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Robert Reich

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

On Monday at a “town hall” sponsored by CNBC in Washington, the president took questions about the economy. When a hedge-fund manager complained that Wall Street executives “feel like we’ve been whacked with a stick” by the administration, Obama said most of his critics think he’s been too soft on the Street.

He noted he still hasn’t been able to end the practice of taxing some hedge fund and private-equity earnings at the capital-gains rates rather than the higher income-tax rates. “The notion that somehow me saying maybe you should be taxed more like your secretary when you’re pulling home a billion dollars…a year I don’t think is me being extremist or anti-business.”

Good as far as he went. But that’s as far as he was willing to go. It was a golden opportunity for Obama to connect the dots — to make the case that: (more…)

Robert Reich

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

Newt Gingrich is saying if Republicans win back control of Congress and reach a budget impasse with the president, they should shut down the government again. GOP pollster Dick Morris is echoing those sentiments, as is Rep. Lynn Westmoreland (R. Ga), and Alaska GOP Senate candidate Joe Miller.

I am continuously amazed at the GOP’s ability to snatch defeat out of the jaws of potential victory. It is the gift that keeps giving.

I was there November 14, 1995 when Newt Gingrich pulled the plug on the federal government the first time. It proved to be the stupidest political move in recent history. Not only did it help Bill Clinton win reelection but it was a boon to almost all other Democrats in 1996 (Gingrich’s photo was widely used in negative ads), and the move damaged Republicans for years.

Gingrich hurt his cause by complaining that Bill Clinton had put him in the back of Air Force One on a trip that occurred about the same time. Republican lore has it that it was this babyish behavior rather than the shutdown itself that caused the public to side with Clinton in the game of chicken Gingrich launched over the budget. Undoubtedly Gingrich’s whining didn’t help, but it was his cavalier attitude toward government itself that was the defining issue. Gingrich was the one who first bragged he’d shut down the government if Clinton didn’t agree to what the Republicans wanted.

Now, remarkably, Gingrich is back at it. (more…)

Mike Lux

By Mike Lux
Author, “The Progressive Revolution: How the Best in America Came to Be”

Barack Obama has never been easy to characterize or categorize: the nation’s first African-American President raised in Hawaii by his white mother and white grandparents from Kansas; the community organizer who headed the Harvard Law Review; the Chicago pol who may be our most intellectual President ever; the President who finally passed a bill to provide health coverage for nearly all our citizens and yet managed to tick off progressives while he did it.

Add in the whole populist thing to this list of contradictory things. Obama has not been a populist President in either style or policy substance. But now at his moment of greatest political peril (so far, at least- we’ll see where things are in the fall of 2012), he turns to a populist tone and rhetoric that is heartening for an old Midwestern populist like me to see. Starting with the little-noticed radio address in August taking on big corporate special interests and the Citizens United decision, then continuing this week with the Milwaukee Labor Day speech, the Cleveland economic speech on Wednesday, and the press conference this morning, Obama is aggressively taking on the bad actor big business special interests, taking on tax cuts for millionaires, taking on trickle-down economics.

Welcome to the barricades, Mr. President. I know that you and us old school populists still don’t agree on some specific economic policies or appointees, but it is good to see that you get what the polls have been showing for a long time now: voters are frustrated with corporate  special interests running things, and are tired of the wealthy and powerful getting inside deals even while the economy is hurting. (more…)

Robert Reich

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

Whatever the outcome of the upcoming midterm elections, the activist phase of the Obama administration has likely come to a close. The president may have a fight on his hands even to hold on to what he’s already achieved because his legislative successes have been large enough to fuel strong opposition but not big enough to strengthen his support. The result could be disastrous for him and congressional Democrats.

Consider the stimulus package. Although it’s difficult to separate the consequences of fiscal and monetary policy, most knowledgeable observers conclude that the stimulus has had a positive effect.

Yet the official rate of unemployment remains above 9%, not including millions either too discouraged to look for work or working part-time when they’d rather have full-time jobs. Almost half of the jobless have been without work for more than six months, a level not seen since the Great Depression.

The central problem continues to be inadequate aggregate demand. The administration’s original sin was not spending enough and focusing the stimulus more directly on job creation.

In fairness, no one knew how sick the economy was in February 2009 when Congress approved the initial stimulus. Yet by late spring 2009 the White House knew the extent of the damage and should have pushed much harder for significantly more spending. Almost a third of the initial stimulus, moreover, came in the form of temporary tax cuts, which already had been proven relatively ineffective at spurring demand after President Bush tried them in 2008. And many states were engaging in reverse stimulus policies, slashing spending and increasing taxes. The administration knew its stimulus was not nearly up to the job.

Even so, the initial spending inflamed conservative critics who claimed that it unnecessarily enlarged the federal deficit. And its subsequent apparent failure to reduce unemployment has only added more fuel to the fire. This pattern–big enough to energize adversaries but not enough to tangibly benefit most people or to gain the enthusiastic support of independent voters and the Democratic base–has come to haunt almost every major initiative. (more…)

Bob Cesca

By Bob Cesca
Author, “One Nation Under Fear”

We’re only three months away from the midterm election when a shockingly large number of American voters will inexplicably vote for Republican candidates. I have no idea if this will mean a Republican takeover of the House or Senate or both, but there will definitely be enough voter support for Republicans to significantly reduce the Democratic majorities in the House and Senate.

Why? Because too many voters tend to be low-information, knee-jerk Springfield-from-The-Simpsons types, and the Republicans have lashed their crazy trains to this new wave of inchoate roid-rage to help sweep them into more congressional seats.

Here are a few of the ongoing economic conditions facing a vast majority of Americans, many of whom are all revved up to vote Republican in November. According to Michael Snyder of the Business Insider:

• 61 percent of Americans “always or usually” live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
• 66 percent of the income growth between 2001 and 2007 went to the top 1 percent of all Americans.
• Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
• The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
• In America today, the average time needed to find a job has risen to a record 35.2 weeks.
• More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
• Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009. (more…)

Gilbert B. Kaplan

By Gilbert B. Kaplan
Former Deputy Assistant and Acting Assistant Secretary of the U. S. Department of Commerce

The outcome of today’s Security and Economic Dialogue (S & ED) talks in Beijing is discouraging for those of us who want to see an immediate effect on Main Street. No specific movement has taken place on currency issues. China’s President Hu says he will take action on currency, but he doesn’t say what action he will take or when he will take it. China’s currency is undervalued by about 40%. It is unlikely that anything he is even contemplating would close that gap. And while we wait for him to make up his mind, more jobs in the U. S. will be lost to China.

The United States is playing defense everywhere in the world. Militarily we are losing influence and appear to be losing wars. Diplomatically our powers of persuasion are waning. And in international trade, jobs are moving off-shore, we have no sustained manufacturing policy, and the production sectors in other countries’ economies are growing faster than ours.

There is certainly a great effort to solve the military and diplomatic problems, but what are we doing on trade? President Obama is aware of the issue, but the solutions are hard to find and are not being articulated. To me, a large part of the problem is that industrial growth in this country, indeed what used to be called industrial policy, takes a second chair to almost every other policy in Washington. The biggest example of that right now is this failure to address currency undervaluation in China, in a forthright and immediate fashion. It has now been years since the problem has been identified.

When I served in the United States government, I heard regularly that we could never deal with the Japan trade issues aggressively because we needed our military bases in Japan in order to stand up to the then-Soviet Union. Now we hear we can’t stand up to China because we need their help on Iran and North Korea or on global warming issues.

But we can’t keep paying for military and diplomatic victories–assuming we are even achieving these–by trading away our economic prowess. Put simply, the cost is too high and we don’t have enough chips left. As Clyde Prestowitz puts it in his new book, The Betrayal of American Prosperity, “the United States fell into the habit–and the addiction continues today–of making economic concessions in order to obtain geopolitical objectives.” He also notes that the blind adherence to laissez faire economics and trade policy was not the way we became a great power and world technology leader. Indeed, the time when America emerged as a world leader–broadly the beginning through the middle of the twentieth century–was when the U. S. government intervened in the economy and actively supported U. S. manufacturing.

Why aren’t we able or willing to do that today? I think the biggest single reason is the failure of the policy community to come up with a sustained and powerful rationale for doing so. There are voices out there calling for this renaissance: Prestowitz, many elected representatives on Capital Hill, Leo Gerard and other union leaders. But for every one of these there are more on the other side, repeating stale mantras calling for more work on the Doha Round, saying we should only talk softly to China while they continue to engage in mercantilist policies, and standing up for a trading system that is not reciprocal.

What we need is a renaissance of American production. We need to make things in this country and balance the terms of trade or our future, and even more our children’s future, will be very dim. As a country we will go further in debt and we will not have the productive capacity to work our way out of it.

How do we create this renaissance? First, we need to create a sustained policy dialogue that will challenge the current assumptions and develop alternatives. To this end, I plan to sponsor a Conference calling for the revival of American manufacturing which will meet in early fall, bringing together the key players on the issue, companies in the U. S., trade associations concerned about this issue, labor leaders, and policy and legal thinkers. This will be under the rubric of the Committee to Support U. S. Trade Laws, an organization devoted to keeping American trade laws strong, of which I am the President.

As part of this effort, we are coming up with new legislation which will strengthen the U. S. trade laws, particularly in the area of ending evasion and fraud. It is amazing that the U. S. has allowed foreign producers to take advantage of weaknesses in enforcement powers under these laws for so long.

The conference and our policy analysis needs to lead into 2010 House and Senate elections, and make it clear that, quite simply, we are not going to take it any more. The loss of jobs and manufacturing needs to be an election issue. We cannot walk away from manufacturing and remain any kind of great power in the future. Candidates who support this goal of returning production to the U. S. should be supported by the American electorate. Those who soft pedal it should not. Indeed this was a key issue in the special election in Western Pennsylvania in which Mark Critz was elected to John Murtha’s seat, and where he stood up strongly against the off-shoring of U. S. jobs.

Making manufacturing a sacrificial lamb has got to come to an end as part of the 2010 elections.

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Mr. Kaplan is the Former Deputy Assistant and Acting Assistant Secretary of the U. S. Department of Commerce and he is currently a partner in the international trade firm of King & Spalding in Washington, D. C. He filed the first successful anti-subsidy case by any U. S. industry against China, which led to large anti-subsidy duties on imports of Chinese pipe into the United States in 2008. Mr. Kaplan can be contacted at gkaplan@kslaw.com.

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This piece was first published on The Huffington Post

Robert Reich

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley 

The loss of 36,000 jobs in February is better than expected but it’s still miserable. 26,000 were lost in January, according to the government’s revised figures. And the “underemployment” rate — including jobless workers who have given up looking for work and part-time workers who want full time jobs — rose from 16.5% in January to 16.8% in February, offsetting some of January’s gains.

And don’t blame it mostly on the weather. Although the surveys on which the report is based were done in mid-February during winter snowstorms in the east, the major impact of bad weather was on hours worked, not the numbers of jobs. If you had a job in February but were snowed in, the Bureau of Labor Statistics reported you as having a job.

This complicates the president’s final push for health care reform. With employers still shedding jobs and consumer confidence down, Americans are worried first and foremost about paying their bills. Because most people aren’t aware of how much of their paychecks are being eaten up by rising health care costs, but can easily be persuaded they’ll be paying more to cover those who don’t have health insurance under any new health plan, the continuing bad news on the jobs front makes it harder for the president to make his health-care sale.

The bad news on jobs also allows economic illiterates (and scoundrels who know better) to continue to claim the stimulus is failing and what’s needed is less government rather than more, including not only a smaller “jobs bill” but less or no health care reform.

In politics as in economics and love, timing is everything. Obama can’t wait much longer if he wants to convince wavering and worried conservative Democrats to join him in a last ditch 51-vote reconciliation measure to get health care through the Senate. We’re already in the gravitational pull of November’s mid-term elections. But the economy is taking a longer time to turn around than anyone expected, and telling Americans the jobs numbers are getting worse more slowly isn’t exactly reassuring.

One small political consolation is the worst job numbers continue to be on the coasts and the old rust belt where Democrats are relatively safer, and the best numbers in the midwest and mountain states and south where Democrats are weakest. So at least Blue Dog Democrats who are under the most pressure from their conservative constituents on health care aren’t grappling with the biggest job losses.

Another is that all across the nation, the people being hit worst by this continuing jobs recession/depression are poor and the lower-middle class who Republicans are trying to court. They’re in greatest danger of losing health care coverage if they haven’t lost it already, and in greatest need for subsidies to allow them and their families to afford it. Wavering and worried congressional Dems should be reaching out to them.

Americans desperately need health care reform. They also desperately need jobs. Even if it’s difficult for many to make the connection, it’s still possible for the nation to try to do two important things at the same time. We need a big jobs bill — including especially extended unemployment insurance, aid to hard-hit states and cities — and we need health care reform. The sooner we do the former and get the economy moving into positive job numbers again, the more quickly and easily we can afford the latter. The big question is whether the president can make the case.

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Cross-posted from Robert Reich’s Blog

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Robert Reich served as the nation’s 22nd Secretary of Labor and now is a professor of public policy at the University of California at Berkeley. His latest book, “Supercapitalism,” is out in paperback. For copies of his articles, books, and public radio commentaries, go to www.robertreich.org.

Robert Reich

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

I had dinner the other night with a Democratic pollster who told me Democrats are heading toward next fall’s mid-term elections with a serious enthusiasm gap: The Republican base is fired up. The Democratic base is packing up.

The Democratic base is lethargic because congressional Democrats continue to compromise on everything the base cares about. For a year now it’s been nothing but compromises, watered-down ideas, weakened provisions, wider loopholes, softened regulations. Health care went from what the Democratic base wanted — single payer — to a public option, to no public option, to a bunch of ideas that the president tried to explain last week, and it now hangs by a string as Nancy Pelosi and Harry Reid try to round up conservative Democrats and a 51-vote reconciliation package in the Senate.

The jobs bill went from what the base wanted — a second stimulus — to $165 billion of extended unemployment benefits and aid to states and locales, then to $15 billion of tax breaks for businesses that make new hires. Financial regulation went from tough new capital requirements, sharp constraints on derivative trading, a consumer protection agency, and a resurrection of the Glass-Steagall Act — all popular with the Dem base — to some limits on derivatives and a consumer-protection agency inside the Treasury Department and a rearrangement of oversight boxes, and it’s now looking like even less.

The environment went from the base’s desire for a carbon tax to a cap-and-trade carbon auction then to a cap-and-trade with all sorts of exemptions and offsets for the biggest polluters, and now Senate Democrats are talking about trying to do it industry-by-industry.

These waffles and wiggle rooms have drained the Democratic base of all passion. “Why should I care?” are words I hear over and over again from stalwart Democrats who worked their hearts out in the last election.

The Republican base, meanwhile, is on a rampage. It’s more and more energized by its mad-as-hell populists. Tea partiers, libertarians, Birchers, birthers, and Dick Armey astro-turfers are channeling the economic anxieties of millions of Americans against “big government.”

Technically, the Democrats have the majority in Congress and could still make major reforms. But conservative, “blue-dog” Democrats won’t go along. They say the public has grown wary of government. But they must know the public has grown even more wary of big business and Wall Street, on which effective government is the only constraint.

Anyone with an ounce of sanity understands government is the only effective countervailing force against the forces that got us into this mess: Against Goldman Sachs and the rest of the big banks that plunged the economy into crisis, got our bailout money, and are now back at their old games, dispensing huge bonuses to themselves. Against WellPoint and the rest of the giant health insurers who are at this moment robbing us of the care we need by raising their rates by double digits. Against giant corporations that are showing big profits by continuing to lay off millions of Americans and cutting the wages of millions of more, by shifting jobs abroad and substituting software. Against big oil and big utilities that are raising prices and rates, and continue to ravage the atmosphere.

If there was ever a time to connect the dots and make the case for government as the singular means of protecting the public from these forces it is now. Yet the White House and the congressional Democrats’ ongoing refusal to blame big business and Wall Street has created the biggest irony in modern political history. A growing portion of the public, fed by the right, blames our problems on “big government.”

Much of the reason for the Democrats’ astonishing reluctance to place blame where it belongs rests with big business’s and Wall Street’s generous flows of campaign donations to Democrats, coupled with their implicit promise of high-paying jobs once Democratic officials retire from government. This is the rot at the center of the system. And unless or until it’s remedied, it will be difficult for the President to achieve any “change you can believe in.”

To his credit, Obama himself has not scaled back his health care ambitions all that much, and he appears, intermittently, to want to push conservative blue-dog Democrats to join him on a bigger jobs bill, tougher financial reform, and a more effective approach to global warming. (His overtures to Republicans seem ever more transparently designed to give blue-dog Democrats cover to vote with him.)

But our president is not comfortable wielding blame. He will not give the public the larger narrative of private-sector greed, its nefarious effect on the American public at this dangerous juncture, and the private sector’s corruption of the democratic process. He has so far eschewed any major plan to get corporate and Wall Street money out of politics. He can be indignant — as when he lashed out at the “fat cats” on Wall Street — but his indignation is fleeting, and it is no match for the faux indignation of the right that blames government for all that ails us.

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Cross-posted from Robert Reich’s Blog

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Robert Reich served as the nation’s 22nd Secretary of Labor and now is a professor of public policy at the University of California at Berkeley. His latest book, “Supercapitalism,” is out in paperback. For copies of his articles, books, and public radio commentaries, go to www.robertreich.org.

Robert Reich

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

Just about everything you’ll hear coming out of Washington starting now is really about November’s mid-term election. The gravitational pull of the midterms was already apparent last year, as Republicans marched in perfect lockstep to vote against whatever the President and Democrats proposed (Republicans always have authoritarian discipline on their side, which is why they’re Republicans), but you haven’t seen anything yet.

The Democrats have enough votes to enact health care — the hurdle Bill Clinton failed to jump, contributing to the Republican takeover in 1994 — but when it’s enacted, expect the spin machines on both sides to be at full throttle. And because health care legislation won’t be implemented for another three or four years (depending whether the House or Senate versions prevail), Americans won’t be able to test the veracity of these wildly divergent claims. So don’t count on health reform to help Dems next November — nor harm them, either.

Foreign policy is just as unlikely to tip the scales. Sad to say, absent a draft most American families will read about American deaths in Afghanistan much the way they’ve absorb the U.S. body count in Iraq — as news items rather than personal tragedies. Nor will Iran’s nuclear capabilities, North Korea’s missile launches, Pakistan’s tumult, or Yemen’s terrorists have much electoral effect — unless terrorists commit an atrocity in America or on American travelers. Needless to say, China’s decision about whether and how much to revalue its currency, although important, will affect the votes of about three Americans (and I think I know all of them).

Issue Number One — the overriding concern that will determine more than anything how many seats the Democrats lose next fall — is jobs. If unemployment is 10 percent or more next November, the Dems are in danger of losing the House and will almost certainly be short of the 60 votes they need in the Senate.

But why would employment be 10 percent or above next November? Surely, you say, there are enough signs of recovery that we can count on a lower rate. Don’t be so sure. Here are likely scenarios, with my probabilities:

Double-dip recession (10 percent likelihood). The commercial real estate market craters, carrying with it hundreds of regional banks and exposing how much junk is still on the books of major Wall Street banks. This triggers a long-awaited “correction” in the Dow and pushes the nation into another recession. Job losses rise. By November, the unemployment rate is back over 10 percent.

Stalled recovery (20 percent). Fearing inflation and overly confident of the strength of the recovery, the Fed stops buying up debt instruments and starts raising rates. These acts choke off the recovery. Unemployment remains at 10 percent.

Jobless recovery (40 percent). The stimulus remains in full force, the Fed keeps interest rates low, firms replace inventories and expand production. But with the average workweek hovering around 33 hours, employers don’t add new jobs; they just have current workers put in more hours. Result: No drop in unemployment.

Solid recovery (20 percent). Demand surges, employers decide to expand capacity. But they don’t add American jobs. Now that foreign workers have access to much of the same equipment and can be linked up to the U.S. so cheaply through the Internet, employers outsource abroad. Result: No drop in unemployment.

Strong recovery (10 percent). The recovery is strong enough for employers to start hiring American workers. Many jobless Americans who have been too discouraged to look for work to begin looking again. But because the BLS household survey (on which the official level of unemployment is based) depends on how many Americans are looking for work, the paradoxical result is for unemployment to remain in double digits.

In other words, I think the chances of unemployment being 10 percent next November are overwhelmingly high. But although voters are acutely sensitive to the rate of unemployment, they’re also influenced by the direction employment is heading. If it looks like jobs are coming back, they may forgive a high absolute level of unemployment — even one as high as 10 percent. But if it looks like jobs aren’t coming back, that we may be stuck with a high level of joblessness for years, voters will take out even more of their anxieties on Democrats next November.

The irony, of course, is that Republicans want to cut spending and reduce the deficit. If they had their way, we’d have double-digit unemployment as far as the eye can see.

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Cross-posted from Robert Reich’s Blog

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Robert Reich served as the nation’s 22nd Secretary of Labor and now is a professor of public policy at the University of California at Berkeley. His latest book, “Supercapitalism,” is out in paperback. For copies of his articles, books, and public radio commentaries, go to www.robertreich.org.

Robert Borosage

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

President Obama is sensibly focused on jobs, unveiling a new initiative yesterday in the wake of the jobs summit. Elements included everything from new infrastructure spending to “cash for caulkers,” tax breaks for weatherizing homes, as well as aid to cities, states and the unemployed. The president suggested that the $200 billion recouped from the banks in the TARP program could be used to both to reduce the deficit and help finance the initiative.

The president’s speech was masterful. But what was left out of the speech was, in many ways, more telling that what was included.

1. Size Matters

The president made no mention of the size of his program. Reports range from some $70 billion to $200 billion. This leaves the House leadership with the responsibility to insure the program is big enough to do the job.

And they should think big. We’ve lost over 7 million jobs; 15 million are unemployed. States and localities are facing staggering deficits over the next year, with an estimated 900,000 jobs at risk. Foreclosures continue. Consumers and businesses are cutting back. In fact, for all the talk of deficits, the nation actually experienced no increase in total debt over the last year, as the rising federal deficit was more than matched by the reduced borrowing of consumers and businesses.

The first recovery plan staved off a far worse collapse. And the latest monthly report suggests that we’re finally hiring nearly as many people as we’re firing (due to rising public sector employment). But zero job growth is not a victory. It takes over 125,000 new jobs a month simply to keep up with population growth. Economist Jamie Galbraith notes that to return to the levels of employment needed to generate rising incomes, we’ll need 250,000 new jobs a month for five years.

So go big. $100 billion or more for states and localities; 100 billion for extending unemployment and food stamps for the victims, 50 billion a year for infrastructure projects, 40 billion a year to create a million public service jobs, plus opening up loans to small and medium sized businesses, plus the inevitable tax cuts and credits — to senior, for weatherization, for small businesses — Congress should be considering, as Paul Krugman suggests, a several hundred billion dollar program over two years.

This will elicit screeds about deficit spending, but the president has this right. If you want to get the deficit down, the first priority is to get people working, earning money, paying taxes, and not drawing on government aid. In his words:

Now, there are those who claim we have to choose between paying down our deficits on the one hand, and investing in job creation and economic growth on the other. This is a false choice. Ensuring that economic growth and job creation are strong and sustained is critical to ensuring that we are increasing revenues and decreasing spending on things like unemployment insurance so that our deficits will start coming down.

Once people are back to work and business is beginning to invest, we can deal with the remaining deficits. And most of the red ink projected over time is caused by our broken health care system and its soaring costs that must get fixed.

Size matters, but not to the party of no. Republicans will howl about deficits whether Democrats spend $7 million or $700 billion. People don’t like deficits, but ask them to choose — jobs programs or deficit reduction, and a large majority choose the former. The key is to put people to work. The last recovery program helped, but it was too small. And Democrats are paying a not undeserved price for an economic program that is producing million-dollar bonuses on Wall Street but too few jobs on Main Street. It is time to be bold, not cautious about jobs.

2. Why not public service?

Obama’s agenda included many of the items detailed by progressives with one glaring exception: there was no mention of direct public service jobs. No modern day WPA that Roosevelt created; no CETA employment project that the last liberal president, Richard Nixon, championed. With long term unemployment at record levels, and joblessness among young people in cities simply devastating, progressives in the Congress should push hard for direct public service jobs — both an expansion of existing programs like AmericaCorps, and the creation of a new Urban and Green Corps to put people directly to work on work that needs to be done. For example, legions could be gainfully employed in taking down or fixing up abandoned houses, turning empty lots into mini-parks, etc. They would gain the benefits of work, learn skills and the society would benefit. They could be paid at prevailing wage scales to avoid undermining current public workers.

3. Ideas Matter

In his speech, the president returned to his vital theme — that we can’t go back to the old economy that was based on booms and busts, finance capturing 40% of the profits, people and the nation living beyond their means, racking up more and more debt. He took a shot at Republicans who ran up deficits with wars abroad and top end tax cuts at home when the economy was growing and now object to them to help people survive after they drove us off the cliff. With Republicans trying to pin the economic mess on Obama, it is vital that the president take them on.

But here’s how the president described why we got in that fix:

In the end, the economic crisis of the past year was not just the result of weaknesses in our economy. It was also the result of weaknesses in our political system, because for decades, too many in Washington put off the hard decisions. For decades, we’ve watched as efforts to solve tough problems have fallen prey to the bitterness of partisanship, to prosaic concerns of politics, to ever-quickening news cycles, to endless campaigns focused on scoring points instead of meeting our common challenges.

Well. No doubt Washington is petty and partisan, with endless campaigns. But in fact, it wasn’t “putting off hard decisions” that drove us off the cliff. It was conservative ideology implemented into policy. George Bush got things done — they just turned out to be ruinous. Top end tax cuts squandered budget surpluses, and contributed to Gilded Age inequality. Scorn for regulation and government gave bankers multi-million dollar personal incentives to gamble recklessly, while gutting enforcement of everything from clean water to labor laws. “Free trade” policies — defined by multinational banks and corporations — shipped good jobs abroad, while providing cheap money to fuel the housing bubble. Under Bush, the special interests ruled, plundering taxpayers for subsidies — for big oil, for Phrma, for agribusiness. Privatization opened up new areas for plunder, with Halliburton providing the poster child. Fundamental challenges — like soaring health care costs, catastrophic climate change, a disintegrating infrastructure — were ignored in the confidence that the market would eventually work things out. It wasn’t gridlock that drove us off the cliff. It was, as Alan Greenspan admitted, an ideology that was simply wrong. It wasn’t inaction that brought us to grief. It was action going in the wrong direction.

This isn’t an academic exercise. Americans will be given a choice in the elections next year. Go back to the old policies that drove us into this mess, or stay on the course Obama has charted to dig out of it. Republicans, increasingly purged of any moderate voices, will blame the economy on Obama, and renew their old mantra of smaller government, lower taxes, less regulation. They won’t accuse Obama of inaction; they’ll accuse him of going the wrong way. Democrats will have to remind people of exactly what put us into this hole. It wasn’t gridlock. It was conservatives having their way and bringing us down. There is no person better able to make this argument than the president. And he should be pounding on it — just as he focuses on jobs — from this day forward.