The Americans wrapped up their meetings at the Toronto summit in an oddly contradictory posture. With much of the world afflicted with austerity fever, President Obama's team found itself in the awkward position of pushing the Europeans not to abandon economic stimulus -- while Obama himself is unable to get the U.S. Senate to approve even modest sums to extend expiring unemployment insurance for upwards of a million workers, or his $23 billion request for emergency aid to the states to spare 300,000 schoolteacher layoffs.
The British, Germans, and Canadians, meanwhile were giving priority to deep budget cuts in their own countries -- while smaller European nations were being made to extract even more severe cuts in exchange for guarantees of their government debt. Obviously, if every nation is cutting back, then economic recovery falters. But this seems far from obvious to the world's leaders.
In part, this general outbreak of austerity is the price that Obama is paying for giving too much attention to deficit-reduction at home, and not enough to jobs. The administration's own embrace of austerity, in the form of a freeze on domestic spending after this fiscal year, as well as Obama's fiscal commission, not only undercuts his credibility with the G-8. It gives ammunition to Senate Republicans and Democratic deficit hawks who refuse to appropriate another dime for jobs measures that are not "paid for" by tax increases or other spending cuts (which of course undercuts any stimulus effect.)
One good piece of news is the departure of OMB director Peter Orszag, the leading deficit hawk inside the administration. Orszag was the architect of the fiscal commission and the domestic spending freeze, and the foe of even modest increased outlays on jobs.
It's not clear that his successor will be a great deal better, though some of the names leaked to the press -- notably Laura Tyson or Gene Sperling -- are less hawkish.
If the Republicans make massive gains this November, the main reason will be the lingering economic slump, which now belongs to the incumbent Democratic administration.
You could spin recent events to suggest that President Obama finally had a pretty good week. He showed presidential resolve in getting BP to part with $20 billion. He fired the insubordinate General Stanley McCrystal. And he persuaded Congressional Democrats to put aside House and Senate differences and agree to a conference bill on financial reform.
But in all of these cases, the back story doesn't reflect so well on Obama. McCrystal's policy, which will continue, is a fantasy. He should have been fired for insubordination several months ago when he was trying to back the president into a corner with his public pronouncements.
Had the new administration cleaned house at Dick Cheney's Interior Department early on, and not given BP safety waivers, the spill probably would not have occurred.
And Obama hardly participated in the final deliberations on financial reform. For lack of progressive presidential leadership, the banking lobby gained back some of what it had lost on the Senate floor, in weaker provisions on derivatives, big loopholes in banks' ability to continue risky trading activities, and looser limits on banks' ability to invest in risky hedge funds and private equity.
Polls show a continuing erosion in the public's confidence in Obama and the Democrats. And none of the recent cases of presidential leadership touches on the real issue that is killing the Democrats, namely high unemployment.
Speaking of polls, one of the oddities of the Administration's reticence on the jobs issue is the reported counsel of the White House political staff that the public cares more about deficit-reduction than about jobs. In this account, the public sees deficit reduction as a sign that government is out of control and doesn't believe that more government spending will help solve the jobs crisis.
Political advisers who take such results at face value are fools. Yes, you can get poll respondents to say that the deficit is a serious concern, but it's a far less salient one than worries about losing your job, your health insurance, your pension, or the value of your home. If Obama can persuade the American people that he is their champion on these immediate pocketbook issues, the abstract worry of the deficit evaporates.
The political team also reportedly argues that Obama can't get serious jobs measures through the Senate in any case, and therefore a major effort would only make him look ineffectual. But this is also the wrong reading.
As I argued in a recent piece for The American Prospect, adapted from A Presidency in Peril, Obama needs to learn from the example of Harry Truman. In the summer and fall of 1948, when Republicans controlled both houses of Congress, and Truman was widely given up as a goner, Truman responded by deliberately sending "the do-nothing 80th Congress" legislation on housing and jobs that he knew they would defeat -- to dramatize the difference between his own program and the Republican one.
Truman not only won re-election in November 1948 in American history's greatest
electoral upset; his coattails were so attractive that 75 House seats went from Republican to Democrat, and the Democrats took back both houses of Congress.
If today's Republicans are blocking aid to spare 300,000 school teacher pink slips, and over a million unemployed workers who are losing their unemployment insurance and Cobra health coverage, Obama should be hanging that callous behavior around their necks, Truman style.
And in that respect, there is one surprising piece of news on the polling front from a most unlikely quarter -- the Peter G. Peterson Foundation.
The Peterson Foundation, bankrolled at a billion dollars, is spending a small fortune to persuade the American people that the deficit is a more serious menace than economic collapse, and that Social Security and Medicare need to go on the chopping block. I have rebutted this view in a paper for the Scholar's Strategy Network.
One of the Foundation's grantees is a closely linked organization called "America Speaks," which is supposedly a representative sounding of public opinion on the Peterson Foundation's favorite causes.
The "national town meeting" just completed June 26th, involving thousands of Americans by satellite link. You have to read the press release very carefully to find these results, but after extensive deliberations, the America Speaks poll included these findings:
The people are often ahead of the leaders and the pundits. If the administration paid attention to where public opinion really is, we'd be hearing a lot more about jobs and a lot less about deficits.
Robert Kuttner's new book is A Presidency in Peril. He is co-editor of The American Prospect and a senior Fellow at Demos.
Hey, look at all those wrong suggestions made by team Bush. Looks as though the Obama economic advisors are on the same path.
As much as I'd like to see the spunk of a Truman return[just contrast the firing of McC to MacA]there is no more guts in politics—exception Sen. Franken—and we are coerced into accepting “whatever.” When we are exposed daily by laissez-faire sqawkers like CNBC's ilk brainwashing us that deregulation and reduced taxes—the delusionary Goldilocks Economy— are all that's needed for recovery in the brazen face face of recent history whereby big business undermines the "Fair Deal" doctrine, there is little hope that we will ever return to the vitality and common sense of the forties.
1) You’ve given at least 1 million dollars to a GOP – or multiple GOP – representatives, and he, she or they have contacted you and acknowledged the donation.
2) You’ve recently been contacted by a GOP congressman, by phone, and struck up a first-name basis conversation.
3) You’ve had legislation introduced and passed that directly benefited your private financial self interest.
If you don’t recognize any of these, you ain’t in the club. You’re just a raa-raa wannabe who’d LIKE to be in the club.
True GOP club members are corporations, large private financial self-interests, and oil company executives.
If you “work hard” and have great “family values” but don’t fit into any of the above categories, sorry, you ain’t in the club. But you can always fantasize!
Cut Military spending by 2/3.
Shift those savings to Social Security and Medicare and Medicaid.
End all forms of Corporate Welfare and Sweetheart Carve Outs and Loopholes, as well as do the same for the wealthy few, while banning public servants from ever becoming lobbiests or visa-versa.
Use those savings to fund clean elections while disallowing other monies except personal small donations.
Ban all 527s or other forms of paid for political adds.
Put term limits on Congress as well as banning them from ever serving in any capacity within Government or as lobbiests to Government in the future after serving oine term.
Jail for a minimum of five years any regulator that is proven to serve the interests of the regulated as versus the interests of the American People.
Jail anyone that is proven to have told a political lie.
Require all Media to provide equal coverage to ALL canidates for public office and open up debates to any canidate thus bringing to heel both corrupt political parties.
End the Electoral College (preserve it thoiugh in case we ever pull the plug) in favor of one person one vote so that we become more of a Democracy.
Overturn Citizens United....see..... moveon.org
Stop complaining about all the problems. We can't do anything about it cause we have no power.
This president and congress' economic policies are a disaster, growing government by leaps and bounds and the corresponding shrinking of the private sector resulting in less private sector income to tax to pay for bigger government that demands more tax revenue. Mathematically impossible, as Europe is finally finding out. Distributing taxable income from those that pay taxes to those that don't reduces the amount of taxable income. Always has, always will.
Tax breaks allowed for this. Private sector jobs are not coming back --
Health care is expensive BECAUSE it is FOR-PROFIT, and the regulations have been engineered by the insurance & health care providers to allow effective loopholes and lack of EFFECTIVE regulation.
The federal bureaucracy has been co-opted by the industries they regulate (see MMS, the FDA, USDA) which has totally skewed the market against individuals in favor of the large globally-connected conglomerates. Those agencies that still have any teeth have been systematically so underfunded that they are no longer effective regulators of industry malpractice & negligence, leaving the public unprotected from abuse.
Self-regulation does not work in a market-driven economy controlled by near monopolies. Without governmental checks on private power, the powerful will ALWAYS rape and pillage the poor & the weak. Distributing excessive DISPOSABLE income so that the poor can AFFORD to pay taxes and to pay their own way actually INCREASES taxable income.
We must end the monopolies - not just in health care but in almost every sector of our economy. In almost every sector there are less than a dozen and sometimes less than a half dozen who effectively control 75-80% of that sector. Drugs, food transportation, food production, etc.
We must end corporate personhood and we must have publicly financed campaigns.
Without the government funding jobs, real jobs, maybe like Roosevelt did with the CCC and the WPA, to rebuild the infrastructure on the country, we will sink further into the Great Recession if not the next depression.