Now that a large shift has occurred in the political scene, so that JOBs, JOBs, JOBs is only part of the equation (except for those without them), and “it’s the economy, stupid!” has taken over, it is time again to call for bold action on the part of the Obama Administration. I say “again” because I, and others, called for this about a year ago, but the Administration did not respond adequately. Now, time is of the essence; the administration either responds or the “game is over.”
First of all, however, let’s deal with some realities:
--Many manufacturing jobs are gone, and they aren’t coming back. Constantly calling for return to “things as they were” is not realistic.
--The United States has lost key industries and services, its people have stopped saving money and are increasingly in personal debt, its government has become increasingly indebted to Asian central banks.
--We live in a world “different” from what we have known; global realities, such as the need for more necessities-- like water, fossil fuels, and electricity-- are affecting many nations, including our own. How we react to global changes will affect our strength and status in the very near future. American “exceptionalism” is not the most helpful response. We continue to be quite unaware of the world beyond our borders, speaking few languages, ignorant of foreign cultures, unconvinced that we need to change anything.
--Corporations are sitting on profits (now near 2 trillion dollars); they are not spending profits on new jobs, new equipment, or R&D. My take is that they may be deliberately sabotaging the Obama administration, and will only begin to spend if Republicans win in 2012.
--However, it is also a fact that multi-national corporations almost uniformly report that their largest growth is in their foreign markets. Companies on the S&P 500 generate 46% of their profits outside the U.S., and many, like Coca-Cola, report much larger foreign profit percentages (80%), with a larger percentage of employees in foreign countries. So, perhaps their focus is elsewhere than here.
--Unemployment is going to remain high no matter what is done to ameliorate it; we are no longer an innovative, pot-boiler of a manufacturing society, but a slow-growth service society that has mainly low-paying jobs with few benefits to offer the broad middle-class. We desperately need innovation in new products.
--College graduates are going to be less and less able to find high-paying jobs; and, as a matter of fact, if Republicans have their way, very soon only those with money and position will even get into the “prestigious” universities with a shot at the top echelon of jobs.
--Republicans are not going to “save” Social Security, Medicare and Medicaid; they will continue their efforts to gut and terminate FDR’s New Deal programs and government welfare for the poor and middle classes. They will not compromise on tax cuts for the rich.
--Negotiating with Republican radicals is like negotiating with a Grizzly bear: it’s futile and useless since the bear wants only to devour its prey.
Thankfully, President Obama has recently acted to push Treasury to increase the number of people saving their mortgages from foreclosure by going after the banks that are not following through on re-structuring mortgages. He is seeking the stoppage of incentive payments to banks who continue to drag their heels. This is bold action of the kind that is needed. But, the roll-out of this action was so benign as to render it ineffective. He should also strongly push his 2011 proposal for a financial crisis responsibility fee against banks with more than $50 billion in assets.
Moreover, what Obama needs to do is to come up with a PLAN of bold steps touted with massive publicity that is unrelenting. Here’s some of what he must do (with thanks to people like Robert Reich, Fareed Zakaria, the CPC, Jacob Hacker & Paul Pierson, Bill Moyers, Kevin Phillips, etc.):
1) Substantially increase the run-down of the wars in Iraq and Afghanistan. Withdraw large numbers of troops; trumpet the savings; say to the world: America must act on economics as its number one concern not only for itself, but for the world economy. Iraq and Afghanistan must stand on their own. Emphasize the war on terror continues and that more special ops and drone attacks will continue as we hunt down El Qaeda.
2) Re-structure Foreign Aid. Withdraw aid to dictators and potentates. Give mainly to humanitarian causes through established vehicles other than failed governments. Support institutions and organizations (including rebel groups) that support and encourage human rights, peace, freedoms and economic justice. Cut back on arms and weapons supplied to other nations or bought from us with our aid money. Give foreign aid only under a spending plan that is subject to audit. (Consult my Blog of Feb. 20, 2011 for further discussion).
3) Present a massive infrastructure/jobs bill to the Congress. Put people to work on highways, schools, bridges, roads, etc. etc. Indicate that any opposition to the bill must answer to the people who need jobs now; we cannot wait any longer for the private sector to act because they are sitting on profits and not aiding their countrymen and women. In addition, expand already-existing government job programs that are showing success or that have potential to be successful: AmeriCorps, Senior Corps, STEP & SCEP, Job Corps, WIA, etc.
4) Support best provisions of “The People’s Budget”, and frame it as part of economic recovery:
+Eliminate subsidies for Big Oil and repeal corporate welfare provisions for oil, gas and coal companies; replace with incentives and penalties for innovation in new energy sources
+Tax U.S. corporate foreign income as it is earned rather than when earnings are repatriated
+Rescind upper-income tax cuts in the tax deal with Republicans, repealing the 33 and 35% rates and adding millionaire tax rates of 45-49%
+Tax capital gains and qualified dividends as ordinary income
+Propose a public option or “Medicare for all” to enhance health reform
+Negotiate Rx payments with Pharmaceutical companies
+Raise the taxable maximum on employee side of SS to 90% of earnings and eliminate taxable maximum on employer side
+Increase SS benefits based on higher employee side contributions
+Invest in job creation, education, clean energy and broadband infrastructure , housing and R&D
5) Go to bat for the stimulus policies that have worked, and strongly challenge the deregulatory, Hoover-emulating policies that got us into this mess in the first place.
6) Strongly oppose “spending caps”, “triggers”, and other process-related gimmicks that serve to divert us from real solutions, and that are nothing more than sneak attacks on entitlements.
7) Offer incentives for personal savings and for less consumption; for innovations in all areas, but particularly in the field of energy
8) Expand the EITC on a progressive scale to cover people earning $20-50k.
9) Expand unemployment insurance and institute a “wage insurance.” by which any loser of a job who takes a new job at lower pay would be eligible for 90% of the difference for up to 2 years.
10) Boost longer-term job training programs. Increase adult and worker training programs in high schools, community colleges, universities, and on-the-job locations. Provide income support (wage insurance) for an additional year for those training to become nurses or teachers, or in other positions for which there are labor shortages.
11) Impose a “severance tax” on profitable corporations that lay off workers perhaps equal to 75% of the full-cost of the laid-off worker’s annual salary.
12) Increase tuition loans and grants for young people, especially those performing national service.
Mr. President: the time is NOW! We can’t wait any longer. We can’t continue to be at the mercy of the rich and powerful. We can’t survive as an example to others if we can’t take bold actions to bolster our economy and save the middle class. We can no longer dictate how foreign countries will act or how they will govern; we can only set an example. Be less like Jimmy Carter and more like FDR and Truman. Do not be reticent or cool or a capitulator. Do not live up to early predictions of your being a “lightweight.” Be The President: the most powerful elected official in the world; the head of the Executive Branch; the leader of the Free World. We need you now, not as a candidate, but as our BOLD, UNCOMPROMISING, ASSERTIVE leader.