Ed Schultz spoke to journalist David Cay Johnston this Friday about what America needs to do to keep adding more jobs to our economy, the importance of continuing the extended unemployment benefits, and the Republicans' refusal to help the problem by passing President Obama's jobs bill.
As Johnston noted, Republicans love to complain about "uncertainty" creating problems with the economy, but par for the course, they're generally the ones causing it.
SCHULTZ: We told you at the top of the show, Republicans are dragging their feet to get a tax cut deal with the American people. Those Republican delays are putting our economic recovery, I think, in some serious neighborhood, dangerous, very dangerous.
But the good news is though, the latest employment numbers came out this morning. The economy added 146,000 jobs in the month of November. The unemployment rate hit a four-year low. It inched down to 7.7 percent.
Here's the bad news. America lost another 7000 manufacturing jobs last month. Overall the job numbers are better than analysts predicted, but republicans refuse to compromise on policies which will bring back even more jobs next year. They are risking our nation's economic recovery. Here's how Speaker John Boehner's explanation today.
BOEHNER: The risk the President wants us to take, increasing tax rates, will hit the many small businesses that produce 60 to 70 percent of the the new jobs in our country. That's the whole issue here.
SCHULTZ: Once again, it's all theory from Boehner. No guarantee on that. But Democratic leader Nancy Pelosi says the problem goes beyond the fiscal cliff debate.
PELOSI: Our economy is moving forward, but it could be growing at a faster rate if the Republican leadership had taken up and passed some of President Obama’s job initiatives including the American Jobs Act and had passed the middle income tax cut.
SCHULTZ: So, let's cut to the chase. One of those Congressional members is lying. Either the Republicans are right on cutting taxes on small businesses will add jobs or the President's stimulus policies are fueling the economic recovery in this country.
Joining me tonight to sort out the facts, David Cay Johnston, Pulitzer Prize winning journalist and author of "The Fine Print." Let's start with the job growth. Unemployment hit rock bottom near the beginning of the -- under the Bush administration. You can see this right here. This is of course the changing of the color here when President Obama took over in January of '09. Who is responsible for this turn around?
JOHNSTON: Oh, absolutely the President and it would be a better turn around if the Republicans had allowed a bigger stimulus. We would have many, many more jobs if we had had a bigger stimulus.
SCHULTZ: You would make the case we didn't spend enough on the economy?
JOHNSTON: Not only did we not spend enough, but we wasted 40 percent of it on tax cuts for small business, which is inherently savings and not stimulus. It was a real policy mistake.
SCHULTZ: So, considering where we were and not 33 months of private sector job growth, is this historic?
JOHNSTON: Well, it's certainly, we're going in the right direction. We're not creating as many jobs as we need for the population growth, but it's astonishing that we are recovering in the way that we are. And if the Republicans would stop creating the uncertainty, remember the uncertainty, by not making a deal, we'd see the numbers improving very dramatically.
SCHULTZ: Well, let me ask in terms of the stability, I mean, these are numbers. Does it look historic? No, it doesn't, but when we were down here, we were on the verge of tipping over. Our whole economic situation, our whole financial situation, in that regard --
JOHNSTON: Obama has managed a bad hand very, very well. But he was dealt an incredibly bad hand and it's surprising it didn't get a lot worse than it did.
SCHULTZ: Okay, this shows the overall unemployment rate under President Obama’s administration. Which of the President's policies have helped the most in this?
JOHNSTON: Well very crucial to this has been his decision to get Congress to extend unemployment benefits, surprisingly. Because when people have the money are spending it back in the economy. Remember, every 50th person you meet statistically only has food stamps today as income, and that's the result of these years of the Republicans' policies.
So having unemployment and extending benefits next year would be very important to continuing to bring this number down and having businesses hire more people because they have customers with money in their pockets to buy products and services.
SCHULTZ: Alright, this is what could have happened if Congress had failed to pass the Recovery Act. The Center on Budget and Policy Priorities says we have added almost 1 million more jobs because of the stimulus package. Why are the Republicans fighting stimulus spending now? Why? Is it they don't want to see President Obama succeed or do they really believe spending more money is not the right thing to do?
JOHNSTON: Well, I think both of those are true. They do not want him to succeed. There's no question about that. They assert that spending more money is wrong. We need to be spending a lot more money, fixing up our infrastructure and creating jobs and making the economy run better, but they're trapped, Ed. They have sold the public on the same idea that we once had sold to us that the earth was the center of the universe and everything revolved around it. And they... it's dogma. They cannot abandon their dogma.
SCHULTZ: You heard the sound byte earlier, John Boehner says cutting taxes on small businesses will help create jobs. Is he right?
JOHNSTON: No. Nobody creates a job to get a tax cut. You create jobs when you have more customers with more money to spend on product and services. It's getting money throwing through the bottom ranks, the bottom 90 percent of the economy that will result in more jobs.
SCHULTZ: Alright, we are seeing record levels of long-term unemployment right now. And this is the angst in the economy. Even though it's dropped to 7.7 percent, millions of people have been out of work for 27 weeks or more. Long-term unemployment benefits expire on December 29th.
This is part of the cliff. It's going to be a tough holiday for a lot of families out there across the country, but last week, we've got to point out that the Congressional Budget Office reported, we could add 300,000 more jobs by extending unemployment benefits which we were talking about. It would cost $30 billion. Now will Republicans agree at least to extend the unemployment benefits, or do they just not see any value in doing that, because they're just ideologically opposed to it?
JOHNSTON: They only need about 25 republicans to step over to agree to do this, and you're seeing Grover Norquist's grip fall apart, so we may well see this. This is a really important thing to do to improve the lives of young people. And one thing to keep in mind is, with that that long term unemployment chart you had, it is younger workers who are being hurt the most.
The job gains are heavily among people 55 and over. We don't want to have a society where we get cynical young people that well, there's no point in playing by the rules and working hard because you won't get a job any way.
SCHULTZ: Why not go over the cliff? If we go over the cliff, we are talking solving the financial problems, but we run the risk of another recession. I believe, personally that we might dip a little bit, but it won't be anything like the first chart we showed. I mean, let's get rid of Bush tax policies and start over. What about that?
JOHNSTON: I think that that may well be a good idea. It's risky Ed. There is some risk as to what will happen. We don't know. But the fact is the government would then have all of this revenue. If it spends that revenue to create jobs and regardless of what the Republicans say, government creates jobs all the time from school teachers like your mother, to people like my brother who was a ditch digger and you could get to work because he was out there cleaning a culvert out after a storm. We need a whole lot of jobs created, and if the government gets all the revenue and we push it out the door, then that will help the economy grow.
SCHULTZ: We had an excellent economy under President Clinton at those rates. And what are we afraid of?
JOHNSTON: In fact more jobs were created in the eight years of Bill Clinton than the 20 years of Reagan and the two Bushes.