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The stimulus, Obama, and FDR
I, maybe us much as or more, than anyone wish that President Barack Obama would be more like FDR. But I also recognize there are disadvantages Obama has that FDR didn’t. Tow of which are smaller majorities in Congress, and less of a crisis than that of 1933. That being said I think two areas in particular where I fault Obama for not being like FDR, is that he hasn’t been as ever-present to the American people, showing them what he’s doing – day in and day out – to fix the economic situation. And second, he has not kept on reminding the American people how we got into this mess in the first place.
Obama has clearly failed on making sure everyone knows that the stimulus worked.
But in Washington stimulus has become the policy that dare not speak its name.
This wouldn’t be surprising if we were talking about a failed program. But, by any reasonable measure, the $800-billion stimulus package that Congress passed in the winter of 2009 was a clear, if limited, success. The Congressional Budget Office estimates that it reduced unemployment by somewhere between 0.8 and 1.7 per cent in recent months. Economists at various Wall Street houses suggest that it boosted G.D.P. by more than two per cent. And a recent study by Mark Zandi and Alan Blinder, economists from, respectively, Moody’s and Princeton, argues that, in the absence of the stimulus, unemployment would have risen above eleven per cent and that G.D.P. would have been almost half a trillion dollars lower. The weight of the evidence suggests that fiscal policy softened the impact of the recession, boosting demand, creating jobs, and helping the economy start growing again. What’s more, it did so without any of the negative effects that deficit spending can entail: interest rates remain at remarkably low levels, and government borrowing didn’t crowd out private investment.
Politically, however, none of this has made any difference. Polls show that a sizable majority of voters think that the stimulus either did nothing to help or actively hurt the economy, and most people say that they’re opposed to a new stimulus plan. The hostility has numerous sources. Many voters conflate the stimulus bill with the highly unpopular bailouts of the banking sector and the auto industry; Republicans have done a good job of encouraging such misconceptions, as when Representative Mike Pence, of Indiana, referred to the “bailout stimulus.” Also, the stimulus—which, to begin with, was too small to completely offset the economy’s precipitous drop in demand—was oversold. The Administration’s forecasts about the recession (particularly regarding job losses) were too optimistic, and so its promises about what the stimulus would accomplish set the public up for disappointment.
But the most interesting aspect of the stimulus’s image problems concern its design and implementation. Paradoxically, the very things that made the stimulus more effective economically may have made it less popular politically. For instance, because research has shown that lump-sum tax refunds get hoarded rather than spent, the government decided not to give individuals their tax cuts all at once, instead refunding a little on each paycheck. The tactic was successful at increasing consumer demand, but it had a big political cost: many voters never noticed that they were getting a tax cut. Similarly, a key part of the stimulus was the billions of dollars that went to state governments. This was crucial in helping the states avoid layoffs and spending cuts, but politically it didn’t get much notice, because it was the dog that didn’t bark—saving jobs just isn’t as conspicuous as creating them. Extending unemployment benefits was also an excellent use of stimulus funds, since that money tends to get spent immediately. But unless you were unemployed this wasn’t something you’d pay attention to.
And without the President and those in his administration being out thee everyday beating back the misinformation, the lies of his opponents have become the reality.
And that failure will make it harder to get the common sense fixes that our economy needs. (Hat tip to Economist’s View for these two links). We certainly need a second WPA to fix our infrastructure in the county, Obama should follow in FDR’s footsteps.
Indeed, Obama’s experience so far resembles FDR’s first uneven stabs at job creation. Roosevelt accepted the Democratic nomination in 1932 touting a plan to put a million men to work in national parks and forests. When he took office, with the unemployment rate at 24.9%, he created the Civilian Conservation Corps, his first jobs program.
[…]
The lesson for Obama in all this is that stimulus works, and the sooner and more aggressive, the better. The vast infrastructure upgrades that were achieved by the WPA were in many ways a side-product, but an important one that is still paying national benefits. Given the country’s potholes, sagging bridges, rickety electric grid and spotty broadband coverage, a push today on new infrastructure would also provide lasting and necessary benefits. In the first round of stimulus spending, jobs were saved and some infrastructure projects got underway, but there’s still much more to do.
Of course, Obama faces challenges that his Depression-era predecessor didn’t. Roosevelt had stronger majorities in Congress. He could propose bold programs that required spending without risking gridlock or defeat. Nor did he inherit a culture of institutionalized deficits that stretched back 30 years, deficits that his opponents didn’t worry about when they wanted to fund wars and tax cuts but were quick to condemn when domestic spending was proposed. When Obama argues for a new round of stimulus, he’ll be standing against a distracting background of red ink.
Putting people back to work on infrastructure is a no-brainer, Building the Bridges to a Sustainable Recovery.
According to data compiled by the civil engineers’ society, planned spending across 15 categories of infrastructure, including aviation, drinking water systems, energy programs, levees, roads, schools and wastewater treatment, will fall short of needed investment by a cumulative total of more than $1.8 trillion in the next five years.
And periodic disasters — like Hurricane Katrina and the Interstate 35 bridge collapse in Minneapolis — have continued to remind us that we should not be neglecting these investments.
Deferring maintenance does nothing to alleviate our national indebtedness; in fact, it makes the problem far worse. According to the Nevada Department of Transportation, for instance, rehabilitation of a 10-mile section of I-80 that would cost $6 million this year would cost $30 million in two years, after the road deteriorated further.
If such a project is at all representative, spending an extra $100 billion nationwide on interstate highway maintenance now would reduce the national debt two years from now by several hundred billion dollars, relative to its level if no action were taken.
Some people object that infrastructure spending takes too long to roll out. But many projects could be started immediately. And remarkably low long-term interest rates imply that markets expect several more years of sluggish economic activity, so even projects that take a little longer would still be timely.
But won’t this extra spending make the deficit problem worse? A better question is this: Why is anyone worried about short-run deficits in the first place?
Deficits are a long-run problem. Every cent the government borrows must eventually be repaid with interest (or, equivalently, be carried at interest indefinitely), so it’s important to pay our bills. Although spending cuts will help, the retirement of millions of baby boomers will also make it necessary to increase revenue.
But not now. With consumer and investment spending remaining far below normal, the short-run imperative is to increase total spending by enough to put everyone back to work as quickly as possible.
While Obama and the Democrats may not have the majorities to get this done, it’s certainly something worth fighting for, and using as a campaign issue in the next two months.
This if %$&king hilarious
Michael Moore nails it, Happy Fuckin’ Labor Day!
Before there were unions, there was no middle class. Working people didn’t get to send their kids to college, few were able to own their own fucking home, nobody could take a fucking day off for a funeral or a sick day or they might lose their fucking job.
Then working people organized themselves into unions. The bosses and the companies fucking hated that. In fact, they were often overheard to say, “Fuck the UAW!!!” That’s because the UAW had beaten one of the world’s biggest industrial corporations when they won their battle on February 11, 1937, 44 days after they’d taken over the GM factories in Flint. Inspired by their victory, workers struck almost every other fucking industry, and union after union was born. Had World War II not begun and had FDR not died, there would have been an economic revolution that would have given everyone — everyone — a fucking decent life.
Nonetheless labor unions did create a middle class for the majority (even companies that didn’t have unions were forced to pay at or near union wages in order to attract a workforce) and that middle class built a great country and a good life. You see, Rahm, when people earn a fucking good wage, they spend it on stuff, which then creates more good paying jobs, and then the middle class grows fucking big. Did you know that back when I was a kid if you had a parent making a union wage, only one parent had to work?! And they were home by 3 or 4pm, 5:30 at the latest! We had dinner together! Dad had four weeks paid vacation. We all had free health and dental care. And anyone with decent grades went to college and it didn’t fucking bankrupt them. (And if you ever used the F-word, the nuns would straighten you out in ways that even you couldn’t bear to hear about).
Then a Republican fired all the air traffic controllers, a Democrat gave us NAFTA and millions of jobs were moved overseas (hey, didn’t you work in that White House, too? “Fuck the UAW, baby!”). Unions got scared and beaten down, a frat boy became president and, like a drunk out of control, spent all our fucking money and our children’s money, too. Fuck.
And now your assistant’s grandma has to work at fucking McDonald’s. Ask her for pictures of what the middle class life used to look like. It was effing cool! I’ll bet grandma doesn’t say “Fuck the UAW!”
Here’s Robert Scheer on his new book at Democracy Now.
And I have to stress this, Amy. This is not some abstract—you know, I studied economics in graduate school, and I could do some mathematical modeling and all that stuff. This is not a game. It’s not a political game. It’s not a mathematics game. They’re real human beings who invest their whole life putting shelter over their family, caring about their family. And when you go out in these communities—and I’ve done some of that—you know, it’s so depressing. You know, I mean, I talked to people in Riverside who cleaned office buildings, you know, in Long Beach and commuted to Riverside so their kids could live in a better neighborhood. And they bought this house, and they made the payments. They made the payments. They did everything they were supposed to do. And the neighborhood went into the toilet, and they lose everything. They lose everything. And that story is repeated millions of times in America.
And the guys who did it to us, they weren’t those vicious right-wingers. And, you know, it wasn’t all the people that we liberals like to attack. It was our friends. Let’s get that straight, you know? When I call this the Clinton bubble, you know, I mean it very seriously. It was our friends. It was people, you know, like the heads of Fannie Mae and Freddie Mac, who claim to be liberal Democrats. But they were being rewarded with enormous bonuses. You know, enormous bonuses. They made out just as well as the people running Citigroup. These were not government agencies. These were actually traded on the stock market, but posing as government-supported agencies. And the fact of the matter is that the damage that was done to us was done by people who talk a very good game. You know, Robert Rubin contributed money to the Harlem dance group, you know? Jesse Jackson even supported the reversal of Glass-Steagall. There’s a whole chapter in my book, you know? The people who acted in a very bad way, in this book, were people who we would probably be more comfortable talking to, you know, over a drink somewhere than the others. So, you know, my book, you know, it’s called “How Reagan Democrats—Reagan Republicans and Clinton Democrats Enriched Wall Street and Mugged Main Street.” And the Clinton Democrats, who now control the Obama administration, are—you know, this is turning the henhouse over to the foxes. And I would say the record of Obama on this has been abysmal. He has been a frontman for Wall Street, and it is shocking.
It’s a harsh, true, and needed push back from the left. We can’t fix the problem until we acknowledge what’s broken.
A righteous rant
Whether it’s eggs that make us sick, huge deficits, two disastrous wars, high unemployment, wages decreasing, and on, and on, and on…. It’s called E. Coli Conservatism.
It is time to get to the root of the problem. I blame the conservatism.
I’ve been studying the conservative turn in American politics pretty much full-time since 1997. I never was a conservative. But I admired conservatives. The people then running the Democratic Party just did not seem to me strong people. They were “triangulators”—splitting every difference, selling out any principle, in the ever-illusive quest to divine the American people’s fickle beliefs at that particular moment. They did not lead. They followed—Chamberlains, not Churchills.
Democrats want a leader that is unabashedly a Democrat. One that, like FDR, welcomes the hatred of the old enemies of peace—business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. It’s likely Bill Clinton did the best that he could have done, given the circumstances, when he was President. And it may also be likely that Barack Obama has done the best he could have, so far, as well. After all FDR set the bar extremely high for any President to attain, Democrat or Republican. But what is most frustrating is the apparent inability for our recent leaders to even put up a strong fight, against those enemies of peace.
As Perlstein goes on to describe in the link above the the right wing, aka conservatives, of the Republican Party started this movement in earnest in the early 1960’s and it didn’t come to complete fruition until the election of George W. Bush in 2000.
Again from Perlstein:
I’ve come to different conclusions now. They were, yes, endlessly determined. It was over 35 years ago, in “Conscience of a Conservative,” when Barry Goldwater wrote these stirring words: “I have little interest in streamlining government or making it more efficient for I mean to reduce its size.” Twenty years after that, President Reagan intoned at his first inaugural address, “Government is not the solution to our problem; government is the problem.”
But Barry Goldwater lost his 1964 presidential race in a landslide. Reagan was inaugurated, and we began seeing headlines like “Wide Spectrum of Regulations Set for Reagan Team’s Scalpel.” But actually, the Reagan team wasn’t able to deregulate all that much, or nearly as much as they wished; the political obstacles, in the 1980s, were just too great.
For these brief four years, however, between the Republican takeover of the Senate in 2002 under President Bush and the recent return of Congress to Democratic control, the scalpel has become a machete. We’ve been able to witness a natural experiment: What would have happened if Goldwater and Reagan had been able to get their way?
Perlstein laid down some other markers earlier this year, his reasons for why Barack Obama Cannot Become a Transformational Leader.
Rules of Liberal Political Success
by Rick Perlstein
(Taken from his talk “Whatever Happened to Hope: Why Barack Obama Cannot Become a Transformational President”)
- Got to make people feel good.
- No liberal regime has ever succeeded in American History without successfully stigmatizing the conservatism that preceded it as a failure that ruined ordinary people’s lives.
- A transformational Democratic president must be a credible defender of the economic interests of ordinary Americans to a preponderance of those ordinary Americans sufficient to push through their distrust of cosmopolitan liberals as such. (Anti Big Business Populism).
- No liberal regime has ever succeeded in American History without successfully stigmatizing it’s opposition as extreme, as alien, as strange, as frightening to ordinary Americans who want order in their lives.
There’s quite a bit to take from those four items. (It’s not so much about Obama, and to make it less about Obama you can substitute Democratic leader/elected official for Democratic president). But mainly what should be taken from this is it’s hard to make a transformational case – bring about change – if one doesn’t make the case, over and over and over again, that those who got us into this mess and their policies were responsible for the failure that ruined their lives.
The facts bear out that when Democrats try and play nice with conservatives/Republicans, they and the American people get burned, every single time. And when Democrats stand up for the American people, regardless of what their enemies say, it only helps them and our nation.
But all of this goes to show why the Democrats face such huge problems in November. It’s one thing to lose a fight, it another to be losing having never really even put up a fight. And what is meant by that. In many instances of the legislative record of the Obama administration, the fight was never allowed to happen – there was a pre-capitulation before a fight ever happened.
For example, when it came to health care, single-payer, was never even allowed into the discussion. Not to rehash, and belabor the point, but basic negotiation tells us that first ask for the moon, then accept less.. But to start at a compromise was a mistake, and began the erosion of the support of the base of the Democratic Party.
And that the base is not sufficiently fired up heading to November has everything to do with this kind of non-transformational leadership that has been on display. If the fight would have been allowed to happen, for single-payer, or even if the President and Democrats would have drawn a line in the sand over the public option, that would have given the base something to rally behind. And, even if it still wouldn’t have passed, it would have shown the base that the party’s leadership was willing to fight for them, and what they believed in. Instead we have our current situation, a depressed base, and an apparent disaster facing the Democrats in six weeks.
While this post may not seem like it so far, it’s meant to be inspiring and a call to action. Not specifically to the Democratic Party, but to get to work “..to be the change we want to see in the world”, as Gandhi said. We get lost in leaders and parties, and think that someone else will do it. Well, they won’t. Party and leaders, like anything or anyone else, have faults. Every great leader has also had a movement of people behind them, forcing them, to keep their word. Whatever your excuse, it’s time to drop it, and get involved.
I’ll leave you with this from an awesome recent post from Drew Westen, What Created the Populist Explosion and How Democrats Can Avoid the Shrapnel in November.
But actions speak louder than words, and Americans want to see action. It may be too late for the kind of jobs bill we should have seen a year and a half ago, but it isn’t too late for Democrats to go on the offensive against the Republicans — virtually all of them — who opposed extending unemployment insurance to millions of Americans who were thrown out of work by the Republicans’ corporate sponsors. It isn’t too late for Democrats to contrast their support for the highly popular aid to state and local governments that just saved the jobs of hundreds of thousands of teachers, firefighters, and police all over the country with Republicans’ desire to throw them out onto the street. It isn’t too late to make a voting issue out of the bill the Republicans are stalling that would give small businesses a fighting chance in an economy stacked against them, and to make clear that one party stands for small businesses, which create 75 percent of the new jobs in this country, and the other party stands for big businesses that outsource American jobs and offshore their profits to avoid paying their fair share of American taxes. It’s not too late to pass a bill that would limit credit card interest rates to a reasonable percent above the rate at which credit is made available to credit card companies. It’s not too late to pass the first badly need “fix” to the health care reform act to demonstrate to Americans that Democrats mean it when they say this was just the first step, namely a law that stops insurance companies from increasing their premiums by 40 percent while cutting the size of their networks by 50-75 percent, which violates the principles of affordability and choice that were so essential to efforts to sell health care reform to the public. It’s not too late to vow to change the rules of the Senate to prevent the use of the filibuster to give every special interest veto power over every important piece of legislation. It’s not too late to introduce legislation that’s been on hold in both the House and Senate to guarantee fair elections, so that the voice of everyday Americans is heard over the voice of the special interests that finance political campaigns.
On every one of these issues, a strong populist message trounces anything the other side can say. But Democrats need to play offense. They need to take up-or-down votes on bill after bill, including those they expect the other side to block, knowing that every one of those votes has the leverage of a campaign ad behind it. They need to change the narrative from what sounds to the average American like a whiny and impotent one — “the Republicans won’t let us do it” — to a narrative of strength in numbers shared with their constituents. And they need to make every election a choice between two well-articulated approaches to governance — and to offer their articulation of both sides’ positions and values.
That leads to a final point. What Democrats have needed to offer the American people is a clear narrative about what and who led our country to the mess in which we find ourselves today and a clear vision of what and who will lead us out. That narrative would have laid a roadmap for our elected officials and voters alike, rather than making each legislative issue a seemingly discrete turn onto a dirt road. That narrative might have included — and should include today — some key elements: that if the economy is tumbling, it’s the role of leadership and government to stop the free-fall; that if Wall Street is gambling with our financial security, our homes, and our jobs, true leaders do not sit back helplessly and wax eloquent about the free market, they take away the dice; that if the private sector can’t create jobs for people who want to work, then we’ll put Americans back to work rebuilding our roads, bridges, and schools; that if Big Oil is preventing us from competing with China’s wind and solar energy programs, then we’ll eliminate the tax breaks that lead to dysfunctional investments in 19th century fuels and have a public-private partnership with companies that will create the clean, safe fuels of the 21st century and the millions of good American jobs that will follow.
That’s what Democrats stand for. It’s time they said it.
I’ve been waiting for a while for Obama to pivot and start taking on the GOP, and showing the failed conservative ideology for what it is. But it just isn’t his way. It may still happen – and it’s the only way to save his presidency – but I certainly don’t expect it. But, no matter, electing good Democrats that are for the people over the powerful is our only way forward. More conservative/GOP control means more pain for the American people. It wasn’t supposed to be this way.
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I believe the phrase is, “Same shit, different day”
From TDS last night on the “GOP’s new contract on America”. Same shit different day, this from Think Progress, In A ‘Shot-By-Shot’ Comparison, Jon Stewart Reveals The GOP’s Pledge Is ‘Exactly Like’ Its ‘Old Ideas.