America is in trouble. The economy is in decline and shows few signs of rebounding. This is because our economy has changed. The mindset of how to make money has dramatically evolved over the past 40 years. Unfortunately the way to create jobs has not. Listening to our politicos and talk heads in the media drone on about job creation leads one to believe we are in greater trouble than anyone cares to admit. They may be right.

The United States economy was once based on manufacturing and was sustainable by selling its goods to domestic and foreign markets. People made good livings manufacturing the same goods they themselves would buy. Those good people the corporations employed to build and make their products were the same people those corporations counted on as their best customers. The domestic marketplace was the most stable for corporations because the employee was likely to buy the products they themselves, or their brothers in manufacturing arms for the same enterprise, were making. The corporation paid the worker well, but the work paid back the company by consuming that which it produced. A symbiotic relationship developed.

The mindset changed and the worker became a cost center. As corporations yearned to make larger and greater profits each quarter the idea of cost cutting became common practice. Workers were an easy target. First came lower wages. Then came reductions in work force size. Then came outsourcing. Then came the offshoring of jobs. These practices not only crippled the American manufacturing sector but decimated the working class in America. Gone were hundreds of thousands of good paying jobs, replaced by the paper hat (low paying service industry) type jobs.

To compound this economic trend another was developing which would reshape our economy completely. America shifted from a production economy to a consumption economy. Americans slowed in making goods but increased in purchasing goods. Consumerism took hold and, with the availability of cheap credit, Americans learned to spend to excess. The jobs were not there to sustain this trend so credit drove our consumer society forward. Then the credit market crashed.

The credit crash exposed the base weakness within the economy. Much of the problem extends from the gutting of our manufacturing sector. With the loss of the hundreds of thousands of jobs we lost the fuel for our economic engine. The continual loss of jobs that paid a living wage left a large chunk of America without the ability to earn money to put back into the economy. Earning minimum wage left much of the population without disposable income. Lacking credit you are unable to buy those luxury items that had the American economy churning prior to the crash. The only reasonable solution to this economic crisis is then to create jobs. Jobs which pay a decent living wage. But how does this job creation take place?

There is the trillion dollar question. How do jobs get created? There are naturally two opposing views in Washington. One says it is the responsibility of the “job creators” (an ambiguous and confusing term coined by a think tank) to create jobs. The other says it is the government who will have to kick start the economic engine to get those jobs created. Who is right? Who do you trust? What is going to work?

Republican dogma focuses on tax cuts for the wealthy, kick backs and tax breaks to corporations and limited government. Their story is that the largest employers in the country are corporations so by giving them more money will encourage them to create jobs. Through deregulation and elimination of government agencies corporations would throw open the doors to factories and rehire those jobs sent overseas. At least that’s their hope. This makes little sense and is an unexplainable position when challenged.

Corporations and the wealthy do not spend money unless there are tangible benefits associated with the expenditure. Simplistically, they refuse to spend a buck unless they can make two. The wealthy got wealthy by not spending their money. Corporations are able to return value to their shareholders by not spending money, which leads to increasing revenues. Giving money to either the wealthy or corporations does not mean a job is going to be created. In fact, giving money to either does nothing but meet their primal desire to gather more wealth and generate more return for themselves. Giving money and tax breaks to either only increases their bottom line. Spending is only going to happen if there is potential for greater return from those invested dollars. The only way that returned investment is going to happen is if money is available to those who buy the products and services, which is the majority of Americans, many of which need jobs. Jobs will not be created without an increased demand for products and services, which is dependent on people first having money to spend.

It is also important to recognize that profits do not guarantee job creation. Exxon Mobil has made billions in profits in the last decade and has led to a reduction in jobs with that corporation. They have received billions of dollars in tax breaks and rebates and have not created the much needed number of jobs that money should or could create through other means. In that same vein, General Electric (GE) has made billions in profits and paid no income tax. At the same time GE has used loopholes in the tax code to earn billions in tax refunds for sending American jobs overseas. You’ll never guess who wrote these changes to the tax code allowing for such massive abuses (your clue: an elephant never forgets!).

The Republicans are dead set against government involvement in job creation. They want greater reductions in what they consider government interference in the business environment. They want the protections afforded by the Environmental Protection Agency (EPA) and the Food and Drug Administration (FDA) removed so business can maximize their profits. This, again, will not lead to job creation. This will only remove national barriers to generating greater global profit. In fact the whole claim of smaller government just doesn’t ring true when you consider the expansion of the military budget and the number of soldiers and security industry partners (nee contractors from interests like Blackwater / Xe) benefiting from increased government spending. This government expansion and increase in spending has provided a fertile environment where one profession has seen a healthy expansion in employment numbers. Smaller government will not lead to more jobs, it will just lead to greater profits.

Continuing on with the Republican smaller government contradiction, the conservative agenda sees no problem in spending money on corporations and the wealthy. Tax breaks and rebates are essentially spending. Taking money away from the coffers through these revenue reductions is essentially passing the bill (lost revenue) on to future generations. These are gifts to those who already have the money, passing on the cost to those who do not. This is the perfect example of the rich getting richer on the backs of the poor. These tax breaks have not lead to an explosion of jobs as promised by conservative thinkers. On the contrary, it has feed the greed of those with money, encouraging them to sit on their fiscal assets that much more. The Republicans like to talk about the welfare state and people getting money for doing nothing, but isn’t that exactly what these tax breaks and rebates do for the rich? These breaks are a windfall of found cash for those who already control the majority of the wealth in the country.

The Democrats are no better. They talk a good game but don’t do anything to rock the corporate boat. Not a single good jobs plan has been delivered by anyone in the Democratic Party. Obama recently made a good effort, but appears to come up well short. No where does the plan identify any transformational idea or technology to be the driver of a new spate of jobs that will pay a living wage. The Democrats don’t appear to have the intestinal fortitude to make the political commitment required to push a program of this size through.

Where do we go? Where do jobs come from? The answer is sadly with the government. Many of the jobs that will need to be created will have to come from large scale projects. Projects with a scope so great it will scare off industry until long after the dust settles. This means infrastructure projects. Long-term infrastructure projects like new dams, a new energy grid, a new transit system to move people and goods around the country, and so on. These are massive projects transcending state borders so will require federal direction and mandates. These are projects which require cooperation by those on both sides of the political aisle. Republicans are going to have to work with Democrats to establish a national infrastructure program to build the systems which will support business, give people a wage they can live on, have some disposable income to spend, and generate consumer good demand for the “job creators” to do their thing, and create some quality jobs. Yup, the talking heads are right. America is in deep, deep trouble.

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