Obamanomics, Part II: What the Country Can Expect
By Martin Brown
Last month (see below) I discussed expected changes in the Obama approach to the economy. Now that America’s 44th president is seated in the Oval Office I thought it might be wise to revisit that topic and take a closer look at the $825 billion stimulus package just passed the House of Representatives.
With Democratic majorities in the House and Senate, it appears likely that President Obama will have his way with most, if not all, of what he and his administration envision as the needed stimulus program to lift the nation out of what now appears to be a protracted and severe recession.
“This is not just a short-term program to boost employment,” Mr. Obama said. “It’s one that will invest in our most important priorities like energy and education, health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century.”
Some of the details of the president’s package include such items as laying 3,000 miles of transmission lines for a new national electric grid, securing 90 major ports against terrorist attacks, and guaranteeing health insurance for 8.5 million Americans in danger of losing coverage with the loss of their employment.
That of course is a very broad picture of just a few of the administration’s plans.
Ohio Representative John Boehner, the House minority leader, cited some other numbers to take issue with President Obama’s plan, saying that the House Democratic leadership included $600 million for the federal government to buy new cars, $650 million for digital television coupons and $50 million for the National Endowment for the Arts. “All told,” he said, “the plan would spend a whopping $275,000 in taxpayer dollars for every new job it aims to create.”
It can only be viewed as amusing that just three months after Republican leaders lined up behind President Bush in support of a $700 billion banking bailout known as the Trouble Asset Relief Plan, TARP, that now Boehner and his colleagues are raising objections to such items as $50 million for the National Endowment for the Arts. Just last week it was reported that Wall Street firms doled out $18.4 billion in bonuses for 2008.
That’s not a jobs program unless these Wall Street executives are planning to hire laid off bank employees to trim their estate’s hedges into dollar signs. It’s safe to assume that $600 million to buy cars helps prop up our failing auto industry, and that $650 million to purchase digital televisions helps prompt consumer spending.
As for infrastructure, if the government does not step up to the plate, who will? Is Exxon going to use its billions in 2008 oil profits to fix interstate bridges that are at risk of collapse, or lay down a new electric grid for our nation?
Additionally the Obama plan would help 8.5 million Americans keep health care coverage by providing workers who lose insurance with tax credits to pay for continuing coverage under the federal law known as Cobra, and by expanding Medicaid coverage for low-income Americans who lack access to Cobra.
The plan includes modernization of 10,000 schools desperately in need of repair. Additionally it would bolster Pell Grants to assist seven million students with the cost of higher education and offer a new tax credit for four million college students. And it would increase food stamp benefits for 30 million Americans and increase Social Security benefits $450 for 7.5 million disabled and elderly people.
By contrast the Republican leadership proposes tax breaks and mortgage rate reductions, more of the medicine that was applied unsuccessfully to the economy in the final year of the Bush administration. No one has a crystal ball when it comes to the future of the economy. The Obama administration says that massive spending is needed and needed now, the Republican minority favors spending but with a completely different approach.
The Obamanomics approach is in its own way as revolutionary and bold as the Reaganomics approach of 1981, when the country was battling the twin evils of a 14% inflation rate and a difficult recession. It’s clear at this point that like Reagan, Obama has got the votes and the popular support among the American people to win this fight. There will be some changes to his plan along the way, but we’re heading into the largest investment of capital by the government into the federal, state, and local economies since Roosevelt’s New Deal spending of the 1930s.
America had two very different leaders in FDR and Reagan, but both were transformational presidents. The sure hand that Obama has quickly applied to the ship of state indicates that he will be the nation’s next transformational president. If you agree or disagree with his approach you can be all but certain that after his term in office America will have once again re-invented itself from our economy on up.
The one consistent theme that runs through the fabric of American history, from the audacity of the colonists in overthrowing the rule of King George, to the inauguration of Barak Obama as the nation’s 44th president, is our nation’s ability to reinvent its future. Buried deeply in the genetic code of the American experience are these intermittent bursts of creative renewal. Today we can only hope that the dawn of the Obama years will mark one such time of creative renewal.
Obama will bring a new way of looking at problems that have lingered for a very long time: health care, the environment, the ever-widening gap between the haves, and have-nots of our society.
The transformational president’s all were masters of the language, and all knew how to inspire their fellow citizens. Lincoln, a one-term congressman from Illinois won the presidential nomination of the new Republican Party principally on his fame as an orator. Theodore Roosevelt came at issues with such ferocity that old structures fell and a new American century was born out of his persistent calls for change. TR’s distant cousin, Franklin Roosevelt, in his sure and steady tone, gave America hope through many of its darkest years. Whether it was a desperate nation facing a disastrous economic crisis, or America struggling through a horrific world war, FDR’s steady hand, forceful words, and quick wit gave hope to a weary nation.
Obamanomics, Part 1
by Martin Brown
Even the brief presidency of John F. Kennedy proved how one leader’s charisma and relative youth could lift a nation to great heights. When Kennedy told American’s that they were capable of greatness, they responded with great acts of courage, knocking down the barriers of segregation and setting their sites on the moon.
The coming weeks, months, and years will tell the story of the Obama presidency.
His first great challenge will be to lift America out of the deep recession it now finds itself in. We already know that we will see massive investments in everything from road repair to green technology. Obama will borrow heavily from the giants, fashioning a cabinet in the style of Lincoln, using his office as a bully pulpit for change and leadership in the style of Theodore Roosevelt, sharing the wealth and the vision of a new America in the spirit of FDR, and inspiring a nation with youth, wit, and pride, in the style of JFK.
Obamanomics is the currency of confidence that our tomorrows will be better than the difficult days we have experienced in recent years. Any president can pump money into the economy only a rare view can truly lift a nation’s sense of determination and vision. I’m betting, as are countless millions of others, that in Barack Obama we have found a president who can do both. Inspiring a time of job growth and new economic opportunities for all.