The stimulus one year later: A bold move that began a jobless recovery
OPINION - Abysmal disparities in economic opportunities prove that equality has not yet been achieved...
One year ago, President Obama was trying to scare us. He told us that if we didn’t sign off on his massive $787 billion dollar stimulus package, we could be stuck in the greatest depression the nation has ever seen. The economic world would come to an end and the fire of hell would rain down on the American consumer. We listened to our new president and allowed the culture of fear to paralyze our collective psyche. While economic caution was an appropriate tool for the president to use, that caution should have been accompanied by a commitment to prudent courage. Instead, it turned into all-out fear and halts on investment, lending and consumer spending, creating even greater problems than he’d had before.
By passing the stimulus in high democratic fashion, the Obama administration was able to spend money the Obama way. He was allowed to ride the popularity of an historic election all the way to a trillion dollar after-party, leaving our country with a shocking deficit that shows no signs of declining anytime in the near future. But Obama had good training from the Republicans, who decided to start spending half a trillion dollars per year on meaningless wars. Massive military spending and unrestrained entitlements are going to lead to the end of U.S. economic dominance and prosperity.
Obama’s economic policy team, which leaves much to be desired, was right about how to respond to the downturn. Spending and borrowing was the way to hit the crisis head on, with enough momentum to help our nation avoid a financial tsunami unlike anything we’d seen in 80 years. Most interesting was that the downturn was driven in large part by corporate and political irresponsibility during the 2001 – 2007 time period. During this era of deregulation and tax cuts, corporate profits rose dramatically, while worker wages remained stagnant. In fact, the United States has not created one net new job in our economy since 1999.
The president took bold moves to stop the financial bleeding. The economy continued to suffer in 2009, but there are some indicators that the economic state of our nation is improving: Since bottoming out below 7,000 in March of 2009, the Dow Jones Industrial Average has risen above 10,000 points once again. In other words, this was a great year to invest in the stock market. Additionally, US GDP growth rose at an annualized rate of 5.7% during the fourth quarter of 2009, a rate we haven’t seen since 2006. If the Republicans are going to blame President Obama for everything else, then he certainly deserves credit for recent growth. But I’m sure you won’t hear that data repeated at any of those “non-racist” Tea Parties.
The big problem for President Obama is jobs. Thus far, the recovery has been essentially jobless, reflecting the same style of economic growth that we’ve had in our nation since the year 2000. Most notably, African-Americans find themselves experiencing unemployment levels matching that in some third world countries, and this is clearly unacceptable.
In January 2009, black unemployment was 72 percent higher than white unemployment (7.8 percent to 13.4 percent) according to the Bureau of Labor Statistics. In January 2010, that difference has risen to 80 percent (9.6 percent to 17.3 percent). The white unemployment rate rose by 1.8 percent during 2009, while the black unemployment rate rose by more than twice as much, 3.9 percent. While we know that black men have it worse than black women when it comes to employment levels, black female unemployment grew by more than four times that of white women (4 percent to .9 percent). All the while, black men are sitting on an unemployment rate of 19.5 percent, a 3.7 percent rise since the start of the year.
Yes Mr. President, we have a problem. All indicators are implying that the African-American community may have earned its first black president by agreeing to remain silent about an economic downturn that makes us want to scream in pain. Black teen unemployment is 80 percent higher than that of white teens (43.5 percent to 24.1 percent), presenting another serious long-term problem. Given that we are living in a nation that has not effectively confronted the issues of poor inner city education and mass incarceration, one must find it unconscionable that a black president can leave black youth in the streets with no education or jobs. The only places that remain for these youth are caskets and penitentiaries, two other industries that are booming at black America’s expense.
No one knows whether President Obama’s stimulus package helped us to avert disaster, or kept the economy from becoming all that it could be. Extensive GDP growth and high stock market returns during the fourth quarter of 2009 are indicators that employment numbers may improve during 2010. The president is right to expect that the increase in national productivity could slowly turn into job creation, since companies may start finding light at the end of the tunnel. But while we can’t be certain if President Obama’s stimulus package actually worked at helping the entire economy, we know one thing that the package certainly did not do: Reduce the unemployment gap between blacks and whites in America.
I applaud President Obama’s decision to hold a meeting last week with Rev. Al Sharpton, Ben Jealous and Marc Morial, but this must be the first step. The president must ensure that the African-American community is included in targeted programs to create economic equality in America, and these plans must not only include the urban poor. Educated African-Americans are not having the same opportunities as their white counter parts, so as painful as it might be for our nation to address the race problem, we must find some way to put that issue on the table. With such abysmal disparities in economic opportunities, we can hardly argue that equality has been achieved.
Dr. Boyce Watkins is the founder of the Your Black World Coalition and the initiator of the National Conversation on Race. For more information, please visit BoyceWatkins.com>
