Unemployment Analysis

    

        With the 2010 Midterm Elections approaching soon, it is no surprise to see unemployment high on the list of key issues.  Since my last posting I have spent hours researching this topic, trying to fully understand the complexity of such a problem.  While reading I realized I had failed to grasp why unemployment rates have skyrocketed.  Although I had encountered possible solutions and reasons as to why it was increasing, I had yet to learn what caused this catastrophe in the first place.  After further examination I was shocked at what I learned. According to globalresearch.ca it is mainly the government to blame for the current unemployment crisis. For the past 50 years the government has supported the outsourcing of American jobs and investment off shores. Also the government has encouraged mergers especially for the failing banks who would simply buy out their competitors. Both of these actions have resulted in fewer jobs in America, as many jobs are now located in foreign countries, and jobs that are in America are now so few because of mergers that eliminate certain positions. Probably the greatest contribution to unemployment is the government’s attempt to fight inflation.  However, I have a question for the government: what inflation? Bill Fleckenstein, a writer for MSN.com, says that inflation is not as big as concern as the government claims it is. In today’s market the average price of goods has been lower than in previous years. Therefore, wouldn’t it make sense to print more money to help this ailing economy? Timothy R. Homan, a writer for Bloomberg Businessweek, explains that it was not only the government’s fault unemployment rose.  When the recession hit, companies became very reserved with their money and were too worried to spend money and expand their business. As a result fewer jobs have been created and companies simply are not hiring at the moment.

            Unemployment will certainly be the driving force behind the 2010 elections. With the unemployment rate almost reaching 10% and Conservatives constantly scrutinizing the way the government has handled the situation, many project Democratic incumbents to be out of a job come November. However, President Obama says that to have unemployment around 9.6% gives an enormous advantage to whoever is not in power. While he makes a valid point about the bias surrounding his party, the majority of Americans have been disappointed with his increased spending as they would rather see a reduction in the national deficit. Obama’s $814 stimulus package has been attacked by the public and Conservatives who have failed to see how it has helped. Obama encourages voters to be patient and understand that this economic problem is not his fault, but rather previous governmental continued used of failed economic policies.

           While unemployment is an issue that is sure to determine which candidates gets elected come this November, I was surprised at how the importance of the issue differed between the two parties.  According to Deborah White, US Liberal Politics Guide, unemployment failed to make the Democrats top five issues of 2010.  Some issues such as the War in Afghanistan and immigration I can understand, but climate legislation and health care? The economy is a huge issue that impacts all Americans, and not making that a priority just seems irresponsible.  However, the Democrats have tried to pass legislation to boost the economy, but Republicans have made it difficult for them to do so. This is also irresponsible of the Republicans who claim unemployment is one of their top priorities, but when it comes time to pass some form of legislation related to the issue, they have a problem with it.  Playing these political games in Washington is not helping America’s unemployment rates get any better.

           

Knowing where each party stands on unemployment and how they plan to fix it is important to understanding the debate. Below I will explore each party’s views and plans on the subject of unemployment. However, before I do so, I would like to address some problems of bias I had with my research. Finding cold hard facts on this subject was very challenging as this debate is plagued with biases.  Conservative sites, such as Fox News, would always say how the Democrats have done nothing to help unemployment and have only made things worse. This article constantly attacked Obama’s stimulus package saying it has had “no impact” on unemployment.  But even when I visited a more Liberal website I was still thrown into the extremes and biases of the argument.  One New York Times article completely attacked the Republicans for blocking all economic legislation in congress and failed to provide a clear reason as to why they would block the legislation.  Bias proved to be a problem, but below I have tried my best to provide unbiased outlines of each party’s agenda when it comes to unemployment. 

The Democrats:

            According to about.com, one of the Democrats main goals in dealing with unemployment is job creation. For example, the President signed the American Recovery and Reinvestment Plan in order to help encourage job creation, but will also make “long-term investments in health care, education, energy, and infrastructure.”  Democrats also plan to create jobs by investing in alternative forms of energy and modernize American infrastructures. This is estimated to create about 3.5 million jobs for Americans.  CNN Senior Congressional Correspondent Dana Bash, says that Democrats also plan to fight unemployment by limiting the outsourcing of U.S. jobs overseas. Unfortunately, Republicans have blocked any attempt by Democrats to pass a bill limiting outsourcing and punishing companies that do so.  However, many Republicans are upset at most Democratic plan for fighting unemployment as they typically require large sums of money. National Debt is a big issue for most Americans, as citizens are tired of seeing the country fall more in debt. Therefore, the Democrats are having trouble getting some of their programs and solutions rolling. As far as assisting those currently unemployed, President Obama signed the unemployment benefits extensions back in January 2010, which provided much relieft to Americans out of work. It took a long time to pass though as Republicans wanted a budget cut to accompany it so the national deficit would not increase. Spending seems to be the Democrats main solution to fixing the unemployment, and while it may be effective, it does add to the deficit which could be a major problem down the road.

The Republicans:

 The Republican plan for helping unemployment seems very complex, but also very specific. Extending the Bush Tax Cuts, as well as, providing tax relief for working families and small businesses are two of their greatest priorities at the moment.  Reducing taxes allows families to save up their money or spend more at a time, while it also sends a message to businesses saying that tax relief is of the highest concern right now, which in turn encourages businesses to expand and hire.  However, let me clarify that the Bush Tax Cuts debate is a matter of Republicans vs. Democrats. There are some Republicans and Democrats that want them extended and there are some from both parties who don’t.  Extending the tax cuts will increase the deficit by 3.7 trillion over the course of 10 years, but it will provide major relief to working Americans and private sector firms. Republicans are also talking about establishing a job growth incentive tax credit in which businesses will receive tax deductions for creating job positions. This has plan has been used in the state of Colorado for a few years now and it has seen much improvement in its state employment rates.  Another task Republicans have discussed is limiting the power of labor unions. While unions do help protect the rights of American workers, sometimes their demands can be to extreme for corporations who end up outsourcing jobs to foreign markets. There are many critics to this plan however, as some point out limiting union powers would allow businesses to exploit workers more. 

Concepts for Reflection

This issue has definitely spurred on the Republican and Democrat rivalry. A common theme I found while researching was that on cites that favored a certain party; the blame was always thrown at the other.  According to World News Vine, the Republicans have introduced no innovative policies on fighting unemployment. But wait; didn’t I just list some of their plans above? Also the Democrats claim that if the Republicans get control of congress, then they will go back to the failed policies that drove us into this mess.  On the other side Republicans are blaming democrats for this mess. Many have blamed the Clinton Administration for this economic downturn, especially the housing crisis. During his terms loans were given out to people who would never be able to pay them off, and that he just reaped the benefits of the Regan/ Bush eras.  On terms of current economic policies Republicans criticize Democratic plans as most require vast amounts of spending which will only add to the deficit.  However, all this bickering between the two parties makes me wonder if the government even cares about helping the unemployed.  Democrats seems to be too focused on health care and minor environmental problems (this does not include the Gulf Oil Spill), which the American people have clearly showed no interest in. Republicans on the other hand claim they want to help, but whenever the Democrats try to introduce a new bill to assist the unemployed, the Republicans shoot it down.  There are pros and cons to each side’s actions and plans, but at the moment it is tough to see if Washington truly has the best interests of the American people in mind.  Unemployment is a huge issue that will require thought out strategies and party cooperation.