Let’s be honest. We didn’t really expect Congress to come up with a "bold" stimulus plan, did we? But do we agree that NO action will only aggravate our current crisis?
The GOP surprised us when it failed to respond more constructively to the bipartisan overture from Barack Obama. I personally witnessed the precedent-setting bipartisan dinner for his defeated opponent (my photo of the President-elect at the dinner honoring McCain, January 19) and noted the subsequent meetings with Congressional Republicans. And what did we get in the way of proposals from the loyal opposition? More of the dogma-driven, supply-side ideology that contributed to our current mess: tax cuts!
On the other hand, GOP critics have a point: the bill that passed the House and was embraced by Obama essentially is an accumulation of favorite Democratic spending proposals.
What is missing is CHANGE. The CHANGE Obama advocated in his campaign for the Presidency. The CHANGE that won him a resounding mandate to govern for four years. The CHANGE from policies that have worked to benefit few and imperil many. Where are the first steps toward affordable health care, a sustainable green economy and alternative energy? And why are we not moving boldly to address the systemic failures that underlie the current crisis in credit markets?
Obama asked for ideas. And Paul Krugman and Robert Reich, among others, obliged. But what these brilliant men offer is predictable: rationales for orthodox Keynesian solutions and concern about labor market distortions, respectively. More is needed, not just in additional spending, but in fresh ideas that advance the President's policy agenda. So, if suggestions are still welcomed, here is my two-cents worth. And please do keep the CHANGE.
Health Care
Obama has promised the nation affordable health care similar to his own Federal Employees Health Benefits Program (FEHBP), to be available to all by the end of his first term. There is no need to back off this goal. Health care is one of the largest drags on our economy and the stimulus bill provides a real opportunity to begin managing its cost. In addition to the bill’s provisions to help state governments fund Medicare and work projects, I suggest that the federal government reimburse all state and local governments for their employer's share of health care for the rest of this year. In exchange, recipients may not fire government workers and must commit to integrating their health care plans with the existing FEHBP starting in 2010. That provides additional and immediate financial assistance to state and local governments, while paving the way for the establishment of a Public Employees Health Benefits Program. By January 2010, the federal government’s negotiated health care program would expand its base and economies of scale. The next step will be to apply the system to businesses, and subsequently to capture the un- and under-insured.
Energy Independence
Most honest leaders recognize that in due course government will have to produce the substantial additional revenue to pay for the stimulus. But good luck finding a politician willing to propose increasing taxes of any kind. So let me suggest instead a hefty tariff on imported oil to fund the “green economy.” A tariff of 50 percent or more on the landed cost of all imported energy (probably with some form of accommodation for our NAFTA partners) can be justified because of national security as well as the external costs to our environment inherent in the use of fossil fuels. And such a levy would promote conservation, subsidize domestic production, and help to fund and protect our investments in alternative energy. This is a measure that should be welcomed by Republicans who advocate "drill, baby, drill” as well as environmentalists interested in promoting clean energy. The windfall earned by American producers could be invested domestically or taxed as profits. And while there may be a marginal increase of fuel cost at the pump, it will pale in comparison with the amounts we forked over to foreign potentates rather than our own Treasury these past few years, when oil was effectively 200% greater than its current price.
Reestablish a ‘Risk-Free’ Investment Benchmark
Explanations for our current credit crisis and financial market meltdown abound, including the Washington Post's excellent series. But absent from all the expert analyses is any mention of the Treasury Department's October 2001 decision to discontinue issuing 30-year Bonds. That decision, on the heels of 9/11 and the cusp of Bush's costly war on terror, both lowered mortgage yields and prompted increased sales of bundled mortgages marketed as alternative 'risk-free' instruments, which in turn fueled the housing bubble and distorted both government and corporate credit point spreads. Treasury Bond auctions have resumed, but a clear provision to finance America’s recovery through borrowing would repair yield spreads – both between short and long term sovereign debt and in relation to all other debt instruments. Transparent budget financing will help re-establish more realistic risk pricing and global confidence in the US economy. But the 30-year Bond will not regain its position as a benchmark for 'risk-free' long-term investment if Fed meddling in the market, as it proposes to do with its planned purchase of Treasuries from troubled banks. In fact, this central-bankers-gone-wild approach will only create a greater Treasury bubble that will seriously aggravate our problems. Once markets are allowed to properly price the cost and risk of our recovery without Fed manipulation, global confidence in the US economy has a chance to be recover.
So Pay the Bill, and Keep the CHANGE
Barack Obama attended his last inaugural event, the Staff Ball, at the DC Armory on January 21. But he arrived after a performance by the opening act, Arcade Fire. So here are some insightful lysircs from their “Intervention”:
You say it's money that we need As if we're only mouths to feed I know no matter what you say There are some debts you'll never pay
You say it's money that we need
As if we're only mouths to feed
I know no matter what you say
There are some debts you'll never pay
The message is relevant to the stimulus bill now before Congress.
We can act responsibly and cautiously if we:
Pay the Bill and Keep the CHANGE.
When asked if she could name a single economist who backs her call for a gas tax holiday this summer, HRC said "I'm not going to put my lot in with economists."
Robert Reich, a former Clinton Administration Labor Secretary, concluded on his blog that HRC's response to the question about the gas tax holiday gimmick is economically stupid (not really an economic term) and highly unlikely to become law anyway, given the fact that neither Hillary Clinton nor John McCain are president.
But the fact that HRC has gone on record that she doesn't trust economists certainly places her in a bind. At some point, a president usually finds some good news from economists to crow about.
That's hard to do if you've already told everyone that you don't trust them.
Robert Reich, long-time friend of the Clintons and former Labor Secretary under President Bill Clinton, has endorsed Barack Obama for President. Here is what he had to say on his blog:
Obama for President
The formal act of endorsing a candidate is generally (and properly)limited to editorial pages and elected officials whose constituents might be influenced by their choice. The rest of us shouldn't assume anyone cares. My avoidance of offering a formal endorsement until now has also been affected by the pull of old friendships and my reluctance as a teacher and commentator to be openly partisan. But my conscience won't let me be silent any longer.I believe that Barack Obama should be elected President of the United States.Although Hillary Clinton has offered solid and sensible policy proposals, Obama's strike me as even more so. His plans for reforming Social Security and health care have a better chance of succeeding. His approaches to the housing crisis and the failures of our financial markets are sounder than hers. His ideas for improving our public schools and confronting the problems of poverty and inequality are more coherent and compelling. He has put forward the more enlightened foreign policy and the more thoughtful plan for controlling global warming.He also presents the best chance of creating a new politics in which citizens become active participants rather than cynical spectators. He has energized many who had given up on politics. He has engaged young people to an extent not seen in decades. He has spoken about the most difficult problems our society faces, such as race, without spinning or simplifying. He has rightly identified the armies of lawyers and lobbyists that have commandeered our democracy, and pointed the way toward taking it back.Finally, he offers the best hope of transcending the boundaries of class, race, and nationality that have divided us. His life history exemplifies this, as do his writings and his record of public service. For these same reasons, he offers the best possibility of restoring America's moral authority in the world.
What Penn Says about Clinton!
http://www.newsweek.com/id/130940
Hillary's Odd Economics
http://robertreich.blogspot.com/ - Clinton Sec. of Labor!!!
Obama needs to point out that as much as she speaks anti-corporate she appointed and has stuck to corporate PR man Mark Penn. Not only are his trade dealings and his holding onto his CEO position representative of what the Clintons would tolerate with their top officials, she misled the Ohio voters on NAFTA, proven in the schedules that conveniently came after that primary. The Clinton campaign has attacked us about Goolsbee talking to the Canadian Embassy while their behavior is a lot worse: Penn is working for other countries in maintaining their good PR so they could get the same deals Clinton says she opposes!!!!!!!!!
This primary is stressing me out man and it's just so ridiculous that people think these candidates are so similar. BARACK is for the people, his campaign is bottom-up baby, we're CHANGING this all up.
Excellent article by former Clinton Administration official, Robert Reich, published in the British quality paper, The Guardian, today.
He sums up the ugly situation that the Clinton campaign is creating:
Will Clinton spoil the party?Robert B ReichMarch 10, 2008 6:00 PMhttp://commentisfree.guardian.co.uk/robert_b_reich/2008/03/will_clinton_spoil_the_party.htmlExcerpt:
I'm thrilled at the record Democratic turnouts across the country, and at the ground-breaking reality of the Democrats' two candidates. But I'm also becoming anxious at the prospect of a fight that could reduce the possibility of either of them entering the White House in January of 2009.Is Hillary Rodham Clinton willing to sacrifice that possibility in order to preserve a tiny possibility that she'll get the nomination? With her primary wins in Ohio and Texas, that seems so. In the days leading up to the Ohio and Texas primaries, we had HRC's statement that both she and McCain have the experience to be commander-in-chief but Obama doesn't. This is the first time in my memory that a major candidate in a primary has said that the other party's nominee would be a better president than his or her own primary opponent. We also had the outpouring of negative advertising from her campaign that both candidates had largely managed to avoid up to this point.And while I can understand her decision, bolstered by last week's results, to fight on in this primary election, the reality is that she can only win by convincing large numbers of superdelegates to join her and re-engineering the Michigan and Florida primaries to her advantage, and then taking the fight all the way to the convention in August - which if she gets that far, will be one of the most divisive in 40 years....The sad news is that whether the Clinton scorched-earth strategy ultimately succeeds or fails, it will have caused great harm. ...Barack Obama has breathed life into the Democratic Party, and into American politics, for the first time in 40 years. Not since Robert Kennedy ran for president has America been so starkly summoned to its ideals. Not since then has America - including, especially, the nation's youth - been so inspired. The Clintons would prefer to write off Obamania as a passing fad, but the reality is that idealism and inspiration are necessary preconditions for positive social change.
## Wikipedia: Robert Bernard Reich (born June 24, 1946) is an American politician, academic, and political commentator. He served as the twenty-second United States Secretary of Labor, serving under President Bill Clinton from 1993 to 1997. Reich is a former Harvard University professor and the former Maurice B. Hexter Professor of Social and Economic Policy at the Heller School for Social Policy and Management at Brandeis University. He is currently a professor at the University of California, Berkeley's Goldman School of Public Policy.
The Social Security system doesn't need a whole lot to keep it going according to many, including Robert Reich (Secretary of Labor during President Bill Clinton's Administration) but experts agree it will need "bolstering." It's one of the foundational pillars of retirement planning for the vast majority of citizens in this country, [disclosure: I'm one of them] and as such worthy of attention.
Senator Obama proposes lifting the current cap on the amount of income subject to Social Security payroll taxes, currently just under $100,000 which is highly regressive. Those in the best position to contribute by virtue of their comfortable incomes don't want to pay more, presumably, and that includes every U.S. Senator and member of Congress. An upward adjustment to the cap amount, as Reich points out, doesn't have to be "all that much to keep Social Security solvent."
Let's be clear: currently, a person earning over one million dollars annually pays the same amount into the Social Security system as somebody earning $99,000 - is that logical?
Why is there a cap in the first place? If it's not outright eliminated, then even adjusting the cap upward is a straightforward, more progressive approach to the funding, which is precisely what Senator Obama has been advocating. It can be enacted quickly, allowing the women and men elected to look after this country's interests to focus their time on more complex priorities, such as insuring that basic health care is genuinely accessible to every citizen.
In fact, there's no reason this can't be enacted well before the Presidential election, allowing the campaigns and voters to focus elsewhere, too. Spread the word!
As I was packing for my week of volunteering in Iowa, I was alerted by a member of my Rapid Response group to a brilliant posting by Geekesque in dailyKos. And a very funny story at that. But when I checked the HillaryHub's facts link, I realized it was based on a real Clinton attack claiming he has been plotting to become President since kindergarten! All I can say is: politics imitates parody. So is this what Hillary meant when she said "Now the fun part starts"?
If you have not read the post, I urge you do so. It will only take a couple of minutes, but this is in my opinion the funniest story to come out of the Presidential campaign to date. And if you have a lot of time on your hands, read some of the almost 1300 comments that have been made on this story, for it has truly inspired some of the most hilarious puns and jokes I can recall.
I was in between flights to Iowa the next day when I read a far more serious blog by none other than Robert Reich, Bill Clinton's Labor Secretary, in which he criticized the "stridency and inaccuracy" of Hillary's charges against Barack Obama. He proceeds to describe Obama's approach to Social Security as "progressive" and his proposals on healthcare as "better" than Hillary's.
