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Leo W. Gerard

By Leo W. Gerard
International President

It would be easy in these troubled times to shrink from campaign promises, to cower from the greatness that might have been, to claim that the beast of the Bush recession had devoured the nation’s potential to achieve great goals.

President Barack Obama chose instead to arrive at his first address to a joint session of Congress prepared to restore America’s hope for lofty causes. In addition, during those 52 minutes of inspiration, President Obama renewed his commitment to work for the benefit of working people, calling for a legislative focus this year on three areas crucial to them: education, energy and health care.

“We are a nation that has seen promise amid peril, and claimed opportunity from ordeal. Now we must be that nation again,” the president said. Yes. Yes we can.

“The weight of this crisis will not determine the destiny of this nation,” he said. “The answers to our problems don’t lie beyond our reach. They exist in our laboratories and universities, in our fields and our factories, in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth.” Notice that the president didn’t mention in this group those vaunted Wall Street financial brainiacks. He did, however, specify working people, blue collars in fields and factories and white collars in labs and universities.

This next bit is crucial. President Obama said he believes government has a responsibility to act during this economic crisis to help resolve it:

“I reject the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity.

For history tells a different story. History reminds us that at every moment of economic upheaval and transformation, this nation has responded with bold action and big ideas. In the midst of civil war, we laid railroad tracks from one coast to another that spurred commerce and industry. From the turmoil of the Industrial Revolution came a system of public high schools that prepared our citizens for a new age. In the wake of war and depression, the GI Bill sent a generation to college and created the largest middle-class in history. And a twilight struggle for freedom led to a nation of highways, an American on the moon, and an explosion of technology that still shapes our world.

In each case, government didn’t supplant private enterprise; it catalyzed private enterprise. It created the conditions for thousands of entrepreneurs and new businesses to adapt and to thrive.”

That puts him in conflict with Republicans who want to sit idly by or believe government should commit more of the shameful failures that got the U.S. into this mess – cutting taxes – particularly for businesses. That is exactly what Louisiana Gov. Bobby Jindal offered as a solution when he rebutted President Obama’s speech for the Republicans afterwards.

Then he went on to try to squirm out of his own party’s responsibility for the current budget deficit – caused in large part by the massive tax cuts the Republican Congress and Republican President bestowed on the rich.  Here’s what Jindal said: “In recent years, these distinctions in philosophy became less clear – because our party got away from its principles. You elected Republicans to champion limited government, fiscal discipline, and personal responsibility. Instead, Republicans went along with earmarks and big government spending in Washington. Republicans lost your trust – and rightly so.” Really? Republicans, who controlled Congress, “went along with” earmarks? Even now they refuse to accept “personal responsibility!”

Among President Obama’s promises in his speech, by contrast, was that he would reverse those Republican tax cuts for the rich. In a pre-emptive strike, he pointed out that only those earning more than a quarter million dollars a year would return to tax rates they had paid before Bush took office. Jindal suggested the Democratic programs would “saddle future generations with debt.” But, again, he failed to mention the debt created by the Republican tax cut for the rich.

President Obama doesn’t accept Jindal’s premise at all, however. He believes that government can be used to prod the economy to grow. He said, “The only way to fully restore America’s economic strength is to make the long-term investments that will lead to new jobs, new industries, and a renewed ability to compete with the rest of the world. The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care; the schools that aren’t preparing our children and the mountain of debt they stand to inherit.  That is our responsibility.”

He said the process begins with energy and that the country that harnesses the power of clean, renewable energy will lead this century. Yet, he said, China has moved ahead of the U.S. to make its economy energy efficient. The U.S. invented solar technology, “but we’ve fallen behind countries like Germany and Japan in producing it.  New plug-in hybrids roll off our assembly lines, but they will run on batteries made in Korea. Well I do not accept a future where the jobs and industries of tomorrow take root beyond our borders – and I know you don’t either.  It is time for America to lead again.”

What’s significant about this is not just that he is seeking leadership in a crucial area, but that he wants factories and workers in the U.S. to make the parts – not import them. Similarly, he promised to remove the tax credit given multinationals that move their manufacturing facilities overseas and to ensure a re-imagined and competitive auto manufacturing industry in America. This president understands the value of that made in America label.

It’s telling who President Obama chose to bring to the assembly and single out first for praise. It was Leonard Abess, a bank president from Miami, who gave his $60 million bonus to his 471 workers. Mr. Abess said he didn’t feel right keeping it himself. This stands in stark contrast to those Wall Street financers who walked away with millions in bonuses – never looking back — after taxpayers had bailed out their failed banks. Obama said that kind of abuse would end in his administration.

Like Abess, Obama clearly appreciates workers. Yes, he does.

Robert Kuttner

Robert Kuttner
Co-Founder and Co-Editor of The American Prospect

Dear David,

President Obama faces two huge challenges in the next few months. One is dealing with the reality of an impending depression. It will take much stronger medicine to avert a depression than the measures taken to date, and the president needs to rally public opinion if he is to persuade Congress to act at the necessary scale.

The related challenge is about appearances — about whether middle America feels that the federal outlays are trickling down to regular people. So far, bankers seem to be getting too much and Main Street too little.

The two challenges are related. If the solutions are not bolder, they won’t cure the crisis. If the public isn’t persuaded of the need, Congress won’t act. If the economy keeps sinking, the people will lose confidence in the president’s leadership.

And if President Obama doesn’t boldly address both challenges, his presidency is in trouble. I take heart from some of the subtle shifts in the president’s positioning in recent weeks, but he needs to go farther, and move faster.

At the core of both problems is the sinking economy and the fact that he hired a team of orthodox economic advisers to fix it. A radical crisis requires radical solutions, but the economic team has been far behind the curve in the remedies it has put forward, both in the reality and the optics.

The Reality:

To prevent a slide into depression, you will need to spend roughly another three trillion dollars of public money in order to pay for a second stimulus package (at least a trillion) and to recapitalize the banking system (as much as two trillion.) Neither Congress nor public opinion is remotely prepared for that action yet. No one but the president is capable of the kind leadership necessary to move public opinion in this direction, and Barack Obama is a better teacher than most presidents. But that money needs to be understood as practical help for ordinary American families, not as more bailout for the culprits who created the mess.

Faced with three trillion dollars in additional needs, the administration has only $350 billion at its disposal — the as yet unspent TARP funds. Right now, the administration seems to be trying to spend that money several times over — first as an equity guarantee to anchor more borrowing from the Federal Reserve as the core of Tim Geithner’s latest bank rescue; then as a source of public funds for the auto restructuring; and again as part of the plan to refinance mortgages and prevent foreclosures. This string is more than played out. There are limits, financially and politically, to the use of the Fed as all-purpose piggy-bank. At some point very soon, Congress needs to be brought back in, because your efforts require both Congressional support and a lot more real money. And Congress will only act if the people understand the stakes.

The political reality is that the economy needs to be on the mend by mid-2010, or the Democrats will lose seats in the mid-term election. But most informed observers think that if present trends continue, the economy will not be in recovery by Election Day 2010. If the Republicans eat into what is now a bare working Congressional majority, you will face legislative gridlock. And the perception of a weakened presidency will become a reality — portending even worse political news for the president’s re-election in 2012.

Right now, the president has enlisted some Republican governors like Charlie Crist urging diehard GOP legislators to back his program. That’s a trifecta. It splits the opposition party, reinforces the perception of Republican obstructionism in Congress, and vindicates the president’s bipartisan overtures. Well done! But this will last only as long as President Obama’s program seems to be working.

As you must know, President Obama is at grave risk of getting on the wrong side of a populist backlash, which the Republicans — however improbably — will exploit. Regular Americans are losing savings, incomes and jobs, and see vast sums from bank rescues going mainly to bankers. A USA Today/Gallup poll published Monday shows that 83% of Americans favor federal aid to create jobs, 67% favor aid to states in financial trouble, and 64% favor relief to homeowners facing foreclosure. But only 39% favor aid to banks. I recently gave a speech to a blue collar audience, and one questioner asked why they didn’t just mail a check for $100,000 to every American family instead. Far fetched as that sounds, the seven trillion dollar cost about equals the direct and indirect costs of the serial bank bailouts (counting advances and guarantees from the Fed.) In days ahead, you will be hearing more of this on talk radio and cable TV.

You already grasp the need for better symbolism on this front. The limit on executive pay for top bankers getting federal relief is a good start. But the public expects a lot more. In the public mind, the bank bailout is conflated with the stimulus package; and what gets the publicity is the fact that the relief is going mostly to bankers, bank shareholders, and bondholders.

It did not help that Tim Geithner went on stage before his plan was ready for prime time. The plan laid an egg on Wall Street, but the financial market is not the only audience that matters. Geithner’s approach is also increasingly unpopular with ordinary people and with commentators. The fact that Geithner’s latest housing rescue also channels the relief through banks and bondholders, and solves only a fraction of the foreclosure crisis, does not help either.

The week that the 2008 election campaign locked in your favor, was, in retrospect, a very close call. That was the week of September 29, after candidate Obama had announced that even though the bank bailout bill was not perfect, he would support it. A large majority of House Republicans, meanwhile, refused to support the bill. Their mail and phone calls were running a hundred to one against the measure.

As you will recall, John McCain clumsily announced the suspension of his campaign and dramatically returned to the Senate, where he played no useful role whatever. When the dust settled, the White House rounded up just enough Republican votes over rank and file GOP opposition, and Barack Obama looked like a statesman while McCain looked like an inept opportunist. But had McCain behaved as a more adroit demagogue and played to the latent populism in the backlash against the bill, he could have been the net beneficiary while painting Obama as the “elite” agent of the banks. Given the close Republican alliance with Wall Street and McCain’s own prior record, the claim would have been preposterous, but politically it might have worked.

There will continue to be this sort of risk going forward. Republicans will posture as pseudo-populists. The administration’s emergency measures both need to cure the economic collapse — and to do so by symbolically and palpably siding with regular people.

With all of these alarms, there is still a lot that I find encouraging about the president’s actions in recent weeks.

President Obama’s event January 31 launching the task force on middle class working families chaired by Vice President Biden was superb, and the president’s remarks were spot on. Among other things, he declared:

We know that you cannot have a strong middle class without a strong labor movement. We know that strong, vibrant, growing unions can exist side by side with strong, vibrant and growing businesses. This isn’t a either/or proposition between the interests of workers and the interests of shareholders. That’s the old argument. The new argument is that the American economy is not and has never been a zero-sum game. When workers are prospering, they buy products that make businesses prosper. We can be competitive and lean and mean and still create a situation where workers are thriving in this country.

We have not heard language like that in the Oval Office since Franklin Roosevelt. And the Employee Free Choice Act, if enacted, would not just create a stronger labor movement but a stronger constituency for the Obama administration and future progressive electoral majorities. It puts the president on the side of working Americans.

I noted with great interest a most unusual front-page piece in the New York Times February 10, headlined, “Geithner Said to Have Prevailed on the Bailout.” In this piece, you and unnamed officials were quoted to the effect that Geithner had won the argument inside the administration against more severe executive pay limits and other tough conditions on banks receiving additional government aid.

What made this piece so interesting is that it deliberately publicized a split in a team famous for self-discipline and for never leaking anything about internal disputes. A blunter translation of the leak might be “You won that one and good luck, Tim, this baby is all yours.” I certainly hope that’s what you meant, because the baby is something of an orphan that nobody wants to claim. And if Geithner is not doing the job in a way that protects the public interest and the president, he certainly deserves to be isolated. Unless he improves on his performance to date, I would not be surprised if in six months, Geithner “decided” to resign to spend more time with his family.

It will be interesting to see whether the center-right economic team who took senior posts in the campaign and then got the top jobs in the administration learns how to get with a bolder program. If they don’t, it is up to the political team to re-educate them or to find people who get it right. I certainly hope you and the president are also talking to people who have a more radical view of how to fix the banking system, like Joe Stiglitz, Nouriel Roubini, Dean Baker, James Galbraith and Paul Krugman. The fact that people like Alan Greenspan and Sen. Lindsey Graham have said that bank nationalization might be necessary certainly gives the president some cover.

In early February, the president’s economic advisers came up with the idea of a White House summit on fiscal responsibility, which was held this Monday, February 23. The idea was to reassure fiscally conservative Blue Dogs and lay the groundwork for a “grand bargain” long promoted by Robert Rubin, Pete Peterson, and some in Congress to pay for the sins of emergency deficit spending this year and next by cutting back on Social Security and Medicare down the road. The preferred vehicle to bring this about was a bipartisan commission modeled on the base-closing commission. It would come up with a plan for automatic triggers for cutbacks in social insurance, and would be subject only to an up or down Congressional vote.

But someone failed to run the political traps. There was plenty of consultation with the Blue Dog Democrats and with some senior Republicans, but nobody thought to tell Nancy Pelosi or Harry Reid. Senior Congressional Democrats, among them Senate Finance Committee Chairman Max Baucus, who is nobody’s idea of a fiscal wastrel, warned the president that this was no time to be cutting back on Social Security and Medicare or putting government on bipartisan automatic pilot.

To his credit, the president changed the character of the White House summit, and preempted it with a budget briefing for reporters on the administration’s commitment to being the deficit back below three percent of GDP by 2013 — by letting the Bush tax cuts expire and by finding other revenue — not by gutting social insurance. Despite a lot of rhetoric about bipartisanship, the idea of a commission is off the table. Congratulations on preventing what might have been a political debacle and seizing the fiscal high ground.

It has been a real pleasure to see President Obama get out of the Washington bubble and get back on the road. His speech in Springfield, where the campaign began, marking the two-hundredth anniversary of President Lincoln’s birth, was one of his finest. And he articulated the themes that must be persuasive to Americans if he is to save the economy and his presidency.

In that speech, he challenged “the philosophy that says every problem can be solved if only government would step out of the way; that if government were just dismantled, divvied up into tax breaks, and handed out to the wealthiest among us, it would somehow benefit us all.”

And he added:

“Such knee-jerk disdain for government – this constant rejection of any common endeavor — cannot rebuild our levees or our roads or our bridges. It cannot refurbish our schools or modernize our health care system; lead to the next medical discovery or yield the research and technology that will spark a clean energy economy.

“Only a nation can do these things. Only by coming together, all of us, and expressing that sense of shared sacrifice and responsibility — for ourselves and one another — can we do the work that must be done in this country. That is the very definition of being American.”

I hope we hear a lot more of this.

Before the economy moves toward recovery, we will need a very different strategy for reviving a functioning banking sector — one rebuilds a simplified financial system to serve the real economy. The current approach is more about saving existing zombie banks, and the people notice. You can call it receivership or nationalization, but sooner or later the president will have to embrace it, and it is better done sooner.

We also need a plan to prevent foreclosures that goes directly to help homeowners, rather than hoping that by giving more incentives to banks and bondholders we can somehow induce them into passing along some relief — a plan that helps homeowners directly. I think the political team gets that. Either the economic team needs to get it, or you need to get a different economic team.

There is the further challenge of branding the practical help that the Obama administration is already providing. Franklin Roosevelt had the blue eagle of the NRA plastered in every store window. And when jobs came via the CCC or the WPA, nobody doubted who was the author of that help. For now, even though $780 billion is a lot of money, it passes through so many hands before it finally reaches local communities that it isn’t branded as help from President Obama. You are probably better equipped to figure out that one than I am, but it is another challenge.

In closing, let me say that during the campaign I wrote a lot of commentary, sometimes back-seat-driving what you were doing. Nine times out of ten when I second guessed your tactics, you were already several steps ahead of me. You’re a stellar political strategist. However, you now have the added challenge of governing, and of governing on the edge of a depression with a team of economic advisers that is sometimes more of an echo of the past than an asset. You don’t have much margin of error, and you need to get the politics right in order to get the economics right. We all need you and President Obama to succeed.

Robert Borosage

By Robert L. Borosage
Co-Director Campaign for America’s Future

Will President Obama defend Social Security from the folks who want to plunder it? That’s the question Bill Grieder poses in a critically important article in the Nation Magazine.

We’ll get an early indication this Monday when the president convenes a “Fiscal Responsibility Summit,” designed as he put it, “to send a signal that we are serious” about America’s long-term deficits.” The focus will be on “entitlement programs” like Social Security and Medicare. “Everything will be on the table,” the budget hawks will get a platform, and rumors now suggest the president may announce a commission designed to “fix” Social Security.

The president is surely right about the need to address America’s long term finances. Doing so now is dicey, for the president has to convince Americans — and the Congress — on the need for more deficit spending: to pay for the bank bailout, finance mortgage relief and eventually a second stimulus to get the economy going. The danger — as Roosevelt discovered in the Great Depression — is to do too little and stop too soon, seeking to balance the budget before the economy regains its feet. But a long term discussion of America’s finances now could help Americans look beyond the crisis, defining where we need to go and how, in the long term, we’ll pay for it.

Progressives, of course, are worried about Obama falling for a trap set by the budget hawks, conservatives in both parties, the beltway establishment and financial elites, personified by Pete Peterson, a billionaire Wall Street baron. Peterson is spending a fortune trying to terrorize Americans about long-term deficits to justify hacking at Social Security and Medicare. Peterson, who made his fortune on Wall Street, never raised a word about the dangers of hyper leveraged finance houses gambling other people’s money. He never expressed qualms about the leveraged buyout artists who were using debt finance to rip apart companies. He didn’t fund an all out effort to stop Bush from raiding the Social Security surplus to pay for tax cuts for the rich. But now he wants folks headed into retirement who have already prepaid a surplus of $2.5 trillion to cover their Social Security retirements to take a cut tor work a few years longer to cover the money squandered on bailing out banks, wars of choice abroad, and tax cuts for the few.

Will Obama fall for this ploy? Not likely. In fact, his position on entitlements has been spot on. Social Security, he has argued, is basically sound, funded far into the future. If it needs more funds decades from now, lifting the cap that now cuts off payroll taxes at $102,000 would take care of the problem.

The real deficit problem, as Obama has argued, is caused by soaring medical costs. This isn’t a problem of “entitlements” like Medicare and Medicaid alone. It’s the result of our broken health care system that wastes over a third of its costs on administration, puts no limits on the costs of drugs, and does a terrible job limiting costs. Other advanced industrial countries spend far less of the GDP on health care while insuring all their people and producing better health results. Solve the problem of soaring health care costs and you solve America’s long term federal budget deficits. Fail to solve it and you bankrupt everything – families, companies that provide health care, state and national governments.

Obama gets this. That’s why he’s insisted on universal health care reform, and why he demanded a downpayment be made in the stimulus on accelerating the transition to computerized medical records and comparative treatment research.

So if the president sticks to his campaign pledges, the summit may provide a platform for the distortions of the budget hawks, but it won’t do much damage.

What we really need however is a true fiscal summit: a long-term assessment of our needs and our finances to begin framing a real “Grand Bargain” to pay for the investments we need.

That would start with what we consider to be the basics. I’d take the measure of a government that works that Obama defined in his inaugural address: a government that “helps families find jobs at a decent wage, care they can afford, a retirement that is dignified.”

Meeting those basic goals will require developing an expanded public social compact to replace the promises that the corporations have shredded – particularly affordable health care and a secure pension above Social Security. It requires expanded public investment in areas vital to a vibrant economy and democracy: notably world-class education, 21st century infrastructure, and investments to fuel the transition to new energy.

Despite our current travails, this is still a rich country. We can afford to pay for this.
Indeed, successful health care reform would save money. The gold standard Lewin Group estimates that Obama’s plan would save some $1.04 trillion over ten years.

New priorities could provide hundreds of billions more. For example, what if we decided to sustain the world’s strongest military by spending as much on our military as the next 10 biggest militaries combined? As Bill Greider reports in his forthcoming book, Come Home America, that would save an estimated $180 a year to invest in areas vital to our future.

Given America’s gilded age inequality, which has been worsened because of wholesale tax cuts and loopholes for the wealthy, progressive tax reform is a moral imperative. Reform of the estate tax – with a complete exemption for fortunes up to $2 million per person ($4 million for a couple) would provide $60 billion a year. Repealing the Bush top end tax cuts for households earning over $250,000, as Obama promised in the campaign, provides another $43 billion a year. A small financial transaction tax on the buying and selling of stocks and other financial products — a vital reform to reduce excessive short term speculation — could generate $100 billion a year. Ending overseas tax havens could generate $100 billion a year from the unpatriotic corporations and wealthy (all figures from Chuck Collins of Responsible Wealth and the Institute for Policy Studies).

This doesn’t claim to be the last word. We can and should argue about the elements of any grand bargain. But everything should be on the table, not just “entitlements.” What are the promises we will make to one another to create a decent society? What are the investments we need coming out of this crisis to sustain the American dream in a global economy? And then, how do we pay for them in the most equitable and efficient way? Now that would be the Fiscal Responsibility Summit we need.

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                Steelworkers Organization of Active Retirees (SOAR): http://legacy.usw.org/usw/program/content/overview_sub.php?modules2_ID=774&modules_ID=775

Leo W. Gerard

By Leo W. Gerard
International President

The sky is falling.

For the average Working Joe or Jane in America, it is anyway. Unemployment is at 7.6 percent and rising. The Economic Policy Institute estimates that there are 4.1 job seekers now for every opening. The mortgage delinquency rate set another record last quarter, and foreclosures are predicted to top 1 million this year. Because of reckless speculation by Wall Street financiers, the stock market is plummeting, taking with it a third of the value of the retirement accounts of hard-working Americans.

If the average Jane and Joe have not lost their jobs, they’ve seen a big chunk of their retirement savings slip away. Or their kid can’t find work. Or a neighbor’s been foreclosed on.

Still, Republicans in Congress couldn’t find it in their hearts to vote for the American Recovery and Reinvestment Act of 2009, commonly called the stimulus bill. They just can’t vote to support the American people – they’re “Republicants.”

An official description of the act the Republicants rejected says it:  “Makes supplemental appropriations for FY2009: (1) for job preservation and creation; (2) to promote economic recovery; (3) to assist those most impacted by the recession; (4) to provide investments needed to increase economic efficiency by spurring technological advances in science and health; (5) to invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits; and (6) to stabilize state and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive state and local tax increases.”

In the House, not a single Republicant voted for this bill to create jobs and restore economic growth. In the Senate, three brave members of the GOP stood up to the Republicants gang to pass the Recovery Act and aid suffering Americans – Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania.

The GOP made it malevolently clear during their majority years in the Bush administration that they opposed anything that would strengthen America’s middle class, but its votes this week were based on deep, and frankly justified, fear of the Recovery and Reinvestment Act.

New York Times Columnist and Nobel Prize winning economist Paul Krugman explained it earlier this week at the Thinking Big Thinking Forward conference conducted in Washington D. C. by EPI, Institute for America’s Future, The American Prospect and Demos.

Republicans are terrified of the Recovery and Reinvestment Act because if it works, if it creates jobs and helps stimulate the economy, then Americans will think good thoughts about government action and spending.

And that could lead to new public support for government payments for important social safety net programs like health care.

Republicans have invested decades, untold millions of dollars and countless hours on Sunday morning blathering-head shows persuading Americans that government is too big. They’ve contended that taxes should be cut to force curtailment of government. Bush supporter Grover Norquist, who is president of Americans for Tax Reform and a director of the American Conservative Union, expressed it best for the group: “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.”

They did cut taxes – for the rich. And they cut services – crucial ones, like inspection of toys so that millions of toxic trinkets imported from China got into the hands – and mouths — of American toddlers. And inspection of food and the factories producing it, so it’s possible that salmonella-tainted peanut butter has sickened 500 and killed eight.

And they placed bunglers in charge of important government agencies. This, of course, was deliberate, to make government look incompetent — an entity deserving of drowning in a bathtub. One of them was the infamous “Brownie,” Michael P. Brown, who headed the Federal Emergency Management Agency, which, in fact, drowned when called to respond to Hurricane Katrina. Brownie’s qualification to head FEMA was his service as commissioner for the International Arabian Horse Association. By contrast, he replaced James Lee Witt, former President Bill Clinton’s FEMA director. Witt won acclaim for good performance in office. His qualification to head FEMA was his tenure as director of the Arkansas Office of Emergency Services.

In addition to cutting service, conservatives eliminated government regulation. The result for America was the subprime mortgage crisis and credit default swaps, an unregulated risky transaction that helped push the nation’s financial institutions to the brink.

Americans put up $700 billion to bail out those bankers last fall. But the Republicants don’t talk about that when they say, as Republicant Congressman Jerry Lewis of California did on Friday, that the American Recovery and Reinvestment Act of 2009  is a recipe for bloated government programs that will saddle taxpayers with debt “well, well into the future.”

“Facts are stubborn things,” Mr. Lewis said.

Fact is, Mr. Lewis voted to indebt Americans for $700 billion to bail out banks.

So, clearly, spending American taxpayers’ money is not a problem for him.

Spending it on taxpayers is.

The Recovery and Reinvestment Act contains about $50 billion for shovel-ready road, airport, bridge and other infrastructure projects nationwide that will create construction and manufacturing jobs. The nation’s electricity grid is to be upgraded with $11 billion, creating similar jobs. States will get $54 billion, which will help out Mr. Lewis’ California, now $42 billion in debt. That money can go for highway and school building as well as to prevent layoffs of teachers, firefighters and other state workers.

Altogether, the $790 billion Recovery and Reinvestment bill is designed to create or preserve between 3.5 and 4 million jobs.

When the sky is falling, that’s some shelter for America’s little guys. If President Obama is right and this act succeeds in creating jobs and stimulating the economy, he will have performed a great service for struggling and suffering workers.

He will also have revived what Norquist and Brownie, Carl Rove and Bush tried so hard to waterboard: the concept that government can do good.

Leo W. Gerard

By Leo W. Gerard

International President

Creep of the Week is a special award bestowed by the Untied Steelworkers on a corporate scoundrel or political bobble-head nodding to anti-worker demands. The awardee must, however, be human — not a demon, or robot or avatar. This week’s winner is former Merrill Lynch Chief Executive Officer (CEO) and Expensive Toilet Connoisseur (ETC) John A. Thain.

Thain’s behavior has been so cartoonish as to suggest he’s a soulless concoction of Marvel Comics. A Wall Street villain: Thain – the bond-shark who spends more on a commode to festoon his office than most Americans earn in a year!

Even James Post, a management professor at Boston University, suggested that Thain was more of an avatar than a human when talking to the AP about him and other Wall Street CEOs who spent $18 billion on year-end bonuses after getting $350 billion in taxpayer dollars to bailout their failing financial companies, “Thain is a symbol of the species. It’s a breed that I think is going to have to change its habits, at least for a time.”

But here’s proof that greed hasn’t completely converted Thain’s soul into a black hole: he paid his chauffeur $230,000 for a year’s service. That, of course, included an $18,000 bonus, about half of what the average American makes for an entire year’s work.

The fact that Thain paid his driver more than what a U.S. Supreme Court justice earns probably says more about what Thain thinks of his own value than what he believes the chauffeur deserved. Still, Thain could have stiffed the guy. Which means, somewhere under all that arrogance and excess, there’s a human. Thus, he qualifies for the award.

The Creep of the Week prize doesn’t come with cash, something Thain will be completely unaccustomed to. This is a guy who slipped his staff at Merrill $3.6 billion in bonuses, including 700 at the $1 million and above level, and did it deliberately in December, a month earlier than usual. That way, they arrived just days before reports of Merrill’s $15 billion fourth quarter losses. And the bonus checks got cashed just days before Bank of America completed its take over of Merrill. BoA may well have cancelled all of the bonuses that weren’t contractually required because they were, in effect, a reward for losing Merrill a grand total of $27 billion that year.

And, BoA had to slither back to taxpayers and beg for another $20 billion from the bank bailout fund to help it complete the Merrill takeover after it discovered the extent of the losses at the brokerage firm.

Even so, Thain thought he should cash in on those bonuses too. After all, he had given his driver one! He planned early in December to ask the BoA board of directors for a $10 million bump just for himself – until bad publicity made him think the better of it.

Then, just last month, BoA’s CEO dumped Thain, placing him among the nearly 600,000 Americans thrown out of work in January. And just after he’d agreed to reimburse the company for that $1.2 million he’d spent renovating his personal office — including his $35,000 ornamental, non-flushable toilet!

Don’t cry for Thain, America. While the typical U.S. worker counts his annual wage in thousands, Thain tabulated his in millions. In 2007, he was the highest paid CE0 on Wall Street, taking $83 million in compensation out of the financially-struggling Merrill. As 7.6 percent of Americans are pinching pennies on the unemployment line, he’ll be squeezing megabucks in the lap of luxury.

Robert Borosage

By Robert L. Borosage

Co-Director Campaign for America’s Future

The Obama administration has made its first serious misstep. No, it wasn’t the wooing of ingrate Republicans, or the dining with clueless reactionary pundits. It is much more significant. Faced with the failure of the Paulson-Bernanke banking bailout, the Obama administration has decided to double down. The new plan, described in broad outline by Treasury Secretary Tim Geithner on Tuesday, antes up another $1.5 trillion or more to keep the banks afloat. But it won’t convince many that they are seaworthy.

The plan isn’t likely to get the administration where it needs to go for two simple reasons. It is wrong about where we are starting from. And it is wrong about where we’re going to. If you don’t know where you are and don’t know where you are going, it is very hard to get there.

The plan won’t admit where we are: the major banks in the US are insolvent. They aren’t addled by a temporary fever. They are broke. If they actually marked their toxic paper to the market price – where there is one – their losses would wipe out their capital, even including the billions kicked in by the government in the first round. Clearly, the Obama administration – like the Bush administration before it – hasn’t accepted that reality.

The plan won’t get us where we need to go: we need to restructure – and downsize – our financial sector. Its baroque excesses – billions in bonuses, golden parachutes, million dollar office renovations, $35,000 “commodes on legs,” $50 million private jets, legions of employees – were constructed atop a housing bubble that finally burst. Now the banks and financial houses must be downsized, chastened, and regulated. As President Obama stated, “the party is over.” But the administration’s plan envisions a restoration, not a restructuring. We don’t want to go there even if we could afford it.

Martin Wolf, the lead economics writer for the establishment Financial Times, notes that the plan was constrained by three assumptions: no nationalization, no losses for bondholders, no new money from the Congress.

No nationalization rules out the way the US normally deals with insolvent banks. The FDIC takes them over, replaces the management; the depositors are reassured, the shareholders take their losses to write off the bad debts. Then the FDIC restructures the bank, merges it or sells it back to private investors. It arranges an orderly and seemly burial. Without doing this with banks that are “too big to fail,” the administration is left paying tribute to zombie banks that consume taxpayers’ money while doing little if any productive banking.

No losses for bondholders means that taxpayers pick up the bill. With an insolvent bank, shareholders lose their investment. That’s how the market works. If that isn’t enough to cover the losses, then creditors take what is called “a haircut.” A portion of the loan they made to the bank is written off or turned into equity (stock). But with neither the shareholders nor the creditors taking the hit, only taxpayers are left.

No new money from the Congress – surely a political reality with the rising popular fury at bailing out millionaire bankers – means that the plan is immensely complicated, combining guarantees from the Federal Reserve, small capital injections, inducements to lure private investors. But the whole point of the exercise is to restore confidence in the soundness of the banks. A jerry-built complicated package only makes everyone nervous that the whole contraption won’t hold up.

How can Obama get back on track? The plan does have one potentially redeeming feature. It pledges that any bank requesting federal assistance will have to undergo what it calls “a stress test,” a detailed assessment of the value of its holdings and liabilities. This is the first thing the FDIC does when it takes over a bank verging on collapse. An honest assessment allows the government to decide whether the bank is salvageable or not. (It is aided in this process by getting rid of the old managers who have a direct interest in covering up the depth of the hole they are in.)

The Treasury could use this clause to “discover” that the banks applying for assistance aren’t solvent – and then proceed to restructure them (never using the N word). Congress might sensibly instruct the administration to do just that. Otherwise, another trillion or so will be devoted to keeping the zombies alive, while the economy — and the Obama presidency — suffer.

But for this to happen, Obama will have to put grit in his policy, not just his rhetoric. As Steve Fraser recounts, in the last great depression, Franklin Roosevelt railed against the “money changers” from his first inaugural on, scouring them for squandering “other people’s money, and promising to chase “these unscrupulous money changers” from their “high seats in the temples of American civilization.”

But FDR combined bite with his bark. Again Fraser summarizes:

After 1929…new financial regulation was at the top of, and made up a hefty part of, Roosevelt’s New Deal agenda during its first year. That included the Bank Holiday, the creation of the Federal Deposit Insurance Corporation, the passing of the Glass-Steagall Act, which separated commercial from investment banking (their prior cohabitation had been a prime incubator of financial hanky-panky during the Jazz Age of the previous decade), and the first Securities Act to monitor the stock exchange.

Over the past weeks, it is apparent that Obama has begun to educate Americans about the scope of the economic devastation that he must deal with. Now it is vital that his policies get as bold and radical as the crisis demands. The new banking plan isn’t there.

Dean Baker

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

Jeff Faux, my former boss at the Economic Policy Institute, tells a story from his days as a foot soldier in President Johnson’s War on Poverty. Johnson was asked by a delegation from Alaska if he had an anti-poverty program for their state. Johnson assured the delegation that he had a “great big program” for Alaska. As soon as the delegation left, Johnson rushed into Jeff’s office and told them that they needed to come up with a program for Alaska.

Unfortunately, many liberals have not moved beyond Lyndon Johnson’s thinking on the role of the government in the economy. They still tie progressive outcomes – the guarantee of good quality health care, education, childcare, housing and a secure retirement – directly to big government. While the government must play a role in ensuring these outcomes, the point should be to have good government, not big government, as we usually conceive it.

There is a long list of ways in which the rules set by the government determine economic outcomes. While these rules have an enormous impact on the economy, they do not amount to “big government” in the sense of a large amount of taxes and spending.

Perhaps the most obvious example along these lines is patent protection for prescription drugs. The Centers for Medicare and Medicaid Services projects that the country will spend more than $330 billion in 2012 for prescription drugs. These same drugs would cost roughly $30 billion in the absence of patent protection. This means that the government’s patent monopolies will be redistributing roughly $300 billion in 2012 from patients to the drug companies. (There are alternatives to patent monopolies for financing the research and development of prescription drugs.)

To put this sum into perspective, after-tax corporate profits are projected to be less than $1,400 billion in 2012, so the amount at stake in preserving patent protection for prescription drugs will be more than 20 percent of all corporate profits. Alternatively, imagine getting Congress to appropriate $300 billion a year, or $3 trillion over a 10-year budget window, for our favorite government program(s).

However, in spite of the enormous amount of money at stake, this issue has received almost no attention from the vast majority of progressives. In fact, most progressives have probably never even given the issue of patent protection for prescription drugs a moment’s consideration.

It is easy to find other examples of ways in which government rules determine who gets the money. Along the same lines as patent protection, the entertainment industry and software industry survive in their current form because of the government’s copyright protection. This form of government intervention has made thousands of people, from Rupert Murdoch to Bill Gates, very rich at the expense of the rest of us.

The trade agreements over the last three decades have been deliberately designed to put manufacturing workers, and noncollege educated workers more generally, directly in competition with low-paid workers in the developing world. The predicted and actual result of this policy is to lower the wages of noncollege educated workers in the United States.

Do we want to rebalance the field? Why not set trade rules that put highly paid medical specialists and other big “winners” in direct competition with their low-paid counterparts in the developing world. We can debate whether this is good policy, but there is no dispute that we can use this “market” outcome to bring down the wages of those at the top.

And speaking of wages of those at the top, we can also rewrite the rules of corporate governance so that CEOs and other top executives don’t get to write their own paychecks. The compensation packages of the top five paid executives could be subject to regular approval by shareholders in a vote where unreturned proxies do not count. My guess is that with these rules much less money would go to those at the top.

There are many other ways in which we can change the rules so that less money flows to those on top, leaving more for the rest of us. Changing the rules does not require big government in the sense of large portions of GDP being collected in tax revenue.

It does require that government take an active role in the economy, but it is already taking an active role in the economy in these areas. The difference is that, currently, the conservatives have been setting these rules, while progressives have been polite enough not to pay attention. Instead, they have mostly focused their energy on matters that will have far less impact.

The economic crisis brought on by the collapse of the housing bubble offers progressives unprecedented opportunities. But we have to be prepared to actually think big, and not just think about big programs.

By Leo W. Gerard
International President

A decade or so ago, some states gave welfare recipients food stamp debit cards. Welfare mothers could use them to buy groceries with plastic, just like virtually everybody else in the check out line. Plastic made accounting easier for clerks because the debit cards failed to function for excluded items like cigarettes and alcohol.

That’s what America needs for Wall Street. When bankers get money from the $700 billion bailout called Troubled Asset Relief Program (TARP), they should receive it on plastic. A TARP debit card would restrict bankers’ spending. TARP plastic would fail to function if bankers tried to use it for excluded items like $18 billion in year-end bonuses, private French-manufactured jets and $35,000 inoperative toilets.

TARP debit cards are required because Wall Street’s wizards of finance have shown repeatedly they can’t or won’t control their own spending.

These are the guys who bankrupted their own financial institutions with unrestrained risk-taking. Then they went bawling to Congress for a bailout that was supposed to free up credit for the rest of the country. Not true to their word, the bankers didn’t extend credit, and businesses and municipal governments across the nation suffered the ugly consequences: that being, of course, unemployment. In the last quarter of 2008, more than 1.5 million Americans lost their jobs – the highest number in more than a quarter century.

Still, after causing all that devastation, and asking those same Americans to clean it up, Wall Street’s bankers don’t understand that they are on the dole. They’ve behaved as if their banks made profits, as if they had a credit card, not a big fat IOU to the American public.

Let’s start with the bonuses. The very financial institutions that already have taken $350 billion in taxpayer dollars to prevent their collapse turned around and gave away more than $18 billion in bonuses to employees. The average bonus was $112,000.

By contrast, the Social Security Administration reported that in 2006, the most recent year for which it has statistics, the average non-Wall Street American’s wages for an entire year’s work totaled $37,078.

Still, the Wall Streeters pouted about their bonuses. Of 900 surveyed by eFinancialCareers.com, a job search Web site, 46 percent said they thought they deserved more.

And no wonder. Look what their bosses get. The financial services industry pays its CEOs more than any other, an average of nearly $19 million in 2007, according to a study by Lawrence Mishel, president of the Economic Policy Institute. Think about 2007. That was one year before Wall Street crashed, taking the country down with it. And its CEOs were making $19 million while overseeing the bankrupting of the system.

The bankers are all claiming none of those bonus bucks they paid out at year’s end came from their TARP funds. But let’s look at it this way. Lehman Brothers didn’t get a TARP bailout. It failed in September, and its workers left the building with their belongings in boxes. None got a year-end bonus. If the U.S. taxpayers had permitted any one of the institutions that got tens of billions in TARP money to go bankrupt, their workers would be in the same shape as Lehman’s – carrying cardboard boxes not big fat bonus checks.

Of course, there’s also the in-your-face bonus behavior of John A. Thain, the former Merrill Lynch chief executive who spent $1.2 million renovating his personal office including that just-for-show toilet and a $1,400 trash can. Thain decided to hand out between $3 and $4 billion in bonuses while Bank of America was struggling to take over the failing Merrill with the help of billions in TARP welfare.

Thain tried to defend the bonuses by saying they are an essential tool banks use to keep their best people. Jon Stewart, host of “The Daily Show,” provided the only reasonable response to this assertion: “You don’t have ‘best people!’ You lost $27 billion! Do you live in Bizarro World?”

Yes. Yes, he does. This is a guy who asked the Bank of America board to give him a $10 million bonus in December after Merrill, the company he directed, lost $15 billion that quarter – for a grand total of  $27 billion in one the year.

Though Bank of America originally received $25 billion in TARP welfare, after Thane’s third quarter losses, it had to return to the taxpayers of America for $118 billion in government loan guarantees and an additional $20 billion in TARP welfare to complete the purchase of Merrill.

Bizarro World is right.

John A. Thane and his ilk, who blithely spend more on decorative toilets for their offices than middle class families can scrape together for a year of college tuition, need a rude awakening.

More than just the debit card, these guys ought to experience the humiliation of standing in a welfare line.

For some reason, when bankers get in trouble, the treasury secretary and the chairman of the Security and Exchange Commission have been running up to New York to huddle in weekend-long secret meetings in those fancy Wall Street offices with decorative toilets to solve their problems by handing them billions in taxpayer money.

No wonder those bankers act so entitled.

Let them drag their sorry lack-of-assets down to Washington, D.C. and stand in line and beg for taxpayer bucks in tawdry public offices like other welfare recipients must do.

When and if they qualify, hand them TARP debit cards that forbid expenditures on bonuses and $1.2 million office renovations for CEOs. Go ahead with President Obama’s plan to limit to $500,000 the salaries of CEOs who receive TARP welfare, but make sure that those wise guys can’t find sneaky ways to circumvent those restrictions with bonuses that come in the form of restricted stock, for example. Otherwise, CEOs will just be buying cigarettes with their taxpayer-funded TARP debit cards.

And then taxpayers, who despise the notion of welfare queens, will demand Congress “discredit” and dethrone the kings of Wall Street.

Robert Kuttner

By Robert Kuttner
Co-Founder and Co-Editor of The American Prospect

I do not view the labor movement as part of the problem, to me it’s part of the solution.

– President Barack Obama, January 30, 2009

The great union leader John L. Lewis, who headed the United Mine Workers from the ’30s through the ’50s and helped organize millions of workers into the CIO, used to declare in organizing drives: “President Roosevelt wants you to join the union.” Roosevelt never said that in so many words, but FDR did strongly back the Wagner Act, giving workers the clear right to organize.

During World War II, Roosevelt’s War Labor Board made clear that corporations seeking war contracts needed to have good labor relations. In practice, that meant unions; and it meant “pattern bargaining” in which workers for different companies in the same industry got the same wages, so that companies could not play workers off against each other.

Roosevelt’s wartime contracting policies, the Wagner Act, and the militancy of the labor movement laid the groundwork for the golden age of American unions during the postwar boom. Not coincidentally, this was also the one period in the past century when the economy became more equal, and more secure for working people.

So, while Roosevelt’s words never quite urged workers to join unions, his deeds spoke volumes. John L. Lewis was well within the bounds of poetic license.

On Friday, President Obama, a onetime organizer, had more words to say about unions, and they were the kind of explicit endorsement that we literally haven’t heard from a president since FDR’s day.
“We need to level the playing field for workers and the unions that represent their interests, because we know that you cannot have a strong middle class without a strong labor movement,” the President said. “When workers are prospering, they buy products that make businesses prosper. We can be competitive and lean and mean and still create a situation where workers are thriving in this country.”
Wow!

And Obama offered deeds to match. This stunning declaration of support came at the White House announcement of a Task Force on Middle Class Working Families headed by Vice President Biden, with Jared Bernstein as its executive director. The idea was proposed last summer by Change to Win unions, who endorsed candidate Obama early in the primary season. He embraced the concept, and it was a commitment he kept. His remarks and actions were a dazzling example of the transformative power of a president to shift public opinion and the political center of gravity.

The task force, and the effusive and genuine embrace of the labor movement, came as a huge relief to union leaders, who have watched anxiously as nearly all the key economic posts went to centrist veterans of the Clinton administration, and the job of secretary of labor was not announced with the other senior economic officials. As it turned out, the appointment of Hilda Solis, a very pro-union member of Congress, was delayed because others had turned down the job first, but the delay sent an unfortunate signal.

Labor activists have also been worried about whether Obama will keep his pledge not just to sign the Employee Free Choice Act (EFCA) guaranteeing the right to join a union, but to work hard on its behalf with legislators, especially in the Senate. Since the election, the US Chamber of Commerce and allied anti-union business organizations have mounted a furious publicity and lobbying offensive with one message: Mr. President, you don’t need this bruising fight right now.

But the Chamber’s allies in the Republican House Caucus have beautifully undercut that logic. The Chamber’s premise was that EFCA would be highly divisive, at a time then the new president was seeking unity. With the wall-to-wall Republican stonewalling on the Obama recovery package, that premise is up in smoke. And the Chamber’s other allies, on Wall Street, have also done a service by inviting some salutary class warfare. Obama responded last week, calling Wall Street bonuses in the face of government bailouts “shameful,” and seems to genuinely view the growth of unions as a necessary counterweight.

The task force itself will be a welcome counterweight to the outsized influence of Wall Street inside the Obama administration. Several weeks ago, Jared Bernstein, then a senior economist at the Economic Policy Institute, wrote a joint op-ed piece for the New York Timeswith Robert Rubin pointing out where they agreed. One issue where they pointedly disagreed was on the Employee Free Choice Act, which Rubin explicitly refused to endorse. The Biden operation now looks to be the go-to place for progressives seeing access to Obama’s priorities. The Task Force will serve as the White House center to review all proposals, legislative and administrative, for their impact on the effort to raise wages and rebuild a middle class.

Without Obama’s strong personal engagement, EFCA will be anything but a legislative cakewalk. Democrats may have a working majority. But at least five business-oriented Democrats are not considered certain votes for EFCA, and Obama will need to let them know that the White House considers this bill a top priority.

Our last two Democrats went out of their way not to get close to organized labor. Jimmy Carter did not lift a finger when the last big push to put some teeth back in the Wagner Act’s right to unionize went down to defeat by just two votes in the Senate in 1978.

On Friday, announcing the Task Force, Obama signed three executive orders. One will prevent federal contractors from discouraging their employees to join unions. Another will assure that workers keep their jobs when a contract changes hands. Down the road is an executive order to promote project agreements on construction contracts.

If Obama is serious, he can take a leaf from FDR’s book, and use government’s extensive contracting power to actively promote unions. Late in the Clinton administration, then Vice President Al Gore led an effort called the Responsible Contractor Initiative. The idea was to reward federal contractors who took the high road by providing good jobs and not standing in the way of unions.

It remains to be seen just how much real power Obama will give Vice President Biden. But the task force is a superb beginning. If government can just use its influence to make sure employers stay neutral, it will be a new day for the labor movement–and for American progressivism.

Robert Kuttner is Co-Editor of The American Prospect. His new book is “Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency.”

This blog was first published on Huffington Post.

David Sirota

 

Author of “The Uprising: An Unauthorized Tour of the Populists Revolt”

When they write their retrospectives about the era that ended with the 2008 election, economic historians will undoubtedly credit George W. Bush with almost single-handedly moving the country to embrace extremist conservatism. It’s a simple storyline: Cowboy president drives bewildered American herd over laissez-faire cliff. What such reductionism will ignore, though, is what we must remember now: namely, that Congress also played a decisive role in the stampede.

As former House Republican leader Tom DeLay said, he and his colleagues deliberately started “every policy initiative from as far to the political right” as possible, so as to shift “the center farther to the right.” The formula emulated Franklin D. Roosevelt’s fabled admonishment to allies: “I agree with you, I want to do it, now make me do it.”

Of course, that triumph was the country’s loss, as Republican policies thrust the political center off a conservative precipice and America into an economic freefall. And as we plummet, we are desperately groping for a lifeline.

If we are lucky and we end up snagging one that saves us – a huge if – it will be one that is strong enough to snap the center back from the conservative brink. This super-durable bungee cord must have the force of law, meaning it will be woven by Democratic legislators now exerting as much pressure on President Obama’s left as congressional Republicans focused on President Bush’s right.

When, for instance, Obama hedged on his promise to revoke $226 billion worth of Bush’s upper-income tax cuts, House Speaker Nancy Pelosi, D-San Francisco, pushed him to fulfill the pledge and put the money into programs that better guarantee job creation.

When Obama initially offered up a stimulus bill filled with discredited business tax breaks, Democratic senators forced him to back off. Reps. David Obey, D-Wis., and Jim Oberstar, D-Minn., then argued that the president’s proposed infrastructure investments were too small to boost the economy. That led House Democrats to increase Obama’s spending targets.

As stimulus negotiations continued, Rep. John Conyers, D-Mich., tried to add provisions letting courts renegotiate banks’ primary-residence mortgages so as to prevent more foreclosures. It’s a commonsense proposal: Judges already have the power to renegotiate vacation-home mortgages, and the New York Federal Reserve Bank says existing bankruptcy laws are exacerbating the foreclosure crisis. While Obama opposed the initiative out of fear that banking industry opposition might slow the underlying stimulus bill, Conyers’ effort ultimately made the president commit to supporting the reforms in future legislation.

Then there was the progressive reaction to Obama’s demand for more financial bailout money. Turning a routine committee hearing into a modern-day incarnation of the Great Depression’s Pecora Commission, Rep. Alan Grayson, D-Fla., upbraided a Federal Reserve official for refusing to disclose which banks are receiving taxpayer dollars. The spectacle was one of many that whipped the House into passing a bill attaching strings to the funds. Obama responded by committing to enact some of the restrictions by fiat.

At once complementary and adversarial, this intragovernmental squabbling probably makes the conflict-averse Obama uncomfortable. But the “make him do it” dynamic could finally bring the center of Washington’s political debate closer to the progressive center of American public opinion. Even more important, it is precisely what will help the new president avert an economic disaster.

David Sirota is the best-selling author of the books “Hostile Takeover” (2006) and “The Uprising” (2008).