Legislative Stalemate Sparks Monetary Action
The fact is that some of the macro numbers do look better, but even Federal Reserve Board Chairman Ben Bernanke has expressed concern about “prolonged high unemployment rates” as these high rates will slow or even derail any recovery. On Friday, October 15, Bernanke spoke to the need for more economic stimulus, but the legislative reality is that there will be no stimulus coming from the White House if it needs Congressional approval. Despite the fact that this congress is fully aware of the hardship that many of our nation’s citizens are shouldering, they have rebuffed White House attempts to create jobs for those who do not have them. If the November 2 election produces the results that the Tea Party is hoping for, Democrats will lose control of the House of Representatives and split control of the Senate. The current legislative stalemate will go from bad to worse, and the likelihood of job creation legislation will be next to none.
Bernanke, then, has opened up the possibility of monetary stimulus. He suggests that the Federal Reserve Bank might buy up US assets, such as Treasury bills, to keep interest rates manageable. The Fed will meet on November 2 and 3, coincidentally at the time of the 2010 election. After their deliberations, their decision on economic stimulus will be announced.
The Fed’s influence is known by its winks and its nods, as much by what is said in public statements as what is unsaid. Fed Chair Bernanke did not speak to the legislative stalemate on Capitol Hill, but by suggesting that stimulus must come from the monetary side, he has essentially concluded that fiscal stimulus is not going to happen. Additionally, by suggesting a tactic to stimulate the economy, a tactic likely to be announced on November 3, he is winking to Wall Street investors, telling them he “has their back” no matter what happens November 2. Bankers and brokers should be comforted by assurances that interest rates won’t rise too high so that economic growth can be maintained. Who will offer assurances to the working people who have not seen employment this year, to those who held the 95,000 jobs that disappeared last month, and to others?
We simply pay insufficient attention to the details of working people’s lives. We are remiss, if not negligent, in not being aggressive about job creation. Too many people feel that the unemployed are at fault for their unemployment, even though unemployment is a clear byproduct of the economic downturn that has gripped our nation for the last three years.
Those lawmakers who interact with the unemployed must see the frustration on their faces, a frustration that comes from looking for work, not finding it, from answering job ad after job ad. The demand for work is so crushing that some employers are reluctant, even, to advertise employment opportunities, fearing the hundreds of applications that come when only two or three jobs are available. A government job creation program would not only improve our libraries and playgrounds, highways and byways, but also engage more of our unemployed in productive activity. Deficit hawks will say such engagement will build up a deficit that future generations will have to repay. What price will future generations pay for “prolonged high unemployment”?
Julianne Malveaux is President of Bennett College for Women in Greensboro, North Carolina. She can be reached at presbennett@bennett.edu.
