Thanks in part to the “Beltway Deficit Feedback Loop,” the jobs crisis is barely even a subject of debate anymore. Paul Krugman reminds folks today, however, that there are options to address the problem that Americans still care about, even if their representatives don’t.
Bear in mind that the unemployed aren’t jobless because they don’t want to work, or because they lack the necessary skills. There’s nothing wrong with our workers — remember, just four years ago the unemployment rate was below 5 percent.
The core of our economic problem is, instead, the debt — mainly mortgage debt — that households ran up during the bubble years of the last decade. Now that the bubble has burst, that debt is acting as a persistent drag on the economy, preventing any real recovery in employment. And once you realize that the overhang of private debt is the problem, you realize that there are a number of things that could be done about it.
For example, we could have W.P.A.-type programs putting the unemployed to work doing useful things like repairing roads — which would also, by raising incomes, make it easier for households to pay down debt. We could have a serious program of mortgage modification, reducing the debts of troubled homeowners. We could try to get inflation back up to the 4 percent rate that prevailed during Ronald Reagan’s second term, which would help to reduce the real burden of debt.
So there are policies we could be pursuing to bring unemployment down. These policies would be unorthodox — but so are the economic problems we face.
If I had to guess, I’d say many White House officials would approve of this kind of approach, but tend not to say so. Why not? Because of political realism — the president and his team don’t see much value in pushing a series of proposals that have no chance of passing Congress. An ambitious approach to lowering unemployment was effectively taken off the table the moment Americans elected a Republican-led House. If voters wanted policymakers to focus on jobs they shouldn’t have backed candidates intent on making unemployment worse.
The administration could still push the issue, even if a jobs agenda can’t pass, but Obama’s team see political risks in such an approach — the more the president sticks his neck out, the more he appears ineffectual when Congress ignores him.
But Krugman urges everyone who still cares about the issue to speak up anyway: “As I see it, policy makers are sinking into a condition of learned helplessness on the jobs issue: the more they fail to do anything about the problem, the more they convince themselves that there’s nothing they could do. And those of us who know better should be doing all we can to break that vicious circle. ”