Marketplace®

Daily business news and economic stories

Time to focus on jobs and growth

Commentator Robert Reich says Washington's focus on debt and deficits will not cure what really ails the U.S. economy.

Kai Ryssdal: We know a little more today about how the next round of the budget fight is going to shape up. The GOP named its members of the super committee that’s supposed to agree on $1 trillion-plus in federal budget cuts.

Commentator Robert Reich says the problem isn’t just a failure to compromise. It’s that it takes our eye way off the ball.


Robert Reich: We’re slouching toward a double dip because we’re getting the problem wrong. We’re not in a debt crisis. Our current crisis is jobs, wages and growth.

The economy is almost at a standstill, with almost no growth in the first half of the year. Although Friday’s job report showed 117,000 new jobs in July, that’s not enough to keep up with population growth, which means even more people have stopped looking for work.

A smaller percent of adult Americans is now working full time than in almost three decades.

The Fed cannot boost the economy by itself. Its near-zero interest rates haven’t worked to date and there’s no reason to suppose they’ll work any better in the future.

We also need an expansive fiscal policy. Yet last week’s budget deal makes it politically harder to enact the stimulus we need. There’s a huge gap between what increasingly scared consumers are willing to spend and what the economy could produce at or near full employment.

Republicans continue to claim the original stimulus didn’t work, but revised data show the drop in 2008 far greater than assumed. The economy plunged 8.9 percent in the fourth quarter of 2008 — the steepest quarterly decline in more than half a century. And in 2009 household buying contracted more than it has in almost 60 years.

So, the original stimulus was way too small to offset this. With cash-starved state and local governments simultaneously scaling back their own spending, the stimulus needed to be even bigger.

The only hope now is voters will tell their members of Congress, who are on recess back home, to enact a bold jobs plan to jumpstart the economy. The government can now borrow money more cheaply than ever and use it for our roads, bridges, ports, parks, schools and everything else that’s being neglected — including more than 20 million Americans who want and need work.


Ryssdal: Robert Reich was secretary of labor for President Clinton. His most recent book is called Aftershock: The Next Economy and America’s Future. Next week, David Frum. Send us your comments — click on this contact link.

Related Topics

Collections:

Latest Episodes

View All Shows
  • Marketplace
    11 hours ago
    25:58
  • Make Me Smart
    16 hours ago
    13:06
  • Marketplace Morning Report
    18 hours ago
    7:06
  • Marketplace Tech
    a day ago
    4:17
  • How We Survive
    2 days ago
    14:10
  • Million Bazillion
    2 days ago
    31:13
  • This Is Uncomfortable
    2 months ago
    37:19
  • Financially Inclined
    2 months ago
    12:30
  • The Uncertain Hour
    4 months ago
    22:50
  • Corner Office from Marketplace
    5 years ago
    20:58