No Rear-View Mirrors: Managing the Economic Crisis

The President-elect has so far shown an uncanny ability to bring all parties to the table as he carefully fills in the outlines of his broad policy agenda. Allies, adversaries, and agnostics all seem to be willing to follow his leadership as he aggressively seeks to quell the roiling seas and extinguish the burning fires that await his presidency. Beyond his Cabinet assemblage, he has now ventured into the thicket of bailout politics with a vigor and sophistication not seen in many years.

Managing inclusion can be a tricky business, but it is crucial in times of crisis, and we are in a bona fide crisis with an economy spiraling deeper and deeper into the abyss, the recent events in Mumbai reminding us of just how precarious and dangerous a place the world actually is, a worsening situation in Afghanistan, and the continuing quagmire in Iraq.

With little time for recriminations against the woefully inept Administration about to mercifully leave office, Obama is showing that his focus and concern is on moving forward, not looking backward. And oh how easy is would be to just look back and start casting blame. The only real lament seems to be that given the constitutional constraints of only allowing one president at a time it is a shame that we have to wait until January 20 to actually start putting new policies and programs into place.

His latest mastery of difficulties involves ensuring that the Nation's states and localities play a pivotal role in putting together a economic recovery program that will maximize the creation of jobs, repair a crumbling infrastructure, and minimize the burdens and hardships on individuals hardest hit by the now official recession.

Our federalist system is dependent upon a working relationship between the central government and state and local jurisdictions. Intergovernmental cooperation is a prerequisite for effective, efficient, and equitable governance. States and cities, counties and boroughs, townships and towns of all sizes and composition, both rural and urban, are disproportionately adversely affected by economic downturns. Their collective ability to manage budgets as the economy worsens is constrained by balanced budget requirements and often by state-imposed limits to raise revenues.

One of the unique aspects to the current reaction to our worsening economic troubles seems to be a national will, and a bipartisan one at that, to adopt a Keynesian approach to spending our way out of this mess. John Maynard Keynes believed that it was okay for the government to borrow money to lift the economy out of recession. Of course, the implicit agreement is that you pay it back once the economy recovers, and that will be a massive undertaking to be sure. Deficits do matter and balanced budgets in times of prosperity are fiscally prudent and responsible. However, borrowing can also be prudent and responsible, assuming one has the will and the ability to repay the loans. At this point we have little choice.

Having the Nation's Governors and Mayors, Democrats and Republicans alike, joined in the effort to create an effective infrastructure-led recovery program will further strengthen the hand the 44th President will have to play after January 20. The times ahead will be difficult, and the economic hardships will be spread broadly. However, the foundation being laid at this point will help to shorten the time it will take for the economic recovery to take hold.

State and local officials are keenly aware of the needs and capabilities of their respective jurisdictions. They will be called upon to actively implement whatever recovery plan is put into place, thus they have a right and a need to be involved in its construction. Obama sees this and is acting upon his best instincts for brining all working partners into the fold. This is not just smart politics, it is smart policy. He realizes he needs broad support for the tough decisions and hard choices that need to be made, and he is going about securing that support.

There is evidence of a pattern here: the need to engage partners, the need to garner the greatest degree of consensus possible, utilization of diplomatic skills to attack problems, and a vision and steadfast dedication to implement it. In a weaker moment I could go on to say that has been missing for a long time, but that would be looking backward, and the mantra henceforth will be forward-looking and visionary.

But if only January 20 were tomorrow...

Comments

[schatsie]

Bingo INSTEAD of fixing the healthcare mess, we are going to privatize,,, we will keep collecting the regressive taxes for it of course
and god forbid we should recoup the moneys that were thrown at the rich over the last 30 years
with offshoring income,
tax dodges up the kazoo and
no more tax auditing for the rich and
secret tax letters letting them off the hook and
deferring tax payments indefinitely with no interest consequences...

We need to get a handle on the taxes on the rich now....

[research]

Yes!

Spend those trillions on energy, infrastructure, states, unemployed, facing foreclosure.

Order a trillion dollars in Wind turbines to install

200 GW !!!!!!!!!!!!!!! (600GW nameplate)

Don't ya think that would jump start the economy?

Cover appropriate roofs with a trillion dollars worth of Solar Cells:

Generate an Average of 125-500 GW !!!!!

Electricity sells for roughly 1$ per Watt per year.

100 to 500B$ per year.

10 or as little as 2 years. Only Maintenance cost, from then on for 20-40 years.

ROI of 100% to 500% over 20 years

What's the ROI on War?

Stop Copying Hoover, and start following FDR!

Giving these bailout to gambling banks will Force us into the Depression,

Just like the GOP conservatives want,

So they can "drown the US gov in a bathtub."