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Today’s jobs report and the Supreme Court’s McCutcheon debacle

Robert Reich, professor of public policy | April 4, 2014

What does the Supreme Court’s McCutcheon decision this week have to do with today’s jobs report, showing 192,000 new jobs for March?

Connect the dots. More than five years after Wall Street’s near meltdown the number of full-time workers is still 4 million less than it was in December 2007, yet the working-age population of the U.S. has increased by 13 million since then.

This explains why so many people are still getting nowhere. Unemployment among those 18 to 29 is 11.4 percent, nearly double the national rate.

Most companies continue to shed workers, cut wages, and horde their cash because they don’t have enough customers to warrant expansion. Why? The vast middle class and poor don’t have enough purchasing power, as 95 percent of the economy’s gains go to the top 1 percent.

That’s why we need to:

(1)  cut taxes on average people (say, exempting the first $15,000 of income from Social Security taxes and making up the shortfall by taking the cap off income subject to it)
(2) raise the minimum wage
(3)  create jobs by repairing roads, bridges, ports, and much of the rest of our crumbling infrastructure
(4)  add teachers and teacher’s aides to now over-crowded classrooms
(5)  create “green” jobs and a new WPA for the long-term unemployed

And pay for much of this by raising taxes on the top, closing tax loopholes for the rich, and ending corporate welfare.

But none of this can be done because some wealthy people and big corporations have a strangle-hold on our politics. McCutcheon makes that strangle-hold even tighter.

Connect the dots and you see how the big-money takeover of our democracy has lead to an economy that’s barely functioning for most Americans.

Cross-posted from Robert Reich’s blog.

Comments to “Today’s jobs report and the Supreme Court’s McCutcheon debacle

  1. Right Robert, tax cuts on lower tax slabs and increasing the minimum wage both methods takes extra money in the crawling economy. This extra money is enough to invest or save for average people. infrastructure development activities like repairing roads, bridges, ports will create lots of engineering jobs and contract jobs. Your suggestion will definitely creates lots of government jobs and private jobs which boost the US economy like chinies have now a days.

  2. Yes, raising minimum wage causes inflation. It has been shown that raising wages ten per cent causes inflation of 0.1%; so yes, this is true but insignificant.

    • Often times when minimum wage is raised, the price of goods and services go up too and things go back to where they used to be.

  3. So grateful for your common sense economic solutions. Anyone who has had the privilege of suffering economic insecurity, knows we primarily spend our limited funds in our community on shelter, food, clothing & entertainment. We don’t have enough to invest or save, so increasing the minimum wage translates into more spending and more jobs.

  4. Oh Robert, you are an embarrassment to the University. How does raising the min wage create jobs? It sure creates inflation, though. Enough of this ‘the rich don’t pay their fair share’ nonsense. How about broadening the tax base so everyone pays taxes, lowering the rate on the wealthy so they put their income back in the private sector? You want ‘green’ jobs? Let the private sector create them. IE, gov’t, just get out of the way!

    • John, you’ve got it backwards. Who has been coddled, given huge tax loopholes and reductions, bailed out, given preferable treatment on capital gains rates… on and on. I pay a greater percentage of my income as taxes than do the Koch brothers. They aren’t spending; they are accumulating. They will not spend until it is profitable to do so. How can it be profitable when so many have no discretionary income?

    • Wow, John. Almost couldn’t believe my eyes. Tax the poor and middle class even more (broaden the tax base) so they have even less money to spend and give more tax cuts for the rich (lower the rate on the wealthy) so they have even more money to spend. Didn’t we already try that with Bush?

      We are living with the results of that debacle. It just made the rich richer and the poor poorer. But, let’s try it again. This time it will work! FOX news says so.

  5. Right on — hit the nail on the head! But between Citizens United and McCutcheon the trend is for more conservative and special interest influence in U.S. politics. As such, I am pessimistic that any of the enlightened suggestions Prof. Reich enumerates above will ever be implemented. I am resigned to living in a flawed society ruled by the one percent, with liberty and justice for some.

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