A Glimmer of Hope

Most Congressional hearings are not that scintillating. The ones you see on TV, with Roger Clemens testifying about steroids, Ben Bernanke, or some general back from the field, are the exceptions (and let's face it: they're pretty predictable too, with important people working hard to not say anything important). Mostly, it's a group of policy wonks or industry reps talking to members of Congress about some minutiae in a bill that may or may not go anywhere. At their worst, these hearings are scripted events where actors trot out their lines in order to move (or block) some legislation valuable (or hurtful) to their constituents.

At their best, however, a hearing can be a great example of good government in action, and as someone whose been testifying for years, let me tell you about one from last week that struck me as uniquely positive. My point is not simply to report on an unusually useful couple of hours in the halls of government. At the risk of over-extrapolating, I thought I saw a glimpse of what our political future might look like if we make the right choice on Nov. 4. And it provided a glimmer of hope.

The hearing was before the House Committee on Education and Labor, chaired by Rep. George Miller (D-CA). The topic was how to best craft a recovery package to accomplish two things: help those hurt by the troubled economy, and stimulate that economy back to life. The majority party gets to choose most of the witnesses, so this panel featured only one Republican witness and, uncharacteristically, not one Republican member of the committee showed up.

This sounds like glib snark, but I can tell you based on personal experience, that's one reason why this hearing worked well. Like I said, I've done these for years, and ever since Reagan, Republican witnesses in economic hearings almost always have one, and only one, theme: supply-side tax cuts (okay, lately they've added "drill, baby, drill," but that's a newcomer, and it's just about as compelling as their tax plan; oh yes, and "deregulation" shows up a lot too, though this is a bit of a non-starter right now, to put it mildly).

If you don't believe me, read the testimony at the above link by the R witness, William Beach from the conservative Heritage Foundation: high-end tax cuts (extend the Bush cuts, cut the capital gains rate, lower the corporate tax), find more oil, avoid "burdensome regulations."

That's almost all they bring to the table, regardless of the evidence, the topic, or outside circumstances. Case in point, this hearing was about a stimulus package that needs to move quickly off the mark, and Beach was pushing tax changes (extending the Bush cuts) that come into play at the end of 2010. It's the same supply-side agenda the Heritage folks push in good times and bad. Their only tool is a hammer, so it all looks like nails to them. Same with the oil thing. Does Beach not recognize that the price of gas is down well over a dollar nation-wide, yet we're still mired in recession?

As I wrote last week in this space, ideology that's impervious to facts is the last thing we need right now, and the fact that such thinking was vastly under-represented was one reason why this hearing worked.

The hearing began with testimony by Dana Stevens, a woman from New Jersey who's been unemployed since July. Since then she's applied for 143 jobs and gotten only seven interviews. She's an extremely impressive, articulate person, and she's even willing to take a pay cut, within reason given her financial needs.

But there's just no work out there. Hiring freezes are pervasive. Back in January of last year there were 1.5 job seekers per available job. Now that ratio has doubled--it's 3 to 1. Add in the six million people who are working fewer hours than they desire, and one in nine persons is un- or underemployed.

Economist Ron Blackwell and I presented facts like these, along with our views re the magnitude and composition of a recovery package. In order to offset a recession that is likely to drive unemployment to at least 8% by the end of next year (it's about 6% now), I think we need to spend roughly $50 billion to help strapped states, $50 billion on infrastructure (more on that below), and $50 billion on extending both unemployment insurance and food stamps. Beyond that, it might be useful to boost household incomes with direct payments, but that was the exclusive thrust of the last round of stimulus, and we should deemphasize such payments this round. Checks can help for awhile, no question, but people need jobs, and that's why many of us are bullish on infrastructure investment right now.

Here's where Professor Robert Pollin's testimony comes in. Do yourself a favor, and give this one a read (same link as above). It's a detailed road map of a vital public investment agenda, with an emphasis on green technologies. There are the usual candidates--schools, water management, roads, bridges--as well as building retrofits, smart grid electrical systems, and renewable energy. Moreover, Pollin shows that in terms of jobs, these investments get you a bigger bang for the buck than tax cuts, military spending, or "drill, baby, drill" (see his figure 1).

In a similar vein, Chris Hansen made a solid case for including the expansion of high speed broadband networks in an infrastructure agenda, providing access to areas that are still off this grid, a serious economic and social disadvantage in today's world.

(A related point in my testimony is that infrastructure investment has often been dismissed in the context of stimulus as having too long a lead time. Not so. There are tons of productive projects in all of these areas ready to go, if not already underway but starved for resources.)

But beyond the good information exchange, what stood out in this hearing was the discussion between the members of Congress and the panelists. These exchanges can too often reduce to partisans getting "experts" to confirm their biases: "Mr. X, you noted in your testimony that 2+2=5. Could you elaborate?"

In this case, members were genuinely seeking our insights into how to structure a recovery package, and providing their own amplification as to what parts made most sense to them. Reps. George Miller and Lynn Woolsey, clearly motivated by the deteriorating economy and rising unemployment, wanted to hear about ways we might extend unemployment insurance benefits to meet the needs of people like Ms. Stevens, including upping the "replacement rate"--the share of salary replaced by UI benefits (it rarely breaks 50%; I think now's a good time to go up to 70%, at least temporarily).

John Sarbanes (D-MD) picked up on a great Pollin point about "crowding in"--how sometimes government investment creates untapped markets that later draws in private investment. The internet is, of course, a classic example, and green technologies create the same possibilities, with even greater potential benefits.

Other members, like Dave Loebsack (D-IA) stressed how the recession is cutting into their state's revenues, and wanted to learn more about the actions states were taking. Unlike the Feds, states have to balance their budgets, and they're actively cutting services (and jobs), as well as raising fees and taxes, actions that will only serve to deepen the recession. Thus, unlike the earlier stimulus package, this one must include state fiscal relief.

Like I said, I don't want to get all starry-eyed here, but I couldn't help but wonder if the dynamics of this hearing--creative, open-minded thinking about solving problems in a progressive, even green, way--might be a tiny harbinger of a new era, where government actually works to solve problems, not create them. Is this, I asked myself, the way things might operate in an Obama era?

I know, this election is by no means over, and despite the favorable polls, I'm not one iota complacent about the outcome. It's just that this hearing revealed what may be a light at the end of the tunnel. Unless that's the headlights of the Straight-talk Express headed right for us.

(Note to readers: I'm going to take a break to work on the paperback edition of Crunch. I want to thank Ms. Huffington and the HP blogteam for the chance to post here on Sunday PM/Monday AM. See you after the election. I'm sure we'll have a lot more to talk about...)

Comments

[eyesus34]

With just a phone and a broadband internet connection I was able to make calls and input data for the Obama campaign during the primaries. It made me wonder, what would happen if small-town America had the same broadband acess as the metropolitan cities? Instead of drill baby drill, what talent lies untapped in small town America? I don't even want to think about where our country would be if our government invested in high speed rail and fuel efficient cars right after 9/11.

[docpooh]

MSNBC just reported that the ATF uncovered a SKINHEAD plot to assassinate OBAMA!

[IslandPress]

Green energy is becoming more popular and with new discovers all the time, there are tons of new ways that we can create energy from natural resources. Terry Tamminen suggests that we use water and trash disposal to power the older buildings that use up the most energy. A project like that would create more jobs and reduce energy costs. To learn more about his idea check out: http://blog.islandpress.org/212/terry-tamminen-bail-out-or-build-out-part-2.

[radnip]

Green energy allows us to jump start a new industry, create jobs, and export expertise and products to the world. Definitely more bang for the buck than Wall Street fat cat bankers.

[leevntheus]

Also-

Anyone with a credit or two in Economics 101 knows that governments should tax during expansion, and deficit spend through recession. Its how the capitalism expansion/contraction model works.

Not only did Bush break this model by pushing massive tax cutting and deficits during relatively good times, but the Republicans are now set to spend the next ten years railing against the "spending" of the Democrats - something that, not only do they KNOW is necessary for the security of America, but actually SET UP as a framework by their actions of the past eight years.

In my book, this is DECEIT and TREASON and these noodleheads should be run up the flag pole.

Let us only hope that, after all of the current ballot suppressing activities currently employed during this election, we still vote in SUCH A MASSIVE LANDSLIDE that a FORCEFUL MANDATE is started for the future of our children and our beloved country.

[dartagnan]

"Their only tool is a hammer, so it all looks like nails to them."

A-yuh. But they will never change. Actually the conservatives have been pushing this same doctrine for well over a century. Because they have the bucks to buy the media they are able to con people with it again and again. Then along comes something like the Great Depression of the '30s or the financial meltdown of 2008 to demonstrate that their ideas are bankrupt, and people wise up. But the wising-up is only temporary, because the CONservs never give up peddling their con.

Hopefully, however, the current fiasco will put in a Democratic president and Congress and we will get at least a few years' respite.

[leevntheus]

Yo! Hello!

Many states such as California and Oregon have already passed alternative renewable energy mandates for the near and middle future. These mandates translate into massive amounts of work on all levels, from think tanks and lobbying to design and engineering, from manufacturing and transportation to installation and service.

The very first expenditure required to get this accelerated is more investment in education, primarily college level degree and certification. You just don't walk off the street and know how to service a windmill generator or install the proper solar grid.

At the age of 45, I have lost all of my business, all of my real estate, and all of my retirement due to this mess. What am I doing about it?

I am now a full time engineering student working towards a BS of Renewable Energy Systems. On my own I am completing studies for a lobbying certification as well as personal instruction of Brazilian Portuguese.

I plan, no, EXPECT to work in this field for many years to come, and the government would be wise to not only support me and many others in this endeavor, but encourage stimulus and growth of green energy in this country and abroad.

Just think of how much further along we would be if King George had not been allowed to steal the vote in '00.

[radnip]

We should invest in education for everyone, particularly in new industries like alternative energy and the green movement.

[Irmanator]

What a great suggestion. Look around for all the good projects that are ready to go or partially-started-but-starved-for-money and fund them completely. Get people working!
I'm Canadian. One of the stupidest things the government of my province did is to buy ocean-going ferries from Germany. They saved maybe ~20% over the cost of building them in the province but they would have made that back in taxes from the labour alone. Add the "crowding in" effect that the author notes and we could have ended up with a self-sustaining ship-building industry.
From what I read, after years of neglect, the infrastructure in many states is in dire need of a cash injection. If you are going to spend government money to try to jumpstart the economy, I think this is a better value than buying toxic derivatives.

[akhabbe]

Is Palin even in the running anymore?

[MatoSka]

There remains another storm on the horizon that candidates for the Presidency have not addressed. Social Security remains a tickng time bomb and the elderly remain the most economically vulnerable in this depression. http://www.cnn.com/2008/POLITICS/10/23/social.security/ Just when seniors need it the most the Social Security fund remains the most vulnerable. Rather than focus on stimulus checks, let's really fix and increase SSI so that those in dire need can afford to live. This can help stabilize housing and prevent foreclosures as well. As the proportion of the Baby Boom generation increases to slide into the age of eligibility, this needs to be addressed and improved. http://www.census.gov/Press-Release/www/releases/archives/facts_for_features_special_editions/006105.html

As pensions wither in the stock crash losing and the Pension Benefit Guaranty Corporation losing $4.79 billion in the last fiscal year, its director is proposing a plan to "diversify" its investments. http://online.wsj.com/article/SB122486911340367147.html This kind of rhetoric in the current context is hard to rationalize.

[CitizenoftheRepublic]

Well paying jobs are the surgery that will take this "heart attack" victim and rebuild its heart. This country still contains the tools, resources and gumption to develop the New World Order! However, those clinging to the philosophy of market first and regulaltion ... smegulation will need to be trounced Nov. 4th or earlier.

[edva]

Things are moving at an acceleratING pace - for better and for worse - in today's world. Yet another reason we need a youthful, intelligent, facile leader who can keep up.

[jan4insight]

Republican witnesses in economic hearings almost always have one, and only one, theme: supply-side tax cuts (okay, lately they've added "drill, baby, drill," but that's a newcomer, and it's just about as compelling as their tax plan; oh yes, and "deregulation" shows up a lot too
-----------------------------------------------------------------------------------------------------

McCain in his debates had this stuff plus a lot of "slash government spending" all of which has gone over the audiences like a lead balloon.

It all sounds sooooo Twentieth century now, doesn't it?

[ProudAmerican23]

"drill, baby, drill," still sits better with me than Baracks "Spend, baby, Spend"

[Zubeck]

That's why Obama will win. As a country, we're moving away from that paradigm and into a more progressive one.
Have you ever asked yourself why they're not drilling on the millions of acres offshore they already have leased? Because THEY CAN'T. Every drill bit they own is drilling right now, and they're unwilling to invest in more equipment the government won't pay for! So what's left? Commodity futures. Good luck selling that. We need to invest in the future in a way that will provide returns in less than decades and for longer than a few years. Oil just doesn't cut it, and in an energy context it's time to move on.

[kph0329]

I found this interview that Barack did that I think everyone will like. Here is the link:

http://www.youtube.com/watch?v=iivL4c_3pck

[weatherwaxx]

The time to hope will be after November 5. Right now there are reports of those hack-bait vote machines switching votes in all key states. McCain is "promising" a huge win in Ohio -- well, I worked the elections in 00 and 04 and I SAW my own vote switched on one of those machines in 06 -- it took half a dozen punch-backs to make it stay Democrat.

DON'T GET COMPLACENT, DON'T GET TOO HOPEFUL, AND BE READY TO DEMAND A PAPER-BALLOT VOTE-OVER IN OHIO ---- because the Republicans are NOT GOING TO ALLOW A FAIR VOTE IF THEY CAN STEAL THE STATE.

"Of course we cheat. If we didn't cheat, we couldn't win."
--Newt Gingrich, then Speaker of the House.

[HyperInfluential]

I think racism may actually be bizarrely working in favor of truth and justice for once, as the deployment of a "Homeland Duty" army unit within the United States, for "crowd control" (in full violation of Posse Comitatus), indicates to me that the corrupt leaders are truly, honestly afraid of massive, widespread, extremely violent riots if Obama does not win. Deep in their heart of hearts, they fear the "urban" Americans and have always had a nightmare about them rising up with violence en masse. Therefore, I think they have decided to let this one go, as evidenced by their halfhearted pretense that they think they might win, and their "post mortem" attacks on each other, which have already begun.

Either that or they're going to use that army unit to enforce martial law when Bush declares himself president for life. But I still think the first scenario is more likely, since they'd probably bring a whole bunch of units instead of just one if they were going to try that.

[carriellbee]

I hope you're right about the first scenario.

[jan4insight]

"Either that or they're going to use that army unit to enforce martial law when Bush declares himself president for life."

I'm breathing a little more easily about that possibility. Have you seen pics of Bush lately? Every vibe he sends out is that he can't wait to get out of there. The last thing Bush wants is president for life.

And, I think HyperInfluential's first scenario is most likely, largely because too many of their supporters have gone for Obama (Financial Times being a notable example), and so the rump GOP is now in the process of devouring itself. Let's hope, and let's be vigilant for a fair election!

[SurrealPumpkin]

One army unit wouldn't be enough.

[Ksisay]

Mark Spoonamore, who helped plan the hacking of the Ohio machines in '04 has turned whistle-blower. The Feds are taking him seriously and have issued some subpoenas, but the press remains silent. Some light on the situation could make it harder for them to get away with it again...
Ask your local paper why they haven't reported it.

[breezyholler]

I was reading an item in the NYT,.describing the sewage infrastructure in Iraq as a 100 million dollar failure. The reality is that this whole trip into Iraq has already become a trillion dollar failure...and the horrendous amount of suffering and loss of life, makes the dollar cost minute in comparison..WE THE PEOPLE must get behind President Obama ..and put a stop to this crazy , unjust and evil war..SOONER THAN LATER !!!!

[flossophy]

breezyholler, go educate thyself and listen to NPR's Intelligence Squared series on "Is the US winning the war in Iraq"

While you're ranting and raving in the comfort of your own personal info-sphere... Iraq is being rebuilt, bad sewers and all, and is becoming stabilized both economically / politically.

What if the Iraq war was over... and no one noticed?

[ProudAmerican23]

breezyholler is someone who believes ONLY what the reporters tell her. She needs to have spent a couple years there and have a list of Iraqi friends on her IM list (like I do) before she starts making political decisions based on what a news paper reporter feeds her.

[alexeiz]

flossophy - I'm not sure what your point is?

Are you saying that it is a good thing that Iraq is being rebuilt? May be for Iraq, but not for US, I'd be happier if this money was used to rebuild infrastructure at home.

And about a war - it wasn't a war from the start, it wasn't declared. And if it was, war operations ended with Bush declaring "Mission accomplished", after that it was just plain occupation.

So, first we screwed up the country that was already screwed up - at tax payers expense, and now we are trying to fix what we screwed up - again at tax payers expense.

[paulfree17]

If it is over why is McCain still afraid of withdrawing troops under any timeline? If we have won we should say so and begin pulling out and let the Iragi's start rebuilding and paying for their own infrastructure so we can start paying for ours.

And we should turn their oil fields back to them but I sincerely doubt that will happen. There is just an article today that the US is threatening Iraq with economic blackmail if the democratically elected government continues to insist on a time table for us to begin removing our troops.

[dshwa]

Yeah, those Iraqi polis are in a tough spot. They've got elections in January and an electorate that's 90% opposed to prolonged (read:any) U.S. pressence. Meanwhile, Bush doesn't want the his last act as president to be begging hat in hand to the U.N. for an extension. Of course, if the U.N. won't give him an extension (a possibility, but not that likely) and the Iraqi's won't sign the status of forces agrement for fear of their political lives (or for that matter, their actual lives) Bush would either have to leave the troops in the country illegally (and probably facing a massive rebirth of the insurgency) or withdraw them instead of leaving the mess for the next president to clean up (and get blamed for). So those Iraqi parliment members are in a really tough spot. I'd bet on us needing a U.N extension, should be fun to watch Bush go about getting one.

[paulfree17]

There has been a redistribution of wealth going on for the past eight years. More and more wealth has been transferred from the middle class to the elite class and mega-corporations than during any previous point in history.

The goal of the economic neo-cons has been to erode the middle class. The two biggest assets of the middle class have been their homes and their 401Ks. The value of both have declined significantly in the last year or two.

As for the dreaded "S" word, why is it that certain functions of society are not decried as socialist while others evoke fear and trepidation when government intervenes. Our police and fire departments are socialized. Our schools are socialized but there is a choice to send children to private schools at personal expense. Our roads and interstates are socialized. Why all the fear of Socialized medicine?

It is time that we begin to re-establish the middle class. We can replace trickle down and trickle up with trickle out.

[Kristen777]

The Republicans in power don't mind redistribution of wealth as long as it's flowing in their direction.

It is not in their best interests to empower the middle class, educate our children, and care for our well being. The poor are easily incapacitated. It's the middle class that is the upper 5%'s biggest threat to their agenda.

You see - they need us!!! But they need us with our hands tied behind our backs.

[flossophy]

... can't let this one go. Where on earth do you get this info?

Redistribution, wherever it's been tried hurts lower & middle classes... and only encourages the wealthier classes to put their money in places where government can't get to it, thus slowing economic activity...

and who feels the brunt of a slow economy???

Ya, you betcha, the lower and middle classes... the upper classes don't feel a thing.

I'd encourage you to reexamine the 'benefits' of our socialized school system... one of the worst in the world. hmm, I wonder why..

How about Social Security (to be bankrupt in a few gens), or Fannie Mae & Freddie Mac (socialized mortgage lending - the cause of our current financial crisis) ... do we see a theme here? all left leaning concepts, perhaps well-intentioned, but with devastating or dismal results.

Perhaps we should line up the wealthy people and put rhetorical guns to their head, saying "it's for the good of the country..." as we vote away their money for our supposed gain. Sounds a lot like East Germany. These are old ideas, which have no place in a modern and free society.

[paulfree17]

First of all, I am a business owner. I employee almost 100 people and provide health care and a generous 401K. Yet I am part of the middle class.

As a business owner I struggle with rising health care costs and have watched my own as well as my employees 401K plans shrink.

I want my employees to do well just as I want to do well. I have never said that I would hire more people if my taxes were lower. After all, even at a marginal tax rate of 35% I still make more 65 cents on every additional dollar I earn. If hiring more people makes me more money I will do it regardless of the marginal tax rate since I am being taxed only a percentage of my profits.

Health care costs on the other hand do cause me to slow down hiring or having to reduce benefits to offset the higher costs. If this government truly wants to help small and medium size businesses then they need to reign in health care costs and not tax the benefits that we pay out as McCain's plan would do.

[alexeiz]

Flossophy, paulfree17 is absolutely correct and your arguments don't hold water at all - may be they are true in some alternative universe, but not here.

We had the strongest middle class in 50s and 60s, when taxes were more progressive and higher in general. There is no historical support for (reasonably) higher taxes slowing the economy.

All countries that have better school system (and there are many, like Finland or Sweden) have socialized school systems, period.

Social security is the only systems that keeps millions of retirees from going into poverty - and there is a way to fix it - and it is not cutting taxes.

I and many other people I know lived for years without health insurance (I couldn't afford it for 18 years) and getting medicare was a life saver.

And by the way, all our financial leaders (including Greenspan) say that Mae and Mac were contributing, but not major factor in our financial crisis - deregulation was.

[CitizenoftheRepublic]

I too am a business owner with around 40 employees and in complete agreement with paulfree17. From the horses mouth to the horses A$$!

[flossophy]

one correction, paulfree17... it's not a "transfer of wealth" from the middle class to the upper class

it's an "exchange of wealth".

It's like this... you pay money to Apple - they give you a MacBook Pro. Everyone is happy.

Transfer of wealth is: Apple employees make loads of money selling computers - the government taxes that 'excess' income - and transfers it to organizations like ACORN for their 'non-partisan' get out the vote drive. Everyone happy?

Gotta love democracy.