Banking and Jobs: Inseparable Issues

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from OpenLeft:



Banking and Jobs: Inseparable Issues
by: Mike Lux

Wed Mar 31, 2010 at 10:40


With the health care fight finally resolved (you notice I didn't use the word "over"- the passage of this bill is only the first step in a long-term battle for a better health care system in America, so nothing is really over), everyone is turning their attention to the economy. As well they should.

In spite of certain establishment economists and pundits (and unfortunately a few administration officials who are politically tone deaf), saying that the recession is over and everything is back on track economically, the simple fact is that while we are no longer dangling over the precipice of another Great Depression, the economy is still broken in major ways. The official unemployment rate still hovers around 10%, and when you add in those who have given up looking for work, those who are underemployed and marginally employed but want fulltime work, the number of people needing full-time jobs is closer to 20%. Wages are still not going up, as even many of those who have jobs have had to take lower wage jobs to get by. Foreclosures are still happening at dangerously high rates, home values are not coming back anywhere near fast enough (or at all in some neighborhoods), and way too many homeowners are still dangerously close to being underwater. Business and personal bankruptcies are still way too high.

Now I know that the economy is officially "growing" again. The GDP is up, the Dow Jones is up, corporate profits are up. If you are an establishment economist, a trust fund baby, or a Wall Street financier, the economy feels like it's just humming along. For the vast majority of Americans, the noise they are hearing is less that of a hum and more of a car wreck. That's why voters react so poorly to Democratic politicians when they say things about how the economy is looking up.

The twin pillars to building a healthy economy are producing good jobs in big numbers, and fixing the badly broken financial system. These are not separate spheres, by the way- the two things are joined at the hip. Washington legislative policy wonks tend to divide everything into different bills they are working on, and DC coalitions follow that approach as well. But if we don't start creating decent-paying jobs, the foreclosure problems will keep getting bigger and housing prices won't recover. If we don't fix the financial sector, an economy where the finance sector is focused on gambling and bubbles rather than in actual investments that will create jobs will continue dragging us down, and endangering us in the future. With so much of America's wealth concentrated in six mega-banks, and those banks investing in little that's creating jobs, we are not going to create real private sector job growth. ..........(more)

The complete piece is at: http://www.openleft.com/diary/18086/banking-and-jobs-inseparable-issues