With the hostage crisis behind him, the president is now ready to talk about the nation's real problem.
Nine paragraphs into his remarks today announcing the nation has paid most of the ransom the radical right demanded as a condition for maintaining the full faith and credit of the United States (he didn't use these exact words), the president pivoted to the agenda he should have been talking about all along:
"And in the coming months I'll continue also to fight for what the American people care most about: new jobs, higher wages, and faster economic growth."
But what precisely will he fight for now that the debt deal has tied his hands?
He says he wants to extend tax cuts for middle class families and make sure the jobless get unemployment benefits.
Fine, but the new deal won't let him. He'll have to go back to Congress after the recess (five weeks from now) and round up enough votes to override the budget caps that now restrict spending. What are the odds? Maybe a little higher than zero.
He says he wants an "infrastructure bank" that would borrow money from private capital markets to pay private contractors to rebuild our nations roads, bridges, airports, and everything else that's falling apart.
Fine, but the new deal he just signed may not let him do this either -- if the infrastructure bank relies on federal funds or even federal loan guarantees to attract private money. The only way he could create an infrastructure bank without sweetening the pot would be by privatizing all the new infrastructure. That means toll roads and toll bridges, user-fee airports, and entry fees everywhere else.
Apart from its potential unfairness to lower-income people, such a privatized infrastructure would have the same effect as a tax increase. After paying more for roads and bridges and all other infrastructure, Americans would have less cash for to spend on goods and services. That means no boost to the economy.
The president also wants to complete trade deals and reform the patent process. These may make the economy slightly more efficient, but they're not going to have any perceptible positive impact on the lives of the 26 million Americans who are now either looking for work, working in part-time jobs but needing full-time ones, or have given up looking.
More importantly, the deal he just signed makes it impossible for the president and Democrats to launch any major jobs program -- no WPA or Civilian Conservation Corps, no major lending program to cash-starved states and locales, no new help for distressed homeowners, and so on. Nada.
"We've got to do everything in our power to grow this economy and put America back to work," the president says, now that the hostage crisis is over.
But the sad truth is he and the nation remain hostage to the ideology of right-wing Republicans who won't let the government spend more money. Yet if the government can't spend more -- at least this year and next, until the pump is primed and the economy is growing again -- we won't see job growth. And without job growth, the economy will remain anemic.
That's why even the stock market is reacting badly to the end of the hostage crisis.
If you hadn't noticed, the number of people unemployed or underemployed keeps growing. (We'll know Friday how many it added in July, but remember it needs to add 125,000 a month just to keep up with the growth of the labor force. Anything below 125,000 means we continue to slide backward.)
The reason: Consumers, who are 70 percent of the economy, haven't been able to pick up the slack. That's because they're still deep in debt. Their homes have plummeted in value. They can't borrow. Their jobs are on the line and their wages are dropping.
So where will the demand come from if not government? The radical right points to the alleged "failure" of the stimulus program as evidence that government spending doesn't work. The fact is it did work -- it saved at least 3 million jobs, and would have saved far more if the stimulus was on the scale needed and directed to job creation.
To be sure, pump-priming is more difficult when the well is almost dry, as it is now. And widening inequality -- the rich taking home an increasing share of the nation's total income and wealth -- has left the vast middle class with even less purchasing power.
But the pump still needs to be primed.
And the well has to be filled: The nation must also push for real tax reform that reverses the surge toward inequality -- raising taxes on the wealthy, cutting them for the middle, and expanding the Earned Income Tax Credit for the poor.
To do this, though, requires that Americans understand the truth. But where will they learn it?
The radical right has not only captured the federal budget. In convincing so many Americans the problem is the size of government rather than their shrinking paychecks and growing economic insecurity, the radical right has also captured the American mind.
Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.
Follow Robert Reich on Twitter: www.twitter.com/RBReich
Could it be at the beginning he made a Faustian bargain with the plutocrats just to survive?
Let me do a bit for my base but the real focus of this administration will be on your wants and needs.
Heh, heh.
His hands were tied long before the debt deal. His hands were tied when he selected Wall Street lap dogs Geithner and Summers. His hands were tied when he continued Bush’s molly coddling of bankster criminals. His hands were tied when he accepted Bush’s wars, bloated military spending, unfunded Medicare Part D, big Pharma’s subsidy and the tax cuts. They were tied when he sought bipartisanship instead of leadership. His hands were tied when he accepted a pathetically small, unfocused and compromised stimulus with Republican pandering tax cuts.
At this late date saying anything except he skrewed he pooch is soft pedaling failure.
Skilled immigrants linked to job creation
Cornell president wants rules eased for students, workers
http://www.stargazette.com/article/20110726/NEWS01/107260360/Skilled-immigrants-linked-job-creation?odyssey=mod%7Cnewswell%7Ctext%7CFRONTPAGE%7Cs
It took me a long time to get out of my denial about President Obama. A strong Democrat, I, like millions of people, was so excited about the good things to come after eight years of Bush. For two years after his election, I scratched my head and as I watched time and time again as he made decisions him respond in a conciliatory, "compromising" manner as the GOP viciously attacked him with unprecedented objectionism. Back when he extended the Bush Tax Cuts I realized, with no satisfaction and only sadness, that this President is not working effectively for traditional Democratic Party principles nor ordinary working class people, the poor and the elderly.
Now this. Who would have imagined in 2008 that we'd be in this boat. And the maddening irony--it didn't have to be this way.
But while I understand health care directly affects the US economy and jobs,
it should have been sold differently and likely later, or rammed through
so fast before the right could spread so many LIE'S and distortions.
Quite a few mistakes, mostly tactical, forgivable considering the
incredible problems he inherited, but in these times we needed
better, and someone less easily wounded by harsh, unfair attacks.
So I wonder if he should not run, and let Hillary become the first woman
President, or maybe Dr. Dean, etc.....it would be a less divisive campaign
and we should win by 3-6%.....Obama can, but it will be close at best....
To do this, though, requires that Americans understand the truth. But where will they learn it?
The radical right has not only captured the federal budget. In convincing so many Americans the problem is the size of government rather than their shrinking paychecks and growing economic insecurity, the radical right has also captured the American mind."
Very well said. I would add that the Right controls the media, and with it, the people's access to the truth about what's going on. In their quest for ratings and market share, the media has abdicated its responsibility to keep government honest. Just imagine how much better things would be if the MSM simply told the truth. Well, they won't be immune. They'll go down with the rest of us.
The 2-party austerity plan, whoever it helps, helps the long-term unemployed nary a whit. They have borrowed all they could in expectation of a future job; they have sold whatever assets they had to pay down what they owe. Neither party has a plan for them beyond benign neglect, except by this point he neglect is malignant.
On July 7 2011 you wrote and articale: "Why would Mitch Mconnell win the day".
You were right! Your other articles are just as as well thougt out.
I wish you ran in the Democratic primary. We need someone like you to replace that incompatent leadership we have.
Robert Riech and Elizabeth Warren ticket.
We need to primary Obama out with someone that will stand for us, instead of the sellouts (Obama and congress) working for the billionaires. Blaming one side or another will not create employment.
We need representatives that don't bow down to the billionaires. It may be too late, given that the Supreme Court turned out to such anti people and so serving of the supper wealthy.
Get all the con men out and replace them with people such as Bernie Sanders and Robert Reich, or else things will get much worse for all but the wealthiest few.