There’s something unsettling about seeing the president — this president, specifically — go before a big-business audience to make nice, as Barack Obama did at the U.S Chamber of Commerce February 7. Normally a president can walk into an event like this and feel instantly at home, swathed in chummy bonhomie as he and the assembled trade jokes and sing each other’s praises. It goes with the job. But not for this president.
When Obama faced America’s business leadership that day, he wasn’t speaking as a pal. He was speaking partly as a supplicant and partly as an assistant principal. The supplicant was asking his detractors to cut him some slack so he can do his job. The assistant principal was telling the kids that it’s time to stop horsing around, settle down and get back to work. That’s not going to happen too fast. This crowd isn’t rushing to help this president.
But that wasn’t the most unsettling part. The big uneasy was the moment it became clear why the president was there. He was asking the business community to please start doing business again. Create jobs and hire employees. Pretty please.
“Ask yourselves what you can do for America,” Obama said. “Ask yourselves what you can do to hire American workers, to support the American economy, and to invest in this nation.” Really, guys, give it some thought, okay?
This raises a disturbing thought. There’s probably nothing more important on the American agenda right now than jobs. Jobs are said to be the reason the Democrats lost the House last November. Jobs are what Obama should have been thinking about when he spent his first two years worrying instead about health care, finance reform and whatnot. Jobs — or, as Rep. Eric Cantor puts it, jobs jobs jobs — are No. 1 on the to-do list of the triumphant Republicans. And the president, chastened, says he’s on the case now.
But the president can’t really do anything about it. So what is his jobs plan? Apparently, he intends to ask nicely. Think of him as the leader of the free world as played by Oliver Twist: Please, sir, can I have some more jobs?
There are ways for governments to create jobs, of course. Franklin Roosevelt did it in the New Deal. Most European countries have industrial policies. But that’s not how our modern free-market system works. In our system, jobs are created by private enterprise. Front an entrepreneur some cash and get out of the way, and he will hire workers, produce something and sell it, bringing in more money for more investment. American businessmen thrive on innovation and initiative.
Except when they don’t. Right now, for example, American corporations have pots and pots of capital available, but they’re not creating jobs. According to the Federal Reserve, corporations are sitting on just under $2 trillion — the equivalent of almost one-seventh of our entire Gross Domestic Product — in liquid cash that they’re not spending or investing. Put differently, the pile of loose change sitting around in corporate America’s sock drawer is bigger than the national economies of all but 10 of the world’s nations. Just sitting there.
Why aren’t they investing and creating jobs? First of all, because they don’t have to. Their money is their own private property. Corporations don’t have to hire people if they don’t want to. They don’t have to produce anything. They can put their money into bonds instead of workshops. They can close their plants and move their operations overseas. They can throw an entire town out of work or impoverish a county. It happens all the time. It’s nobody’s business but the corporation’s.
That’s where the logic breaks down. How is this nobody else’s business? How come it’s wrong to destroy someone’s home with a bomb, but perfectly acceptable to destroy their livelihood with the click of a computer?
Come to think of it, how is it that we can elect the people who decide our children’s curriculum, collect our garbage and manage our parks, but our most essential needs — access to food, clothing and shelter — are subject to the whims of corporations whose only obligation is to enrich their shareholders? What kind of democracy is it where we get to decide everything except the things that matter most?
Oh, we all know the theory: If you let investors make decisions, they will invest wisely and create jobs and prosperity for everyone. The fewer regulations and taxes you burden them with, the more prosperity for everyone.
In fact, the system did work pretty well for quite a while. The economy has had its ups and downs, but it’s always bounced back better than before. This time the economy is bouncing back — new GDP growth, record-high corporate profits — but the jobs aren’t.
Yes, January unemployment figure showed a slight decline, from 9.4% to 9%. But that’s only partly because of hiring. Much of the decrease reflects unemployed workers giving up on ever finding jobs and simply dropping out. Officially, 14.5 million Americans are unemployed. Unofficially, an estimated 5 million more would like to work but gave up trying.
Where are the jobs? Corporate leaders and business analysts say companies are afraid to expand right now because they don’t see demand. Recession-shocked consumers aren’t buying enough. True, people would spend more if more of them had jobs, but go explain that to the big shots.
It’s also said that after downsizing to survive the recession, businesses are finding they can prosper with fewer workers. Improved productivity plays a role here. It’s also true that many businesses find they can make more money playing the financial markets than producing actual things.
There’s something bigger going on, though: an explosive growth of off-shoring, or moving company operations overseas where wages are lower. Increasingly, too, firms are selling their products to booming overseas economies, leaving America entirely out of the equation.
There’s a flood of new literature on the phenomenon. One of the best reads is a new article by Harold Meyerson posted on The American Prospect’s website. “With each passing year,” Meyerson writes, “and even more so during the recession, America’s leading corporations grow more and more decoupled from the American economy. Their interests grow increasingly detached from those of our workers, our consumers — and our economic future.”