We are headed into the most ambitious era of progressive economic reform since the New Deal. The crisis leaves little alternative, as job losses mount across the country and the world. The Obama administration has hit the ground running, pushing to pass an $800 billion plus recovery plan, scrambling to put together a new plan for banks still on life support, and cobbling together an initiative to help millions of families on the verge of losing their homes.
But recovery, however daunting, is not enough. Even as the administration struggles to fend off a full-scale depression, it faces the task of constructing the foundations of the new economy out of the ashes of the old.
Republicans, still grousing about more tax cuts and less spending, are clueless. But even many Democrats seem to assume that if we just get the economy going, bail out the banks, add a dash of regulation, we can go back to business as usual.
But that is neither possible nor desirable. That old economy was founded on stagnant incomes and unsustainable debt. Families struggled to keep their heads above water by taking money out of their homes and assuming ever higher levels of student, car, credit card and consumer loans. The country served as the consumer of last resort for the world by borrowing staggering sums -- $2 billion a day over the last years - from creditors abroad, largely Japanese and Chinese central bankers. That economy was floated on asset bubbles like that in housing which has now exploded in our faces. We can't resuscitate the old economy - and should not want to.
The next economy must seek to provide a sustainable and a widely shared prosperity, one where the American dream remains in reach for working people. That will require new thinking and bold reforms. A group of progressive organizations have joined together to kick off this discussion. (For the first conference on "thinking big, thinking forward -- already oversubscribed -- go here.)
But many of the changes needed are clear -- and the initial struggles over signature reforms are already teed up.
What is needed to insure to every person a job with a decent wage, a world class public education, affordable health care, and retirement with dignity? This is the pledge Franklin Roosevelt made when he laid out his Economic Bill of Rights in the midst of World War II. It was echoed in Obama's inaugural address. Surely that new economy must include:
1. A new public social compact -- affordable health care, pensions above Social Security -- to replace the promises that the corporations have shredded. The signature fight over health care reform will begin this year..
2. Sustained public investment in areas vital to a maintaining a high wage path in a global economy -- world class schools, affordable college, 21st century infrastructure, cutting edge science, research and development. The first volleys of the signature battle -- over whether we will sustain expanded public investment after the economy regains its footing or short-change it --are already being exchanged.
3. A new global economic strategy -- featuring a new industrial policy -- that enables the US to balance its trade, while creating global rules that protect workers, consumers and the environment, rather than threaten them. The initial struggle over making the transition to renewable energy the centerpiece of economic reform is beginning.
4. Restructuring and regulation of the financial sector, making banking a boring occupation again, devoted to making loans to the real economy, not hawking exotic instruments in operatic speculative ventures. The signature reform -- taking over and breaking up the major banks that are on life support -- is likely to be fought out in the next months.
5. An aggressive wage policy that empowers workers to organize and bargain collectively, raises the minimum wage, and mandates basic benefits and safety standards. The donnybrook will begin this Spring over the Employee Free Choice Act.
These are fundamental choices threatening entrenched interests. Health care reform requires taking on the drug and insurance companies. Sustaining public investment requires defeating the military lobby and the wealthy whose taxes will rise. A new global strategy challenges the multinationals that profit from the old order. Getting Wall Street under control threatens the largest political donors. The business lobby promises Armageddon if the Employee Free Choice Act moves forward.
President Obama has already signaled his intention to go forward with the core reforms in this agenda. So forget about a new era of bipartisan consensus and get ready to rumble. We're headed into pitched battles that will succeed only with massive popular mobilization. We won't have this opportunity again, and we dare not blow it.
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