Editorial: Economy has changed in profound ways; it’s about time we did tooPublished 12:35am Thursday, June 23, 2011
It’s high time Americans pay attention to members of Congress besides Anthony Weiner and pose tough questions to their politicians about what we have to show for 10 years of Bush tax cuts and what we’re going to do differently instead of more of the same.
We have sat here for decades watching our jobs be outsourced and now seem surprised we don’t have enough.
It’s only going to get worse with posturing for the 2012 election well underway.
There is a huge gulf between American corporations which operate around the world and regular Americans because they have $2 trillion sitting on their balance sheets, but aren’t inclined to hire workers at home.
American firms made $1.68 trillion in profits in the last quarter of 2010 alone. Corporations and their executives profit immensely from moving jobs to low-cost countries.
They keep their profits abroad to avoid paying taxes.
What if they had to create a certain number of jobs to take advantage of tax breaks?
Unemployment is stubbornly high and wages are flat — as they were even before President Obama took office and the Great Recession laid bare what had been happening in the years leading up to the global meltdown.
The U.S. experienced its weakest period of job creation since the Great Depression from 2000 to 2007.
This has been documented by Nobel laureate Michael Spence, author of “The Next Convergence.”
Spence “was kind of stunned when I first looked at the data.”
During rampant globalization from 1990 to 2008, companies operating in global markets, such as manufacturers, banks, exporters, financial services and energy firms, contributed next to nothing to American job growth.
Those that did mostly operate in the U.S. market, free of global competition — but government agencies, retailers, hotels and health care concerns, pay less and require fewer skills than our outsourced jobs.
So much for the notion businesses need more economic and regulatory “certainty” to invest on these shores.
They’re not coming back, not with emerging middle classes in vast untapped markets in China, India and Brazil.
Technology let companies weather the recession almost entirely by shedding jobs.
Nobody has the stomach for a third round of stimulus Band-Aids, which hasn’t overcome structural challenges to job creation.
With two-career households, the workforce is less mobile.
Some say it may take a TARP for homeowners instead of investment banks to fix the housing market, then there’s the fear of an adrift generation of workers who may never find good jobs, isolating them from society.
A jobless rate of 9 percent is bad enough, but a 24-percent youth unemployment rate assures a deepening wealth divide going forward.
There are no quick or easy solutions, which makes the problem incomprehensible to Congress, obsessed with returning to office. Bridging the divide between the fortunes of companies and the fortunes of their employees looms as a major challenge. New rules are quickly thwarted by crafty corporate counsel, so one answer would seem to be tax simplification which eliminate loopholes altogether.
Germany faced a similar juncture about 2000 from the wealth gap created by unifying East and West. Its public and private sectors came together. CEOs sat down with labor leaders, offered subsidies to forestall outsourcing and worked with educators to turn out a workforce with the right skills.
While cooperation seems impossible in our politically polarized standoff, crisis could be the backdrop in which to forge change which otherwise might never occur.Economy has changed in profound ways — it’s about time we did, too.