A Real JOBS Act Needs Elements Of FDR's New Deal
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(Glenn Halog, Creative Commons)
The WPA employed more than 8.5 million individuals on 1.4 million projects in its eight years of existence. The WPA’s leaders chose for the content of their programs “work that would not interfere with private enterprise, especially vast public building projects like the construction of highways, bridges, and dams.” Millions of unskilled workers were employed in construction projects, as well as arts and literacy projects, and students were given opportunities to work and earn federal funding under its National Youth Administration division. Although the program was costly to the government, more costly than direct relief programs, its leader, Harry Hopkins, remarked:
“Give a man a dole, and you save his body and destroy his spirit. Give him a job and you save both body and spirit.”
New Deal programs providing jobs for the many unemployed assisted in economic recovery, although full recovery did not occur until World War II, with the help of a war economy. Now, in a time in which the United States is in constant war, it seems that the kind of government programs afforded by the New Deal are lacking, and could provide a part of the answer to economic recovery.
President Obama recently signed into law the JOBS (Jump-Start Our Business Start-Ups) Act, a bill “aimed at giving small businesses more access to capital,” according to the LA Times. President Obama stated upon signing the bill: “I've always said that the true engine of job creation in this country is the private sector, not the government. For startups and small businesses, this bill is a potential game changer.”
What the legislation does, as reported by the Huffington Post, is to combine “a half-dozen smaller, bipartisan bills that exempt young companies from Securities and Exchange Commission reporting rules in order to reduce the costs and red tape of raising capital.”
“The centerpiece provision would phase in SEC regulations over a five-year period to allow smaller companies to go public sooner. Firms that have annual gross revenues of less than $1 billion would enjoy this ‘emerging growth company’ status.
[…]
“House Republicans hailed the legislation as a jobs bill that by spurring capital formation would lead to small businesses hiring more people. ‘The jobs act is a victory for unemployed Americans who are literally crying out for jobs. It is a victory for small companies and for entrepreneurs who want Washington to reduce the red tape that stifles innovation, economic growth, and job creation,' House Financial Services Chairman Spencer Bachus, R-Ala., said.”
Despite the Republican cheer of “victory” upon the signing of the bill, it clearly does not go far enough. The bill labels companies with up to $1 billion in revenue “emerging growth companies,” and relieves them “of disclosure and other securities law requirements for their first five years after going public.” The idea of allowing easier access to capital for businesses by decreasing regulation seems to invite fraud and deception, no matter how much the White House claims it will make sure the policy is being enforced correctly, and does not guarantee that the capital would go directly into job creation. Andrew Sorkin of the New York Times writes:
“Its goal is noble: start-ups and small businesses are the lifeblood of our economy, and it is hard to argue with helping entrepreneurs build businesses and hire employees.
“However, the legislation, in the name of creating jobs, dismantles some of the most basic protections for the most susceptible investors apt to be drawn into get-rich-quick scams and too-good-to-be-true investment ‘opportunities.’”
The bill seems just to have just as noble intentions and potentially harmful results as the policy of trickle-down economics, the idea that tax cuts for the wealthy and big business would help the economy by allowing them to create more jobs, a policy that has not exactly been successful in lowering the rate of unemployed and in bolstering the economy. Rather, it has resulted in, first, cuts to much-needed programs, such as education; second, vast and growing income inequality; and, third, reduction of the financial ability of government to provide its own effective jobs programs, including transportation projects that are needed especially now when the infrastructure of the country is crumbling with age.
Deregulation and tax breaks have traditionally resulted in, respectively, economic crashes, and the ability of the rich to maintain a high level of comfort during the crisis, relative to the middle and poorer classes who end up taking the brutal hit. Why is the government under the impression that deregulation will translate into jobs, rather than an economy increasingly riddled with the same problems that brought it to its current crisis state in the first place?
Rather than focus on increasing deregulation so that businesses can more easily obtain money and maybe use it to create jobs, why doesn’t the government take the initiative to create new jobs itself? The economy is clearly in crisis, people clearly need jobs, the wealthy and big business clearly aren’t doing their best with the money the government is giving them to create those jobs, so why shouldn’t the government? It seems that the cost of doing so would be worth the economc recovery such action would facilitate.
This country has a transportation system that is physically eroding, an unemployment rate that is at a level of 8.2 percent, and rather than doing all it can to improve the situation, the government continues to avoid the responsibility for fedreal job creation that has historically assisted in the recovery of an economy in recession.
President Franklin Delano Roosevelt’s New Deal programs enabled this country's recovery from the Great Depression by investing in the people and creating jobs. Why can’t this government learn a lesson from that, and do the same?
Reach Senior Opinion Editor Cara Palmer here or follow her on Twitter.
