Labor Day: Put America Back to Work

by Michael Blim

The Democrats are running scared and triaging their Congressional majorities for salvageable seats, according to the Sunday New York Times lead story. The President may be confined to quarters, but they are going to impress Michele Obama, last seen by photo yesterday with two really nice heads of fennel fresh from the White House garden, into campaign work.

Let’s hope that the Democrats don’t send her out to talk about victory gardens. Combined with her husband’s “be patient” counsel after the bad unemployment news last week, I’d almost feel obliged to start building a Hooverville by the Washington Monument, or at least toss around a medicine ball by the White House in remembrance of one of America’s greatest humanitarians and technocrats who saved Europe from starving after the First World War, but couldn’t bring himself to save his own people from the ravages of the Great Depression.

The present occupant of the White House is no Hoover, I guess, though I do reserve the right to second-guess myself another time.  After all, the President has avoided telling us that prosperity is just around the corner, which nobody believed in 1932 and no one believes now. Yet his approach to our grave economic situation seems almost as passive and bloodless as was Hoover’s.

Patience is no answer to the problem of 25 million unemployed. There is nothing on the horizon from factories to banks, workplaces and federal programs that has the remotest chance of putting 25 million Americans back to work within the next five years. The unemployed are suffering terrible damage with the promise of more. Whole chunks of people’s lives are being written off for which there is no recompense, no recovery. Some years back a sociologist compared the annual wages of people from identical backgrounds and work histories. The only difference among them is that one group had spent a year in the Armed Forces during the Vietnam War. Decades later, the one year gap in their job records had left the Vietnam veterans earning less than those who were identical to them, save for the fact that they did not spend a year of their lives fighting the Vietnam War.

Imagine the impact of this recession as it rips through people’s work lives, makes short work of people’s careers, prevents other people from starting, and diminishes their livelihoods.  Imagine their lives as a series of little Vietnams. Where does patience fit in, exactly?

This Administration is running backwards. Its response grows more pallid and miniscule by the day.

Perhaps like Hoover, there are just some things it cannot bring itself to do.

It is obsessed with technocratic tinkering.  It searches high and low for creating incentives, trying in other words to get other people to put people back to work. Now the Administration is testing every little string that has ever been tethered to the bow of economic growth since the days of JFK in hope of finding one or more that can help us hit the target of job creation.

Investment tax credits, payroll tax holidays, and other short-term remedies are being put on a wish list for release this week by the White House, according to weekend press reports. Doubtless simulations have been run measuring their possible impacts, but common sense suggests that this tweaking doesn’t have a chance of really solving the problem of 25 million unemployed. Indeed, one wonders if these new options are being offered simply to bolster the Democrats’ November chances, or whether they are Obama’s versions of Hoover’s medicine balls thrown around to renew America’s hope.

Banks and big businesses are sitting on mounds of cash. Money is cheaper than at any time in recent memory; in fact, you could say that for big firms and banks, it is virtually free. The Fed and the federal government are pressing banks to loan more to small businesses, but lack of business confidence is slowing down loan demand perhaps even more than bankers’ reticence to lend. How can “incentives” move business people who may be making fairly sensible decisions not to invest, expand, rehire and undertake new risks? Fears of higher taxes are the least of business worries.

The President and his fellow White House technocrats are treating the American economy as if it were one rather large, temperamental machine that given the right mix of new inputs, a richer mix of fuel, a better grade of ore, a higher quality steel will produce the output once more that our country needs to return to prosperity. They believe that they can still adjust the machine based upon the same law-like assumptions that made the American economic engine purr throughout the post-World War II period.

Perhaps they are wrong.  The machine, as many economist wonder, may be broken. Or our belief that we could understand it in its complexity and get good results by simply tinkering with the machine’s inputs may be mistaken.

But these strike me as very fine, indeed precious points, a kind of creeping medievalism in our midst, if now in technocratic drag. Best said, they are beside the point: No situation in which 25 million people are unemployed is tolerable, and it requires no deep understanding of the economic system to understand that people need work, and incomes from work, in any event. We need not sweet reason or tinkering. We need to put people to work.

President Obama and his team are flunking the biggest policy test of all. They are searching to get the economy “right,” as good technocrats or bad technocrats.  (I think like John Boehner that Obama should fire Geithner and Summers, but suggest he wait until after the November massacre.) The method, if not the metaphor, should be medical rather than technocratic: like a good doctor, Obama should treat the obvious symptoms, alleviate pain, and help the patient to full recovery, even if as often happens to doctors that he doesn’t have all the facts or even a good diagnosis. The symptom is mass unemployment. The obvious cure is putting people to work.

Getting it “right” is putting people to work, in a practical and in a profound moral sense. On this Labor Day, I say let’s put people to work and let’s see where it takes us. What business will not do, the government must.  And this Administration does the country a grave disservice by persevering in its belief that either business or its tinker-toy incentives will do the job.