Despite economic forecasts to the contrary jobless claims rose last week by 12,000 to 500,000, the third straight weekly increase and the first time in nine months that they hit the half-million mark.
Economists say the figures, released Thursday, indicate the pace of firing and layoffs is increasing and show that either the economic “recovery” has stalled or that the Great Recession could be headed for a “double dip.”
This week’s news was particularly gruesome, not only because of rising unemployment but also because jobless numbers never fell low enough for a period of job creation to begin. The economy must add 125,000 jobs each month just to keep up with population growth.
Saddled with Republicans and Blue Dog Democrats in the Senate who repeatedly stall meaningful jobs legislation, President Obama used the release of the figures to press for passage of a $30 billion small business lending bill.
“The jobless report compels us to act,” the president said late Thursday. Another Labor Department report, issued one day before the jobless claims figures were released, said small businesses are bearing the brunt of the recession. The report noted that companies with fewer than 50 employees accounted for 61.8 percent of all job losses in the fourth quarter of 2009.
“And yet the obstruction continues,” Obama declared outside the White House on Thursday. “It’s obstruction that stands in the way of small business owners getting the loans and the tax cuts they need to prosper. It’s obstruction that defies common sense.”
Although no one in government has been pushing for a massive, government-run public works program along the lines the labor movement has been proposing, the White House has argued that jobless rates will go down if Congress passes bills like the state aid bill the president signed into law last week.
Christine Romer, chair of the Council of Economic Advisers, said the jobless report “emphasizes just how important the additional job measures before Congress are.
Progressives say stubborn GOP opposition to creation of a $30 billion fund to encourage banks to lend to small businesses, which, when combined with bank leverage, could result in $300 billion in actual loans, is best explained by Big Oil’s opposition to the bill.
The bill, they say, should make honest deficit hawks happy because it pays for itself. The Democratic backed bill would do this by repealing a section of the tax code which allows five big oil companies to deduct 60 percent of their income from oil and gas production from their tax liability. The repeal would only apply to the five largest corporations with more than $1 billion in before-tax income.
As one of five oil companies with a combined pre-tax income of $25 billion, BP is one of the companies lobbying against Obama’s small business aid bill. Eliminating the tax loophole would make perfect sense, progressives note, even if the funds generated weren’t being used to pay for the president’s $30 billion Small Business Jobs and Credit Act.
Deficit hawks determined to block jobs legislation that is “not paid for,” progressives note, will block even bills that are paid for if it’s the big oil companies that have to do the paying.
Photo: Marilyn Bechtel
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