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Les Leopold

By Les Leopold
Author, “The Looting of America”

January’s reported unemploymentrate remains stubbornly high at 9.0 percent. The Bureau of Labor Statistics’ U6 jobless rate, which stands at 16.1 percent, is more accurate, since it counts “discouraged workers” who’ve given up looking for a job. Right now, more than 28 million Americans are without work or have been forced into part-time work. It will take more than 22 million new jobs to bring the official unemployment rate down to 5 percent (our current definition of full-employment).

Please don’t wait around for John Paulson to create those jobs. He might have raked in a record $5 billion in 2010, but his job isn’t about employing people to make things or provide services. He’s a hedge fund manager. Paulson (a spiritual but not a blood relation of Henry, Bush’s Treasury Secretary) leads the list of America’s top “earners” for the year. If you divide his 2010 take by the standard work year of 2,080 hours, you’ll find that this ubermensch had a wage of $2.4 million an HOUR.

SEC goes after Goldman from Marketplace on Vimeo.

The robber barons of old earned their moniker by commandeering railroad, meatpacking, oil and steel monopolies. Paulson’s was a different kind of theft — but theft it was. In fact, he barely evaded prison for his role in Goldman Sachs’ Abacus deal, which suckered investors into buying securities that were explicitly designed to fail. Paulson colluded with Goldman Sachs to build a synthetic collateralized debt obligation (CDO) that bet on the very worst kinds of mortgage securities. Goldman got the fees and Paulson got a billion dollars for betting against those securities. The investors, trusting GS’s sales pitch, had no idea that Paulson was allowed to pick the most toxic securities to mix into the stew. As Paddy Hirsch of American Public Media’s “Marketplace” points out in this entertaining video , it’s like a gambler and a bookie colluding to field a horse they’ve groomed to lose. Eventually, GS was flushed out into the open by an angry mob of CDO investors and forced to cough up a record $550 million in penalties for “not disclosing the role of Paulson and Co. Inc. in the portfolio selection process and that Paulson’s economic interests were adverse to the CDO investors.” (more…)

Les Leopold

By Les Leopold
Author, “The Looting of America”

If future job creation reaches about 208,000 jobs per month, the average monthly job creation for the best year for job creation in the 2000s, it will take almost 140 months (about 11.5 years) to reach pre-recession employment levels. In a more optimistic scenario with 321,000 jobs created per month, the average monthly job creation for the best year in the 1990s, it will take 59 months (almost 5 years). ~Michael Greenstone, Adam Looney The Long Road Back to Full Employment: How the Great Recession Compares to Previous U.S. Recessions, The Brookings Institution

This may be the first time in American history that the super-rich are experiencing an economic boom while the rest of us are coping with serious economic difficulties. Even during the depths of the Great Depression there was some equality of suffering. Of course, the wealthy weren’t exactly standing in bread lines wondering if they’d ever work again. But the rich and the poor both felt the crisis. This time around, it’s a Tale of Two Cities: the super-rich are doing just fine, thanks to taxpayer largess, even as the rest of us are staggering through the highest sustained unemployment level since 1937.

Our Wall Street billionaires easily weathered the financial storm that they themselves created. It’s as if nothing had happened. The financial reforms Congress passed are weak. The biggest banks actually are bigger. And Wall Street profits and bonuses are approaching record highs. That’s in stark contrast with the fact that more than 29 million Americans are without work or have been forced into part-time jobs.

With the Republican landslide, the super-rich have nothing to fear from Congress. No need to worry about tax increases or tighter regulations now. The hedge funds will be able to hang on to their 15 percent tax rate (by claiming their earnings as capital gains) while raking in $900,000 an hour (not a typo). Meanwhile the pressure mounts to cut social spending — because, of course, we’ve got to combat the large deficits we racked up by giving tax breaks to the rich, bailing out Wall Street, and dealing with the financial crash that Wall Street created. (We get a deficit commission instead of a jobs commission?)

But the real mystery is how quiet progressives are. We seem constitutionally incapable of facing the enormity of the employment crisis.

As far as I can tell, most liberal advocacy groups are carrying on as if the economy hadn’t crashed at all. It’s like we’re all stuck in our remote silos — each working on our own separate issues. We have no shared vision, shared programs or shared will to tackle the broader unemployment crisis. We hope the economy will somehow resurrect itself so that we can go on fighting for our favorite cause without any further interruptions.

Meanwhile, the right, especially the Tea Party, definitely is in crisis mode, and they have a plan. In my opinion they have misidentified the crisis – big government and debt – and have the wrong plan — cut taxes and government spending. But they have a vision, they have passion, and they’re not afraid to challenge not only the Democrats, but the Republicans. They’ve hit on a clever theory to explain the jobs crisis, one that can’t be disproved by facts: It’s caused by big government’s interference in the economy. The solution: slice government spending and regulations so that free enterprise can prosper. And if unemployment still remains high after budget cuts–well, then we just didn’t cut enough. It’s a perfect Catch 22.

And the rest of us are saying… what? What do environmentalists propose to do about the jobs crisis? What is the women’s movement’s economic program? What do progressives involved in healthcare or education think we should do to create the 22 million new jobs we need to get back to full employment?

Yes, there’s a lot of positive discussion about rebuilding our economy through green jobs and renewable energy. But the scale of these proposals is far too small to put much of a dent in the unemployment numbers. Are we all too afraid to say what’s really needed?

We need hundreds of billions of dollars of public investment, right now, paid by taxes on the super-rich.

Why are progressives so timid? Part of the answer lies in our permanent attachment to the Democratic Party. It seems that we can’t ever imagine a time when it would be appropriate to abandon or at least openly fight with the Dems — even those who abandoned us long ago. What will we do as the remaining Blue Dogs move even further to the right, joining with the Republicans on deficit reduction, gutting health care reform, outlawing abortions and stonewalling on climate change? One thing is certain — the Democratic Party is in no mood to lay out a bold national proposal to create the millions of new jobs we need. Most are tacking to the “center” to avoid the fate of Russ Feingold, the very best of the bunch.

What would a massive job creation program look like?

Let’s start with a no-brainer: We hire an army of at least one million installers to weatherize every home and business in the country. Hiring all these workers –at decent wages –through tens of thousands of local contractors will probably add another 400,000 jobs (in addition to the original million) as these re-employed workers spend their earnings. Households and businesses will save on their energy bills, and we’ll reduce global warming emissions. The budget crisis facing state governments will ease as tax dollars start pouring in and unemployment insurance claims plummet. We’ll trigger an economic upswing that’s also good for the environment.

Next, we should fund free higher education at all public colleges and universities, a social good that will also open up the job market by drawing people from the workforce into the educational system. A hiring and construction boom on campuses all over the country will generate a flood of jobs for our millions of unemployed construction workers. This is precisely how the GI Bill of Rights averted what could have been a staggering unemployment crisis after WWII — a time when millions of returning veterans were coming back home in search of work. Through the GI bill, three million instead went to school. Congressional studies show that the GI Bill returned almost $7 dollars of economic growth for every dollar invested — probably the best investment the federal government ever made.

We should also invest massively in alternative energy research, in rebuilding and enhancing our infrastructure, and in meeting a myriad of other needs in our communities. Ask every town in the country to come up with ten projects that need doing right now, and then have the federal government fund them. The ripple effect would wake up our slumbering economy.

Oh, but won’t all this cost a fortune? Aren’t we already tapped out from Wall Street bailouts and the half-assed stimulus program (not to mention two wars)?

Good question — it gets us to the best part of our in-your-face program. We need to make those who crushed our economy, and whom we so generously bailed out, foot the bill. The American people, I believe, would support a windfall tax on financial profits and bonuses and eliminating tax loopholes on hedge funds to fund the jobs we so desperately need.

Time for a Jobs Party?

Will any of this pass in the near future? Of course not. But it’ll never happen if we don’t propose what is really needed.

We have no prayer of tackling the jobs crisis until we articulate a clear-cut agenda and start pressing for it. And we can’t do it alone. We need a sustained, organized voice independent of the Democratic Party that focuses clearly on the jobs crisis. In fact, we should take a cold hard look at creating a Jobs Party. Maybe, one day, it would become a third party that would truly vie for power. But at the very least it could create the same kind of chaos among the Democrats as the Tea Party is creating among the Republicans. Wouldn’t it be nice to see Democratic officials, fearing primary fights, tripping all over themselves to proclaim their allegiance to the Jobs Party agenda?

Right now, the only conversation we’re hearing on jobs is a boring rerun of failed neo-liberalism – cut taxes on the super-rich, deregulate big business and pray for rain. Instead, we need to force politicians to engage in a much more aggressive national conversation about jobs. How are we are going to create the 22 million new jobs to get us back near full-employment?

Will it really take eleven years or more, as the Brookings Institution study (cited above) suggests, for us to get these jobs back? That’s up to us. A Jobs Party with moxie could speed up the timetable during this new era of joblessness.

Maybe all this sound fanciful and unrealistic. But let’s remind ourselves of how fast the world is changing. Did anyone believe that President Obama could go from being America’s darling to chopped liver in less than two years? Did anyone believe that a Tea Party would become a “credible” force among more than 40 percent of the electorate by pushing an agenda that died with Barry Goldwater a generation ago?

Actually, the most fanciful path of all might be hoping we can muddle through indefinitely with the Democrats while ignoring the employment crisis as we plug away, day after day, inside our issue silos.

Come on — let’s say what we really believe in before we forget how.

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Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009. He is working on a new book, “How to Earn $900,000 an Hour: The Rise of Wall Street Billionaires and the New Class War,” which is to be published in 2011.

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This piece was first published on The Huffington Post.

Les Leopold

By Les Leopold
Author, “The Looting of America”

WASHINGTON (Reuters) – New claims for jobless benefits unexpectedly rose last week (Oct 14, 2010).

Let’s be honest. Wouldn’t you like to rake in a cool $900,000 for one hour’s work? No? Still have hippie ideals, perhaps? You could work for just 10 minutes and walk off with $150,000. Push yourself to work one entire day and we’re talking $7.2 million. Hang in there for a month, and you’ll pull in more than the richest athletes make in 10 years — $256.5 million. And in one year? Well, you’ll be earning what the top ten hedge fund honchos each averaged in 2009 — $1.87 billion. Wouldn’t you like to know their secrets? Here are a few:

Step 1: Check your conscience at the door.
You must be able to live with the knowledge that while you were making $900,000 an hour, more than 29 million other Americans had no job at all or were forced into part-time work. Also you’ll have to live with the uncomfortable fact that your sector — high finance — crashed the economy, leaving eight million Americans jobless in a matter of months.

You’re obviously good at math so you’ll be able to calculate that it will now take 22.5 million new jobs to bring the economy back to full-employment (an unemployment rate of 5 percent or less). That’s the equivalent of creating 630 new corporations the size of Apple Corp. (35,000 employees each). Sadly, you’re also a realist, so you know that unemployment is likely to remain at record post-WWII highs for years to come. (more…)

Les Leopold

By Les Leopold
Author, “The Looting of America”

The ranks of the working-age poor in the United States climbed to the highest level since the 1960s as the recession threw millions of people out of work last year, leaving one in seven Americans in poverty. The overall poverty rate climbed to 14.3 per cent, or 43.6 million people, the Census Bureau said last week in its annual report on the economic well-being of US households. Gulfnews.com

While 43.6 million Americans live in poverty, the richest men of finance sure are getting pissy. First Steve Schwartzman, head of the Blackrock private equity company, compares the Obama administration’s effort to close billionaires’ tax loopholes to “the Nazi invasion of Poland.” Then hedge fund mogul David Loeb announces that he’s abandoning the Democrats because they’re violating “this country’s core founding principles” — including “non-punitive taxation, Constitutionally-guaranteed protections against persecution of the minority, and an inexorable right of self-determination.” Instead of showing their outrage about the spread of poverty in the richest nation on Earth, the super-rich want us to pity them?

Why are Wall Street’s billionaires so whiny? Is it really possible to make $900,000 an hour (not a typo — that’s what the top ten hedge fund managers take in), and still feel aggrieved about the way government is treating you? After you’ve been bailed out by the federal government to the tune of $10 trillion (also not a typo) in loans, asset swaps, liquidity and other guarantees, can you really still feel like an oppressed minority?

You’d think the Wall Street moguls would be thankful. Not just thankful — down on their knees kissing the ground taxpayers walk on and hollering hallelujah at the top of their lungs! These guys profited from puffing up the housing bubble, then got bailed out when the going got tough. (Please see The Looting of America for all the gory details.) Without taxpayer largess, these hedge fund honchos would be flat broke. Instead, they’re back to hauling in obscene profits.

These billionaires don’t even have to worry about serious financial reforms. The paltry legislation that squeaked through Congress did nothing to end too big and too interconnected to fail. In fact, the biggest firms got even bigger as they gobbled up troubled banks, with the generous support of the federal government. No bank or hedge fund was broken up. Nobody was forced to pay a financial transaction tax. None of the big boys had a cap placed on their astronomical wealth. No one’s paying reparations for wrecking the US economy. The big bankers are still free to create and trade the very derivatives that catapulted us into this global crisis. You’d think the billionaires would be praying on the altar of government and erecting statues on Capital Hill in honor of St. Bailout.

Instead, standing before us are these troubled souls, haunted by visions of persecution. Why? (more…)

Les Leopold

By Les Leopold
Author, “The Looting of America”

The August unemployment numbers are ugly, yet again. Nearly 30 million Americans are still jobless or forced into part-time jobs. The Bureau of Labor Statistics official unemployment rate is 9.6%. It’s borader and more telling jobless rate (U6) of 16.7% confirms that we’re stuck in our own version of the Great Depression. We’ll need more than 22 million new jobs to bring us back to full-employment. Happy Labor Day.

To get out of this quagmire we’ll have to face up to two fundamental facts:

1. We really are in the midst of a horrific jobs crisis. All the happy talk about the economy being on the road to recovery is just plain old denial. We’ll never find jobs for all the people who desperately need them until we recognize that this employment crisis poses a clear and present danger to our republic. Modern capitalist societies require full employment. When we don’t have it for long periods of time, chaos ensues. What’s missing in Washington is a sense of urgency. Denial is dangerous — and an insult to the unemployed.

2. We must face up to the real causes of this mess. Unfortunately, a lot of Americans are succumbing to a wrong-headed narrative that has been pushed into our heads:

“We Americans sank ourselves in debt. We consumed more than we produced. We bought homes we couldn’t afford and used them as ATMs. Of course Wall Street did its part by offering us mortgages they knew we couldn’t really afford. The government also contributed mightily by pushing Fannie and Freddie, the giant housing agencies, to underwrite “politically correct” loans to low-income residents who shouldn’t have been buying homes at all. In short, we all are to blame.” (more…)

Les Leopold

By Les Leopold
Author, “The Looting of America”

My wife, a labor economist, is upset with NPR’s “The Take Away” (and many other news programs) for reinforcing the myth that somehow the unemployed are to blame for not having a job. We all should be angry as well because the jobs just aren’t there. In fact, the latest unemployment statistics show that there are five unemployed workers available for every vacant job. Why blame workers when it’s so clear that Wall Street’s reckless gambling caused the jobs crisis?

By now, you’d think we’d have buried this issue. But like Dracula it refuses to die. And so, I return to the subject with the hope of driving a stake through its heart and giving it a proper burial. Among the claims we need to put to rest:

1. Extended unemployment benefits are causing unemployment. Extending benefits for the long-term unemployed will only encourage them to sit at home on their extended derrieres and let vacant jobs go begging.

What jobs? We’re down 8 million since the start of the Great Recession. We aren’t even creating enough new jobs to keep up with population growth. So what jobs are the unemployed not taking? (more…)

Les Leopold

By Les Leopold
Author, “The Looting of America”

As the financial reform bills grind through the congressional conference committee, the largest banks are howling like little brats because they haven’t gotten everything they want, right now! “Gimme!”

Of course the reform package already gives the biggest banks the juiciest goody of all by letting them continue to be “too big to fail.” Life will be good for the top 20 or so financial institutions. They’ll have access to cheaper funds based on implicit government guarantees –since everyone on the planet knows we’ll bail them out the next time they crash. (Hedge fund managers — the top 10 each earned a cool $900,000 an hour in 2009 — are also faring well on Capitol Hill. Senators just stalemated a measure that that would have forced them to pay income taxes like the rest of us instead of pretending their income is capital gains, which is taxed at lower levels. The idea had been to use those extra tax dollars to extend unemployment benefits and aid distressed state and local governments that are now laying off teachers. Let them eat cake.)

But the big banks still aren’t satisfied. Now they’re whining about the possibility that Congress might pass a version of the so-called Volcker Rule, which would prohibit them from engaging in “proprietary trading” — trading for their own accounts — while also receiving federal guarantees for their consumer deposits. From a taxpayer’s point of view, the argument is pretty simple: Why should the government let these bonus-rich banks speculate using taxpayer guarantees as collateral? Why should we underwrite their casinos?

The banks’ response to that question is extremely revealing. Their first defense is to insist that the financial crash wasn’t their fault. (“Honest, I didn’t break the cookie jar!”) The housing bubble did it!, they wail. As the New York Times reports, “the banks assert that the financial crisis of 2008 was a lending-based crisis caused by reckless loans made to unqualified home buyers. It was not, they say, a trading crisis.”

The bankers are hoping to redirect the public’s wrath with this little fabrication, but haven’t quite succeeded. And won’t, unless (until?) they buy up all the media. In truth, the crisis was started and amplified by their own financial engineers who dreamed up a series of fantasy finance instruments like synthetic CDOs. From these, the banks built an upside-down pyramid of bets based on extremely risky assets. The banks claimed these bets were as safe as AAA-rated Treasury notes — but of course they weren’t. (That didn’t stop the rating agencies from gladly joining the banks in this profitable scam.)

The banks’ socially useless new financial instruments multiplied a manageable $300 billion sub-prime mortgage problem into a multi-trillion dollar global disaster. This massive gambling operation directly led to the destruction of more jobs than any time since the Great Depression. Twenty-nine million people are without work or forced into part-time jobs, not because of housing loans by low-income buyers, not because of over-leveraged consumers, but because the biggest banks in the world got too big, too powerful, and way too greedy. And now we’re allowing them to get even bigger and greedier. (For an easy to read account of how calamitous financial gambling actually caused the crash, see The Looting of America.)

The banks’ second defense, believe it or not, is to argue that their financial gambling operations are really safer than making loans. Say what? According to a chief lobbyist for the 19 largest financial companies:

[Making loans] “is arguably the riskiest activity that any financial entity can engage in. It is money out the door that banks hope will be paid back.”

Take a deep breath and think about that one. The biggest banks in the world are telling us they’re scared to make loans? That lending people money so they can start or expand a business or buy a house or car is too risky compared to their high-stakes trading games?

Hmm. Risky for whom? It’s true that under the current rules governing high finance, the bankers can rig the game and win every time. They’re essentially serving as “the house” within a vast global casino. That yields a lot more cash than their traditional job of moving the nation’s savings into productive investments. And as we’ve just seen, if it all comes crashing down around their ears, the tax-paying public will rescue them.

In fact the banks’ gambling games are hugely risky – just not for them. They get all the upside, while the taxpayer underwrites the downside. That’s not theory. It just happened and it’s likely to happen again before long.

Meanwhile, the banks have now admitted the deep, dark truth: They’re no longer focusing on the old-fashioned business of moving savings to productive investments. Their mission now is to dominate the financial industry while making as much money possible.

This narrow focus on speculative gambling is the major reason behind our jobless recovery. The banks aren’t making their capital readily available to the real economy where it is desperately needed. Instead, the banks are back to creating and propagating fantasy financial instruments — the most profitable financial enterprise ever invented. They’re addicted to it, like gambling junkies at the craps table.

The casino they’ve built is quite big and splashy. They’ve got their high-speed trading. They got their customized derivatives. And they’ve got control of the largest financial marketplaces on Earth. It’s certainly a beautiful spread for the big boys, as the field narrows down to a handful of huge banks. They’re amassing trillions in assets and capital…and hundreds of billions in bonuses.

But they won’t be using these riches to invest in something so boring as a business or consumer loan. Instead, they’ll put more money down at the casino, multiplying their returns and their influence over both global finance and our political system. (And maybe they’ll spend a few bucks to ensure that the media rewrite the history of the crash while they’re at it.)

So yes, Congress should make banks separate proprietary trading and risky derivatives businesses from everyday, old-fashioned banking. (Though I expect that any such rules Congress passes will be riddled with holes, leaving the largest banks free to gamble.)

But even if these reforms are reasonably strong and enforced, they attack only a small part of the problem: Too big to fail financial institutions are far too large and far too powerful to coexist with democracy. They pose an immediate threat to middle-class life. The only sensible and safe solution is to bust them into smithereens.

I don’t know how we’ll get there. But if we don’t we may find ourselves permanently ruled by a new financial oligarchy that pulls the strings of economic and political power.

This is not the time to give up. Democracy keeps raising its head, from the striking workers in China to marches in the streets of Europe. What will happen over the next decade in this epic clash with global financiers? That’s up to us.

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Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.

Mitchell Hirsch

By Mitchell Hirsch
Blogger

Having moved to protect more of the income of wealthy hedge fund and other investment managers from being taxed at normal rates, the Senate is now considering taking $100 a month away from recipients of unemployment insurance.

The New York Times reports:

Senate Democrats are exploring whether to eliminate an extra $25 a week in unemployment benefits, part of the economic stimulus legislation passed in 2009, as a way to cut costs and attract Republican votes for a stalled package of tax breaks, tax increases on the affluent and safety-net spending.

Top officials said that change would save billions of dollars over the next six months and could lead to approval of an overall extension of jobless pay by making the legislative package easier to swallow for lawmakers worried about deficit spending.

When they approved the stimulus legislation in 2009, lawmakers raised the basic unemployment benefit by $25 to provide additional financial help. Some Democrats have suggested that increase be jettisoned as they try to hold down the cost of safety-net spending.

There are currently more than 10 million jobless workers receiving either state or federal unemployment insurance. Eliminating the extra $25 per week would cut the average six month unemployment compensation by $600. And it would reduce the average weekly unemployment check to $290.

Meanwhile, those needy hedge fund managers, they get to keep more of their sky-high incomes, with more of it protected from the tax rates ordinary workers must pay.

The Miami Herald reports:

Senate Democrats on Tuesday weakened efforts to end a controversial Wall Street tax break, watering down a bid to raise taxes on managers of hedge funds, private-equity funds, venture capital firms and other business partnerships.

The Senate action retreated from a step taken last month by the House of Representatives, where lawmakers voted to get tough with Wall Street financiers, an apparent bow to election-year pressure from constituents outraged that some captains of finance were taxed at lower rates than their secretaries are.

Currently, managers of these investment funds are compensated with a share of the fund’s profits, referred to as “carried interest.” This compensation is taxed as a capital gain, and the capital gains tax is now 15 percent.

Senators scaled back the House plan to tax as “ordinary income” some 75 percent of the fund-income these managers receive. Instead, the Senate would trim the tax hit to 65 percent, and 55 percent for assets held longer than seven years.

See what they mean by “cutting spending?” Yeah – your spending.

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The piece originally was published at Working America’s Main Street blog.

Isaiah J. Poole

By Isaiah J. Poole
Executive editor of the blog site OurFuture.org

Oh, the irony. As Defense Secretary Robert Gates was on Capitol Hill today telling a Senate appropriations subcommittee that Congress has to approve a $33 billion supplemental war funding request by July 4 or else “we begin to have to do stupid things,” the Senate did an incredibly stupid thing itself: By a vote of 45 to 52, it blocked a spending and tax measure that if enacted would prevent the loss of hundreds of thousands of jobs nationwide and would begin to close a particularly egregious tax loophole.

Once again, a majority of the Senate has placed trying to use whipped-up fear of growing deficits to protect their own jobs over aggressive action to create and protect jobs for the American people.

HR 4213, the American Jobs and Closing Tax Loopholes Act of 2010, was the victim today of yet another conservative filibuster. But this time, several Democrats joined the typically unbroken wall of Republican opposition. Those Democrats were Sens. Evan Bayh, Ind.; Mark Begich, Ark.; Russ Feingold, Wis.; Herb Kohl, Wis.; Mary Landrieu, La.; Claire McCaskill. Mo.; Robert Menendez, N.J.; Bill Nelson, Fla.; Ben Nelson, Neb.; Mark Pryor, Ark., and Jim Webb, Va. Independent Sen. Joe Lieberman, Conn., also voted to block the bill. Sens. Robert Byrd, W.Va.; and Blanche Lincoln, Ark., did not vote.

Just a taste of what was at stake in this bill was explained by Pennsylvania Gov. Ed Rendell earlier today. The bill included funding to offset state spending for Medicaid, and without that money “we will have to lay off 20,000 people. These would be teachers, state workers, fireman, policemen and caseworkers,” Rendell was quoted by CQ as saying.

In fact, according to the Center for Budget and Policy Priorities, about 900,000 jobs are likely to be lost in the next 12 months without federal aid that would help states keep these workers. And how stupid would it be to allow that to happen, in the name of deficit reduction?

Critics say that the measure would add $80 billion to the federal deficit. But what do we lose when 900,000 people who are teaching our children, protecting our lives and property, maintaining our public spaces and serving us in innumerable other ways are unemployed?

Here’s one way to think of the loss. On Sunday The Washington Post profiled Angie Walker, a D.C. resident living in view of the Capitol building in the city’s Ward 8. She has a 19-year-old daughter and a 2-year-old grandson. In her neighborhood, the Post reports, “unemployment, estimated at 25 percent, approaches 40 percent when counting the underemployed and those who have given up looking.” Her experience as a cook means that she can get some jobs, “but they’re almost always part time, low paying and temporary.”

What are we saying to Walker and her children when White House officials threaten to do “stupid things” if their defense spending proposals aren’t rubber-stamped by Congress but there are no comparable rumbles of thunder when Congress won’t act on a measure essential to the nation’s economic security?

Angie Walker is like a lot of us. She’s made a couple of wrong turns in her life but she’s now trying to do what those Senate deficit hawks say she’s supposed to do: apply for work and then apply herself when she gets that work. But playing by those rules doesn’t work when Congress won’t make the basic policy decisions that are necessary to get a broken economy to work. We can’t afford to send that message to Walker and her children. And if the economy is not working for Angie Walker and the thousands of other struggling Ward 8 residents, it’s not working, period.

It is time to tell the Senate that it is being stupid. The Senate must pass legislation that will aid the jobless and prevent a massive wave of layoffs.

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This post originally appeared on the  Campaign for America’s Future (CAF) Blog for OurFuture.  Sign up here for the CAF daily summary.

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Isaiah J. Poole worked for 25 years in mainstream media, most recently at Congressional Quarterly. Most of his journalism experience has been in Washington as both a reporter and an editor on topics ranging from presidential politics to pop culture. He is a founding member of the Washington Association of Black Journalists and the National Lesbian and Gay Journalists Association.