This post highlights two reports which describe plans to create millions of jobs by 2027. The first by Frank Stricker, and then the report "What Would Sanders Do?" by professor Gerald Friedman:
Full Employment and How to Get It
(see here to read the article)
Full employment to men means an abundance of good jobs, higher wages, growing income. White Americans with "no college" voted for Trump by a margin of two to one, 67% to 28%, nearly a 40% margin in favor of Trump. And "white males" also went for Trump by a two to one measure, a 32% margin. They were impressed by Trump's claim to be able to create good jobs. Here is Stricker's report card on job and wage growth:
Stricker will have to revise his grade for the years 2012 to 2016, according to this report, up from a D to a C (a 7% increase over a 5 year period). The report concurs with Stricker that wage growth was low: it rose at a "0.1% annual growth rate from 1980 to 2007." That's a 27 year "F" in Stricker's grade system, a total increase of 2.7%.
The Federal Reserve graph (at St. Louis FRED, here) shows a 4% rise in wages over the past 38 years in "Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over." That's 4% in 38 years, while the economy on a per person basis grew by 79% (see here at Measuring Worth, GDP per person). Again, so you will remember: 4% growth in median wage income, 79% growth in total economy on a per person basis. Give the economy an FF. Wage growth was abysmal.
Total job growth, not that wonderful. The prime-age working population employment rate is the best indicator; see this graph at the BLS. Same rate as in 1987, 30 years ago, and we are 3.5% below the high point in April, 2000. That 3.5% equals 3.6 million jobs, even after adding 16.4 million jobs since February 2010. In October 2009 the unemployment rate hit 10.0%. To add clarity, the economy did add jobs, albeit not great jobs, in the past 7 years, but we are still down, not near the employment rate of 2000. Not recovered. And wage growth has been abysmal. See Table 1 here, real wage growth up 4% since 2008, that's 0.6% growth per year.
I recommend readers go straight to "Full Employment and How to Get It", by professor Frank Stricker, who also wrote the book Why America Lost the War on Poverty, and How We Can Win It. (He also wrote an article on Infrastructure here. Another excellent article on direct job creation is here at Demos. org by Algernon Austin. He calculates a need for 7 million new jobs for workers age 24 to 55. This implies a current unemployment rate of betweem 7 and 9% for this age group (not 3.3% the official rate), see this BLS site for confirmation, here. The unemployment rate for this age cohort is about 1% lower than the total unemployment rate. A 7% or 9% unemployment rate may seem so implausible as to be unbelievable, but it is believable and provable. This is why Austin's article is also powerful and important. And why such a direct job program is most important. I should mention that unemployment stood at 25% in 1933 and at 9.6 in 1937 -- fiscal policy works, see this article by Marshall Auerback.) Fiscal policy in this case means direct government job creation.
Readers who really want a super-clear picture of the poor employment conditions, with 20 million unemployed, about 1 in 8 workers, can read this excellent report at the Levy Economics Institute by Wray and Dantas. This is a visionary report with a radical solution: "The creation of a new New Deal program could provide the workers we need for many of the infrastructure projects that Trump and others want, but would go well beyond this by creating jobs for anyone who is ready and willing to work. It would be an open-ended job guarantee—not limited by the labor requirements of any single project—since it aims to achieve true full employment on a permanent basis. The federal government would take responsibility to provide the funding for a base wage to be paid to anyone who works in the program." (see page 16)
Stricker's program, like the Sanders' Program I deal with below, would lift the income of the middle income, non-supervisory employee, whose income would increase by $20,000 a year, a 50% increase by 2026.
Michael Braxton states: “I am for Hillary. Praise the lord. Trump will probably start us another war. Praise the lord. And he is a racist. Praise the lord.”
This photo originates from an article in the British paper The Guardian, by Chris Arnade, "What I learned after 100,000 miles on the road talking to Trump supporters". Pictured above, Michael Braxton, a resident of Natchitoches, Louisiana, offers his straight-from-the-shoulder assessment of Trump before the election. Arnade, the author states,
"It became simple: if I wanted to talk to a community overwhelmingly supporting Trump, I would go to a white town or neighborhood nearest the rusting factory surrounded by razor fence. . . . The early Trump voters I met were the losers from these changes. Their once superior status – based only on being white – was being dismantled, while their lack of education was also being punished. They lived in towns and communities devastated by economic upheaval. They were born in them and stayed in them, despite their fall. For many, who had focused on their community over career, it felt like their entire world was collapsing."
Read the article here.
These articles vividly portray the men and women who swung their votes to Trump. "Pride and Poverty in America" is the apt title of his articles. Arnade drove his car 140,000 miles across the U.S. searching for his interviews. Then you can listen to a friendly interview with Arnade at the radio broadcast Behind the News with Doug Henwood, here.
I need say no more. But here's some additional background reading.
The Political and Economic Impact of Infrastructure Programs
Bernie Sanders called for a $1 trillion investment in infrastructure over 10 years. Unfortunately he downplayed the direct job creation part of the program. Had he called it a jobs program first, that also upgraded infrastructure, the clear intent would have been appreciated by voters -- white male voters -- who rejected Hillary Clinton. But perhaps he shied away from sounding too socialistic. Read this important report What Would Sanders Do? , describing the wide-ranging effect of his public investment program. See Table 1 for a quick glance. Most of his spending increase, 74%, deals with universal health care or Medicare for All. Yet he calls $1 trillion over 10 years in Infrastructure, and another $1.2 trillion in spending for "Climate change, energy resiliency."
Also see his web page platform describing his program" Rebuilding America. His program would have served two important national purposes: 1) upgraded public roads, seaports, airports, rail lines, electrical grid, drinking water and sewage systems, private home and public building insulation leading to energy conservation, public school building and municipal building upgrades, and broadband internet improvements, as well as human services improvements in senior health care and pre-school education, and 2) jobs. See the Stricker article above for the impact millions of public jobs will have. Readers can review also the Progressive Caucus Budget, The People's Budget, 2017, which claims would create 3.6 million new good jobs; and view the spending program for this budget here at the Economic Policy Site, see Table 2, page 22. Page 8 states, "
Readers may also read the Center for American Progress report "Toward a Marshall Plan for America".
A reminder of why the American Society of Structural Engineers gave the country a D+ in infrastructure. (recommend this article at Newsweek magazine, with a photo of the 2007 collapse of a bridge in Minnesota, Interstate 35W. )
Polls show as high as 81% support for infrastructure improvement, see here.
Trump's plan will be financed by borrowing from the private financial market, doubling the cost of investment. And it will saddle users with life-time user fees -- an obvious avoidable error. But it will enrich the private corporations who feed on the government.
Ellen Brown debunks Trump's plan explaining the hidden costs of private financing:
"Private equity investment now generates an average return of about 11.8% annually on a 10-year basis. For infrastructure investment, those profits are made on tolls and fees paid by the public. Even at simple interest, that puts the cost to the public of financing $1 trillion in infrastructure projects at $1.18 trillion, more than doubling the cost. Cities often make these desperate deals because they are heavily in debt and the arrangement can give them cash up front. But as a 2008 Government Accountability Office report warned, “there is no ‘free’ money in public-private partnerships.” Local residents wind up picking up the tab."
See a report from the Center for American Progress, How Donald Trump's Infrastructure Plan Fails America. And more from CAP, "Fact Sheet: A Plan for Investing in America's Infrastructure".
The Economic Policy Institute presents several articles on Infrastructure and Trump. The first, here, states "The recently released Trump federal budget plan guts infrastructure, period. Read the link—the damage the Trump budget would do to public investment and infrastructure is staggering. This alone should make any open-minded person extraordinarily skeptical of their claims to value infrastructure spending." The next here and the next here are long, dense, and you might read them only if you want to know in depth. The last "here" shows a graph of the cost of 20 year government bonds at 3.86% per year, which makes the 11.8% mentioned in Ellen Brown's article 3 times more expensive. The "here" before that shows a graph of non-defense discretionary spending dropping to 40% of it's 30 year historical average under the Trump 2017 to 2026 budget. And this article from the CBPP (dot) org states that the Trump Republican budget will cut $6 trillion in federal spending over 10 years, and 62% of these cuts ($3.7 trillion) would cut programs serving low- and moderate income people. "In 2026, it would cut such programs overall by 42 percent — causing tens of millions of people to lose health coverage and millions to lose basic food or other support."
Most people realize that the Trump-Rep. budget is a massive tax cut to millionaires, see this report, and this article. Half a million in lower taxes to millionaires, $240 to middle-income families (see page 7, first "report"). From the "article": "Trump’s tax plan would give $6.2 trillion in tax breaks, according to the non-partisan Tax Policy Center, mostly benefitting the rich and big corporations. The tax plan would also grow the deficit by $7 trillion because it closed few loopholes to pay for the tax cuts."
This passes, incredibly, for responsible government taxing and spending. People do not pay attention, obviously.
Hillary Clinton lost the "white no college" vote by 39% points -- 67% for Trump and 28% for Clinton. I remember this as 70 to 30. That represented 34% of all votes cast. And she lost the "men - white" vote by 32 points -- 63% to 31%; also representing 34% of votes cast. See the results at Wikipedia. White men with little education beyond high school turned to Trump, there's no doubt.
If Democrats in 2018 wish to make gains among these voters they must offer better employment and wage growth programs that will rescue these disenchanted workers who have had decades of poor job and wage growth (see the Stricker article). This malaise portends a future of bleak social disruption.
Later I'll expand more of the infrastructure and direct job creation. This is an essential issue that can break the iceberg of disaffection and recast our political theater as we know it. The American Prospect published an article supporting the idea of appealing to White Working Class citizens, and it concluded: "The party needs to rediscover its roots as a working-class party, one that was initially exclusionary of people of color but that today can and must represent the interests and values of working people of all races. As the party fights Trump and his brand of divisive right-wing populism, the party needs to bring in more working-class candidates and leaders who can credibly talk with their communities about common economic and social challenges, can forcefully take on the corporate interests that harm these communities, and who can be trusted to fight for the well-being and security of all working men and women. "
Reviewing the Leet position:
As a review of my strange viewpoint about the U.S. economy, the reader may as well watch William Lazonick's appraisal of U.S. corporations. Winner of the Harvard Business Review award for best article, Lazonick speaks on a video here, repeating his claim that corporations, at least in the S&P 500 which comprises 75% of all stock market equity, over the past 10 years have appropriated 91% of their collective profits and distributed them as stock dividends or stock buybacks, thereby looting the corporations of research investments and depriving their workers of raises.
And this finding dovetails perfectly with the shocking study by Saez, Piketty and Zucman that shows that the income of U.S. adults in the lowest earning half have not risen since 1980, their income is still $16,000 per adult 35 years later, 1980 to 2015. The BEA.gov (Personal Income, Table 2.1) shows that "Disposable personal income" "per capita" in "chained 2009 dollars" has risen by 91%, from $20,158 to $38,432, 1980 to 2015. The Saez, et al report states: "Average pre-tax national income per adult has increased 60% since 1980, but we find that it has stagnated for the bottom 50% of the distribution at about $16,000 a year. . . . Income has boomed at the top: in 1980, top 1% adults earned on average 27 times more than bottom 50% adults, while they earn 81 times more today."
While the gap was $16,000 to $432,000 in 1980, it is now $16,000 to $1.3 million. A companion article from the Washington Center for Equitable Growth may be read here.
The World Wealth and Income Database is available to compare various countries, with graphs, tables, comparisons.
I belabor my readers with all these extra reading projects because I feel the background is indispensable for a rounded evaluation of my eccentric position, which I find completely convincing.
As I always state in my latest essays, my best utopian essay is December 2016, and the most thorough run down of Inequality is the one before that, July, 2016.
Another photo from the Arnade articles, this of Robert McAdams of Peru, Nebraska, from the article linked to already, here. "We need to get this country straight again," he says.
Here's a little extra on the Minneapolis bridge collapse, 2007,
Full Employment and How to Get It
(see here to read the article)
Full employment to men means an abundance of good jobs, higher wages, growing income. White Americans with "no college" voted for Trump by a margin of two to one, 67% to 28%, nearly a 40% margin in favor of Trump. And "white males" also went for Trump by a two to one measure, a 32% margin. They were impressed by Trump's claim to be able to create good jobs. Here is Stricker's report card on job and wage growth:
Report Card on Growth in Real Wages and Total Jobs, Five-Year Periods, 1950-2015
Wages Jobs
1950-1955 A+ A
1955-1960 A B
1960-1965 B+ A
1965-1970 C A+
1970-1975 F B+
1975-1980 FF A+
1980-1985 FF D
1985-1990 FF A
1990-1995 FF D
1995-2000 C- A
2000-2005 F F
2005-2010 F F
2010-2015 D B
Total five-year growth in wages and jobs graded thusly: 10% or more = A, 8%-9% = B, 7% = C, 6% = D, under 6% = F, decline =FF.
The Federal Reserve graph (at St. Louis FRED, here) shows a 4% rise in wages over the past 38 years in "Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over." That's 4% in 38 years, while the economy on a per person basis grew by 79% (see here at Measuring Worth, GDP per person). Again, so you will remember: 4% growth in median wage income, 79% growth in total economy on a per person basis. Give the economy an FF. Wage growth was abysmal.
Total job growth, not that wonderful. The prime-age working population employment rate is the best indicator; see this graph at the BLS. Same rate as in 1987, 30 years ago, and we are 3.5% below the high point in April, 2000. That 3.5% equals 3.6 million jobs, even after adding 16.4 million jobs since February 2010. In October 2009 the unemployment rate hit 10.0%. To add clarity, the economy did add jobs, albeit not great jobs, in the past 7 years, but we are still down, not near the employment rate of 2000. Not recovered. And wage growth has been abysmal. See Table 1 here, real wage growth up 4% since 2008, that's 0.6% growth per year.
I recommend readers go straight to "Full Employment and How to Get It", by professor Frank Stricker, who also wrote the book Why America Lost the War on Poverty, and How We Can Win It. (He also wrote an article on Infrastructure here. Another excellent article on direct job creation is here at Demos. org by Algernon Austin. He calculates a need for 7 million new jobs for workers age 24 to 55. This implies a current unemployment rate of betweem 7 and 9% for this age group (not 3.3% the official rate), see this BLS site for confirmation, here. The unemployment rate for this age cohort is about 1% lower than the total unemployment rate. A 7% or 9% unemployment rate may seem so implausible as to be unbelievable, but it is believable and provable. This is why Austin's article is also powerful and important. And why such a direct job program is most important. I should mention that unemployment stood at 25% in 1933 and at 9.6 in 1937 -- fiscal policy works, see this article by Marshall Auerback.) Fiscal policy in this case means direct government job creation.
Readers who really want a super-clear picture of the poor employment conditions, with 20 million unemployed, about 1 in 8 workers, can read this excellent report at the Levy Economics Institute by Wray and Dantas. This is a visionary report with a radical solution: "The creation of a new New Deal program could provide the workers we need for many of the infrastructure projects that Trump and others want, but would go well beyond this by creating jobs for anyone who is ready and willing to work. It would be an open-ended job guarantee—not limited by the labor requirements of any single project—since it aims to achieve true full employment on a permanent basis. The federal government would take responsibility to provide the funding for a base wage to be paid to anyone who works in the program." (see page 16)
Stricker's program, like the Sanders' Program I deal with below, would lift the income of the middle income, non-supervisory employee, whose income would increase by $20,000 a year, a 50% increase by 2026.
Michael Braxton states: “I am for Hillary. Praise the lord. Trump will probably start us another war. Praise the lord. And he is a racist. Praise the lord.”
This photo originates from an article in the British paper The Guardian, by Chris Arnade, "What I learned after 100,000 miles on the road talking to Trump supporters". Pictured above, Michael Braxton, a resident of Natchitoches, Louisiana, offers his straight-from-the-shoulder assessment of Trump before the election. Arnade, the author states,
"It became simple: if I wanted to talk to a community overwhelmingly supporting Trump, I would go to a white town or neighborhood nearest the rusting factory surrounded by razor fence. . . . The early Trump voters I met were the losers from these changes. Their once superior status – based only on being white – was being dismantled, while their lack of education was also being punished. They lived in towns and communities devastated by economic upheaval. They were born in them and stayed in them, despite their fall. For many, who had focused on their community over career, it felt like their entire world was collapsing."
Read the article here.
These articles vividly portray the men and women who swung their votes to Trump. "Pride and Poverty in America" is the apt title of his articles. Arnade drove his car 140,000 miles across the U.S. searching for his interviews. Then you can listen to a friendly interview with Arnade at the radio broadcast Behind the News with Doug Henwood, here.
I need say no more. But here's some additional background reading.
The Political and Economic Impact of Infrastructure Programs
Bernie Sanders called for a $1 trillion investment in infrastructure over 10 years. Unfortunately he downplayed the direct job creation part of the program. Had he called it a jobs program first, that also upgraded infrastructure, the clear intent would have been appreciated by voters -- white male voters -- who rejected Hillary Clinton. But perhaps he shied away from sounding too socialistic. Read this important report What Would Sanders Do? , describing the wide-ranging effect of his public investment program. See Table 1 for a quick glance. Most of his spending increase, 74%, deals with universal health care or Medicare for All. Yet he calls $1 trillion over 10 years in Infrastructure, and another $1.2 trillion in spending for "Climate change, energy resiliency."
Also see his web page platform describing his program" Rebuilding America. His program would have served two important national purposes: 1) upgraded public roads, seaports, airports, rail lines, electrical grid, drinking water and sewage systems, private home and public building insulation leading to energy conservation, public school building and municipal building upgrades, and broadband internet improvements, as well as human services improvements in senior health care and pre-school education, and 2) jobs. See the Stricker article above for the impact millions of public jobs will have. Readers can review also the Progressive Caucus Budget, The People's Budget, 2017, which claims would create 3.6 million new good jobs; and view the spending program for this budget here at the Economic Policy Site, see Table 2, page 22. Page 8 states, "
This stimulus program includes a $208 billion investment in
infrastructure, spending that reaches $1.2 trillion over FY2016–
2026, which approaches the level the American Society of Civil
Engineers calls for to close the nation’s investment shortfall while
offering a sustained, continuing dedicated source of funding
specifically for infrastructure investments (ASCE 2013)."
infrastructure, spending that reaches $1.2 trillion over FY2016–
2026, which approaches the level the American Society of Civil
Engineers calls for to close the nation’s investment shortfall while
offering a sustained, continuing dedicated source of funding
specifically for infrastructure investments (ASCE 2013)."
A reminder of why the American Society of Structural Engineers gave the country a D+ in infrastructure. (recommend this article at Newsweek magazine, with a photo of the 2007 collapse of a bridge in Minnesota, Interstate 35W. )
Polls show as high as 81% support for infrastructure improvement, see here.
Trump's plan will be financed by borrowing from the private financial market, doubling the cost of investment. And it will saddle users with life-time user fees -- an obvious avoidable error. But it will enrich the private corporations who feed on the government.
Ellen Brown debunks Trump's plan explaining the hidden costs of private financing:
"Private equity investment now generates an average return of about 11.8% annually on a 10-year basis. For infrastructure investment, those profits are made on tolls and fees paid by the public. Even at simple interest, that puts the cost to the public of financing $1 trillion in infrastructure projects at $1.18 trillion, more than doubling the cost. Cities often make these desperate deals because they are heavily in debt and the arrangement can give them cash up front. But as a 2008 Government Accountability Office report warned, “there is no ‘free’ money in public-private partnerships.” Local residents wind up picking up the tab."
See a report from the Center for American Progress, How Donald Trump's Infrastructure Plan Fails America. And more from CAP, "Fact Sheet: A Plan for Investing in America's Infrastructure".
The Economic Policy Institute presents several articles on Infrastructure and Trump. The first, here, states "The recently released Trump federal budget plan guts infrastructure, period. Read the link—the damage the Trump budget would do to public investment and infrastructure is staggering. This alone should make any open-minded person extraordinarily skeptical of their claims to value infrastructure spending." The next here and the next here are long, dense, and you might read them only if you want to know in depth. The last "here" shows a graph of the cost of 20 year government bonds at 3.86% per year, which makes the 11.8% mentioned in Ellen Brown's article 3 times more expensive. The "here" before that shows a graph of non-defense discretionary spending dropping to 40% of it's 30 year historical average under the Trump 2017 to 2026 budget. And this article from the CBPP (dot) org states that the Trump Republican budget will cut $6 trillion in federal spending over 10 years, and 62% of these cuts ($3.7 trillion) would cut programs serving low- and moderate income people. "In 2026, it would cut such programs overall by 42 percent — causing tens of millions of people to lose health coverage and millions to lose basic food or other support."
Most people realize that the Trump-Rep. budget is a massive tax cut to millionaires, see this report, and this article. Half a million in lower taxes to millionaires, $240 to middle-income families (see page 7, first "report"). From the "article": "Trump’s tax plan would give $6.2 trillion in tax breaks, according to the non-partisan Tax Policy Center, mostly benefitting the rich and big corporations. The tax plan would also grow the deficit by $7 trillion because it closed few loopholes to pay for the tax cuts."
This passes, incredibly, for responsible government taxing and spending. People do not pay attention, obviously.
Hillary Clinton lost the "white no college" vote by 39% points -- 67% for Trump and 28% for Clinton. I remember this as 70 to 30. That represented 34% of all votes cast. And she lost the "men - white" vote by 32 points -- 63% to 31%; also representing 34% of votes cast. See the results at Wikipedia. White men with little education beyond high school turned to Trump, there's no doubt.
If Democrats in 2018 wish to make gains among these voters they must offer better employment and wage growth programs that will rescue these disenchanted workers who have had decades of poor job and wage growth (see the Stricker article). This malaise portends a future of bleak social disruption.
Later I'll expand more of the infrastructure and direct job creation. This is an essential issue that can break the iceberg of disaffection and recast our political theater as we know it. The American Prospect published an article supporting the idea of appealing to White Working Class citizens, and it concluded: "The party needs to rediscover its roots as a working-class party, one that was initially exclusionary of people of color but that today can and must represent the interests and values of working people of all races. As the party fights Trump and his brand of divisive right-wing populism, the party needs to bring in more working-class candidates and leaders who can credibly talk with their communities about common economic and social challenges, can forcefully take on the corporate interests that harm these communities, and who can be trusted to fight for the well-being and security of all working men and women. "
Reviewing the Leet position:
As a review of my strange viewpoint about the U.S. economy, the reader may as well watch William Lazonick's appraisal of U.S. corporations. Winner of the Harvard Business Review award for best article, Lazonick speaks on a video here, repeating his claim that corporations, at least in the S&P 500 which comprises 75% of all stock market equity, over the past 10 years have appropriated 91% of their collective profits and distributed them as stock dividends or stock buybacks, thereby looting the corporations of research investments and depriving their workers of raises.
And this finding dovetails perfectly with the shocking study by Saez, Piketty and Zucman that shows that the income of U.S. adults in the lowest earning half have not risen since 1980, their income is still $16,000 per adult 35 years later, 1980 to 2015. The BEA.gov (Personal Income, Table 2.1) shows that "Disposable personal income" "per capita" in "chained 2009 dollars" has risen by 91%, from $20,158 to $38,432, 1980 to 2015. The Saez, et al report states: "Average pre-tax national income per adult has increased 60% since 1980, but we find that it has stagnated for the bottom 50% of the distribution at about $16,000 a year. . . . Income has boomed at the top: in 1980, top 1% adults earned on average 27 times more than bottom 50% adults, while they earn 81 times more today."
While the gap was $16,000 to $432,000 in 1980, it is now $16,000 to $1.3 million. A companion article from the Washington Center for Equitable Growth may be read here.
I belabor my readers with all these extra reading projects because I feel the background is indispensable for a rounded evaluation of my eccentric position, which I find completely convincing.
As I always state in my latest essays, my best utopian essay is December 2016, and the most thorough run down of Inequality is the one before that, July, 2016.
Another photo from the Arnade articles, this of Robert McAdams of Peru, Nebraska, from the article linked to already, here. "We need to get this country straight again," he says.
Here's a little extra on the Minneapolis bridge collapse, 2007,
