--Mediocrity breeds contempt.--Anon.
The test for the president's jobs program speech is whether it rallies enough sustained enthusiasm and support for a March on Washington that draws over 1 million people. Any proposal that falls short of this criterion is doomed.
To do that, the president's plan must be simple and effective -- easy to communicate and understand, and easy to grasp why it will be effective.
The president might begin by recalling for all of us that, from 1947 through 1951, the US spent $13B (5% of its GDP) rebuilding Europe. At that time the US debt was about the same percentage of GDP as it is today, but our parents and grandparents did not moan and groan that we could not afford it. And, that was on a different continent and included large populations (Germany and Italy) that were just at war with us. The Soviet Union was invited to be included in the aid -- but "Uncle" Joe Stalin preferred the leverage destitution provided him.
When the Marshall Plan concluded, output had increased by 35%. [One wonders if the rightwing has ever invented a story about why this "government spending" really did not work].
The US needs a domestic Marshall Plan for itself -- $700B over 4 years is about the same percent of GDP as $13B was in 1947.
From what is being blathered about the Beltway, the discussion within the administration is whether to "go big" -- i.e., propose major initiatives Republicans will not agree to, and then campaign on them -- or "go small" -- propose minor initiatives Republicans will not agree to, and then berate them for opposing what they have always supported.
It is the wrong debate. Wrong economically. Wrong politically.
It is wrong because it begins and ends with the flawed premise that the major audience is the Beltway yappers, lobbyists with PR firms and policy-wonks. Or, even Congress.
The audience, the only audience that will ever count, is the American people. If the president can get the American people on is side, in massive numbers, that is all that will matter. Yes, the yappers, lobbyists and anointed policy-wonks have the money and media machines to make their voices heard, but it is a mistake for the administration even to try to feed them their pablum.
That leads to multipoint plans, watered down pronouncements, and the perception of a visionless and rudderless society. When it is complicated, confusion -- the tactic of the rightwing to deny everything from cigarette-smoking causing lung cancer to more heat-trapping gasses resulting in more heat being trapped -- is easy to create.
No one rallies, no one goes to the barricades, no one steps up to fight if they are uncertain or confused. Nor do droves of people rally to achieve a 1% improvement.
Clarity and certainty are required.
To do so, the president should focus on two and only two proposals, and they each must take account of perceived prior failures, i.e., they must be guarantees not incentives that rely on what side of the bed someone gets up on in the morning to determine if they will be acted upon.
The first is that the proposal must guarantee millions of jobs. The keys are guarantee and millions, not just one million. Without a guarantee, any incentive proposed will be sliced and diced for why it will not work, how much it will waste, who the winners and losers are, and so forth.
At the level of one million jobs, it will be considered OK, but insufficient. Four (4) million should be the minimum -- and recall, the WPA hired 4 million people in 4 months.
At this time, providing incentives for this or that investment will fall on deaf ears -- the American people need to know that several million new jobs are to be guaranteed. The simplest way to do this is in the roads, bridges, electric grid, retrofitting buildings, dams, sewage, water, school buildings -- collectively referred to as "infrastructure". No fewer than 4 million jobs should be guaranteed, either through engaging private companies or, if necessary, through a modern Works Progress Administration, directly hiring the workers.
A corollary of this approach is that it will become highly politically salable to tax the wealthy to pay for those millions of guaranteed jobs. The best economic argument is to get non-productive money transferred to productive -- i.e., the financial activities (i.e, "FAT") tax of 0.5% on financial markets transactions that would generate $100-150B annually and ending the Bush tax cuts for the wealthy, generating another $70B... or, if one prefers, improved enforcement can get some of the $350B in taxes that are owed, but not paid. Together, that is about the amount the domestic Marshall Plan requires.
There is also a potent political argument for this approach -- the financial industry's excesses played a major role in our collapse, the taxpayers bailed them out, it is fitting an proper for them to help bail out the country.
It is time the president gave voice to that sentiment, widely shared by the American people for the simple reason that it is true.
If the jobs are to be guaranteed, there is no even remotely credible argument that the proposal will not work to create them. Since almost all infrastructure work is, by definition, local, the value of the government supported endeavors will be immediately obvious to the entire country -- road by road, bridge by bridge, school by school, community by community.
Let them try to say that money taken from the "private sector" will result in no net job gain -- it will not pass the laugh test. Let them try to say that this is "socialism", I doubt they'd want to sustain that pitch when 4 million plus people are working again.
The second proposal the president should make is guaranteed mortgage modification. So long as housing remains depressed, so long as homeowners have to squirrel away money to make sure they can meet mortgage payments, so long as so many mortgages are underwater, the burst housing bubble will be a drag on the economy.
It is not suggested that the president, in his speech, go into all the details, but he should be clear about what is guaranteed to occur. [One thought is to tie banks' access to the Federal Reserve's loan facility to agreement to modify principal and interest on mortgages, providing the banks a pro rata share of profits when the homeowner sells].
That's it. Guaranteed jobs. Guaranteed mortgage modifications.
A domestic Marshall Plan. To rebuild America.
Of course, we will immediately hear all the reasons why none of this is a good idea.
The American people would rally in droves behind these two guarantees. We would March on Washington in the millions to make it happen.
If they do not heed, they will be gone in 2012, never to pollute our dialogue, never to darken our doorposts, again.