No this is not on taxes. This is on the broader issue of Whose Side Is the White House On?. James K. Galbraith "in a speech given on November 20, 2010 at the ADA Education Fund’s Post-election Conference at the Harvard Kennedy School" lays out the case that President Obama is not working for we the people.
James Galbraith, Paul Krugman, Joseph Stiglitz, and Robert Reich are my favorite economists. They do not always agree with each other. Each has a deep knowledge of economics that they bring to the table. Each also understands politics and each is a liberal.
In his speech James K. Galbraith nails President Obama and explains why democrats will lose in November 2012. The speech is not about tax cuts. The second paragraph in the speech is.
Recovery begins with realism and there is nothing to be gained by kidding ourselves. On the topics that I know most about, the administration is beyond being a disappointment. It’s beyond inept, unprepared, weak, and ineffective. Four and again two years ago, the people demanded change. As a candidate, the President promised change. In foreign policy and the core economic policies, he delivered continuity instead. That was true on Afghanistan and it was and is true in economic policy, especially in respect to the banks. What we got was George W. Bush’s policies without Bush’s toughness, without his in-your-face refusal to compromise prematurely. Without what he himself calls his understanding that you do not negotiate with yourself.
Continuity and not change is the problem. Continuity and not change is the problem democrats and President Obama will face with the "framework" President Obama and the republicans developed. Continuity with huge bonuses for bankers is the problem. Continuity with high unemployment is the problem. Continuity with borrowing to pay for tax cuts with the rich. Continuity with war. Continuity with Gitmo. Continuity by not prosecuting for war crimes. Continuity with poor health care which for many is going to get worse and more expensive as medicaid is reduced. Quite simply President Obama ran away from the platform he ran on.
In economic policy it was said earlier we have a lack of narrative. This afternoon, Gregory King asked why the people didn’t know that the Republican Party is uniformly and massively opposed to job programs, to state and local assistance, and to every legislative measure that might aid and promote economic recovery from the worst crisis and recession in modern times. Why is that that they didn’t know? Could it have anything to do with the fact that the White House didn’t tell them?
This is exactly the same problem with the tax cut framework. The white house failed to tell people and in particular democrats in congress what was being negotiated behind closed doors. Yeah, congressional democrats are pissed in part by the poor deal, and they are in part pissed for (the White House) essentially cutting House Democrats out of the negotiations. As James Galbraith says "the White House didn't tell them."
The president deprived himself of any chance to develop a (economic) narrative from the beginning by surrounding himself with holdover appointments from the Bush and even the Clinton administrations: Secretary Geithner, Chairman Bernanke, and, since we’re here at Harvard, I’ll call him by his highest title, President Summers. These men have no commitment to the base, no commitment to the Democratic Party as a whole, no particular commitment to Barack Obama, and none to the broad objective of national economic recovery that can be detected from their actions.
Keeping poor people started by President Obama selecting John Podesta to co-chair his transition team. The press fawned over the selections of Geithner and Summers to give Obama economic advice. Put bluntly a man who did not pay his taxes and a sexist who did not see women as equals. Both came from the past, hardly a change. And that is just the beginning of the president failure to implement change.
With this team the President also chose to cover up economic crime. Not only has the greatest wave of financial fraud in our history gone largely uninvestigated and unpunished, the government and this administration with its stress tests (which were fakes), its relaxation of accounting standards which permitted banks to hold toxic assets on their books at far higher prices than any investor would pay, with its failure to make criminal referrals where these were clearly warranted, with its continuation in office — sometimes in acting capacities — of some of the leading non-regulators of the earlier era, has continued an ongoing active complicity in financial fraud. And the perpetrators, of course, prospered as never before: reporting profits that they would not have been able to report under honest accounting standards and converting tax payer support into bonuses; while at the same time cutting back savagely on loans to businesses and individuals, and ramping up foreclosures, much of that accomplished with forged documents and perjured affidavits.
. . .
On the larger economic policy front, the White House gave away the game from the beginning. How? First by guessing at the scale of the disaster. When leading economic advisers (I believe, in fact, it was President Summers) announced that the unemployment rate would peak at 8%, they not only guessed wrong, but gave away the right to assign responsibility to the previous administration when things got worse. This was either elementary bad politics or deliberate self-sabotage. But it gets worse. The optimistic forecast helped to justify a weak program. Useful things were done, but not nearly enough to convey the impression of a forceful policy to the broader public. Then once the banks were taken care of and the stock market took off again, it seems clear that the team at the White House didn’t care anymore.
. . .
What is at stake in the long run? Two things, mainly, in my view. First, it seems to me that we as progressives need to make an honorable defense of the great legacies of the New Deal and Great Society — programs and institutions that brought America out of the Great Depression and bought us through the Second World War, brought us to our period of greatest prosperity, and the greatest advances in social justice. Social Security, Medicare, housing finance — the front-line right now is the foreclosure crisis, the crisis, I should say, of foreclosure fraud — the progressive tax code, anti-poverty policy, public investment, public safety, and human and civil rights. We are going to lose these battles– get used to it. But we need to make an honorable fight, to state clearly what our principles are and to lay down a record which is trustworthy for the future.
Below Galbraith speaks to many of the proposals I have stated in many diaries and comments.
Beyond this, bold proposals are what we should be advancing now; even when they lose, they have their value. We can talk about job programs; we can talk about an infrastructure bank; we can talk about Juliet Schor’s idea of a four-day work week; we can talk about my idea of expanding Social Security and creating an early retirement option so that people who are older and unemployed or anxious to get out of the labor force can leave on comfortable terms, and so create job openings for younger people who, as we’ve heard today, are facing very long periods of extremely aggravating and frustrating unemployment; we can talk about establishing a systematic program of general revenue sharing to support state and local governments, we can talk about the financial restructuring we so desperately need and that we’ll have to have if we are going to have a country which has a viable private credit system and in which large financial power is not constantly dictating the terms of every political maneuver.
Of course he says it better than I ever could. Galbraith ends with
This isn’t a parlor game. The outcome isn’t destined to be alright. It will not necessarily end in progress whatever happens. What we do, how we proceed, and how we effectively resist what is plainly about to happen, matters very greatly for the future of our country, of our children, and of another generation to come. We need to lose our fear, our hesitation, and our unwillingness to face the facts. If we thereby lose some of our hopes, let’s remember the dictum of William of Orange that "it is not necessary to hope in order to persevere."
The President should know that, as Lincoln said to the Congress in the dark winter of 1862, he "cannot escape history." And we are heading now into a very dark time, so let’s face it with eyes open. And if we must, let’s seek leadership that shares our values, fights for our principles, and deserves our trust.
This is the best argument I have heard for us democrats to nominate someone other than President Obama for 2012. His ship is sinking. As the ship sinks he pulls all of us down with him, democrats, the nation and the world.
Thanks for all the comments. Please do not HR comments. I believe deeply in open discussion, even if that discussion is repulsive.
There is an The Information Technology Revolution happening. We need to appreciate this reality. Robert Reich writes tangentially about this in The Future of Manufacturing, GM, and American Workers (Part I). I highly recommend reading all the parts of this series.