Like many Americans who want to help the president succeed, I'm waiting for the Big Idea to come out of the White House that will defibrillate our economy. Once it's launched I will do whatever I can -- write, cajole, march, shout -- to help get Americans back to work.
However the New York Times headline Tuesday, "Obama Weighs Smaller Measures on the Economy," if true, will extinguish what's left of the hope and optimism that catapulted him into office.
In the piece, veteran White House correspondent Sheryl Gay Stolberg parrots the Fox-invented, now mainstream, canard that big ideas (read "change,") is impossible. "With voters angry about government spending and economists divided about just what approach is the correct one, such aggressive steps are by now out of the question."
If the White House swallows this line then come November the hard-right minority will roll back into power having pulled off the most masterful political rebirth in our nation's history.
Ms. Stolberg is factually in error when she writes that economists are divided on what approach to take. Not only left-leaning economists like Nobel Laureates Krugman and Stiglitz and Jeffrey Sachs, but Ben Bernanke and even the GOP economist you quote, Bruce Bartlett, agree that the medicine is a second stimulus. In Bartlett's own words:
"I think there are a lot of economists who, in principle, would support some new fiscal stimulus, perhaps a jobs program where people were directly employed by the government or something of that sort," Mr. Bartlett said. "But politically it's simply not possible to do anything remotely like that under the current circumstances."
Yes, voters are angry about government spending -- when it's not spent on them. The Big Idea that I started talking about yesterday will put a newly paved road, a safe bridge, a fuel-cell plant right where ordinary voters can see them -- in their own home town. It will be large enough to employ if not them, then at least someone they went to high school with. And it won't irresponsibly balloon Bush's reckless war and millionaire-tax-cut deficit.
The America Forward Fund would be a private/public partnership based around infrastructure bonds to unleash a wave of infrastructure and modernization projects on a scale large enough to noticeably shrink the number of unemployed. The census helped in the very short term and the information it generates helps the country in the long run. These necessary, small, medium and large-scale projects would do the same. The government already issues Build America Bonds as part of the original stimulus package and they have already helped build, helped employ and helped save $12.3 billion compared with traditional bonds. The America Forward Fund would partner Build America Bonds with private equity.
The idea is very different from a second government-only stimulus program. Infrastructure bonds are taxable so their effect on the deficit is mitigated. Organized labor would have to make significant, short-term concessions so that the program would have the most economic bang for the buck.
Of course experts like Jeffrey Sachs and Paul Krugman have been suggesting similar ideas for months. What I'd like to add to the debate is the attempt to merge public and private initiative; to let capitalism do what it does best, coupled with sensible government oversight and participation.
The idea came to me by reading the news on a particularly dire day.
1.) We have at least 14.6 million unemployed Americans.
2.) We have record amounts, in the hundreds of billions, of uninvested capital. $33.12 billion alone was withdrawn from stock market mutual funds in the first seven months of this year.
3.) We can't be the greatest nation in the world, or even a very good one with an infrastructure grade of D from the American Society of Civil Engineers. Across the nation we have systems and sub-systems that belong in museums, not safeguarding our families. We only patch them up when a bridge falls or a century-old switching system shorts.
We usually think of a perfect storm as simultaneous events leading toward intensified disaster, but in this case the president can make a compelling case for a perfect storm of unprecedented and history-making opportunity. In short:
We have hundreds of billion in uninvested private capital, millions of people aching for a job, and thousands of crucial projects that are decades overdo. Separately each is a disaster, but harnessed together they could lead us back to prosperity.
But who and how to administer such a massive and involved undertaking? How do you forcefully counter the cynically anarchic mantra the GOP has been chanting since Reagan that government itself is the problem?
I'd suggest calling upon someone a-politcial and respected like General Colin Powell (a la another General turned Secretary of State, George Marshall). He could oversee a board of retired labor leaders, industrialists, engineers and politicians from both parties, people who were intimately involved in public works projects but who no longer stand to gain financially from them.
The president got us to believe in the impossible -- his own election. Now he can help us believe again, this time in nothing short of a domestic Marshall Plan. We not only need something big, something hopeful, we crave it.
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