(10 am. – promoted by ek hornbeck)
Burning the Midnight Oil for Progressive Populism
First off, the thing to do with the BS about gutting the safety net on the excuse that the Take Everything Away Party wants to kill it is to take the idea of gutting the safety programs behind the farmhouse to the mint bed and apply a sharp ax.
How to do that, I don’t know.
But if it can be done, then there’s still the question of whether and how to sell the “Jobs Policy”
In a Nutshell
Without the specifics, the broad outline (pdf) of the policy is about $240b in tax cuts and $200b in spending. Of the $200b in spending, about $50b is unemployment insurance extension, which is maintaining what we presently have, and $35b is offsetting state and local cuts in teacher and first responder employment, so about $115b in new spending stimulus.
Economically, the alternative is not status quo, the alternative is ongoing cuts, so you could argue that its a useful $200b increase in spending in economic terms ~ but in political terms, “it could have been worse” is a sharp an argument as a plastic knife, so I’ll count it as $115b in stimulus.
Can that work? Well, it depends on what you mean by work. To the extent that the $115b in spending can be done over the next year, it is more “Stimulus” than we had last year, and almost as much as we had in the Fiscal Year from October 2009 to September 2010 ~ when unemployment did, in fact, noticably decline.
So in terms of “will unemployment noticeably decline?” as working (as low a bar as that may be), yes, it’s likely to work.
Over the long haul, if that worth the promised future spending cuts over the next decade to “pay for” the payroll tax cuts that will have such weak effect? …
… well, that’s the question.
In policy terms, we need employment now. When we set the damage to be done in the future against whatever fights we lose in the future based on the “baseline” including absurd cuts …. against the damage that will be done by a second recession if we allow the economy to continue heading into a second recession … the recession is more total damage.
And in political terms, I was here in Ohio when Governor Strickland was facing re-election against a heavily corporate backed and heavily attacked for his corporate background rival, and the heavy attacks on his corporate background had a serious impact … but Kasich still won by 2%. If the economy slips into a recession next year, the Citizen’s United money is going to get that to use to continue attacking the half measures taken in 2009, and could quite conceivably lay the foundation for policies that extend the current Depression into something to rival the Great Depression.
Fighting to preserve the safety net is complex enough: I argue for simplifying everything else.
But HOW to support the Jobs Bill
The problem is, based on past performance, we would expect the Obama administration to cave on the useful parts of the Job Bill and accept a “compromise” consisting of only the useless parts. After all, the Republicans would happily accept the useless parts, as advancing their interests while still tilting the playing field to their advantage as they choose between nominating a bad candidate or several worse ones.
So support needs to be both simple, and to be support for the spending plus tax cuts as a package deal.
I reckon the message is:
The real job creators are customers. All the tax cuts in the world are useless unless businesses have orders to fill. Pulling out the spending makes the tax cuts useless, so no spending, no jobs. And no jobs, no deal.
No spending, no jobs. And no jobs, no deal.
… bold steps in the wrong direction. What lovely times we live in.
Joe Nocera said that there needs to be more pressure on the banks to extend credit to small business. He had an e-mail from a friend with a small business who couldn’t get credit. The banks just aren’t lending and sitting on trillions.
The other elephant in the room that wasn’t mentioned is the continued foreclosure/housing crisis that will add another trillion or so to the losses already sustained by the government and Fannie/Freddie who were more or less forced to buy the bad Mortgage Backed Securities from BoA and other Too Big To Fail banks.
The solution to Social Security is easy, raise the cap and stop borrowing from the trust.
Medicare has one quick fix, negotiate with the pharmaceutical companies like the VA does. The other fix would be to end the wars we are involves in. The savings from that would fund the Medicare shortfall for 75 years. That was calculated by several economists including Dean Baker
Sadly this president and congress won’t do any of this.