The U.S. economy has lost more jobs than it has added since the recovery

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4 Socialist Action SPECIAL EDITION OCT. 2, 2010 and Development said it doesn’t expect the U.S. unemployment rate to fall to prerecession levels until at least 2013.

Gross domestic product has bounced up and down throughout 2010, but not even the most bullish forecasters see growth in the next few quarters being sufficient even to add enough jobs to keep up with population growth, much less to restore any of the millions of jobs lost during the Great Recession.

A typical example of the social impact of lingering catastrophic levels of joblessness is The New York Times story in September reporting that the average jobless worker over 50 years of age has no confidence that he or she will ever work again. And with rising medical costs and disappearing health-care insurance, vanishing pensions and plummeting home values, the fear of permanent joblessness for older workers often turns into worries over their very chances of survival.

Mainstream analysts compare this decade’s recession with other post-World War II recessions. But the more crucial comparison is with the Great Depressions of the 1890s and 1930s—periods in which, like today, there were occasional “recoveries” that proved in the long run to be mere blips on the longer-term downward slides. The current downturn has to do with the turn to speculative investments due to global manufacturing overcapacity and a decades-long slump in profitability, which is just part of the “normal” functioning of the capitalist system.

Trying to bring back jobs through protectionism— such as the AFL-CIO’s recent call for trade sanctions against China—will only exacerbate the crisis, as each nation’s ruling class, already starved of productive investment outlets, finds itself cooped up even tighter within national borders, and seeks to save itself through erecting higher and higher walls, deepening austerity imposed on workers, and even, if need be, war against its competitors.

A decline in living standards On Sept. 16, the Census Bureau issued a report detailing more fallout from the recession:

• 43.6 million Americans (or 1 in 7) are living below the official poverty line, and inflationadjusted median income fell 4.8% from 2000 to 2009—stagnating even through the “recovery”

of 2003 to 2007. One out of every three Americans in 2009 had income below a level that many economists consider just “making ends meet.”

• More than 2.3 million homes have been repossessed since December 2007. More than 1 million American households are likely to lose their homes to foreclosure this year.

• Total student loan debt exceeds total credit card debt, with $850 billion outstanding—and more and more young adults are living at home.

• The number of people without health insurance rose from 46 million in 2008 to 51 million in 2009 (or from 15.4% to 16.7%).

Meanwhile, government spending to restore jobs is off the table. The British magazine The Economist notes that despite Republican howls of “big government,” “most of the growth in government to date has been temporary and unavoidable; the longer-run growth in government is more modest, and reflects the policies of both Mr. Obama and his predecessor.” Obama’s latest economic proposals, it said, “are designed more for political than economic impact … less to power up the economy than to parry political attacks.”

These proposals include letting businesses deduct the full cost of investment against taxes next year instead of over three or more years. But the impact “will be muted by low interest rates and the fact that businesses are much more worried about weak demand than their cost of capital…”

Banks have the cash, but nowhere to invest it. Yet Obama’s response is to give the private sector even more cash. The Economist states, “Politically [the economic proposals] have served Mr. Obama’s purpose, giving him some tax-cutting credentials at a time when Republicans are accusing him of proposing to wreck the economy by letting George Bush’s tax cuts for the rich expire.” But Republicans praised Obama’s investment tax credit as “quite radically different” from his earlier “stimulus”—i.e., it avoids even the miserly direct spending on jobs that the “stimulus” provided.

The Economist also notes that the weight of lingering massive debt levels is still dragging down consumer confidence and spending: “Statistics say that the economy has been growing for nearly 15 months, but so sluggishly that most people seem to think it is still in recession.” Almost a quarter of all Americans with mortgages still owe more than their houses are worth, and the journal predicts that “a fetid pool of underwater mortgages will … corrode the financial system and harm the recovery.”

Another Obama proposal is an “Infrastructure Bank.” As Black Agenda Report Executive Director Glen Ford has pointed out, this bank has nothing in common with the direct expenditure on public works jobs of the New Deal, but would instead use federal money to guarantee profits of investors in investments that they would have a key role in choosing.

Obama supporters express frustration Popular frustration with the economy was on display at a Sept. 20 CNBC town hall meeting, where one Obama supporter after another in the audience told the president to his face that they were disappointed in him and were tired of defending him against critics.

But the week before, Obama was yucking it up at a