or ‘Katrina Moment?’ Let's hope it is his ‘New Deal’ moment wherein ...
he makes good on his campaign pledge to change America.
Frank Rich asked the question: "Has a ‘Katrina Moment’ Arrived [for President Obama]?" (see Rich's New York Times Op-Ed "Has a ‘Katrina Moment’ Arrived?"). The enclosed passage from Mr. Rich’s article suggest how this might be President Obama’s ‘Katrina Moment’:
"Within 24 hours, [Larry] Summers’s stand was discarded by Obama, who tardily (and impotently) vowed to ‘pursue every single legal avenue’ to block the [A.I.G.] bonuses. The question is not just why the White House was the last to learn about bonuses that Democratic congressmen had sought hearings about back in December, but why it was so slow to realize that the public’s anger couldn’t be sated by Summers’s legalese or by constant reiteration of the word outrage. By the time Obama acted, even the G.O.P. leader [no, not Rush Limbaugh] Mitch McConnell was ahead of him in full (if hypocritical) fulmination." Frank Rich, national paper edition, 2009 March 22.
The only thing that seems to be missing is a 'heckuva job Brownie-type' praising of Mr. Summers' performance.
Conversely, an opportune moment for making fundamental changes, not peripheral adjustments, in the course of America’s economic direction now presents itself, and President Obama should take this opportunity to dramatically and progressively change the economic direction of the country. He could change the nation's economic course by not continuing the inequitable economic policies of the last 25 years.
To achieve effective and progressive change in America’s economic direction, President Obama should also consider the advice of economists outside the Administration; e.g, James K. Galbraith, Joseph E. Stiglitz, and others. Galbraith’s article "No Return to Normal: Why the economic crisis, and its solution, are bigger than you think" (published by Washington Monthly and previously highlighted on Daily Kos) could serve as a guide/starting point for the development of a more equitable, ‘main street’ type of economic and financial recovery.
The following two passages from Galbraith’s article illuminate the general underpinnings of his economic argument:
"In short, if we are in a true collapse of finance, our models will not serve. It is then appropriate to reach back, past the postwar years, to the experience of the Great Depression [and the Franklin Delano Roosevelt’s New Deal]. And this can only be done by qualitative and historical analysis. Our modern numerical models just don’t capture the key feature of that crisis—which is, precisely, the collapse of the financial system." James K. Galbraith
"If the banking system is crippled, then to be effective the public sector must do much, much more. How much more? By how much can spending be raised in a real depression? And does this remedy work? Recent months have seen much debate over the economic effects of the New Deal, and much repetition of the commonplace that the effort was too small to end the Great Depression, something achieved, it is said, only by World War II. A new paper by the economist Marshall Auerback has usefully corrected this record." James K. Galbraith
Galbraith offers bold and decisive arguments for a modern-day New Deal; and the recent, dramatic monetary actions of Chairman Ben Bernanke, which include the infusion of 1.2-trillion dollars of stimulus into the financial system, help to underpin Galbraith’s case for additional and larger fiscal responses.
So, it appears that President Obama is now at a fateful fork in the road with respect to economic policy. Will he continue the plutocratic economic policies of the last 25 years - a time when there was a Guilded-Age-type rise in income inequality - or will President Obama invigorate the nation’s economic system with a modern version of the New Deal?