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 The Stimulus: Waiting for the Jobs That Aren't Coming
By Robert Wicke


The stimulus has been distant third in public issues lately, ranking behind health care reform or "deform," so far, and the so-called climate bill. I apologize in advance that there are so many numbers in this, many of them huge, unimaginable numbers. But, there is really no way to avoid this, and still talk about the relative values of one thing as opposed to another.

On July 20, 2009, special inspector general, Neil Barofsky issued a
report to Congress, projecting that eventually Federal Government
outlays to the financial sector would reach $24 trillion, and that they
were currently at $4.7 trillion (AP).(1) According to John Bellamy
Foster of Monthly Review, in an interview on Democracy Now,
the federal government has already handed out about "$12 trillion
in various forms: cash, capital infusions, debt subsidies, loans and so on to the financial institutions, .. " He said that the stimulus package is
only a small part of that." ($787 billion or about 6% of the total). (2)
On that, it hardly matters exactly which is the correct number; the point is that the stimulus is dwarfed by aid to the financial sector, in any case. (And it must be remembered, as well, that not all of the stimulus relates to jobs, some of it is tax breaks, for example.)

Given the relative small size of the jobs programs in the stimulus,
how do the principal people in the Obama administration think
the stimulus is doing, as far as jobs are concerned? "Credit card"
Joe Biden marked the 200-day anniversary of the stimulus package
by giving a speech at the Brookings Institution in which he claimed
that it had created 500,000 to 750,000 jobs. He cautioned against
giving it too much weight by itself, but he wanted the audience to know that the stimulus was "pulling its own weight." (3) Curiously, the week after that, Biden was upstaged by the Council of Economic Advisers, who claimed 600,000 to 1.1 million jobs had been created or saved. ((4)

The media we know to never be sticklers for accuracy. So, immediately the punditry began trumpeting the higher number. One million after all makes for a nice round sound bite for easy repetition throughout the whole system. But, even the range from the Council of Economic Advisers is based on guesswork, given that nobody is quite sure what the baseline for such a claim might be.(5) How many of those jobs had been created and how many saved; and what would the job situation look like without the stimulus?

Are there reporting errors, particularly, when it's difficult to know
what to count? Construction workers, for example, could be
counted several times, because they may be reported as working
on several different parts of a project at the same time. Each time
ringing in as another job.

Worse yet, what happens when that 600,000 to one million jobs
figure is compared against the baseline of population increase?
In order to meet that, it's necessary to create 100,000 new
jobs a month, just in order to keep us from increased unemployment. .
In fact, the stimulus thus far hasn't actually so kept up. The real
unemployment rate includes people who are no longer considered
to be in the labor force plus people working part time in lieu of a
full time job. This rate rose from 16.3 to 16.8%, in August, and
the official unemployment rate then at 9.7% rose for each of the
first two quarters of the year, as well as for the Summer months,
excepting a small dip in July. (6)

As far as jobs programs go, any real assessment of the administration's efforts would indicate that, actually, the Obama administration hasn't really even caught up to where the Roosevelt administration reached in 1933. What came before the WPA, the Works Project Administration, was the PWA, the Public Works Administration, which by the fall of 1933 had succeeded in putting barely 100,000 people to work. The PWA worked the same way the Obama administration's stimulus works, strictly through the private sector, i.e. by government contract.

After a social worker by the name of Harry Hopkins joined the government, FDR's administration shifted to direct hiring by Federal Agencies, which was far quicker and involved a scale sufficient to meet the emergency. It was not required to negotiate a few reams of contractual material, before they could start. The money went into the pockets of the workers and was spent to take care of their needs, so added almost immediately to demand. Likewise for the CCC (Civilian Conservation Corp) (7)

"[Roosevelt's] government hired about 60 per cent of the unemployed
in public works and conservation projects that planted a billion trees,
saved the whooping crane, modernized rural America, and built such
diverse projects as the Cathedral of Learning in Pittsburgh, the Montana state capitol, much of the Chicago lakefront, New York's Lincoln Tunnel and Triborough Bridge complex, the Tennessee Valley Authority and the aircraft carriers Enterprise and Yorktown. It also built or renovated 2,500 hospitals, 45,000 schools, 13,000 parks and playgrounds, 7,800 bridges, 700,000 miles of roads, and a thousand airfields. And it employed 50,000 teachers, rebuilt the country's entire rural schools system, and hired 3,000 writers, musicians, sculptors and painters, including William de Kooning and Jackson Pollock." (8)

More to our particular point, these programs created about eight million jobs.Comparing it to the present stimulus and accepting the administration's dubious numbers, it was eight times as much. Real unemployment is around 25 million counting marginally attached workers and part timers. Even if we use 20 million instead, employing 60% if the unemployed would be about 12 million.

The New Deal jobs programs took place over two or
three years, but we would have to really hurry from where we are now to come anywhere close to putting 12 million to work. After 8 months, we still may or may not have succeeded in putting 600,000 to one million to work. (Nobody knows for certain if we've done any better than say 200,000 - 300,000, or about 2% of what the New Deal did.)

The stimulus package relies on the problematic model of the government contractor, which the roads we drive on daily are an abysmal example of. Shoddy engineering and workmanship are practically guaranteed by the need to establish one nearly permanent job site after another, to keep the whole business alive. Moreover, there are two basic models of government contracts. One is the cost plus contract, which very nearly always ends up producing cost-overruns, and, the other is the fixed price version, which take a long time to negotiate, during which time, of course, no jobs are being created.

This all leads me to wholesale, stick-my-neck-out, sans crystal ball
stab at the future. If anything like full employment is any part of our future, the ironclad link between jobs and commercial interests will have to be at least relaxed, if not eliminated. When jobs are off-shored, as even such things as US income tax services and investment reports are today (to India), demand in the US drops down to dangerous levels. Unfortunately, at this juncture it is quite difficult if not impossible to imagine the Obama administration abandoning its corporate lean sufficiently to do what is necessary. And, to imagine a sufficient portion of Congress doing so is even harder.

Of course, the global front is almost as problematic As Michel Chossudovsky of Global Research in Canada has additionally pointed out, in the race to the bottom, the endless competition as to who will work for the least heating up, decline happens to demand globally. In large portions of the globe it goes down.

We may end up in the US needing a permanent jobs program, along the line of the WPA or the CCC, paying out in livable wages, not in the minimum wage or less. That's probably an advance. We could get more of what we need done, and would go beyond the gross inequity of people's livelihood being determined so exclusively in corporate boardrooms. Why, after all, should workers have to pay when the bosses screw up - talk about injustice!

(1) http://www.msnbc.msn.com/id/32010841/ns/business-us_business
(2) http://www.democracynow.org/2009/9/17/philosopher_
grace_lee_boggs_and_sociologist
(3) http://www.propublica.org//ion/stimulus/item/bidens-stimulus-speech- a-context-check-903
(4) http://www.propublica.org/ion/stimulus/item/has-the-stimulus-really-created-or-save-one-million-jobs-911
(5) Ibid.
(6) http://www.bls.gov/news.release/empsit.nr0.htm
(7) For a brief, but good summary, see Charles Peters, "Tilting at Windmills," Washington Monthly, 41(2), March/April, 2009
(8) James K. Galbraith, "No Return to Normal: Why the Economic Crisis, and Its Solution, are Bigger than You Think," Washington Monthly, Op.Cit.