Wednesday, December 31, 2008

Recovery, Not Stimulus

On December 19 the Congressional Progressive Caucus put out a press release outlining an agenda for dealing with the current economic crisis. The HTML version of this press release includes hyperlinks to additional information in the form of Word files. It bears reproduction in its entirety:

Washington, D.C. – As work continues on an economic recovery strategy which is widely expected to take the form of one massive package, the Co-Chairs of the Congressional Progressive Caucus (CPC) Congresswoman Lynn Woolsey (D-CA) and Congressman Raúl M. Grijalva (D-AZ) today released a detailed blueprint of recommendations to provide at least $1 trillion to kick start the U.S. economy out of recession and back on the path to recovery and growth. To view the Cover Letter, click here. To view the blueprint of recommendations, click here.

“What our economy needs, and needs as quickly as we can deliver, is a bold and comprehensive economic recovery package that will kick start our economy into recovery,” CPC Co-Chair Lynn Woolsey (D-CA) underscored. “ It’s got to be big and bold, at least $1 trillion, so that it can reach down to the local level where it can help the people and the communities who need it the most. The only way to do that is to pass a large enough recovery package to shake-up our current situation, anything much less than $1 trillion would be like trying to put out a forest fire with a squirt gun.”

“The Progressive Caucus is determined to bring justice and prosperity to the American economy, and this proposal does both,” stated CPC Co-Chair Raúl M. Grijalva (D-AZ). “The American people’s urgent needs in health care, employment, education and infrastructure have been neglected for so very long that the basic structure of our economic system has been undermined. Now that the American people have the attention of Wall Street and Washington, we intend to lift their voice and demand the profound change the people voted for.”

The priorities highlighted by the CPC focus on providing long term, as well as short term growth, while also ensuring that the funding is targeted to the individuals and communities who need it the most. In addition to already discussed proposals regarding unemployment insurance, food stamps, and health care, the Progressive Caucus Members are ready to work with President-elect Barack Obama to finalize a package that includes the following:

  • Physical infrastructure – Rebuild our nation’s crumbling infrastructure, generating millions of new jobs with established labor practices and meeting environmental regulations.
  • Human capital infrastructure – To build a world-class, 21st century economy, it is vital that the federal government invest in all of our nation’s human capital (our most valuable resource), and create opportunities for everyone, including the most vulnerable, to meet their basic human needs, find jobs, and move up the ladder of economic opportunity.
  • Keeping people in their homes and housing reform – The federal government must preserve the American dream of home ownership by implementing a moratorium on foreclosures, increasing funding for the National Housing Trust Fund, and investing in public housing repairs.
  • Job creation – These investments will be the cornerstone of our new economy as we make immediate and long term investments in education, transportation, and small business development in the field of green energy.
  • Fiscal relief for state, local and tribal governments – Renewal of the federal government’s commitment to its struggling state partners with the reinvigoration of the CDBG [Community Development Block Grant Program], creation of a new energy block grant to transition communities to new, more efficient green energy sources, and temporary suspension of matching grant requirements for infrastructure projects.
  • Education and job training opportunities – Workers who have lost their jobs, as well as those transitioning from other industries, must have access to expanded re-training opportunities so that they can gain the skills sought by local employers. In addition, an increase in funding should be made available through the Workforce Investment Act to train younger workers who are first entering the market.
  • Transitional job opportunities – As unemployment continues to rise, it's more important than ever that the federal government enact policies, such as expanded adult services through the Workforce Investment Act, to expand job opportunities for disabled persons and others facing multiple barriers to employment.
  • Tax relief for impoverished and low-income families – The federal government must provide true economic stimulus to low income, impoverished families with expansion of the EITC [earned income tax credit], and a fully refundable child tax credit.

There is much to be said for this proposal. Most important is that it shifts the focus back from Wall Street (which has been the center of attention of the current administration) to Main Street (without which, as I have argued, Wall Street could not get much business done). Put another way, the priority of "stimulating" financial institutions (usually by bailing them out) in order to get them back to business as usual has been replaced with a plan that tries to account for the condition of the economy as a whole and for how recovery from that condition may be effected. From this point of view, it is worth observing that, according to Katrina vanden Heuvel's latest post to her Editor's Cut blog on the Web site for The Nation, the Obama Administration is planning to follow in the wake of the Bush Administration's stimulus strategies:

Obama political adviser David Axelrod said this weekend that the new Administration is looking at a stimulus bill in the range of $675 to $775 billion over two years.

Note, also, the amount of money that the Obama Administration plans to commit, which is probably what inspired Woolsey's metaphor about putting out a forest fire with a squirt gun.

As I said, the CPC press release was issued on December 19. Apparently, "the usual unreliable sources" for news coverage have decided that it was not newsworthy; and even The Nation took about a week and a half to bring it to the surface. Part of the problem probably resides in the very name of the CPC and the fact that the mainstream media have conditioned us to be as afraid of the adjective "progressive" as we are of "socialist." By virtue of our "conditioned ignorance of history," we seem to overlook that one of the faces on Mount Rushmore is of our only President who represented the Progressive Party and even managed to summon Republican support for the Progressives. (Those who have not picked up on these clues can follow the above hyperlink.)

In these times I can think of no better remedy for our impoverished view of history than a glance at the Wikipedia entry for the Progressive Party of 1912. At the very least I would hope that any reader come away having made note of two points:

  1. The title of the party platform document, issued on August 7, 1912, was "A Contract With the People." This is, to say the least, an ironic contrast with the 1994 Contract with America, which laid the groundwork for the 2000 election turning out the way it did. It also emphasizes the same displaced priorities of the Republican Party that had provoked the Progressives to break with them in 1912. The 1994 contract could hide behind an abstraction of "America" as an excuse for ignoring the fundamental needs of "the People;" and we have now endured eight years of that displaced priority.
  2. From that point of view, we must also make note of a sentence from that platform document given pride of place in the Wikipedia entry:

    To destroy this invisible Government, to dissolve the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day.

    Whether or not Roosevelt himself was the author of that sentence is beside the point. More important is that the "invisible Government" that the Progressives were trying to unseat in 1912 had become "blatantly visible" by the time of last month's election. The question we must now face is whether or not we have thrown out the rascals or simply replaced them with new rascals who will be better at being "invisible."

Of course the Progressives did not win the 1912 election; but they demonstrated that "the People" deserved a platform worthy of their needs and interests. They also demonstrated that third parties should not be dismissed as irrelevant, since they earned 80 electoral votes, a sharp contrast to the 8 for the Republicans. Was the decline of this Progressive movement a casualty of the fear of the success of the Russian Revolution? There never seemed to have been any connection between the Progressives and the Soviet Communists; but facts were never an obstacle to the "Red Scare" fear tactics of the media and the demagogues they supported (even before the benefits of the Internet). The real fear has always been around the extent to which "the People" should be empowered by their government, a question that has been ferociously debated since the days of Alexander Hamilton and Thomas Jefferson (the latter speaking for "the People" and now up there on Mount Rushmore). How we deal with that fear today may determine whether 2009 will be a year of stimulating financial institutions back to their business-as-usual or a year of economic recovery for the entire country (and possibly the rest of the world).

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