Government and Jobs

Government, claim the conservatives, should not be in the business of creating jobs. My question is, why not? In a calamitous economic downturn, like the one we are seeing now, government ought to be the employer of last resort. There are a number of reasons for this.

In an asset-driven economic collapse, the value of fixed assets like stock or property, tends to deteriorate to the point that it no longer has any worth to the holder. The current collapse was led by the housing sector, in which over-indebted mortgage holders found the value of their property worth less than the outstanding mortgage. Far from owning an asset, what they now held was a liability, anywhere up to fifty percent of the outstanding mortgage.

The net result is that households drew back from spending and attempted to pay down their outstanding debts, such as credit cards, in order to build up their savings. Where it was feasible for the mortgage holder, they walked away from their mortgage debt, in other words, went into foreclosure.

From the banks perspective, during the housing boom, they were making packets of money. When the Ponzi scheme collapsed, those profits vanished. The banks, who had been lending money to anyone with a pulse, no believed that the economic conditions, which they created, were no longer conducive to lending money. The net result was a credit squeeze, in which the banks decide that no-one was a good credit risk, and they stopped lending to anyone.

People were no longer spending, more and more people were losing their jobs, and businesses could no longer borrow to finance employment and operations. Employment slumped, and those people with jobs were forced to work longer hours, often for lower wages. The unemployed could no longer find work in the private sector, who had stopped hiring and were laying off jobs.

The situation only became worse. Businesses were under pressure from shareholders, who demanded more and more profit in order to take the risk of owning stock. Businesses found it expedient to outsource jobs to low wage countries around the world, which further decimated employment.

The final nail in the employment coffin, as is so often the case, was driven home by the conservatives in Congress and state houses around the country. Government, runs the line, does not create jobs, it should be up to the private sector to create jobs. In addition, it claimed that during a crisis, the deficit should be reduced.

The net result was a hemorrhage of jobs by government at the worst possible time for job seekers. Just as teachers, police officers, and fire fighters were flooding onto the market, the market was closing the employment door, leaving no outlet for the jobless. They were thus forced to turn to unemployment insurance, which pays a small amount for a certain period of time, say one hundred weeks.

Since private employers were not hiring and jobs were becoming harder to find, there was only one solution to get people back to work. Conservatives decided that they were not going to allow that to happen. They put a stop to any thought of government employment by claiming that government does not create jobs.

From the point of view of all those government employees that were losing their jobs, government had been creating jobs, good jobs, that kept them employed and vastly improved the economy by so doing. Those government employees pay rent or a mortgage, purchase products such as furniture, vehicles, and computers. Their income adds to the economy, which means that more private sector workers are able to find jobs, pay rent, and purchase products.

Government does not create these jobs for the sake of creating jobs. Those people provide essential services for which people would otherwise have to pay a great deal, or go without. That is the price of living in an advanced society. In order to grease the wheels of that society, those that have more must pay more than those that don’t, to enable the entire population to have certain things. Roads, bridges, power lines, waterways, harbors, airports are all things that are created by government. Government has to have office buildings, computers, furniture and a host of other products in order to work effectively. All of these things create jobs for workers.

In the face of withering unemployment, during which corporations do not hire, it is incumbent on government, in an advanced society, to create employment. There are so many things that need to be done in this country, that corporations just are not willing to do, because it is not cost effective for them.

Vaccines, for instance, bring very little income to large pharmaceutical companies. In order to ensure that their population is safe and secure not just from enemies abroad, but disease here in the United States, government must finance basic research in a whole host of areas. Corporations are just not in a position to fund this sort of basic research.

The Large Hadron Collider in Bern, Switzerland, was a joint, cooperative effort between nations. It was created to determine the nature of matter, a fundamental need for humans to understand our universe and what it is made of. It created hundreds of jobs and the research that emerges from it will help fuel study across the globe.

Similarly in the United States, NASA produced a startling array of research that continues to have repercussions around the world. Corporations just did not have the huge sums of financing necessary to enable space flight. Now, private companies are starting to enter space, but without NASA, it would not have been possible.

The green economy has a long way to go, and countries like China and Germany are spending large amounts on research into alternative energy. The United States is falling behind in this race and needs to step up research into wind, solar, hydro, geothermal and other innovative forms of energy. This research will fuel a future containing thousands of new jobs.

Our environment has been decimated by the actions of corporations who are responsible for large scale deforestation, river, ocean and air pollution. Our fisheries have been devastated. What the nation needs now is a massive public works program to reclaim forests, clean up rivers, oceans and streams, retro-fit power plants, mines, and chemical plants with pollution-proof systems.

We can, with determination, turn back the climate change clock, reclaim essential minerals like potassium, phosphorus and others. What it will take is a public works program on the scale of the interstate highways and other programs like the Tennessee Valley Authority that put people back to work. It was government that did this, not corporations. In order to get America back to work, this is what we need to do.

To Governor Romney and the conservatives in the Republican Party, stop putting barriers in the way of hard working Americans. Let Americans get back to work and produce a clean, energy efficient country, and do it before anyone else. Let the world see what a truly great nation can do when they work together. Anyone can rip minerals out of the Earth. it takes a special people to conserve what they have.

 

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