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Macomb, IL – Almost 2 million Illinoisans were expected to have traveled on Labor Day weekend - up 11% from 2009 - and 1.8 million of us were driving. Maybe that was because gasoline prices were not up as high as people feared - 11 cents per gallon higher than Labor Day 2009, according to the American Automobile Association. When the economy's tank is running on fumes, maybe we see less-bad news as good news.
President Obama last Friday finally seemed to show some determination to push for a second stimulus. After 20 months of compromise and capitulation to the Party of No, maybe Democrats are realizing that voters are as annoyed with them being spineless as they are with Republicans being stubborn.
Obama insisted that the economy is improving from the deepest recession in decades but acknowledged that "progress has been painfully slow."
At his White House news conference, he said, "For all the progress we've made, we're not there yet. And that means people are frustrated and why people are angry."
Anger or frustration might explain why consumers welcome higher gas prices, but Congress must meet that anger with action: another stimulus and a new approach to managing the economy.
The Bureau of Labor Statistics' most recent Consumer Price Index shows a modest increase in prices in July (a 1.6% overall hike in prices from July 2009). However, fuel prices rose 13%. The BLS' next report, for August, is due out this Friday.
Meanwhile, unemployment stalks the country like a silent psychopath. The jobless rate in August was 9.6%, which means 261,000 more unemployed Americans than July, totaling 14.86 million now.
Today's tragic trap is set up thusly: Consumer spending accounts for two-thirds of the nation's Gross Domestic Product, meaning we buy $2 out of every $3 worth of goods and services. But fewer U.S. consumers are now U.S. workers, so there's less money coming in - or being spent. Fewer folks have jobs because businesses aren't hiring, and they're not hiring because fewer people are buying their products.
That might make sense, except for the fact that profits are up, and businesses have the revenues to hire and expand, if they choose. Christine Owen, director of the National Employment Law Project, said, "Corporations have plenty of money. They're sitting on $1.8 trillion, and their profits are up. But they're not adding to their work forces. The economy has to have a whole lot more stimulus."
Before you cringe at the thought of more government involvement - or retreat into a joyous reverie about higher prices that are outpacing your pay but not as bad as you feared - consider the evolution of the Great Recession. In fact, visualize it, if you go online to the web-only magazine Slate, which has a mapping tool that displays the deterioration of the U.S. economy through job losses.
Posted months ago, the sequence of job losses remains chilling, not unlike the shocking visual of casualties during the Civil War exhibited as a moving color map at the Lincoln Museum in Springfield. The trend is shown to pre-date Obama's inauguration, with bad news splashing like bloodstains in January 2007, then August of that year, then December 2007, then the tipping point, in May 2008, after which the losses mount month after month, through that year's election campaign and beyond.
If the private sector is mimicking Republicans' do-nothing stance, our elected representatives should step in to create jobs to repair America's infrastructure, putting cash in the pockets of workers, who'll again become consumers and hopefully spur businesses to do what they should be doing now: hiring and making government involvement in jobs less vital.
Clearly, the first stimulus was too little, if not too late to prevent a total collapse. But besides another stimulus, Congress must set a new industrial policy to encourage the private sector to bring broadband and better rail service to rural areas, create green jobs, serve communities - markets - and protect the public interest in trade and manufacturing.
Robert Borosage, president of the progressive Institute for America's Future., said, "We've got an economy where corporate profits are up, bank profits are up, inequality is rising - and there are no jobs. This cannot become the new normal."
Bill Knight is a freelance writer who teaches at Western Illinois University