The Republican recession took a little over two years to eliminate almost an entire decade of job creation (2000- 2007) and now the GOP wants President Obama to create ten years worth of jobs in 3 years of his first term. The problem is this President was forced to comply with Republican demands of tax cuts and other supply side mechanisms in order to stimulate the economy.
Let’s take quantitative easing for example. This was a federal reserve program that essentially flooded the big commercial banks with cheap money. Wall Street banks could approach the Fed and borrow cash at rates unseen in the regular market, approximately 1% or less. These funds that the huge commercial banks had borrowed are really your tax dollars that the Fed bought from the Treasury. The plan was to give money to big banks and it would filter down to your local, smaller banks and ultimately into the local economy. This unfortunately didn’t happen.
What happened was, Wall Street sat on it. They bolstered their capital on hand, but rather than using their own profits to increase financial stability, they used your tax dollars. Interestingly, the Tea Party is still quiet about this. Over ONE TRILLION dollars of your money is stashed on Wall Street. Essentially, making job creation VERY difficult for small business due to tight credit. Many businesses take out loans just to pay employees. If the businesses can not access credit, they can’t hire, even if their demand for their products increases.
Again, with out regulations, or rules to force corporations and banks to do the right thing, they won’t do it. That money Wall Street has from (QE) is completely separate from any stimulus the President wanted.
The fact that every single Republican running for President blames President Obama for the longevity of their party’s recession is completely dishonest.
This quote from the fiscal times sheds the light on what has been lost since the Great Republican recession,
The real job losses are greater than the estimate of 7.5 million. They are closer to 10.5 million, as 3 million people have stopped looking for work. Equally troublesome is the lower labor participation rate; some 5 million jobs have vanished from manufacturing, long America’s greatest strength. Just think: Total payrolls today amount to 131 million, but this figure is lower than it was at the beginning of the year 2000, even though our population has grown by nearly 30 million.
It took almost an entire decade to increase jobs by 10 million (2000-2007), now the Republicans in power want President Obama to do it in 3 years? That is a little absurd, but at least private sector jobs are being created, just not at the rate we need to get out of this Wall Street-manufactured, GOP-induced recession.
What President Obama and the government need to do is by-pass the banks entirely, create 50 state banks, just like North Dakota has. North Dakota missed the credit crisis. Capital is flowing to business and their unemployment rate is 3.5%. This Wall Street manufactured recession can only be cured with government intervention and NOT the free market.