Thursday, January 28, 2010

One BIG Reason Pres. Obama's Approach to State of the Union MAY be TOO LITTLE TOO LATE for the Economy and Jobs (unless more direct approach is taken)

Michigan Indefinitely Delays 200 Road & Bridge Projects

Lansing Associated Press writer KATHY BARKS HOFFMAN just posted a report, which NPR picked up, that underlines the reasons we may still be on the path to a second great depression.

And unless President Obama and Congress develop a quick and aggressive response to this economic reality in Michigan and many other states, he will be following the path of Herbert Hoover rather than F.D. Roosevelt.

According to Hoffman's report:
Michigan transportation officials have voted to delay more than 200 road and bridge projects previously planned for the next five years because the state is running low on money.
And, according to Hoffman, "Michigan could go from spending roughly $1.4 billion on roads this year with the help of federal stimulus money to less than $600 million three out of the next four years."

And this is just the tip of the iceberg of the additional economic decline and job loss in store for many states like Michigan in the coming years, unless something is done immediately to prevent states from heading down this path toward delaying and canceling major infrastructure projects, which must be the base of any economic recovery.

Unless President Obama and Congress support a major new economic stimulus package directed at helping the States to avoid massive additional job loss across Michigan and many other states as the result of cancellation of infrastructure projects like these in Michigan, the success Obama had in slowing job losses in 2009 (although we're still losing jobs each month) will quickly reverse, and we'll be sliding backwards again. And this time the Democrats won't simply be able to blame the Republicans, since when this downward spiral begins, it will be as much a result of insufficient and weak Democratic policy response, as due to Republican obstructionism.

The fact that even last night in his State of the Union speech President Obama continued to appeal to a hope that the Republican party would come around to support a "common sense" bipartisan strategy to help the country rise out of its crisis, would seem to indicate that he and his advisors have barely begun to reckon with the banality of evil that has been driving the Republican strategy for more than eight years now.

And if Obama and his advisors think they can confront and reverse this nihilistic and destructive Republican political force by appeals to common sense, they have apparently not even begun to think seriously about the lessons the struggles of the civil rights movement and the work of Dr. Martin Luther King have to teach us.

President Obama said in his speech that he was not naive. Unfortunately, based on the lack of a clear strategy and focus for supporting a strong economic/jobs recovery in his speech, I'm not convinced he is right about himself or his administration.

Based on the speech last night, the Obama administration continues to pursue an extremely naive political strategy, which sacrifices the power of popular progressive mobilization that could carry it forward, to a weak political strategy that keeps him hostage to the Republicans.

The continuing insistence on appealing to a Republican Party that has shown it is primarily invested in the destruction of the Obama Presidency at all costs, and that it has little concern for common sense or the good of the country, is bizarre and tragic from a President who should know better. After all, if the Republican Party had any concern for the country's welfare and the welfare of people, it would never have landed us in this economic mess in the first place!

The great slide into the first great Depression of the 1930s occurred largely because under President Hoover the Federal Government failed to help states avoid exactly the kinds of severe cut-backs states are now facing, and instead tried to focus on traditional business incentives to stimulate the economy.

Unless President Obama's administration and Congress wake up to the hard lessons of the previous great depression, and quickly, we will find ourselves repeating the mistakes of the past, and of President Hoover, who like Obama was a good man with good intentions who wanted to help his country, and even had a great resume of past experience for doing so.

But when it comes to the hard reality of capitalist economic cycles, good intentions that are not backed up with necessary and informed policy action, are utterly meaningless. And if we end up in another great depression, history will not remember Obama's good intentions. It will record and remember his failure to listen to the lessons of history, and to act on the advice of historically-informed economists like Paul Krugman, who should be put in charge of running Obama's economic team (though I suspect he may not want such a thankless job)....

See Krugman's recent blog post on the stupidity of the approach suggested by Obama's speech last night, which according to Krugman (and I agree) completely failed to change the narrative that has put the Republicans in charge of the rhetorical battle over both policy and politics in 2010.

I love Krugman because he pulls no punches, while his critiques also go to the core of what is wrong with the entire framework of both the Republican and Democratic approaches to policy in this crisis.

And unless politicians in charge of policy strategy begin to listen to Krugman and other economists like him, the consequences of all the premature 2009 talk of having avoided another great depression, which merely continues the delusional detachment from reality of the Bush era, will soon be coming home to roost.

The illusion-creating stock market "recovery" will be forced to meet the reality of continuing job loss, as our whole economy turns around for its "second dip." And this time, since we're starting at 10% unemployment (which hides a much larger unemployment rate that is structural and not even being counted--in cities like Detroit, for example, the real unemployment rate is around 30%, even higher than national rate in depths of the 1930s depression), we'll be entering depression era territory pretty quickly--thanks to the feckless policies of both political parties.

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