In “A Generation in the Balance” the Pasty Little Putz says the lack of confidence in government has turned many older voters rightward. Younger voters have not followed. But even they will want results eventually. No shit, Sherlock? Really? Something tells me they’re smart enough to understand that the reason nothing gets done is The Party of No. Prof. Krugman, in “The Jobs Imperative,” says Washington’s assumption that the economic recovery will trickle down to workers is wrong and unacceptable. It’s time for an emergency jobs program. If I never hear the words “trickle down” again it will be too soon. Here’s The Pasty Little Putz:
Do downturns create Democrats? The Great Depression certainly did: The generation that came of age in the 1930s has cleaved to the Democratic Party like no population before or since. And it makes intuitive sense that experiencing a recession at a formative age could inspire lifelong sympathy for the party of the welfare state and lifelong suspicion toward the party of free markets.
In a recent paper, “Growing Up In a Recession,” Paola Giuliano, an assistant professor of economics at U.C.L.A., and Antonio Spilimbergo, an economist at the International Monetary Fund, offer statistics to back this intuition up. Looking at over 40 years of survey data, the authors report that Americans who experienced “macroeconomic shocks” between the ages of 18 and 25 were more worried about poverty and inequality across their voting lives, and more skeptical about the wisdom of the market.
These findings track with the results of the 2008 election, when a cratering economy helped Barack Obama win an extraordinary landslide among young and first-time voters. And they provide grist for the liberal hope that the rising generation will prove as enduringly Democratic as that of their Depression-era grandparents, with George W. Bush playing Herbert Hoover to Obama’s F.D.R.
But the study shouldn’t make liberals too cocky. The authors find that growing up in a recession can encourage conservative instincts as well. Downturns make young voters distrustful of unfettered capitalism, yes. But they also make them less confident in the federal government.
This finding may explain why recent recessions have actually ended up pushing America rightward. The stagflation of the 1970s, for instance, and the hapless liberal response, helped usher in Ronald Reagan’s revolution. (The cohort that grew up with Reagan is the most staunchly Republican in modern history.) The slump of the early 1990s bolstered Bill Clinton’s first presidential campaign — but it also gave a boost to the fiscally conservative populism of Ross Perot, and then to the Republican wave of 1994.
Recessions, it seems, only benefit liberals when an activist government is perceived to have answers to the crisis. When liberal interventions seem to be effective, a downturn can help midwife an enduring Democratic majority. But if they don’t seem to be working — or worse, if they seem to be working for insiders and favored constituencies, rather than for the common man — then suspicion of state power can trump disillusionment with free markets.
Among voters at large, that’s what seems to be happening at the moment. Nothing the government has done across the last 12 months has inspired much public confidence. Of the billions poured out in bailouts and stimulus, a substantial share has gone to privileged insiders and liberal interest groups — Wall Street bankers, auto unions, public-sector employees. Beltway Democrats have spent months laboring on an enormous health care bill that feels irrelevant, at best, to the continuing unemployment crisis. And Obama and his advisers overpromised on the stimulus package, whose economic boost, while real, remains imperceptible to a nation coping with a double-digit jobless rate.
Meanwhile, the regions hardest hit by the current downturn are places where liberals have dominated for generations, and where government is overextended already. (Of the 10 “States in Fiscal Peril” featured in a recent Pew report, nine went for Barack Obama in 2008.) Even if the residents of California or New Jersey or Illinois wanted further expansions of government, there isn’t any revenue to finance them.
So voters are turning rightward instead. In New Jersey, a recent Quinnipiac poll found that 61 percent of voters favored laying off state workers to reduce the current budget shortfall; only 23 percent favored raising taxes instead. Nationally, the percentage of Americans who say that government is doing “too much” hit a 10-year peak this fall. In 2007, 69 percent of the public said that government should guarantee universal health care; now that number is down to 47 percent.
The silver lining for liberals, though, is that this rightward turn hasn’t touched younger voters yet. With 18- to 29-year-olds, Democratic identification remains high, and Obama’s approval ratings are still up over 60 percent.
This suggests that a Depression-style realignment, in which today’s youthful “Obama Democrats” are still voting for hope and change (and grumbling about George W. Bush) in 2050 and beyond, remains within the Democratic Party’s grasp.
But even the young will need to see results eventually. And the more that Democrats flail in the present, the more likely it becomes that the Great Recession will be remembered as the time when liberalism let the future slip away.
How long, NYT, how long? Here’s Prof. Krugman:
If you’re looking for a job right now, your prospects are terrible. There are six times as many Americans seeking work as there are job openings, and the average duration of unemployment — the time the average job-seeker has spent looking for work — is more than six months, the highest level since the 1930s.
You might think, then, that doing something about the employment situation would be a top policy priority. But now that total financial collapse has been averted, all the urgency seems to have vanished from policy discussion, replaced by a strange passivity. There’s a pervasive sense in Washington that nothing more can or should be done, that we should just wait for the economic recovery to trickle down to workers.
This is wrong and unacceptable.
Yes, the recession is probably over in a technical sense, but that doesn’t mean that full employment is just around the corner. Historically, financial crises have typically been followed not just by severe recessions but by anemic recoveries; it’s usually years before unemployment declines to anything like normal levels. And all indications are that the aftermath of the latest financial crisis is following the usual script. The Federal Reserve, for example, expects unemployment, currently 10.2 percent, to stay above 8 percent — a number that would have been considered disastrous not long ago — until sometime in 2012.
And the damage from sustained high unemployment will last much longer. The long-term unemployed can lose their skills, and even when the economy recovers they tend to have difficulty finding a job, because they’re regarded as poor risks by potential employers. Meanwhile, students who graduate into a poor labor market start their careers at a huge disadvantage — and pay a price in lower earnings for their whole working lives. Failure to act on unemployment isn’t just cruel, it’s short-sighted.
So it’s time for an emergency jobs program.
How is a jobs program different from a second stimulus? It’s a matter of priorities. The 2009 Obama stimulus bill was focused on restoring economic growth. It was, in effect, based on the belief that if you build G.D.P., the jobs will come. That strategy might have worked if the stimulus had been big enough — but it wasn’t. And as a matter of political reality, it’s hard to see how the administration could pass a second stimulus big enough to make up for the original shortfall.
So our best hope now is for a somewhat cheaper program that generates more jobs for the buck. Such a program should shy away from measures, like general tax cuts, that at best lead only indirectly to job creation, with many possible disconnects along the way. Instead, it should consist of measures that more or less directly save or add jobs.
One such measure would be another round of aid to beleaguered state and local governments, which have seen their tax receipts plunge and which, unlike the federal government, can’t borrow to cover a temporary shortfall. More aid would help avoid both a drastic worsening of public services (especially education) and the elimination of hundreds of thousands of jobs.
Meanwhile, the federal government could provide jobs by … providing jobs. It’s time for at least a small-scale version of the New Deal’s Works Progress Administration, one that would offer relatively low-paying (but much better than nothing) public-service employment. There would be accusations that the government was creating make-work jobs, but the W.P.A. left many solid achievements in its wake. And the key point is that direct public employment can create a lot of jobs at relatively low cost. In a proposal to be released today, the Economic Policy Institute, a progressive think tank, argues that spending $40 billion a year for three years on public-service employment would create a million jobs, which sounds about right.
Finally, we can offer businesses direct incentives for employment. It’s probably too late for a job-conserving program, like the highly successful subsidy Germany offered to employers who maintained their work forces. But employers could be encouraged to add workers as the economy expands. The Economic Policy Institute proposes a tax credit for employers who increase their payrolls, which is certainly worth trying.
All of this would cost money, probably several hundred billion dollars, and raise the budget deficit in the short run. But this has to be weighed against the high cost of inaction in the face of a social and economic emergency.
Later this week, President Obama will hold a “jobs summit.” Most of the people I talk to are cynical about the event, and expect the administration to offer no more than symbolic gestures. But it doesn’t have to be that way. Yes, we can create more jobs — and yes, we should.
