How bad is the economy? We’re halfway to a lost
BY MARK TRAHANT
How bad is this economy? Former Treasury Secretary Lawrence
Summers wrote in The Financial Times this week that the United
States is now halfway to a lost economic decade (similar to Japan’s)
and that the number of working Americans has dropped from 63.1
percent to 58.4 percent. A net loss of more than 10 million jobs.
Summers defines the problem brilliantly. He writes in the FT: “After
bubbles burst there is no pent-up desire to invest. Instead there
is a glut of capital caused by over-investment during the period of
confidence – vacant houses, malls without tenants and factories
without customers. At the same time consumers discover they have
less wealth than they expected, less collateral to borrow against and
are under more pressure than they expected from their creditors.”
Last week I wrote about how this economic crisis will impact Indian
Country through the loss of government-funded jobs. Indeed, readers
reacted to my commentary with two basic reactions. One group said
it’s time for Native Americans to get off the dole; another asked why
tribes aren’t solving this problem on their own?
But Indian Country is not unique when it comes to government as
a source of jobs. The whole idea of “dole” is pretty funny when it
comes from readers living in the rural American West. We live in a
subsidized region. We Westerners have an odd birthright, historically
receiving far more in federal support than we pay in taxes. Our
water delivery, our power, our roads, our way of life were funded in
part by taxpayers. In fact, you don’t really need to go beyond water
to understand this scheme. It takes massive amounts of federal
spending to keep water flowing in a dry land.
The late great author Wallace Stegner wrote about the idea of a
West populated by federal employees in Salt Lake City and Boise or
any city where government agencies have regional offices. He once
told historian Richard Etulain that states “get an awful lot in federal
payrolls and an awful lot of jobs and homes and everything else from
the federal government.” The West, he said, should acknowledge
the federal government is not only a “permanent partner in that
collaboration, but a very essential one, absolutely essential.”
Yet as we in the reddest of red states demand federal contraction, we
forgot how many of our neighbors actually work for the government.
Of course government is already shrinking — and as that trend grows
it will impact everyone because when those workers lose their jobs,
they will not have money to spend as consumers. That’s essential
in a consumer-driven economy such as ours. On top of that, state,
cities, schools, and other governments are trimming jobs making the
contraction that much deeper.
Oh, yeah, I know the counter argument, the private sector will hire
those soon-to-be displaced workers.
The problem is the math involved. Without a boost in consumer
spending (and that’s not going to happen with smaller payrolls from
federal, state and local governments) there is no way the private
sector will create enough jobs to hire those already out of work, let
alone those who will be laid off in the contraction ahead.
The United States does have a structural deficit problem and it must
be fixed. But much of that deficit is related to health care spending,
not basic services. That’s why health care reform was so important
and just a baby step towards where we need to go. But that’s a long
term problem that requires a long term solution.
But right now we need jobs. Even government jobs. Especially if we
hope to avoid a lost decade or two.
Mark Trahant is a writer, speaker and Twitter poet. He is a member of
the Shoshone-Bannock Tribes and lives in Fort Hall, Idaho. Trahant’s
recent book, “The Last Great Battle of the Indian Wars,” is the story of
Sen. Henry Jackson and Forrest Gerard.