Jobs, Foreclosures, Speculation: Leadership Needed

Hopefully the depressing May job numbers (net of 54,000 jobs created: +83,000 private sector - 29,000 public sector) will wake up the Obama administration.  The blame is being attributed to speculation-driven high energy prices and the continuing problems with Japan's economy following the earthquake and tsunami.  The public sector job loss results from the ongoing cuts to public services as typified in the jobs-loss-budget forced by the House Republicans earlier this year and the state cuts to services made in many instances while decreasing the tax burdens on the wealthy and corporations.

Make no mistake.  Jobs creation, not deficit reduction, is the Number One domestic priority for the Administration.  Not only is unemployment in itself causing continuing hardships for millions.  It is unemployment, not subprime mortgages, that is now the leading cause of foreclosures. 

The long term deficit problem is something that can be dealt with in time and whose severity will decrease with time as more jobs are created.  It does not have to be addressed now while we are still in the midst of a recession.  Obama must force the Republicans hand on this issue and take the argument to the Amercian people.  Simple Keynesian economics say that you increase government spending in a recession to get the economy moving.  Republican supply-side-economics, as noted in my last post, are a non-starter for job creation. 

So now is the time for Obama to take the argument to the streets and put the lie to the Republican call for tax breaks for the rich and corporations and for services cuts for the rest of us.  It will be difficult to accomplish anything as long as the Republicans control the House and filibuster in the Senate.  The Republicans really have nothing to lose - if recovery is forestalled then Obama will lose in 2012. 

Nevertheless the argument needs to be made - the Big Lie of the ineffectiveness of the 2009 stimulus needs to be rebutted and a new stimulus is needed if the economy is to recover.  Here are six actions that will help the rebound:

• A payroll tax holiday
• A WPA-like jobs program to (1) rebuild the country's infrastructure and (2) move towards a renewable, non-CO2-producing (i.e., let's stop with the nonsense about ethanol) energy economy
• A jobs-training program to improve health care delivery, especially delivery of preventive care
• A redefined foreclosure prevention program based on the new reality that unemployment (and not sub-prime mortgages) is driving the current foreclosures...a strong housing market is the sine qua non for economic recovery
• Re-regulation to prevent oil speculation - high energy prices are a prime factor in the current slow-down in the economy.  And oil speculation is the primary cause of the cost increase.  Rex Tillerson, ExxonMobil CEO, has stated that based solely on supply and demand, oil prices should be in the range of $60-$70/barrel.  This means that speculation adds about 75cts/gallon more at the pump.  I don't usually agree with Fox News but they are correct in at least one area - the dangers of speculation.  The CFTC (Commodities Futures Trading Commission) is charged with writing the regulations that control excessive speculation.  They need to be forceful in this.  SOS is one group that is working to make this happen.  Again, let's not get fooled by the Republican rhetoric - it is not regulation of the oil industry that is causing the problem - it is the deregulated commodities market combined with speculation and greed on the part of traders (e.g., the Koch brothers, the infamous billionaire supporters of all things right-wing).
• Increased aid to states so that they can maintain their portion of necessary social and education services until  revenues are increased as people go back to work.