitution, and what type of country you want us to have.

We need a war to fix our economy, but it’s one against fossil fuel consumption (not just where we get it from). Most Americans seem to understand this but it’s something Republicans are loathe to do. Now that’s a war that’s big enough to help our economy.

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