Blog

Leo W. Gerard

By Leo W. Gerard

International President

Congress drove the Big Three CEOs out of Washington, D.C. last week, ordering them not to return with their tin cups until they could guarantee their companies would be viable after a $25 billion bailout.

Just days later, Citigroup, a bank that had already received a $25 billion bailout in October, held its hands out for more. Within 48 hours, federal officials approved giving the bank another $20 billion and providing backing for $306 billion in its risky loans and securities. Even though Citigroup was failing just weeks after getting its first government bailout, Congress didn’t subject its CEO to the public lecturing and demands for business plans that it did the Big Three.

The message here could not be more clear: Washington will bailout out those who shower before work but not those who shower afterwards.

Washington, D.C. is a white collar town. President Bush and members of Congress understand their suited counterparts on Wall Street. In fact, several prominent figures in the banking industry – including Citigroup’s Robert Rubin, a former Secretary of the Treasury, and UBS Investment Bank’s Phil Gramm, a former Texas Senator, – worked in Washington first, aiding and abetting the current crisis by de-regulating the financial markets and everything else they could.

Detroit, by contrast, is a blue collar town. It’s a place where workers at the Big Three earn thousands of dollars — the average production employee making $67,480 last year — not hundreds of thousands, and certainly not Wall Street’s millions. The Citigroup CEO credited with overseeing the bank’s ill-fated investments, Charles O. Prince III, was forced out a year ago as the bank’s massive sub-prime losses began mounting but the board of directors still gave him a $12.5 million bonus, $68 million in salary and accumulated stockholdings, a $1.7 million pension, an office, and a car and driver for up to five years. Heading the board executive committee at that time was Rubin, who would briefly serve as chairman and receive $17 million in compensation as the bank declined further into financial ruin.

Detroit is a place where workers are unionized; Wall Street is not. And right-wing Republicans and conservative pundits have made it clear they want the union workers to suffer. They want federal aid denied to the Big Three so that the firms go bankrupt. Then the companies can renege on pensions they guaranteed to retirees and can break salary and benefit promises to workers in current contracts.

Senate Minority Whip Jon Kyl writes on his web site that Chapter 11 bankruptcy would be best for the Big Three because it would enable them to break their pledges to retirees receiving health care and other benefits earned over decades of service, what he calls “legacy debts”: “Like many other industries, including the airlines, the goal under Chapter 11 is to gain temporary protection, reorganize in a way to reduce legacy debts, and emerge as a more viable and competitive company.”

Conservative columnist George Will, similarly, wrote: “Do nothing that will delay bankrupt companies from filing for bankruptcy protection, so that improvident labor contracts can be unraveled. . .” Will’s fellow Washington Post Columnist Martin Feldstein blamed all of Detroit’s problems on the unions, writing that the basic reason the Big Three can’t compete: “is labor costs imposed by union contracts.” He said if Congress gives the Big Three a loan, it must require “that the unions accept reductions in wages and benefits to levels that allow the firms to compete with imports and with non-union U.S. auto firms. The trustees of retiree benefits should be required to accept reductions in those benefits.”

They want the unions broken. They want retirees’ benefits slashed and union workers’ wages and benefits cut, which, of course, will enable the foreign auto makers – whose U.S. plants are non-union – to reduce their wages. It’ll be an all-American race to the bottom, rather than the preferable opposite, where workers and retirees are treated with dignity and respect for their hard labor.

None of those conservatives, however, is calling for Citigroup’s Charles O. Prince III, who took down Citigroup at a cost of untold billions to taxpayers, to return his $1.7 million pension, office and car and driver.

Unlike Citigroup and the other Wall Street banks, which have their very own inside-the-beltway apologists in the form of Federal Reserve Chairman Ben Bernanke and Treasury Secretary Hank Paulson to argue their case before Congress, the Big Three CEOs had to appear before Congress to plead for themselves.

There, legitimately, lawmakers grilled them about flying to the hearings in expensive private jets and about their multi-million dollar compensation packages. Still, none of the lawmakers has asked Citigroup’s CEO, Vikram S. Pandit, to take $1 for next year’s compensation, as they did the auto executives. Nor have they asked any of the CEOs from the nine banks that shared $125 billion in bailout money in October to sell their private jets, as they did the auto executives.

Conservatives also argued that the Big Three should be left to die because in a free market, that’s what happens to poorly operated companies offering inferior products.

Sen. Richard Shelby, the ranking Republican on the Senate Banking Committee, said, for example, “I do not support the use of U.S. taxpayer dollars to reward the mismanagement of Detroit-based auto manufacturers.”

Shelby made this accusation while part of the Congress that ran up the largest federal deficits known to man and allowed Paulson to broker a deal to sell troubled Wachovia bank to troubled Citigroup – a bank that so far got two bailouts, the first of which arriving within weeks of the failed Wachovia marriage.

Shelby, of course, has a lot to lose if Michigan does well. His home state of Alabama gave tax breaks to foreign car companies Mercedes-Benz, Honda and Hyundai to locate factories there – hardly a free market approach.

So, like many conservatives, he twists reality to suit his circumstances. He’s right that American car companies made mistakes. In October, GM’s sales were off 45 percent from the year before, Chrysler 35 percent and Ford 30. But he’s wrong about that being a result of mismanagement alone, well, unless he thinks his precious foreign car companies made the same mistakes. Toyota was down 23 percent, Honda 25 and Nissan 33 for the same month.

And if aid denial is based on bad products, Wall Street definitely should be the first refused. Its firms built and sold what are now being called “toxic securities,” products so defective that they took down banks, the U.S. economy and international financial stability – creating the deepest economic crisis since the Great Depression. Now that’s mismanagement for you!

When the representatives of blue collars went to Congress hat in hand, lawmakers insisted that to get loans automakers would have to present viable business plans. Congress didn’t impose similar conditions, however, when Bernanke and Paulson went to Congress seeking grants for reckless white collar firms.

In fact, they gave $125 billion to nine big Wall Street banks in October, contending the direct infusion of money would melt frozen credit. It didn’t. The firms apparently didn’t lend the money, and the deal didn’t require them to. There’s a viable business plan for you!

Paulson and Bernanke gave insurance giant AIG $85 billion. And when that didn’t work, they forked over more until it all added up to $150 billion. Now, it’s not clear that will be enough to resolve AIG’s problems. Sen. Jon Kyl, the Republican from Arizona who voted for the Wall Street bailout, didn’t demand a viable business plan for AIG or Citigroup, yet said this about the auto industry request: “There’s no reason to throw money at a problem that’s not going to get solved.”

This year, as Wall Street’s recklessness destroyed the American economy, a million Americans lost their jobs. It’s no wonder no one is buying cars. It’s not just that they can’t get credit. It’s also that they don’t have money to spend or they’re afraid to spend the money they have.

Some of those furloughed had been on Wall Street. Citigroup announced recently it would cut 52,000 jobs by early next year. But of the million jobs lost so far, 100,000, or one in ten, have been auto workers or employees of auto suppliers. Unemployment in Michigan is 9.3 percent – while in the rest of the nation it is 6.5.

Just like Paulson who couldn’t see that Citigroup was too weak to buy Wachovia, the conservatives intent on denying the Big Three loans are shortsighted. They don’t see that 2.3 million jobs in and dependent on the auto industry could be lost. They don’t see the effect of slashing the wages and benefits of people who get their hands dirty for a living.

It would mean even more mortgage foreclosures and even more credit card debt unpaid to those struggling banks. It would mean the Big Three defaulting on the $100 billion they owe to those weak banks and bondholders, some of which is secured, some not.

It’s the big circle of economic life. If Congress spits on the autoworkers and the millions whose jobs depend on the Big Three, the lawmakers may find themselves using more and more taxpayer dollars to scrub new blood off Wall Street.

Dean Baker

By Dean Baker
Co-Director, Center for Economic and Policy Research

Henry Paulson’s main claim to fame is getting just about everything wrong in his tenure as Treasury secretary. However, he now stands to gain lasting notoriety as the person who destroyed the domestic U.S. auto industry, and the economies of the Michigan, Ohio, and Indiana along with them.

The story is that the big three automakers are struggling with record sales declines. This collapse in car sales in turn is the fallout from the collapse of the Greenspan-Bernanke housing bubble. While the domestic automakers have been hit hardest, all manufacturers have seen sharp drops in sales. Toyota’s sales were down 23.0 percent compared with its year ago levels. Honda’s sales were down 25.2 percent, and Nissan’s sales fell 33.0 percent.

These huge plunges in year over year sales by the world’s top car manufacturers can’t be blamed on the industry. Responsibility for this plunge lies with Mr. Paulson and other economic policy makers, and their Wall Street friends.

The basic arithmetic is simple. General Motors saw its sales fall by 45 percent compared to its year ago levels. That means its revenue has been cut nearly in half. While it has made some reductions in employment and can ease back its production, there is no way it can reduce its expenses by the same amount. Many of its expenses, like interest costs, property taxes, and health insurance for retirees are largely fixed independent of short-term fluctuations in output.

As a result General Motors is now losing close to $2 billion a month. At this rate, it will burn through its capital in around 2 months and be forced into bankruptcy. Chrysler and Ford are in somewhat better shape, but the basic story is the same. Furthermore, the fallout from a GM bankruptcy could sink Chrysler and Ford as well, as common suppliers shut down and credit for the industry vanishes and customers flee to manufacturers with longer life expectancies.

There have been analysts, presumably including Henry Paulson, who think that bankruptcy is a reasonable solution for the auto industry. This is yet another of Mr. Paulson’s famous mistakes. (Remember, this guy missed the housing bubble completely, thought its impact would be small when it burst, didn’t see a problem with letting Lehman Brothers fail, and thought the TARP [RIP] was a good idea.)

Bankruptcy would allow GM, Ford and Chrysler to more quickly cut back their bloated dealer networks and adjust their car lines with current market demand, as its proponents claim. Bankruptcy would also void union contracts, which will thrill the millionaire bankers by forcing workers earning $57,000 a year to take pay cuts. And, all those lazy retirees will see the health care benefits that they worked for taken away.

That’s the good part. Realistically, bankruptcy is likely to kill all three manufacturers, taking down much of the region’s economy with them.

First, some folks may recall the credit crunch. Lenders are extremely reluctant to take risks. In the absence of government guarantees, it is unlikely that any banks will step forward to provide GM and the others the money they need to keep operating in bankruptcy. In other words, bankruptcy is very likely to mean a complete shutdown of the Big Three.

Let’s say that the anti-bailout crowd suddenly gets a soft spot and decides to guarantee loans to the firms operating under bankruptcy protection. There is still the problem of selling cars. Customers will be very reluctant to buy cars produced by a manufacturer in bankruptcy, since they won’t know if a dealer and supplier network will exist in 3 or 4 years so that they can get their car serviced and buy replacement parts.

While people don’t mind flying an airline in bankruptcy, buying a car is to some extent an investment in the company. Many fewer customers will be willing to invest in a bankrupt car company.

But let’s assume that the investment financing is arranged and that customers are still willing to come through the doors. The bankruptcy itself is still likely to be devastating to the economies of Michigan, Ohio, and Indiana, the three states where Big Three employment is concentrated.

Bankruptcy protects the firm from its creditors. The creditors of these firms are thousands of suppliers who are heavily concentrated in the same states. In most cases, the Big Three manufacturers were their major customers. These suppliers have already been squeezed by falling demand and lower product prices. If they cannot collect the money owed them by the Big Three, there will be a whole chain of secondary bankruptcies.

The impact in these states is potentially huge. According to the Center for Automotive Research, auto related employment accounts for almost 7 percent of total employment in Michigan, 6 percent in Indiana, and 5 percent in Ohio. Losing 7 percent of total employment in Michigan would be equivalent to losing more than 9 million jobs nationwide.

That is Mr. Paulson’s latest plan for the auto industry and these three states. This will be quite a legacy.

There is one last point that should really gall just about everyone. Mr. Paulson has argued that he does not have the legal authority to use the money appropriated for TARP for bailing out the auto industry.

This claim is outrageous for two reasons. As many of us who opposed the TARP argued, it gave Paulson a virtual blank check, and that is pretty much how he has interpreted it, using the money to bail out a wide range of non-bank institutions.

The other reason why this is so galling is that this is an administration that has taken pride in claiming virtually unlimited powers in a wide range of areas, including the conduct of war and holding of prisoners without charges or trial. It would be incredible if they allow Detroit to sink because they claim that they don’t have the legal authority to save it.

Robert Borosage

By Robert L. Borosage

Co-Director

Campaign for America’s Future

Free fall. The US has lost private sector jobs for 10 straight months. One quarter of all businesses in the US plan to cut payroll over the next year. Retail sales fell in October by the largest monthly drop on record. Auto sales have collapsed, driving the auto companies towards the precipice. Unemployment is up to 6.1%, with most analysts predicting it will soar past 8% over the next year. (That translates into unemployment among young minority men at rates of 50% or more). States are now facing $100 billion in deficits in operating budgets for the next fiscal year. Twelve million homes are “under water,” worth less than their mortgages. The US has joined Germany and Japan in what is becoming a global recession.

The era of big government is over is over. In the crisis, we are, as Richard Nixon once said, “all Keynesians now.” Former Clinton Treasury Secretaries Robert Rubin and Lawrence Summers, until recently notable deficit hawks, now call for substantial fiscal stimulus — deficit funded federal spending — to get the economy going.

Summers whose alliterative guidelines for this year’s earlier $150 billion stimulus — “timely, temporary and targeted” — helped to fix its mistaken focus on tax rebates, has changed his consonants. Now he says the stimulus should be “speedy, substantial and sustained,” noting that some estimates on Wall Street have gone as high as “$500 to $700 billion.” Rubin agreed, saying “we need a very substantial stimulus,” while mumbling about needing to reduce the budget deficit over the longer run.

A major recovery program — featuring substantial public investment — will be inevitably the first initiative of the Obama administration. It should feature more spending than tax cuts — investing in renewable energy and conservation, in rebuilding everything from schools to bridges to a smart electric gird, in helping cities and states avoid crippling cuts of services, in keeping college affordable, providing health care to children, and aiding those most in need.

Our public investment needs can easily use the money. A stunning report by Eric Lotke at the Campaign for America’s Future details the staggering investment deficits that have accumulated over the last thirty years. For decades, we’ve chosen to cut taxes on the wealthy while starving vital public investments. The result is an America that is literally falling apart, while much of the private wealth was squandered in the speculative frenzy that now has leveled our economy. Rather than adding to that folly, we should be focusing on strategic public investments that will put people to work in the short term while contributing to a more competitive economy, a better educated citizenry and a cleaner environment.

The time to get started has already passed, as the downturn is accelerating. Tomorrow, as Senate Majority leader Harry Reid suggests, Congress should pass a $100 billion down payment on recovery, while instructing the Treasury Secretary to use some of the $700 billion rescue fund to help keep the auto industry from going belly up, with devastating effects throughout the Midwest.

But, as this is written, it looks like that won’t happen. Republicans didn’t get the message from the election, and apparently don’t read the financial section of the papers. The Republican minority in the Senate seems intent on adding one last obstruction to its ignominious record. Secretary Paulson has indicated that while he’s happy to throw $250 billion at Wall Street banks with no conditions, he isn’t ready to save the Midwest with a $25 bridge loan for the automakers under strict conditions.

In the face of the threatened Republican filibuster, this Congress is likely to adjourn for the final time without acting on the deepening economic downturn. When the new administration and the new Congress convene next January, the crisis here — and across the globe — will surely be far worse. Make no small plans, President Obama, you are about to inherit the full catastrophe.

David Sirota

By David Sirota
Author of “The Uprising: An Unauthorized Tour of the Populist Revolt”

Remember when Doris Kearns Goodwin and the rest of the elite media socialites took to the studios of Charlie Rose’s show to portray the opponents of the bailout as wild-eyed leftists? Seems there’s some serious bipartisan pushback going on (h/t Atrios):

WASHINGTON — U.S. Sen. Jim Inhofe said Saturday that Congress was not told the truth about the bailout of the nation’s financial system and should take back what is left of the $700 billion “blank check” it gave the Bush administration.

“It is just outrageous that the American people don’t know that Congress doesn’t know how much money he (Treasury Secretary Henry Paulson) has given away to anyone,” the Oklahoma Republican told the Tulsa World.

“It could be to his friends. It could be to anybody else. We don’t know. There is no way of knowing.”

Inhofe, who on issues like global warming is something of a know-nothing, is nonetheless absolutely correct on this one. Bailoutsleuth.com has been reporting how Paulson has tried to shroud bailout expenditures in secrecy, while Bloomberg News recently reported that Federal Reserve Chairman Ben Bernanke is refusing to release the names of the recipients of about $2 trillion in taxpayer-funded loans.

Inhofe will likely find an ally in Sen. Bernie Sanders (I-VT), who issued this press release this morning:

WASHINGTON, November 17 – Senator Bernie Sanders (I-Vt.) said today he will introduce legislation to stop the release of a $350-billion second round of the Wall Street bailout.

Sanders, who voted against the $700-billion package Congress approved in October, said he has serious concerns about how the Bush administration and Treasury Secretary Henry Paulson are spending the bailout money that was already released. He also said it was unacceptable that the oversight provisions in the bill were ignored.

When the bailout originally passed over bipartisan objections, many voices began demanding Paulson refrain from buying bad mortgages, and instead buy voting stock in banks on terms that force banks to make loans off the new capital, restrict bank salaries/dividends and protect taxpayers’ investment. Paulson partially buckled to that pressure, first a few weeks ago, then again late last week. Indeed, he discarded his original proposal (which would have been a straight-up giveaway) and began buying stakes in banks. The problem is he opted to buy non-voting stock on bad terms that do not protect taxpayers and allow bank executives to continue paying bonuses.

Now, with bipartisan congressional anger mounting, we may see a forceful legislative campaign to take back what remaining money Paulson wants to give away to his friends on Wall Street. The guy is working overtime to shovel out as much taxpayer money – our money – to his buddies before January 20th comes and he’s out of a job. It’s time to stop the kleptocracy, take back the money and spend it on a major economic stimulus to bolster the real economy here in “real America” where real people work real jobs – not simply give it away to a few financial industry fat cats in Manhattan.

UPDATE:

Check this out from the Financial Times:

A senior Republican senator is seeking an investigation into potential conflicts of interest among former Goldman Sachs executives serving at the US Treasury and whether any officials exceeded their authority by implementing a controversial tax change without the approval of Congress.
Chuck Grassley, the most senior Republican on the Senate finance committee, asked Eric Thorson, inspector-general of the Treasury, to investigate the “independence” of several Treasury officials who formerly worked at Goldman Sachs and serve as advisers to Treasury secretary Hank Paulson, the former chief executive of the Wall Street bank.

Leo W. Gerard

By Leo W. Gerard

International President

Within hours of Barack Obama’s election, naysayers chastened caution. Don’t go too far, they inveighed. Build trust slowly with restrained, moderate, and gradual actions, they admonished.

In other words: Start with piddling plans.

Basically, they want to abort hope — kill it before it has a chance.

That is all wrong after an election in which it’s believed that a higher percentage of Americans voted than at any time in the past 40 years; a win that brought tears to the eyes of even hardened reporters; a result that drew joyful citizens into streets across the country to celebrate, a balloting that swept even larger majorities of Democrats into the U.S. House and Senate.

This moment during which the nation is suffering great economic peril pleads for political valor. This moment screams for boldness.

Troubled times demand greatness. Franklin D. Roosevelt knew that. He’s the reason U.S. presidents are judged by the sum of their accomplishments in their first 100 days in office.

When FDR was inaugurated in 1933, the country was in the midst of the Great Depression. He didn’t waste time tinkering. After 100 days, he’d given the country the Emergency Banking Act, the Securities and Exchange Commission, the Civilian Conservation Corps, the Federal Emergency Relief Act and the Tennessee Valley Authority.

Obama may not inherit a Great Depression, but he’ll take the oath during an intense recession. Look at the news that arrived the same week as his election: unemployment rose to 6.5 percent after 10 straight months of jobs losses totaling more than 1.2 million; the stock market dropped 1,000 points in 48 hours after the worst October showing in two decades; auto makers travelled to Capitol Hill begging like hobos for handouts to stave off bankruptcy, two dozen major retailers revealed sales declines, most double digit, and the New York Times reported hospitals strained as they register fewer paying patients and increasing charity cases.

These problems won’t be solved with timidity. In his first press conference after the election, Obama said resolving the economic crisis is his top priority. He said, in fact, “I will confront the economic crisis head on.” No weak-heartedness suggested there.

He said a new president can restore confidence and advance an agenda for the middle class. That is exactly what FDR did with the combination of legislation and fireside chats.

During this brief press conference, Obama got it right, emphasizing aid to the middle class. He said it is essential to pass a rescue plan that would create jobs and extend unemployment benefits. He wants aid to state and local governments so they don’t increase taxes or furlough workers.

The federal government should help both small businesses and the huge auto industry, which provides jobs directly and indirectly through its suppliers.

The $700 billion bailout must be reviewed, he said, to ensure that it is stabilizing markets, that it’s not unduly rewarding the Wall Street risk-takers who caused the crisis, and that it’s helping families avoid foreclosure.

In addition, he said it’s essential to implement policies to grow the middle class such as investing in clean energy technology, resolving the nation’s health insurance dilemma, and providing tax relief for working families.

These are the correct priorities. And his plans are audacious. Which means he needs our help.

He called for bi-partisan cooperation in accomplishing these goals. But he’ll need more than that. He will need the kind of support he got in those weeks just before Election Day.

All of those who voted for him, all of those who want to keep hope alive, and all of those who want real change must demand both houses of Congress and both political parties work with Obama to accomplish it. Those who believe in real change must make it clear that they won’t stand by and allow courageous action to be reduced to faint-hearted baby steps.

On election night, Obama told the crowd in Chicago that the victory was theirs: “I know you didn’t do this just to win an election and I know you didn’t do it for me.”

Then he warned of what is ahead:

“You did it because you understand the enormity of the task that lies ahead. For even as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime – two wars, a planet in peril, the worst financial crisis in a century.”

With more than 10,000 volunteers across the country, the United Steelworkers campaigned hard to help get Obama on that Chicago stage to make that speech. We will back him as he works to fulfill his promises of what is a New Deal for the new century. And we urge every American who wants real change to join us to ensure his success, the nation’s success.

By David Sirota
Author of “The Uprising: An Unauthorized Tour of the Populist Revolt”

“What do we do now?”

That’s the question Bill McKay ponders in the classic movie “The Candidate” after he wins office promising “a better way.” America will now ask Democrats the same haunting query following the historic election.

These are heady times for the party of Jefferson, Roosevelt and now Obama. Only a few years ago, Democrats were almost relegated to permanent minority status by a Mission Accomplished sign and a flight suit. But since President Bush’s 2004 re-election, they gained at least 50 House seats, 12 Senate seats, seven state legislatures and seven governorships. As Republicans used “socialism” attacks to make the national campaign race a referendum on conservatism, Democrats also registered their biggest presidential triumph since 1964.

So, while the President-elect talks of forming a bipartisan cabinet, his victory wasn’t the public’s cry for milquetoast government-by-blue-ribbon-commission. As the Center for Community Change’s Deepak Bhargava says, Obama’s win was an ideological mandate presenting “an opening for transformational, progressive change.”

Maximizing this opportunity relies on Democrats understanding the parable from Spiderman comics – the one about great power coming with “great responsibility.” In politics, that latter phrase is a euphemism for high expectations.

What the party gains in strength it loses in a Republican scapegoat that previously justified inaction. On huge issues — whether re-regulating Wall Street, reforming trade, solving the health care emergency, or ending the Iraq War — America envisages enormous progress in the months ahead, and Democrats will have no one to blame for failure but themselves. After all, with over 340 electoral votes, President Obama cannot credibly claim he lacks the political capital to legislatively steamroll a humiliated GOP and its remaining senators. The same goes for Democrats everywhere. Meeting expectations requires championing far-reaching — even radical — initiatives.

That was always ‘08′s theme. Amid lipsticked pigs, Joe the Plumber and Super Bowl-sized candidate events, the election became a choice between continued conservative rule and a progressive agenda as far-reaching as the current crises. And as a defeated John McCain said, “The American people have spoken, and they have spoken clearly.”

To meet the challenge, Democrats have to abandon their worst habits.

They must, for instance, acknowledge their progressive mandate, rather than denying it like Sen. Harry Reid (D-Nev.) did on Tuesday. “This is not a mandate for a political party or an ideology,” he fearfully told reporters.

They should also retire the Innocent Bystander Fable — the myth about being powerless onlookers. Democrats first cited this fable as reason the Iraq War continued during their congressional majority — expecting the country to forget that Congress can halt war funding. Today, Sen. Chuck Schumer (D-N.Y.) says “there’s not much we can do” to amend the sputtering bank bailout. In 2009, such mendacity will metastasize from banal dishonesty into grist for scathing comedy-show punch lines.

 Democrats need to discard other lies, too — especially those about Bill Clinton. To hear pundits tell it, Clinton’s first-term pitfalls underscore why the next administration should avoid “governing in a way that is, or seems, skewed to the left,” as the Washington Post’s Ruth Marcus most recently asserted. History, of course, proves the opposite. Recounting Clinton’s early years to Politico.com, a lobbyist correctly noted that the new president didn’t move left — he pushed conservative policies like NAFTA, thereby demoralizing his base and helping Republicans take Congress.

Obama rose on a promise to eschew those triangulations — and he won because America realized invertebracy and sail trimming will not solve problems. Voters rejected Clinton-style incrementalism in the primary, then scorned conservatism in the general election, meaning Democrats’ best response to Bill McKay’s “what do we do now?” question is a two-word answer: Go big.

That is not merely the better way — it is the only way.

David Sirota is a columnist, fellow at the Campaign for America’s Future and board member of the Progressive States Network — both nonpartisan organizations. His blog is atwww.credoaction.com/sirota.

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Bob Cesca

 

By Bob Cesca

Author of One Nation Under Fear

“I find I’m so excited, I can barely sit still or hold a thought in my head. I think it’s the excitement only a free man can feel, a free man at the start of a long journey whose conclusion is uncertain.” — Ellis Boyd ‘Red’ Redding, The Shawshank Redemption

Earlier this year, HBO premiered their brilliant mini-series John Adams, based upon David McCullough’s epic biography of our second president — the founding father who Thomas Jefferson referred to as “a colossus of liberty.”

And as the scenes of the last 24 hours have rolled by, I can’t stop thinking about a poignant scene from third act of episode six: “Unnecessary War.”

The scene follows President and Mrs. Adams as they arrive at the still-under-construction executive mansion in Washington only to discover, to their visible disgust, that African slaves — both men and women — were being tasked with the construction of what would later become known as the White House.

We follow the Adamses, who were vocal opponents of slavery, as they walk below the familiar triangular peak of the north portico and through the front doors — the first presidential couple to occupy that historic building. As they step through the mud in what appears to be silent horror, they’re taken aback by numerous slaves toiling all around. Painting and plastering the walls. Sweeping the floors. Moving furniture.

“The negroes will see to your trunks,” a white foreman offers to “help” with the presidential luggage, and then barks at a slave, “Here! You boy!”

The scene culminates with Abigail Adams, played by Laura Linney, shouting with indignation, “Half-fed slaves building our nation’s capital?!”

Not only was this scene a powerful cinematic illustration of the contradictions and ironies of America’s founding liberties, but it also sets the stage for an event you and I will be fortunate enough to witness just 76 days from right now.

Today, President Bush, of all people, described the forthcoming Inauguration Day and, perhaps inadvertently, presented the ultimate historical bookend to that scene from John Adams when he remarked, “It will be a stirring sight to watch President Obama, his wife, Michelle, and their beautiful girls step through the doors of the White House.”

Indeed it will, sir. After eight years of awfulness, George W. Bush actually managed to say something that touched me in a way that didn’t precipitate, you know, me breaking something. Damm you, Mr. President, you magnificent bastard.

To arrive at this moment has required a too-long and too-painful journey. For African Americans, yes. But also for the maturation of the ideals championed by John Adams and his generation of founding patriots. For a nation that professes to spread freedom and yet continues to deny it to some of its own people. For those of us who have hungered for some kind of redemption to help wash away the original sins lurking between the lines of our Constitution.

President-elect Obama hasn’t and probably can’t absolve those sins, and no single event or person can be expected to accomplish such a task. The southern and Appalachian white vote was evidence of the continued existence of those deep prejudices, and certain Gollum-ish elements of the Republican Party have proved this year that the Southern Strategy is very much alive.

But this new president has set for us an unique example — he’s become a national role-model and a guide, leading a record number of us towards the realization that it doesn’t have to be “that way.” It doesn’t have to be us versus them anymore. The multi-racial, multi-cultural coalition that President-elect Obama achieved in this election — his truly American coalition — has succeeded in further marginalizing the ridiculous and archaic fear-mongers and fire-eaters who feed upon the exploitation of our original, founding sins.

In terms of race, in terms of history, politics and American life we’ve crossed over to a better place and a more hopeful time. Not simply because of one man, but because we were prescient enough to have recognized ourselves and the true nature of America reflected in that one man. From there, we set about the task of freeing ourselves from the darkness of this decade and the skulking shadows that have for too long haunted us. In this respect, all of us — all races — are a little more free at last.

After all these years, we’ve finally arrived at moment when America feels like it’s supposed to feel.

This January 20th, all of America will be stepping through those doors with President and Mrs. Obama as the dark ride of the last eight years reaches its long-overdue conclusion — a conclusion more joyful and overwhelming than I think any of us fully anticipated prior to 11 p.m. eastern time Tuesday night — when we pushed beyond a crucial threshold on our way to a more perfect union. And now, as the pictures roll in from celebrations here and around the world…”I find I’m so excited I can barely sit still or hold a thought in my head.”

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Cesca’s One Nation Under Fear, with a foreword by Arianna Huffington of Huffington Post is available on Amazon. For more by Bob Cesca, see BobCesca.com! Go!

Robert L. Borosage

By Robert L. Borosage

Co-Director Campaign for America’s Future

Today, in the New York Times, an Institute for America’s Future op ad calls on us to “remember who we are,” comparing the present crisis with that our parents and grandparents faced at dawn of the New Deal. To see the ad, go here.

If, as seems likely, Obama is elected and Democrats win greater majorities in both houses of Congress, will we witness a new era of bold progressive change – a 21st century Green New Deal? Certainly many of the elements are present:

.. “their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit, they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They only know the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.”

In his “closing” for the election, Obama is already issuing a similar moral indictment. He too is calling Americans to come together, to trust one another.

In one week, you can turn the page on policies that have put the greed and irresponsibility of Wall Street before the hard work and sacrifice of folks on Main Street….

I know these are difficult times for America. But I also know that we have faced difficult times before. The American story has never been about things coming easy – it’s been about rising to the moment when the moment was hard. It’s about seeing the highest mountaintop from the deepest of valleys. It’s about rejecting fear and division for unity of purpose. That’s how we’ve overcome war and depression. That’s how we’ve won great struggles for civil rights and women’s rights and worker’s rights. And that’s how we’ll emerge from this crisis stronger and more prosperous than we were before – as one nation; as one people.

Does all this add up to a new era of bold reform? Two more elements are vital.

Obama will face the same choice in the worst economic crisis since that Great Depression. Yet, today’s conditions are far less dire. Many voices will counsel caution. Many will tell him to limit his priorities. Many will warn of unsustainable debts and deficits. What he decides is needed will be telling.

The current progressive movement is neither as organized nor as grounded. Some good many are pure Obama fans. Some – including much of the best of the bloggers – grew up in opposition to the war in Iraq and the crimes and catastrophes of the Bush administration. They are scornful of compromised Democrats, suspicious of a leadership that didn’t end the war, cynical about the many corruptions of modern day politicians. Most of the organized progressive movement has spent the last years fighting to stop bad things from happening. Will a progressive movement come together that is independent enough to push Obama hard to go father than he might otherwise go, and responsible enough to help support reforms, and go after those in both parties that stand in the way? The Obama White House will clearly prefer the remarkable base that they have built during the campaign, ready to be mobilized in his support. Will they come to appreciate the benefits of an independent progressive movement demanding more than they think is possible?

Inheriting a country mired in two wars, headed into a deep and long recession, marked by Gilded Age inequality and growing insecurity, the next president will face stark challenges. If Obama is elected, he will have the moment, mandate, momentum, and moral armament to launch a new era of bold progressive reform. And in the coming months, if all goes well on Tuesday, we will learn if he has the audacity of hope to undertake it, and whether progressives can forge a force for change to propel it.