“Wow, these grapes are sour!” A fitting epitaph for Republicans as they try to grab the spotlight to bitch and moan about Obama, the Democrats, and spending while really only offering one policy prescription for the economic dire straits we’re in: tax cuts. And tax cuts they got! Even a casual glance at both bills reveals that when it comes to spending, both houses of congress aren’t too far apart. The Senate bill is the one where you wonder what happened to the party that advocates for states. The sizable tax cuts, the lack of local spending for states’ local governments, and the glaring gap between the House’s bill on infrastructure spending makes me question some Republican’s love for the states and localities that comprise these United States. Yeah, we’ve heard the old saw about this stimulus bill being the proverbial “Democratic Christmas Tree” when it comes to spending, but c’mon! The idea is to get people back to work so they have money to spend on products and services that come from private businesses — and that won’t come from tax cuts alone.
It doesn’t take much effort to realize that every day private industry is shedding jobs, that unemployment rolls are growing, and consumption is falling. In short, people are not spending money, and private industries are doing the same. Credit is tight, people are saving their dollars, businesses are cutting and slashing budgets to weather this storm. It’s batten down the hatches time, folks. It’s a natural response when times are tough. But what force turns fear into optimism? What entity has the kind of power and resources to “prime the pump,” shock the system out of the current doldrums and restore large scale trust? Government. In fairness, tax cuts do have a stimulative effect at times, but they take a long time to work. What’s needed are spending programs (yes, spending) that will increase GDP.
Government spending on programs and projects will lead the way to create stable jobs that will allow individuals to feel optimistic about buying products and services that private businesses provide. However, unbridled consumption is something that comes with consequences to our environment and even to our psyche. I have long been critical of society’s fixation on “things,” and I am in no way saying that we need to go back to a yuppie ideology. Rather, since we’ve already tried variations of the kind of Reagan-inspired economic policies hardcore Republicans have embraced for over a generation — and those polices have clearly shown their limits and their failures — it’s time to see if the democratic pragmatism Obama embodies works. (more…)
The “hit the ground running” strategy the Obama Administration has adhered to since the inauguration has an unfortunate side effect:Â It’s making people impatient for positive change in the economy, the war in Iraq, and the general sense of malaise that has permeated not only the U.S. but most of the world as well.
Managing expectations is a tough thing to do when, for example, Obama’s presidential campaign was premised on the keywords of “Change” and “Hope.” People are expecting rapid change; a wave of a magic wand and things will be “back to normal.” But whatever “normal” was, we’re not going back — hell, I don’t think we even want to go back. Clearly, we’re at the proverbial turning point where the current economic problems that plague the world aren’t going to go away in a few months. And if there were ever an image that sums up the shock, frustration, and collective inability of the world’s leadership to manage this crisis, it would be Desmond Tutu’s excessive emoting at the World Economic Forum in Davos, Switzerland.
As the political culture in Washington D.C. frets over the likes of Tom Daschle and certain provisions in the economic stimulus plan, there’s very little talk about the nature of the global economic mess we’re in. Perhaps it’s just easier to concentrate on taxes owed, pork barrel spending, what constitutes lobbying, but it seems whatever heavy lifting that is done by our friends in the mainstream media to enlighten us plebs on the details of this economic crisis, is undercut by a plethora of “sexy news stories” designed for easy consumption. Fortunately, the information is out there, and while it’s not really that sexy to read, it does illuminate the enormity of the crisis and how we got to where we are.
To wit: The Economist has a wonkish, but ultimately helpful feature in the January 24th-30th edition that was broken up into a series of articles examining the current financial crisis from a number of perspectives. Now, I’m not an economist, but after reading through the articles, I have a good sense of why the economic leaders who convened in Switzerland haven’t a clue what is to be done. Ideology and downright confusion over the mechanisms that brought us to this current state have a great deal to do with it. Not all who attended the conference were die hard capitalist, but many were and it seems the “way out” of this mess involves a partnership with an entity capitalists tend to dread: the State. Like it or not, the State is the only entity with the wherewithal to instill an important “soft factor” in the economy: optimism. Optimism bolsters trust, and our capitalist economies thrive when these, admittedly, difficult to quantify variables are strong. (more…)
As the news about the global economic downturn goes from bad to worse, we’re at a point where government inaction is not a palatable option. Something needs to be done, and countermeasures against further slippage into recession need to be implemented with all deliberate speed. Most other countries in the grip of this recession are doing the same, and now, it seems, the United States is poised to spend an amazing amount of money to prime the pump to revive the economy. And since private enterprise is doing everything in its power to weather this storm the only way it knows how (i.e., by cutting overhead, reducing spending, and laying off employees), the importance of government action is magnified, because it’s seemingly the only option left.
President Obama’s proposed $825 billion stimulus package is currently running through the sausage mill of Congress, but this time, it’s supposed to be an “earmark free” bill. But that’s not stopping Republicans from bloviating about pork in the bill that allots money for family planning (Contraceptives!) and the NEA (Robert Mapplethorpe! “Piss Christ!” One of the Guys!). Those amounts are small compared with the money directed at improving the infrastructure of many agencies in the federal government — which, like the Social Security Administration for example, have not upgraded their central computer system Since the last days of the Carter Administration.
If pork = any kind of government spending, then the Republicans ought to stop acting holier than thou on this stimulus package and remember the heady days when they were in full support of blowing billions on war and war related organizations like Kellogg, Brown and Root. You remember Kellogg, Brown, and Root, right? You know, the company Dick Cheney was president and CEO of before appointing himself the vice presidential candidate during George W. Bush’s campaign for the White House? The same company that’s been overcharging the American taxpayer for services provided to American soldiers serving in Iraq — just to name one example? I know, there’s a thing called “the loyal opposition,” but it seems the Republican leadership has very little they can really oppose, so they are going after those golden oldies of the cultural wars: birth control and controversial artists. What was that line Obama used about setting aside childish things? Clearly it has fallen on deaf ears. (more…)
Even if Barack Obama was just another in the long line of white males who have been elected to the presidency, this would still be an historic moment in the United States. There’s a political sea change happening that, if played right, could herald a new progressive era; an era where instead of “going back” to an ideal of small government of the 19th century, we will see an active government that uses innovations from the private sector in novel and pragmatic ways to address the mess Bush left.
The sweeping changes enacted by Bush since his presidency began will have to be quickly undone so the United States can repair deep rifts with our allies, address the economic catastrophe we’re currently mired in, and defuse tense political situations in the Middle East, the Gulf, Russia, Afghanistan, Pakistan and India (just to name a few). Add to that all the small, medium and large political battles that will be fought daily, weekly and monthly, and it’s clear the number of hurdles Obama must overcome to be an effective leader are jaw-dropping in scope. But he spent two years telling us that he wanted the job, and, well, the majority of voters gave it to him — and gave it to him enthusiastically.
During my years of political socialization, the high level of cynicism toward government and politicians has been a constant that I didn’t think would ever change in my lifetime. However, during this election the exigencies of our economic and political condition were such that a good deal of that cynicism transformed into genuine hope. Never have I witnessed the energy, elation, and enthusiasm of voters as they worked and worked and worked to help get Obama elected president. And unlike Bill Clinton who, it seemed, promised voters anything and everything — only to break their hearts over and over — Barack Obama comes across as a guy whose realism and understanding of the political processes are such that the phrase “the art of the possible” may aptly describe the guiding philosophy of his administration.
Time will indeed tell if the progressive pragmatism of Obama will be a reality. My views of his candidacy, his campaign, and his ultimate election to the highest office of the land are, for those who regularly read my writing, well known.  However, I’d like to start an open thread on what you think are the most pressing problems the Obama Administration needs to address — and the realistic outcome you would like to see.
Watching President Bush’s final press conference yesterday reminded me of the phrase “failing upward.” Never in recent (and not-so-recent) history have we had a president so thoroughly unqualified for the job. Many sneered at Ronald Reagan because of his acting background, but few would deny that serving seven years as president of his union (Screen Actors Guild) introduced him to the art of politics in ways that would help him as governor of California, and then as president.
With George W. Bush, however, I get the sense that he went into the family business of politics because, well, there was nothing left to do. He had already run his business into the ground and had proven that he was not the most adroit person at heading up a baseball team, but, to his credit, he had succeeded in one thing: becoming an alcoholic.
What Karl Rove saw in George W. Bush I’ll never know. Perhaps it was Bush’s old money insouciance that impressed the intellectually rich but monetarily poor Rove. Perhaps it was the idea that he had found a guy who had a high “EQ Factor” with the masses, but was fine being a sock puppet when it came to day-to-day decisions. Maybe it was his frat boy belief that he could do anything to anyone and get away with it that made him perfect for Rove’s Machiavellian designs. It’s difficult to know, since Turd Blossom and Dubya don’t really talk about their relationship. But watching and experiencing the last eight years of the Bush Administration, it’s clear Bush and his team were in awe of radical transformation. However, the fountainhead of that radical vision wasn’t Bush — and therein lay the problem. Bush was surrounded with radicals but, if pushed, was really interested in the status quo of the country club set. His intellectually incurious mind, his inability to form coherent sentences, his failure at grasping the complexities of political events and exerting an artful diplomacy when needed reinforced that even Bush’s puppet masters couldn’t get the dummy to convincingly act the part. (more…)
The optimistic adage that a rising tide floats all boats is less sanguine when one contemplates the obverse. As the Great Recession of 2008 spills over to 2009 with what some are predicting is going to be far worse than what we experienced in 2008, the tools government has at its disposal to address global economic crises may not be strong enough to combat the ills that ail us. In the United States, the housing bust that affected the financial markets — and is now affecting the retail sector — has global consequences. No one knows this more than people who spend their entire careers watching, examining, analyzing and writing about economic issues.
Just this weekend, a throng of such folk met San Francisco for the annual American Economics Association conference. And while I’m sure there were many dry and arcane recitations of scholarly papers that very few in the world can understand, there was one academic paper I read that suggests individual countries will have a difficult time recovering from this financial crisis by using what are thought of as tried and (mostly) true tools of the trade. As Carmen Reinhart and Kenneth Rogoff wrote in the conclusion of their paper “The Aftermath of Financial Crises:”
Since the onset of the current crisis, asset prices have tumbled in the United States and elsewhere along the tracks lain down by historical precedent.The analysis of the post-crisis outcomes in this paper for unemployment, output and government debt provide sobering benchmark numbers for how the crisis will continue to unfold. Indeed, these historical comparisons were based on episodes that, with the notable exception of the Great Depression in the United States, were individual or regional in nature. The global nature of the crisis will make it far more difficult for many countries to grow their way out through higher exports, or to smooth the consumption effects through foreign borrowing. In such circumstances, the recent lull in sovereign defaults is likely to come to an end. As Reinhart and Rogoff (2008b) highlight, defaults in emerging market economies tend to rise sharply when many countries are simultaneously experiencing domestic banking crises.
In other words, because of the banking crises (which generally take a long time to recover from), the large amount of debt governments are going to assume to loosen up credit, spend on New Deal-type jobs programs (like what Obama is proposing), stanch the number of mortgage defaults, and get the economy headed into positive numbers is clearly premised on the availability of money. Alas, in the U.S., foreign credit comes mainly from sources who aren’t really allies (i.e., China, Russia and OPEC countries). If that money dries up due to a sharp decline in oil and product consumption, we may be headed deeper into the financial abyss. (more…)
If you’re a Republican Party stalwart, and say you went to the Republican Governors Association meeting in Miami hoping for a good answer to the question of “Now what?” you might find yourself sweating bullets that the brand you thought was going to be a “permanent majority” for a generation (if not two), because Karl Rove said so, is looking a little like GM nowadays. Not quite bankrupt, but pretty close to it in terms of winning political ideas.
Now what, indeed. The GOP is certainly at a crossroads as it’s abundantly clear many voters lost their taste for what the Republicans were selling and bolted in large numbers to Barack Obama. The party, though down, is not out, and hopes they can win voters back by getting back to basics like small government, low taxation, fiscal prudence and the like. But there’s another wing of the party that thinks the culture wars will work its voodoo and bring voters back into the Big Tent. Moreover, they gots to get ‘em some of that Web 2.0 that Obama successfully used to stay in touch with supporters. In short, despite the dubbing they got on November 4th, Republicans are convinced the old brand still has national appeal — they just have to find the right medium to deliver the message. (more…)
It’s been said that a political campaign is run on the poetry of promises, while the task of governing is about the prose of policy. As President-Elect Barack Obama sheds his poetic cloak and has to become a wordsmith of a different sort, there are a myriad of emotions in this post-election/transition time that Americans are certainly feeling. Will Obama be like FDR, Jimmy Carter, or Bill Clinton? It’s too soon to tell, but one thing is certain: Obama won not because of a political crisis like Watergate, or because a third party candidate split up the vote allowing him to squeak in, but because a clear majority voted for his campaign of hope and change. What many Americans hope for is that Obama will be a transformative leader who is able to steer the ship of state in another direction; a direction that will bring greater prosperity, less cynicism, and more cooperation in the culture at large.
It will be an interesting time for Reagan revolutionaries, too. Many conservatives are big admirers of FDR. They are impressed by his patrician demeanor during a crisis, his ability to explain governmental action to Americans via his “Fireside Chats” (where he would often start his address with “My Friends”– which should sound familiar to those who listened to John McCain’s speeches), the way he and his administration had the political acumen to reshape the Executive Branch, and, above all, the way his policies won the hearts and minds of the majority of Americans. In Reagan, conservatives thought they had their FDR that would realign the political map so conservatives would hold power, much like New Deal Liberals did. It didn’t quite go the way they envisioned. Now that most Americans have clearly rejected the politics of resentment (and “Joe the Plumber” as its poster boy) in favor of a pragmatic activism, it will be interesting to see if the prose of Obama’s leadership proves to be a strong enough tonic to put the politics of resentment into remission. (more…)
Today, Americans are asked to choose which candidate best reflects our political point of view and authorize him or her (remember: Cynthia McKinney is running) to lead the country for the next four years. It’s been a long campaign, but it has also been one of the most exciting campaigns I’ve witnessed in my life time. My question to you, dear reader, is this: Given the past eight years under George W. Bush, who is your choice for president and what do you want him/her to do that’s different from Bush? I’ll meet you in the comments section!
When I was growing up, I remember my father used to keep a credit card hidden in the back of his closet. It was one of those “In case of emergency” things that he rarely used. If he did use it, he paid it off at the end of the month. So, I had it embedded in my mind that if I ever got a credit card, that I had, had, had to pay it off at the end of the month if I ever made a charge. And for the most part, that’s what I did.
I was surprised when I got a my first credit card. It was a department store card that came in the mail weeks after I filled out an application at a table in the quad during my first year of college. I had a part-time job that paid minimum wage, and I put down what I earned at the job figuring I’d never get approved for credit. After all, I didn’t make much money, so why would a credit card company take the risk? Ha! Macy’s looked at the “financial me” that was on the paper application, and stamped out a card with my name on it. A few days after it arrived, I went to the mall and bought some socks and a shirt, and felt some unease when I presented my card. “Will they accept this from such a fresh-faced kid?” I thought. Yes they did. And then I did something naive: I ran upstairs and paid my credit card bill because I thought it was the responsible thing to do. The woman at the credit department had a good laugh when I pulled cash out of my wallet to pay for the credit charge I just made.
She just worked there as an hourly employee, but I’m sure somewhere in the thicket of the billing department, some salaried analyst cringed. Why? Well, my behavior marked me as a deadbeat. (more…)
As the news about the global economic downturn goes from bad to worse, we’re at a point where government inaction is not a palatable option. Something needs to be done, and countermeasures against further slippage into recession need to be implemented with all deliberate speed. Most other countries in the grip of this recession are doing the same, and now, it seems, the United States is poised to spend an amazing amount of money to prime the pump to revive the economy. And since private enterprise is doing everything in its power to weather this storm the only way it knows how (i.e., by cutting overhead, reducing spending, and laying off employees), the importance of government action is magnified, because it’s seemingly the only option left.
The optimistic adage that a rising tide floats all boats is less sanguine when one contemplates the obverse. As the Great Recession of 2008 spills over to 2009 with what some are predicting is going to be far worse than what we experienced in 2008, the tools government has at its disposal to address global economic crises may not be strong enough to combat the ills that ail us. In the United States, the housing bust that affected the financial markets — and is now affecting the retail sector — has global consequences. No one knows this more than people who spend their entire careers watching, examining, analyzing and writing about economic issues.
They are impressed by his patrician demeanor during a crisis, his ability to explain governmental action to Americans via his “Fireside Chats” (where he would often start his address with “My Friends”– which should sound familiar to those who listened to John McCain’s speeches), the way he and his administration had the political acumen to reshape the Executive Branch, and, above all, the way his policies won the hearts and minds of the majority of Americans. In Reagan, conservatives thought they had their FDR that would realign the political map so conservatives would hold power, much like New Deal Liberals did. It didn’t quite go the way they envisioned. Now that most Americans have clearly rejected the politics of resentment (and “Joe the Plumber” as its poster boy) in favor of a pragmatic activism, it will be interesting to see if the prose of Obama’s leadership proves to be a strong enough tonic to put the politics of resentment into remission. 
