A Spending Freeze Could Worsen Jobs/Economic Crisis, and Follows the Path of Herbert Hoover rather than Roosevelt

Will President Obama follow the path of Herbert Hoover or Franklin D. Roosevelt in his attempt to lead the nation to economic recovery? That is the question that still remains to be answered, after his State of the Union Address.

Lawrence Mishel, president of the Economic Policy Institute, had the following to say about the Obama administration’s proposal to ‘freeze’ overall non-defense discretionary spending for three years starting with fiscal year 2011:

In all likelihood the unemployment rate will be higher in October than it is now, yet somehow the White House thinks it’s appropriate to begin reducing domestic discretionary spending at that time. Reducing overall spending when tens of millions of Americans remain out of work would be a disaster. It will condemn millions of families to years of avoidable economic hardships.

President Obama's . . . proposed ‘freeze’ is bad economic policy. It ignores the basic facts that deficit reduction must begin with job creation and economic recovery, offers little more than window-dressing on long-term deficit reduction, and inappropriately vilifies domestic spending.

Shifting federal spending from less effective to more effective programs is certainly welcome, but it doesn’t justify an overall spending reduction — especially not at a time when we need the federal government to inject demand into a severely weakened economy in order to create jobs. What President Obama should offer . . . is a bold plan to put millions of Americans back to work. To do anything less is to turn a cold shoulder to the needless suffering of millions of Americans and make any focus on ‘jobs’ simply rhetorical.

For more of Lawrence Mishel's statement, click here.

To Pres. Obama & the Democrats: "Have you the will to reach the far horizon where rest the hopes of men?"

After his victory Tuesday night, Senator Scott Brown of Massachusetts summed up the nightmare scenario for Democrats in 2010: “What happened here tonight can happen all over America.”

This loss of Ted Kennedy’s Senate seat to a Republican for the first time since the 1950s does more to underline the fundamental consequence of Democrat’s sleepwalking approach through 2009 than any additional words can offer. And the message of this loss should now be loud and clear for Democrats across the country—especially for those in the Obama administration: Either wake up to the need for a fundamental transformation of strategy into one that is more clearly and assertively progressive and populist, and willing to fight! Or get ready to become a lame-duck party on the way to a one-term Obama Presidency.

At the inauguration of President Roosevelt in the midst of the Great Depression in 1933, the poet Robert Sherwood posed a fundamental question to Roosevelt on behalf of the American people:

“Are we sure that you have fixed your eyes on
A goal beyond the politician’s ken?
Have you the will to reach the far horizon
Where rest the hopes of men?”

At this crucial historical juncture for the Obama administration and the country, the American people need to pose this query to President Obama and the Democratic leadership in Congress.

Have you the will to reach the far horizon where rest the hopes of men?

During the four long months between the election of 1932 and Roosevelt’s inauguration in March of 1933, President Hoover did everything he could to try to tempt Roosevelt into abandoning his ambitions for the New Deal. As Arthur Schlesinger observed about this moment in The Crisis of the Old Order: “In the name of ‘cooperation,’ Hoover proposed that Roosevelt repudiate” most of the major policies that would make up the New Deal.

Roosevelt, however, made clear that he was not interested in this kind of “cooperation.” Instead, on the basis of a firm repudiation of Republican appeals, on the day of his Inauguration Roosevelt launched the greatest hundred days of institutional reform legislation this country had ever seen, and thereby laid the foundation for the programs of the New Deal.

President Obama’s first year, on the other hand, raises serious questions about how much of the potential for significant reform and the hopes he inspired for a second New Deal may have been surrendered in the months before his Inauguration by two parallel sets of compromises: (1) his decision to recruit for his economic/financial team representatives of the very financial elite that had set us up for the 2008 financial crisis and recession; and (2) his commitment to going out of his way to seek “cooperation” with a Republican party that had no interest in any constructive cooperation with the Democratic leadership.

Instead of accepting this political reality and beginning day one of his administration with a clear plan to fight and reverse the damage done by the Republican party’s disastrous framework of policies over eight years of misrule under the Bush administration, the Obama team seemed to have no clear plan for its first months beyond a moderate course of economic stimulus to correct the most severe aspects of the financial debacle, a commitment to health reform—without any clear will to fight for a public plan, and a rather bizarre commitment to seeking bipartisan cooperation with a Party that had brought the country to the brink of ruin, and was showing no desire to change its ways.

In a situation where the Democrats had won the most resounding political victory of a generation, and a clear progressive mandate for reversing the horrendous damage done by eight years of Republican misrule, the Obama team seemed more interested in establishing a tone of reconciliation than a fighting spirit aimed at building on the tremendous popular achievement of the Obama candidacy of 2008.

And because the Obama team so quickly and naively surrendered the tremendous power and potential of the political victory it had achieved, along with the opportunity for dramatic change offered it by the disastrous economic collapse that was the appropriate culmination of the Bush era, his team soon found, to its apparent surprise, that the popular anger and energy it had chosen to spurn and dissipate was instead being harnessed by the Republicans—against the middle-of-the-road Obama agenda.

Many inspired by the Obama candidacy had hope his election would bring about a movement for the restoration of a democratic government of, by, and for the people instead of the corporations and banks. But we were all quickly confronted with the reality of a President who had placed into leadership many of the financial whizzes responsible for the financial meltdown, and who appeared to be more interested in conciliating and appealing to the good graces of a Republican party committed to his failure, than to fighting for a progressive populist agenda that included a strong public health plan.

Instead of launching his Presidency with a strong critique of the last eight years of Republican misrule and errors of domestic and foreign policy, and building on the power of his victory to offer a strong and clear alternative agenda of policies that would reestablish the fundamental principles of a government that would fight for and with the people, against the corporations, banks and financial interests that had brought so much harm to the American economy and the millions of people who have lost their jobs; instead of using the historic victory of 2008 to establish a clear progressive agenda for a second New Deal, the Obama team’s somnambulant agenda of 2009 allowed most of the energy and hope of 2008 to be dissipated.

Instead of harnessing the transformative passion he inspired in the American people to fight for the restoration of a progressive agenda for government in 2009, the administration allowed these energies to decay into a free floating anger and anxiety that could be harnessed by others for anti-progressive purposes.

While obviously not intended, the consequences of this somnambulant Democratic politics in 2009 are already beginning to manifest—in the victory of Scott Brown. Democratic sleepwalking has allowed the populists on the right to step into the gap and scoop up the vast energies and anger in the country against the deep economic and political inequalities evident to all, in ways that have set the stage for these libertarian-right populists to become the insurgent force for the election year of 2010!

Only a sleepwalking Democratic Party could have squandered, in one year, the great opportunity offered for progressive populist renewal by the Obama victory of 2008. Enough said.

Now the only question remains: Will the Obama administration and the Democratic Party awaken from its sleepwalking?!

If the Obama administration and the Democratic Congress do not quickly wake up and develop a progressive policy spine for battle, they will be paving their way to lame-duck status, and will be forced to limp through 2011 and 2012 on the way to the end of a one-term Obama presidency—a presidency that will be viewed by history as more like the Hoover than the Roosevelt administration.

But this sorrowful history has not yet been written, and we are not condemned to this historical trajectory. Everything now depends on how the Obama administration and Democratic leadership responds to the dramatic loss in Massachusetts. Will the Democrats in Congress become even more cowardly, and lay down to die, as some in Congress already seem to be indicating they are willing to do? Or will the Obama administration and the rest of the Democratic leadership see the writing on the wall, and transform themselves into a Party of progressive Leaders willing to fight for the people who elected Obama to lead us in a new direction?

President Obama, in the words of the poet, the American people now ask:

[Can we trust] that you have fixed your eyes on
A goal beyond the politician’s ken?
Have you the will to reach the far horizon
Where rest the hopes of men?

Our hope has not yet completely died, but it withers a bit more every day…

Who Will Pay the Bills for Iraq War and Financial Bail-Out Under the McCain/Palin Plan?: A TIME FOR QUESTIONS

From Great Crisis of 2008:

This past week, as the financial system teetered on the verge of collapse because of the Republicans' anti-government, anti-regulation, anti-tax laissez-faire ideology, we were offered the spectacle of Republican VP nominee Sarah Palin underlining the irrationality of this Republican ideology by arguing that raising taxes on the wealthy would be both unpatriotic and harmful to the nation.

According to the Republican logic of Palin and McCain, asking the wealthy to pay more taxes (as Joe Biden proposed) "is not patriotism," but is "about killing jobs and hurting small businesses and making things worse." (And McCain said the idea of asking the wealthy to pay more taxes was "dumb.")

It must be nice for those like Palin and McCain to think such things, as the Republicans continue to uphold a policy of protecting the wealthy from taxation while the middle class and poor are burdened with the explosive growth of the national bill for fighting unnecessary wars and providing gigantic trillion-dollar bail-outs to pay for the consequences of failed Republican economic policies.

In response to these revealing comments on taxation and patriotism by Palin and McCain, the corporate media needs to be shamed into asking serious questions about the Palin/McCain-Hoover vision of tax policy and government finance, since we now know these questions will be at the center of the next administration's attention:

If taxation of the wealthy is now unpatriotic, how will the Republicans propose to pay the tremendous costs of fighting their wars and bailing out the financial system that has been brought to the brink of collapse under their watch? How will the Republican ticket of Palin/McCain pay the gigantic bill for the bail-out of the entire financial system that their own failed economic and war policies have now forced us into, as a new phase of the Republican "shock doctrine" is applied to the national economy?

And we would also like to ask the corporate media when they will begin to uphold their own patriotic duty by asking the Palin/McCain Republican ticket some fundamental questions about patriotism, taxation, and basic economics (since Palin has raised this issue for discussion, and the financial health of even the corporate media depends on the maintenance of an ordered national financial system):

--If taxation of the wealthy is now unpatriotic, how do the Republicans propose to pay for their 3 trillion-dollar war in Iraq? (Answer: continue to charge the cost to the Chinese-financed national credit card for the next generation to pay back!)

--If taxation is unpatriotic, is paying for the war in Iraq also unpatriotic? If it's unpatriotic for the wealthy to pay more taxes, is it not even more unpatriotic to be placing ever greater burdens of taxation on the next generation, and on the middle and lower classes?

Republicans like Palin and McCain would like to continue to avoid any responsibility for answering questions about how they expect the nation to pay the gigantic debt-load of the failed policies the Republicans have imposed on our country. (This involves, after all, some "looking backwards," which Palin and McCain would like to avoid at all costs, for obvious reasons.) And unfortunately the corporate media often seems completely willing to allow them to continue to avoid answering questions that require some "looking backwards" in order to understand how their past beliefs and decisions would influence future policies.

According to the logic of Palin/McCain, if it is unpatriotic to ask the wealthy to pay more taxes, guess who will end up paying these gigantic expenses under another Republican administration--even as the corporate CEOs are allowed to continue to walk away with million dollar salaries for running our financial system and country into the ground!

Palin/McCain would love to continue to get away with calling taxation of the wealthy unpatriotic, even while they continue to ignore the gigantic tsunami of expenses that Republican policies have imposed on the American people.

Republicans like McCain and Palin would like to separate themselves from the Bush legacy by claiming they will now come to the rescue of the middle class they have helped to destroy, even while they would also love to continue to be seen as the ones who will protect the wealthy while the middle class and poor are burdened with the ever-growing cost of paying for the failed Republican policies of the past.

Actually, the Republicans would like to be able to get away with having no one pay for the disastrous economic policies of the past eight years, which was also Hoover's strategy after the Crash of 1929--a do-nothing strategy that drove an economy in crisis into a great economic depression:

As John Kenneth Galbraith noted in his book The Great Crash 1929,

"In November of 1929, Mr. Hoover announced a cut in taxes ... [while he] asked business firms to keep up their capital investment and to maintain wages ... [both measures that] were largely without effect....

And, like McCain in the first debate, the Hoover policy insisted that there should be a major cut in government expenditures, to go along with the tax cuts....

As Galbraith summarizes, this combined commitment to tax cuts and decreasing government expenditures amounted to a fundamental rejection of the use of fiscal policy, and thus

"amounted precisely to a rejection of all affirmative government economic policy," and a disavowal of "all the available steps to check deflation and depression."

And it was this "triumph of dogma over thought" that turned the economic crisis of 1929-30 into the decade-long great depression of the 1930s (Galbraith, pp. 182-186).

In October 2008 the American nation faces a clear choice between a Democratic candidate who at least acknowledges and understands that the policies of the past have failed, and that we need a fundamentally new approach to things (even if he cannot yet be clear about what that approach will be (even Roosevelt was not clear about what he would do until AFTER he took office in 1933), and a Republican candidate who, up until a week or so ago, was still declaring--like the Bush/Hoover administrations--that the "fundamentals of the US economy were sound," and who would solve this crisis by applying the depression-creating policies of the Hoover administration: tax cuts and decreases in government spending.

And of course the Republicans rely on the silence of the corporate media and the stupidity of half of the American public to get them into office again in the face of their continuing commitment to burdening the middle class with the bills of failed policies favoring the superwealthy.

Why are the corporate media not asking the most fundamental questions about failed Republican economic policy? These media corporations (even FOX News) should recognize that the failure of the US and global financial system will also bring about the bankruptcy of much of the corporate media structure (while their CEOs walk away with whatever remains)??!!

It is precisely the corporate media's silence and lack of critical attention to the fundamentally irrational and unsustainable approach of Republicans to taxation, regulation, and economic policy that has allowed the country to fall into this mess, and even now--as things fall apart-- the corporate media continues to ignore the many ways the Palin/McCain team would simply like to continue this same absurd economy-killing set of Hooverian policies toward national finance and taxation!

When will the corporate media begin to challenge the way Republican policy is fundamentally undermining the future of this country and of their own corporate jobs and future?!--along with the ability of the vast majority of the people of this country to live decent lives?!! When will the media begin to challenge directly the fundamental lack of patriotism in Republican policies that continue to destroy the foundations that support national finance and economy?

What is more unpatriotic than a national media that continues to pass over the ways Republican policy has destroyed our national economy during the last eight years?

And so we need to challenge and shame the corporate media into asking these critical questions by challenging those in the corporate media: If you care at all about patriotism, why aren't you asking these kinds of critical questions of the Republicans, to make clear to the American public how utterly absurd is so much of what the McCain/Palin ticket is offering to the American public?!! If Palin/McCain think that taxing the wealthy is unpatriotic even in the face of this gigantic meltdown, what principles will guide another Republican administration when they are elected?!!

At a time when the entire economy of the nation and the globe is teetering on the edge of the abyss, the U.S. media continues to be facile and stupid in the face of the destructive irrationality of ideas and policy that the Republican candidates, and often also the Democratic party (since Robert Rubin, former Treasury Secretary under Clinton and now apparently an Obama advisor, is almost just as bad as the Republicans!) continue to dish out to us.

ENOUGH!!! When will the individual citizens and taxpayers who are part of the corporate media rise up against the destructive stupidity of their bosses and the policies that have been destroying our country? When will all members of the media, across the nation, get mad enough at what the Republicans are proposing to continue to do to our country, and begin to raise these fundamental questions in public, for all to hear??!!

The McCain/Palin ticket survives only because they think they can continue to get away with dishing out bullshit to the American people. When will the corporate media reveal the absurd emptiness of the Republican campaign as the bullshit it really is-- protecting the wealthiest while piling the expensive burden on generations to come of the middle class, until all but a small corporate and government elite in this country will be reduced to poverty (as in the last days of the Soviet Union)?

Democratic VP nominee Joe Biden made a clear, straight-forward and rational statement about the responsibility of ALL American citizens, including the wealthy, to take on a fair part of the burden of paying for the privilege of being a citizen of this country. Biden was making the point that the wealthy have not been asked by the Republicans or the Democrats to pay their fair share of the costs of war and failed economic policies that benefited the wealthy. (And intelligent and patriotic wealthy people like Warren Buffett would agree with Biden's point, and would favor higher rates of taxation for the wealthy.)

Paying taxes is the way we all support our country and our government. If this is unpatriotic, what does patriotism mean? And this is why we all have a stake in using our powers of citizenship to determine the character and quality of our government, since when it fails, we all end up paying the costs of this failure.

So it's high time for all people, and especially those in the corporate media, to ask the Republican candidates: if they think raising taxes on the wealthy is unpatriotic, how do they propose to pay the exploding costs of the gigantic failures of war and financial policy that their eight years of rule have imposed on the people of this country!!!?

When will the so-called "fourth estate" of the media begin to uphold its responsibility and patriotic duty by asking these basic questions of those who would have us elect them to continue to run the country into the ground by continuing the same irrational policies that have guided the Bush administration?!

If the corporate media cannot be responsible for patriotic reasons, they might at least realize they need to ask these questions for the sake of their own survival. For if there is a great crash of 2008 or 2009 (the crash of 1929 did not occur until several months after Republican Hoover took over from Republican Coolidge, on the promise of "change" that never came), employees of the corporate media will suffer right along with the rest of us.