In US, A Job-loss Economy Emerges
by Seth Sandronsky
August 4, 2003
The U.S. economy grew at a 2.4 percent annualized rate between April and June. It was the fastest expansion since the July-August 2002 quarter.
Indebted consumers spurred the second-quarter growth, increasing their spending at an annual rate of 3.3 percent. However, rising mortgage rates since mid-June suggest an end to the home refinancing boom, a big boost for consumer spending.
The U.S. invasion and occupation of Iraq sparked a 44 percent jump in war spending for April-June 2003. This Keynesian stimulus from the Bush White House via the American taxpayer is helping U.S. energy and military corporations.
Crucially, the nearly $80 billion being spent by American taxpayers to invade and occupy Iraq just through September 2003, is roughly equal to the total budget deficits of all U.S. states. No state is more bankrupt than California, at the heart of the national economy.
What is striking is how few new private-sector jobs have been created by the administration’s third tax cut (partially titled “jobs and growth”). The same can be said for the Fed’s interest-rate cuts.
It is unclear if the latter led to the 6.9 percent jump in new business spending during April-June 2003. Neither fiscal nor monetary policy are spurring a hiring boom.
The jobless rate in July fell to 6.2 percent, or 9.1 million workers versus 6.4 percent, or 9.4 million workers in June, the Labor Department reported.
But July’s fall in unemployment was due in part to the 556,000 people dropping out of the job market.
Against that backdrop 2,166,260 people are now being held in the nation's jails and prisons. Significantly, these caged human beings are not counted in the official jobless data.
One group out of work gets little press versus that given to the rising second-quarter GDP. Consider black teens.
For African Americans, ages 16 to 19, the jobless rate in July 2003 was 36.0 percent, up from 27.1 percent in July 2002, the Labor Department reported.
White teens of both genders had a 15.8 percent unemployment rate in July 2003, up from a 15.6 percent rate the previous July.
According to a group of academic economists, the 2001 recession (six straight months of contracting gross domestic product) has officially ended. Yet post-recession times such as now (“jobless recoveries”) need federal deficit spending to create jobs where the private sector can’t.
As the staid Financial Times editorialized on July 30, “Fiscal stimulus is the federal government’s business.” Much hangs in the balance for U.S. workers now.
And for the future. The 2004 presidential election is a case in point.
A July 29 headline in the Financial Times read “Seeking employment: why economic recovery without creating jobs spells electoral danger for George W. Bush.” The analysis noted that “by actively seeking to boost growth itself, this Bush administration has indelibly identified itself with the performance of the economy.”
And what a performance it isn’t for the U.S working class. They are living America’s new job-loss economy.
To them, Bush’s “jobs and growth” plan is a hollow promise, indeed. It is time for a new, “New Deal.”
Seth Sandronsky is a member of Peace Action and co-editor with Because People Matter, Sacramento’s progressive paper. He can be reached at: email@example.com.