Much of the handwringing over President Barack Obama's disappointing economic performance centers on his failure to emulate FDR, whose muscular public works spending generated millions of jobs and helped lift the country from the Great Depression. But former Senator Bill Bradley, who has been talking up job creation strategies of late, argues that Obama would do well to channel another former president best known by his initials -- LBJ.
In the face of relentless Republican opposition against any and all efforts to spur economic growth, Bradley argues that the president ought to employ the tactics of the legendary Texas lawmaker Lyndon Johnson and strong-arm opponents into cooperating on a master plan to restore economic vigor via a sustained campaign of shame.
"If I were Obama, I would have names of the 40 Republicans who, by virtue of background, education and reasonableness, know that this total obstruction is counterproductive," Bradley told me last week. "I'd know more about those 40 Republicans than their mothers, and I'd invite them down to the White House and tell them that it's crucial to the country's future that they get with the program. A week or two later, if they still didn't go along, I'd call their mothers and their brothers and their high school history teacher. I'd call their biggest employers and their campaign contributors. I'd call all the people I could appeal to, and I'd appeal to them as Americans."
The question you may well be asking now is, are there still in fact 40 Republicans left in Congress who can be considered reasonable, and who might be open to appeals to the national interest? Most congressional Republicans are little more than obedient apparatchiks to Mitch McConnell and John Boehner, who clearly decided long ago that their party's path back to the White House leads through broad misery for much of the nation. Theirs is a cynical strategy of monkey-wrenching the economy in the hopes that the resulting damage gets blamed on the incumbent, or at least sows enough dismay and disgust to depress voter turnout and make the presidential election close. (When your horse is Mitt Romney, with his propensity for missteps, better that the track be sloppy.)
But putting aside the perpetual complications of American politics, the always-thoughtful Bradley -- a Democrat, but a pragmatist more than a partisan -- is right to channel his impatience with the status quo into a legislative strategy for economic improvement. In his provocative new book, "We Can All Do Better," he maps out a comprehensive plan that, in a reasonable world, might serve as the basis for a serious conversation about how to improve our fortunes.
According to Bradley's diagnosis, our political paralysis stems in part from the fact that efforts to elevate the economy have been so piecemeal that they have invited targeted opposition from the usual interest groups. Keynesian-inclined Democrats proffer stimulus spending in a bid to create jobs, only to confront deficit hawks in both parties who brand such efforts as wasteful and risky. Everyone pays lip service to bringing down long-term budget deficits eventually, while dividing on when and how. Some propose targeted tax cuts for employers as a fillip to hiring. Republicans claim that cutting taxes for rich people will shrink the deficit and boost job growth, an assertion that collides with facts of both the historical and arithmetical variety.
The result of these narrow strategies operating independently is what we have suffered for nearly the entire course of Obama's administration, ever since the passage of his necessary but inadequate stimulus bill: ceaseless bickering, accusations and jockeying across the political aisle, with little in the way of helpful policy, let alone large numbers of new jobs.
In Bradley's view, the only way to get past this swamp is through a kind of uber-Grand Bargain that acknowledges the legitimacy of many of these approaches -- minus the tax cuts for wealthy people -- but only as part of a sprawling package.
He frames the pursuit of this package with a useful question: How do we persuade the chief executives of America's corporations, those outside of finance, who are collectively hoarding some $1.8 trillion in cash and liquid assets on their balance sheets, to put this money toward hiring people?
If CEOs spent a mere one-fifth of those dollars on hiring, handing out paychecks at the median salary of $49,000 a year, that would drop unemployment down to about five percent.
When you ask people running big companies why they are holding cash rather than hiring, they typically respond by citing a pair of worries. First, they speak of fiscal fears, the short-term worry that, absent a deal between the White House and Congress, taxes will go up for everyone next year; and secondly, the longer-term worry that runaway American budget deficits will produce inflation, which makes them reluctant to invest until they see a path back to fiscal soundness. They are also afraid to hire in the face of chronically weak demand for goods and services. When your shop is already devoid of customers and your order book is light, who wants to add to the payroll?
Bradley's thinking centers on how to assuage these two concerns and turn them into fear of not hiring soon enough, lest companies miss out on the fresh profit opportunities of economic growth. He would attack uncertainty with a long-term deficit reduction strategy centered on cutting defense spending and lifting the retirement age for social security benefits by a year or two. He would boost demand through a $1 trillion, five-year infrastructure build-out focused on big-ticket items such as high-speed rail and an upgrade to the nation's air traffic control system.
Then, he would prod the private sector to hire with a federal subsidy that would cover 30 percent of the cost of salaries for new employees, up to a maximum of $25,000 per year. That program would run for two years with a cap of $50 billion. Cognizant of that limit, and mindful that credits would be handed out on a first-come, first-served basis, companies would have an incentive to move fast before the other guys exhaust the available subsidies.
"You don't spend a dollar of taxpayer money unless a job is created," Bradley. "The company has to believe that a worker will produce real value, because they're going to be paying 70 percent of the costs."
These are sensible ideas worthy of serious consideration, yet they confront the same question as ever: Are the people running Congress capable of serious consideration? Or will they hold firm to using joblessness as a campaign strategy?
That's where the LBJ component comes in. Somewhere on the map of congressional districts, the usual blue-red divide must give way to considerations of green. If there is indeed a hidden slice of the Republican ranks comprised of thinking people who can be peeled away from their leadership via a mixture of national concern, shame and constituent pressure, no better time than now to bring them to the fore.
Follow Peter S. Goodman on Twitter: www.twitter.com/petersgoodman
Obama embodies "the paralysis of analysis"
Maybe if he knew his father, he would know what it means to act decisively, and to commit to his word.
And this article leaves out Fact number 1: LBJ had a huge plurality of Dems in both houses of Congress throughout his term and a half.
2. The Republicans, one of whose leaders was Everett Dirkson, actually cared about the country and its people. Many of them got in line to vote for Civil Rights, and the arm-twisting was really reserved for the southern Dems.
LBJ had an enviable domestic record, and was a Dem. He's one of three Dems one can point to in the 20th century, that wasn't an utter milquetoast/doormat (Humphrey, McCarthy, McGovern, Carter, Mondale, Dukakis, Gore, Kerry, Obama).
Yes, the mega major government stimulus program of WWII, did pull us out of any remnants of the Depression in pure Keynesnian style.
Non-governmental intervention return of unemployment levels to pre-depression levels. Making bombs and bullets and employing men as soldiers does not count as a return to prosperity.
Non-war related employment did not return to pre-depression levels till after WWII.
The war spending was not sustainable, the US economy would have collapsed had wartime spending levels continued much longer.
The smartest thing Keynsian policy men did during WWII was to strongly encourage savings and the purchase of war bonds. This distributed savings broadly in the economy and once the war was over a very large fraction of the people had money in their pockets and could once again spend it on personal goods. This drove the recovery.
The government BS programs did not.
We have outsourced/sent jobs overseas and in the process lost our middle class. Politicians nor their families ever have to worry about money; the laws they make ensures this continues; paid for by lobbyists for the companies that outsource. (Apple, Microsoft among some).
Obama had a chance to enforce tarriffs on countries we import from and balance our trade. Had he done this when he took office we would now have low unemployment. Bush, Clinton were no better. But, Obama is in office now, I voted for him. Throw him out. Getting rich from American's misery is morally bankrupt. Americans don't need this from American politicians.
Simple as that, people can make all the excuses for him, but facts are facts.
I used to say "How can you support Bush, after what he has done?" Now I say, "How can you support Obama after what he has not done?"
Our middle class is devastated, and people care more about "Their Guy." As long as people vote for party and not country we will continue this decline. I gave Obama a chance, he failed. I will give Romney a chance if he fails I will vote for the other guy.
Political partisans are getting rich. The best solution would be a "Middle of the Road" third party, that won't happen, both parties give too much money to the media and government for that to be an option.
Why do you think that Obama has "destroyed jobs"? Do you consider people fighting a fire to be "building destroyers"? Don't you have to get a fire under control, cool it down, clear out the debris, before you can start rebuilding? And what if people are trying to pull down the ladders and turn off the water while the firefighters are fighting that fire?
I mean, c'mon. Think about it. The only entity in the world that issues US dollars (legally) is the federal government. It's a closed system. Every person in the US gets their dollars, originally, from the fed govt. Where else would they come from? The federal government issues currency by SPENDING into the economy, and this is not happening, and hence, the economy is stalled.
If you want the private sector to have a surplus--think of a scale because it's a closed system and therefore you can--then the federal government must have a deficit. When the economy is in the tank, as it is now, deficit spending must be larger to get the economy going again. Larry Summers slashed Christine Romer's recommendation that the stimulus be $1.7 trillion in 2009 instead of the measly $800 billion he recommended. (This was revealed only this year.) Summers was wrong.
Huffington Post, start checking out MMT.
Summers was wrong, but the Repubs and right-wing people at the time were going nuts about ANY stimulus... before Obama was inaugurated.
Perhaps there is, right now, more of a problem of perception?
1) Build millions of miles of bike and horse paths
2) Replant diversified forests, grasslands and hedgerows
3) Tear down derelict buildings and parking lots and plant urban farms
4) Retrofit all buildings
5) Build light rail and trollies
6) Clean up every creek, stream, river, lake, beach
7) Put solar hot water and micro wind on all buildings
8) Develop clean energy
9) Put water catchment on all buildings
10) Modernize water, sewage systems
11) Put all power lines under ground
Where's the money coming from to create them? Same place as the money spent to pave the road to your house, neighborhood public schools, indoor plumbing, outgoing sewage, electricity, telephone, police/fire dept, libraries, post offices.
Where's the money being spent instead.
CEO salaries
Shareholder profits
Campaign financing
Campaign contributions
AND
Hoarding money
Outsourcing and firing
Buying their own stock
Robotizing
If we must borrow to create jobs, then we should be fostering jobs in innovation - science, engineering, medicine. These are areas with lasting value unlike what you suggest