
Warren Buffet said today that the leaders of this nation need to treat the President as the commander-in-chief of an economic war because that’s what we’re in right now, and he characterized the economy as falling off a cliff. Well, I’m not sure I’d go that far, since we’ve so recently gotten into far too much trouble treating a President as though he were a commander-in-chief beyond criticism. Having said that, however, I do think that the public at large needs to recognize that the President is engaged in a sustained effort to re-create an economy that will work for Americans and that his effort to do so will take continuing support beyond just patience with his early attempts to “get ahead of the curve.”
To help in getting that kind of support, I think the President needs to set expectations in a different way. Some think he should frequently express confidence in the outcome of his initiatives thus far, and should adopt a mask of optimism about an economic upturn to wear in public appearances. This is a mistake. It’s not what FDR did during the Depression and it’s not what Obama should do now. FDR never promised people a rose garden, and he never said that any particular initiative he tried would work to end the economic disaster. What he did promise, and what he and his administration demonstrated in every conceivable way he could, was that he would not rest until the problem of the Depression was solved; that he would leave no stone unturned in this effort, and that he would evaluate his effort as he went forward, and that when certain things didn’t work he would try other things, until he found the things that did work to end the Depression.
FDR’s administration is often portrayed by Republicans as ideological, as attempting to bring Socialism to the United States. But this is nonsense and a big lie. The philosophy of the Roosevelt Administration wasn’t Capitalism, or Socialism, or Liberalism. It was Pragmatism: the home-grown American Philosophy/non-ideology that we ought to seek to solve problems by first facing them, and then finding and applying what works, and that we ought to disregard whether what works is called “Capitalist” or “Socialist,” or whatever, and recognize that if it works, it’s “American.”
Republicans are fond of saying that the President wants to make America like France or like Europe. The proper answer to that is “if it works, it’s not only like America; it is American.”
So what Obama needs to say more and more, as he tries to lead us out of the increasingly dark economic place that we are in, is that his Administration is about solving the primary American problems including the current economic crisis that have been neglected and that have built up over the many years of the Carter, Reagan, Bush, Clinton, and Bush administrations. And that to be successful at this, he needs the support of the people against the many who want to see him fail, and who will, if given a chance, try to cause his failure by opposing his necessarily continuing attempts to solve these problems, with 1) proposals for balancing budgets, freezing spending, leaving business alone, and further dismantling the existing social safety net, and 2) with labels like ‘socialism,” “communism,” “radicalism,” “European,” and various combinations of these.
In asking for this support, President Obama has to make clear that he believes very strongly that we can and will solve our economic problems, but that no one really knows, in advance what combination of programs and policies will work, so that we have try to different things as rapidly as possible until we hit on the right combination. And he also needs to emphasize, very strongly, that even though no one can say for sure what will work to get us out of the recession soonest, we are very, very clear about what won’t work.
He can then make sure people understand that worrying about balanced budgets right now won’t work, because that will entail cutting Government spending at a time where the Government is needed to increase the woefully weak demand in the economy. He also needs to emphasize that weakening the social safety net by “reforming” social security right now will also not work and for the same reason. Finally, he needs to say that we also already know that “freezing spending,” that favorite proposal of Hooverian wingnuts like Rush Limbaugh, Mitch McConnell, Mike Pence, John Boehner, and Darrell Issa, also will do nothing except to make the recession worse even faster.
Hoovervilles have now returned to the American scene in the form of a “tent city” in Sacramento, California. Jealous of Hoover’s place in history, the wingnuts are now looking to create “Limbaughvilles,” “Boehnervilles,” “McConellvilles,” “Pencevilles,” and “Issavilles,” because they want to see the President fail, more than they want to see him and America succeed. This is where selfishness and a religious faith in one’s ideology leads. But now is not the time for unshakable faith in the false God of the free market. It is the time for finding out what works, and for support of a President who will take us to that place wherever it leads, and ideology be damned.
2 responses so far ↓
1 KerrieAnne // Mar 10, 2009 at 12:54 am
Hey Joe – a short passionate blog – in fact we have not just an American problem but a global one. I feel for the engineer now out of work in Detroit who responded to my question on LinkedIn. I feel for the women in our city in Australia laid off by a clothing factory closing. Pragmatism is needed. Also to find ways of bringing people together and communicate in ways that do not repel them.
I have found htttp://www.manufacturethis.org – the blog of the Alliance for American Manufacturing very informative. I am not sure that they have all the answers – but since that blog set up in Sept 2007 it has been consistently on message about the troubles in manufacturing land. It is astonishing when Alan Greenspan even talks of nationalisation of banks as an option on the table.
As a world citizen – I want to see America’s troubles fixed and also those in Europe and in Asia – the regions identified as hurting the most – we cannot afford a win-lose situation here. We are going to need a lot of global cooperation. We need to rebuild a resilient system of free and fair trade.
2 Joe // Mar 10, 2009 at 1:15 pm
Hello KerrieAnne,
Welcome to my blog and thanks very much for your great comment, which I very much agree with. Our current economic problems are world-wide problems, and there is a global dimension to them I did not address in my blog.
I think the global dimension is more difficult to deal with than the domestic one. This is not only true because of the dominance of national political systems, which, of necessity divide us to lesser or greater degree. But it is also true because nation-based economic authorities tend to follow very conservative economic policies, which, in many cases, border on “beggar-thy-neighbor” economics. When the world is awash in products and there is no demand for these products, demand needs to be created by Government action, not only in the United States, but all over the world.
To a great extent, the recent world global economy was funded by housing bubbles, used by credit card companies and Banks to provide loans which in turn grew customer demand. That demand was based on the bubble, not on increased wages world-wide. In fact, business did all it could to repress wages and increase profits to inflate stock markets. But, in the long-run, this expansion was unsustainable, as are all expansions based on financial tricks and increasing inequality in economic returns among people.
If business wants to maintain and grow demand it needs to better distribute the gains from economic activity. It needs to support, pay for, and acquiesce in Government efforts all over the world to better balance out rewards. It needs also to acquiesce in and support Government efforts to ensure that the money supply is sufficient to absorb the products the world is capable of creating. Governments of nations with unused productive capacity need to turn to investments in the future that produce valued things. They need not worry about deficits or inflation or debts our grandchildren will have to pay, as long as they take to care to invest in assets that our grandchildren can use, value and enjoy. The don’t need to worry about inflation resulting from their printing money, as long as that money is being used to fund unused productive capacity or useful investments. Inflation will occur if the money supply outruns our productive capacity. But with factories shutting down all over the world, that’s not our problem right now.
Best,
Joe