Economy: Jobless Rate Hits a High

The Report

Reuters reports a grim report from the Department of Labor: job losses for October 2008 totaled 240,000. This number puts the unemployment rate at 6.5%, its highest rate since 1994. The unemployment rate has jumped over the past three months as Wall Street firms have reeled from the financial crisis. The the last three months (August, September, and October), an astronomical 651,000 jobs have been lost.

Photo courtesy of Reuters

Implications

The report doesn't look good for working and middle class Americans who are already struggling with mortgages, retirement plans, and a shortage of available credit from banks. Every unemployed individual means a consumer that doesn't have money to spend or to pay back credit loans with. So even if you've got a safe, steady job, you'll feel the ripple effects of soaring unemployment.

So what can we do to get people back to work? As I wrote last night, referencing a Paul Krugman article, Barack Obama has an opportunity to test some progressive solutions to our economic recession. During the Great Depression, President Roosevelt addressed high unemployment through government creation of public works jobs in new organizations like the Tennessee Valley Authority. Of course, World War II also created a lot of military and civilian jobs. President-elect Obama should consider a program that includes public works projects  that would hire unemployed Americans.

One perfect opportunity exists in the area of transportation infrastructure, and by this I don't mean highways (although there might be some job creation opportunities in roadwork). Instead, I mean improving or remaking our national rail system. With the price of fuel still high and the cost of greenhouse gases from cars on global warming, national mass transit is a worthy goal. Amtrak has the potential to be an efficient substitute for cross-country driving. However, upgrades to the track are necessary. Amtrak currently shares a lot of track with private freight. When these freight trains are routed in front of Amtrak Superliners, travellers experience massive delays. A few summers ago I took Amtrak from Boston to Chicago. The train stopped in Buffalo and we had to get off the train in order for several freight trains to use the tracks. This cause us hours of delay. From what I understand, this is not an uncommon experience for Amtrak passengers travelling long distances. Adding track designated specifically for Amtrak trains would help alleviate delays. This sort of project would create jobs across the whole continental U.S.

Another option would be to start from scratch to build a high-speed rail system. This would be a much costlier option but could very well be worth it in the number of jobs created and increase in transportation infrastructure.  High-speed trains can exceed 200 MPH, making them excellent options for regional trips. This would require the U.S. to lay new track across the country. Or, we could build a high-speed rail system for a specific region (i.e. the Midwest, the Northeast Corridor, etc.) in order to create jobs in that region.

The possibilities are endless, but the fact is that public works projects benefit both those looking for employment and the public in general.

Krugman Calls for a Second New Deal

Since the onset of the acute phase of the economic crisis in September, pundits and debate moderators have been asking Barack Obama if he plans on scaling back his agenda to compensate for the enormous federal deficit. Many voices in the media have argued that attempting a large-scale agenda that includes a national healthcare program, investment in alternative energy, and an increase in educational spending is simply not feasible when the federal government is responsible for so much of Wall Street's debt.

Nobel Laureate Paul Krugman begs to differ. In his most recent Op-Ed piece in The New York Times, Krugman argues that Obama should march forward with his proposed sweeping reforms.

Bear in mind, also, that this year’s presidential election was a clear referendum on political philosophies — and the progressive philosophy won.
...
This year, however, Mr. Obama ran on a platform of guaranteed health care and tax breaks for the middle class, paid for with higher taxes on the affluent. John McCain denounced his opponent as a socialist and a “redistributor,” but America voted for him anyway. That’s a real mandate.

Barack Obama won 364 electoral votes and a clear majority of the popular vote. Americans endorsed a progressive policy platform, especially on economic issues, because they realized that the status quo would not heal the economic recession and solve the domestic issues facing the nation. So it's clear that there is widespread support for a progressive agenda.

What about the assertion that we simply can't afford more federal spending right now? Krugman writes that federal spending on crucial programs, not tax cuts and trickle-down theories, is exactly what the United States needs during this time of crisis. A few more years of running on a federal deficit will probably be necessary with or without the enactment of Obama's domestic policy agenda.

But standard textbook economics says that it’s O.K., in fact appropriate, to run temporary deficits in the face of a depressed economy. Meanwhile, one or two years of red ink, while it would add modestly to future federal interest expenses, shouldn’t stand in the way of a health care plan that, even if quickly enacted into law, probably wouldn’t take effect until 2011.

The recession is not a reason to abandon a progressive agenda; rather, it is an opportunity to demonstrate the effectiveness of progressive ideas in our economy. Advancing such an agenda is a moral imperative in a time when working and middle class Americans are feeling the pain of unemployment, a declining market, and a lack of credit. Enhancing government services will provide safety for those most at risk during this recession.

And right now happens to be one of those times when the converse is also true, and good morals are good economics. Helping the neediest in a time of crisis, through expanded health and unemployment benefits, is the morally right thing to do; it’s also a far more effective form of economic stimulus than cutting the capital gains tax. Providing aid to beleaguered state and local governments, so that they can sustain essential public services, is important for those who depend on those services; it’s also a way to avoid job losses and limit the depth of the economy’s slump.

So a serious progressive agenda — call it a new New Deal — isn’t just economically possible, it’s exactly what the economy needs.

President-elect Obama has a reason to pursue a progressive agenda and a mandate to do so. What we need is a Second New Deal, not a postponement of the progressive agenda. I share Paul Krugman's confidence in Barack Obama's ability to move quickly to enact this agenda.

Thoughts on Rahm Emanuel as Chief of Staff

It's official; Rahm Emanuel has accepted the position of White House Chief of Staff for President-elect Barack Obama. The appointment to this position will mean that Emanuel will be one of the most influential voices in the Obama administration.

First, some background information on Rahm Emanuel

Emanuel worked on the campaigns of Illinois Senator Paul Simon, Chicago Mayor Richard M. Daley, and President Bill Clinton. After Clinton won the 1992 election Emanuel served as an advisor in the Clinton administration. In 2002, he was elected as Congressman of Illinois' 5th District (Chicago and some Northwest suburbs). He was chairman of the Democratic Congressional Campaign Committee during its successful 2006 bid to put Democrats in the majority in Congress.  He is currently chairman of the House Democratic Caucus.

Emanuel is known as a fiery, profane politician who can twist arms. A friend who worked on a Congressional campaign once told me stories about a campaign clerical worker having to take profanity-laced calls from Rahm. His take-no-prisoners attitude has earned him the scorn of some House Republicans such as Minority Leader John Boehner, who called Emanuel "an ironic choice for a president-elect who has promised to change Washington, make politics more civil and govern from the center." But other Republicans appreciate Emanuel's ability to break gridlock and get things done. Senator Lindsey Graham noted that despite Emanuel's tough demeanor he "understands the need to work together."

What does Rahm Emanuel mean for the Obama White House?

The pick of Representative Emanuel for Chief of Staff shows me that Barack Obama is serious about getting work done immediately after he becomes President. Emanuel won't tolerate nonsense or distractions, and as a result, Obama's White House will be more organized, efficient, and tenacious. Emanuel strengthens Obama's influence on Capitol Hill.

My largest concern with Emanuel is the fact that he has some ties to the old Democratic establishment. Barack Obama and Howard Dean have vastly improved the Democratic brand in areas of the country that were previously Republican strongholds. I hope that Emanuel fits in with Obama's 50 State political strategy, which will need to sell the ideas of national health insurance, government job-creation, financial intervention, green energy, international diplomacy, and improvements in education to conservatives.

Despite this concern, I think that Emanuel's shrewd political savvy will be an invaluable tool in the Obama administration. He isn't the type of weak-kneed Democrat that used to buckle in fear of Republicans over issues like national security. As CNN's David Gergen aptly put it, Emanuel will play bad cop to Obama's good cop. Hey, if it works on TV crime shows, it'll work in the White House.

Introduction

Welcome to The Liberal Pragmatist. This blog is founded with the purpose of sharing news, opinions, and ideas about politics and culture.

I am, above all, a political junkie. I'm the guy who stays up until 3 AM watching election returns on MSNBC. I'm the guy who actually enjoys talking about politics with friends, even if we may not share the same views. To me, the government (and the political system of the United States in general) is a tool that we can use to solve problems. A pragmatist such as myself is interested in implementing policies that work; I try not to let ideology get in the way of objective observation. My goal for this blog is to discuss and critique news, ideas, and policies here in the United States.

I hope you'll leave comments if you find a subject engaging!