SPEAKERS: LONG-TERM SLUMP GIVES CHANCE FOR LONGER-TERM RECOVERY MEASURES

Friday, November 14, 2008

(PAI)SPEAKERS: LONG-TERM SLUMP GIVES CHANCE FOR LONGER-TERM RECOVERY MEASURES
By Mark Gruenberg
PAI Staff Writer

    WASHINGTON (PAI)--The present Bush economic crash will last at least 18 months and gives the incoming Obama administration and the new Democratic-run Congress the opportunity to enact longer-term recovery measures, not just quick fixes, a panel of progressives said.

    Speaking at the Center for American Progress on Nov. 12, the group said a prime measure among them should be the creation of “green” manufacturing jobs, and a second measure should be long-term projects to repair the nation’s infrastructure.

    Both ideas have been strongly pushed by organized labor and adopted, at least on the campaign trail, by President-elect Barack Obama (D). The Steel Workers are the prime union movers of the Apollo Alliance, a 10-year $330 billion plan to create millions of new industrial jobs by tax credits and other measures fostering U.S. factories making environmentally friendly products. The Communications Workers have joined them.

    And the Laborers have led other building trades unions in campaigning for immediate federal funding for thousands of infrastructure projects--rebuilding roads, bridges and airports--that are ready to go but just lack the federal cash.

    Laborers President Terry O’Sullivan notes that every $1 billion in construction spending generates 47,000 new jobs--and that retrofitting public buildings alone could put tens of thousands of people to work.

    The ideas from the progressive, pro-worker think tank, are among the array of suggestions being offered to the incoming administration, particularly in how to deal with the second Bush crash.

    Obama has not signed on to any one particular group’s set of ideas, though some of those he endorsed on the campaign trail are identical to those that USWA and the Building Trades have pushed.

    The D.C. panel forecast that Obama would be dealing with the second Bush recession, where unemployment could go as high as 8%--it already is at 6.5%--through at least the end of 2009. That means longer-term measures make sense, they said.

    Republicans, led by outgoing anti-worker GOP President George W. Bush, oppose a second stimulus package in general and long-term measures in particular. They contend the recession will be over before those measures have time to kick in.

    But the panel says the recession is too deep already to consider such objections. “The risk of going too slow, being too small and being too incremental exceeds the risk of a higher deficit,” said Center for American Progress chief economist Gene Sperling.

    Added Bracken Hendricks, the center’s energy analyst, “The most expensive path we can take so far on climate change is inaction.” Doing nothing about rising greenhouse gas emissions, by not switching to a greener economy, “would cost the global economy $2 trillion a year in lost output by the end of the century,” he said.

    Hendricks said long-range construction projects that could be included in the stimulus package would include $100 billion over 1-2 years for improving 300 mass transit projects nationwide which would provide alternatives to cars. “Turn on the bulldozers,” he declared. “That’ll provide more access to jobs for low-income workers.”

    He also advocated weatherization of public buildings, and said a $100 billion investment in that would create two million jobs for electricians, bricklayers, masons and other skilled craft and construction workers.

    “A traditional stimulus package” of putting tax rebate checks in people’s pockets, produces growth, but 22% of the funds go to goods and services from outside the U.S., Hendricks said. “This would swap those wasted resources for (paying) skilled labor” at home, he added. “It employs the electrician and produces long-term investment.”

    Health care specialist Judy Feder, an unsuccessful Democratic congressional candidate in Northern Virginia, added comprehensive health care reform to the mix.

    Feder pointed out removing the burden of health care costs from U.S. companies would both pave the way for comprehensive reform that could focus on cost-cutting, but also improve U.S. companies’ competitiveness vis-à-vis their foreign competitors.

    Detroit’s “Big Three” auto companies, currently reeling financially from the credit crunch and the Bush crash, are “the poster child” for the impact of health care costs on U.S. firms, Feder said. The auto firms are lobbying for $25 billion to help them through their present cash crunch, as part of a “Stimulus II” package.

    The money would help them pay current expenses, including health care. GM, the biggest, most troubled of the firms, agreed with the Auto Workers to shift its health care costs--and health care administration--to the union. But that will be in 2010.

    Shifting health care costs away from companies, and their workers, would also help individuals and families, Feder said. Presently, “it’s a source of financial catastrophe” for both, she added. “Now, the economic crisis is so large that fixing health care has become part and parcel of fixing the economy.”    ###