US Presidential Politics And Jobs
by Seth Sandronsky

February 9, 2004

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In January, U.S. firms hired 112,000 new workers, the Labor Dept. reported.

In December, 16,000 new jobs were created, up from a revised total of 1,000.

Thus 2004, a year that will end with a presidential election, began with a rebound in hiring. However, the January jobs data fell short on two counts.

First, hiring growth was less than the Bush administration’s forecast of new job creation. Second, the number of workers entering the job market exceeded the total of new jobs created.

Moreover, the loss of unionized manufacturing jobs continued. In contrast, many of the new service jobs being created pay lower wages and benefits.

Yet administration officials such as N. Gregory Mankiw, chairman of the president's Council of Economic Advisers, were upbeat at the January jobs report. He expected new hiring to increase in the long run.

Mankiw might learn a thing or two about the long run by talking with discouraged workers who have given up searching for paid work as they think that it will not be offered to them. The Labor Dept. counted 432,000 of these folks in January, about the number of people now living in the city of Sacramento.

Away from the White House, Democratic presidential candidates such as Sen. John Edwards have countered Mankiw’s view that improved hiring is poised to continue. Edwards criticized the U.S. trade and budget deficits for hampering new investment for job creation.

Crucially, he and fellow Democrats (Dennis Kucinich, Howard Dean, John Kerry, Wesley Clark and Al Sharpton) vying for the party’s nomination seem unable to grasp that U.S. borrowing is an essential part of world commerce.

The fact of the matter is that the national and global economy are sustained with such red ink.

Private debt helped to fuel U.S. and world growth in the 1990s. During that decade, the U.S. jobless rate was lower, boosting some workers’ wages as the federal government’s budget stayed in surplus.

But the deflating of the stock market bubbles created an economic situation in which private borrowing was not enough to sustain domestic U.S. spending based on lending. Thus the federal government has boosted its debt to take up the slack, thanks in part to increased lending from foreign creditors.

What would happen without the overall rise in U.S. borrowing? For starters, job creation would be weaker and economic expansion less robust in George W. Bush’s America.

Why are Democratic presidential candidates averse to tackling the role of U.S. debt and jobs creation? For starters, they might have to explain how American workers have become more productive in the past two years, yet have gone deeper into debt.

When considering debt and jobs, there is a big difference between government and private debt. Take the federal deficit and the deficit on the current account (mostly trade) with the rest of the world.

Private-sector borrowing by firms and households can and does cause some of them to go bust in a jobless recovery after a recession. However, the federal government is not likely to become bankrupt due to its debt anytime soon.

Private-sector debt is under-reported. Uncle Sam's debt is front-page news.

On that note, President Bush and Congress could pursue a fiscal policy of temporary deficits to create public-sector employment, instead of fat contracts for weapons makers. But the latter is corporate America which owns the means of production in the nation and controls much of the government.

Accordingly, the president has proposed a "more war and less butter" budget that weakens federally-spurred job creation and non-military spending generally for the 2005 fiscal year. American workers are perhaps dimly aware of this backward march into the future.

Why? Pin no small part of the blame on the blurry focus around the creation of jobs and debt in Democrats’ run for the White House.

What such silence reveals is the power of a wealthy minority. It alone stands in the way of a government that improves working people’s lives.

Such a political agenda for the U.S. population would meet their basic needs for food, health care, jobs, schools and shelter. The absence of this focus is a reflection of how firmly the U.S. ruling class has captured political and ideological power.

In that light, the politics of U.S. job creation need to be re-framed to reflect the realities of American workers, those employed, under- and unemployed. Otherwise, the current discussion about work in the 2004 presidential election will continue to be limited.

Seth Sandronsky is a member of Peace Action and co-editor with Because People Matter, Sacramento’s progressive paper. He can be reached at: ssandron@hotmail.com

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