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Last week my diary caused quite a stir. So much so that it brought consumer confidence down and stunted economic growth this quarter? Hmm......

I'll admit, I had a good laugh at the 3 response diaries, except my power is overestimated. This is true whether we're talking about the economy or this election even as your resident "prophet of the left."

However, as "prophet of the left" I do remember a time when only the right wing claimed the WPA was not a good idea. And yet, there was a reason I named this diary When Some Kossacks Are Using Right Wing New Deal Denialism We've Already Lost. When some kossacks hear uncomfortable sourced truths like that this administration didn’t have the stomach (meaning they were against the idea and didn't even want to try) for a new direct hire WPA-style program during one of the worst unemployment crisis since the Great Depression, out comes the utter nonsense about what a bad idea it is.

To counter that complete lack of knowledge regarding a permanent direct hire WPA style program, I’m going to add onto Meteor Blades’s’s excellent response and reference to the brilliant MMT economist L. Randall Wray. Unlike the Chicago school garbage espoused too much within the Obama administration today, I rate L. Randall Wray and his colleagues at the Center for Full Employment and Price Stability at the University of Missouri-Kansas City above most. They have knowledge of actual national accounting dynamics and an actual proven record of being right.

I will be referencing Randy Wray’s new piece on the MMT job guarantee and its proven real world applications.

Randy Wray: The Job Guarantee and Real World Experience

There have been many job creation programs implemented around the world, some of which were narrowly targeted while others were broad-based. The American New Deal included several moderately inclusive programs such as the Civilian Conservation Corp and the Works Progress Administration. Sweden developed broad based employment programs that virtually guaranteed access to jobs.

From WWII until the 1970s a number of countries, including Australia, maintained a close approximation of full employment (measured unemployment below 2%) through a combination of high aggregate demand plus loosely coordinated direct job creation. (Often there would be an informal “employer of last resort”, such as the national railroads, that would hire just about anyone.) As Bill Mitchell argues, a national commitment to full employment spurred government to implement policies that created jobs—even if it did not explicitly embrace a national and universal job guarantee/employer of the last resort program.

In the aftermath of its economic crisis that came with the collapse of its currency board, Argentina created Plan Jefes y Jefas that guaranteed a job for poor heads of households. (See Tcherneva and Wray 2005 here) The program successfully created 2 million new jobs that not only provided employment and income for poor families, but also provided needed services and free goods to poor neighborhoods.


To deal with the looming crisis and skyrocketing unemployment and poverty rates, the Argentinean government implemented a limited job guarantee program called Plan Jefes y Jefas de Hogar Desocupados (Program for the Unemployed Male and Female Heads of Households, or simply Jefes). Participation in the program grew quickly, to about 5% of the population, and about 13% of the labor force.


More recently, India passed the National Rural Employment Guarantee Act (2005) that commits the government to providing employment in a public works project to any adult living in a rural area. The job must be provided within 15 days of registration, and must provide employment for a minimum of 100 days per year. These programs represent a relatively explicit recognition that government can and should act as employer of last resort.

As you can see, this is outlined rather well with real world examples in practice from the past to the present. These real world examples backed by data defeat the dishonest ignorant narrative that these kinds of programs cannot be pursued. Obviously this type of hogwash is used to paper over the shortcomings of this administration and Congress.

There were those kinds of excuses about the WPA only being for farm boys in my last diary. This critique obviously omits quite a lot about how the WPA works. Good thing there were a number of commentators in my last diary that provided a good rebuttal. For instance, Kossack badger answered this perfectly and brilliantly.

Project work requires a variety of skills (4+ / 0-)
not just the modern equivalent of "shovel work".

If government funded a project to, for example, modernize the electrical grid or build a new smart grid, which has substantial benefit beyond "make work", there would be a need for engineers, CAD people, purchasing, accounting, production planning and scheduling, mechanics, trainers, receptionists as well as the people who plant poles in the ground and string the wires. In short, all the different kinds of work that a modern enterprise of nearly any sort requires.

The components required to construct such a grid would have to be purchased from manufacturers, and there are actually still some utility-equipment manufacturers operating here - or we could develop more, if there was some certainty of a larger market continuing to exist due to a long term government program.

And all of the wages and expenditures from that program will be spent on food, clothing, cars, Christman presents for kids, badly needed health and dental care, and all the other goods and services that people spend money on, creating even more demand in the economy and putting more people back to work.

Some people would need re-training or additional training. Some jobs created would continue to exist even after the long term project was completed.

And that's one element of what could be a broader plan to restore and improve our infrastructure and natural resource base.

So now the question is why do you only care about programs to help unemployed office workers, and not construction workers or other people doing manual labor?

It's just as silly and unfair to ask you that as for you to posit the questions you asked in the post I'm responding to.

It does actually matter that Jared Bernstein was seriously advocating this route and was shot down by the White House. And Bernstein does have direct access to the White House working for Joe Biden so let’s not kid ourselves. This really is a big problem.

Lawrence Lewis had a great comment in my last diary:

the political climate (70+ / 0-)
is a valid excuse for sometimes not getting things done. it is not a valid excuse for not trying every possible political means to get things done.

This is the main critique. These are trying times because our leaders in Congress and the White House won't even try, sometimes. I have to wonder why exactly no effort was made on the really big life changing stuff we need. I’m also tired of the endless loop of myths and excuses regarding this lack of interest in our interest.

  • Myth 1: We don’t have 60 votes! There is nothing that can be done! So shut up!

    The truth: George W. Bush and Republicans in Congress never had a filibuster proof majority. It’s true, but they still took your 4th amendment rights away with the Patriot Act that Democrats voted for as well. Enough Democrats voted with Republicans starting an illegal immoral war in Iraq without 60 votes. Republicans stacked the Roberts court without 60 votes by scaring Democrats with the nuclear option in which they threatened to kill the filibuster.

    Most Democrats decided they didn’t want to kill the filibuster when they had the chance at the beginning of last Congress. Hell, they didn’t want to even reform it at all. That really showed they really don’t care about the Republican obstruction being whined about in those emails asking you for money.

    Republicans also passed two Bush tax cuts and Medicare Part D that never should have passed the Byrd rule during reconciliation because they were obviously going to substantially raise the deficit. Did you hear about any Democrats raising a point of order to the Senate Parliamentarian during reconciliation? No. If they had, Republicans would have needed 60 votes to override it.

    That’s how reconciliation works. As it was obvious that the Bush tax cuts were going to raise the deficit they were set to expire in 10 years until they were extended by a Democratic president along with a lower estate tax than Bush had. During the Bush years, Democrats never used reconciliation the same way for anything as positive as those things are negative. That brings me to the next myth.

  • Myth 2: We didn’t even have 50 votes! There was nothing that can be done! So shut up!

    The truth: When it came to health care, the public option, and reconciliation, it was much more likely that we did have 50 votes to pass it. Why? Harry Reid put a public option into the bill that came out of the finance committee. He only took it out once Lieberman threatened to filibuster it. Besides, the public option was dealt away at the beginning in a deal with for profit hospitals like affordable prescription drugs and big pharma defeating Byron Dorgan's reimportation amendment.

    If the argument is that Democratic leadership knows what will pass and what won’t, The Senate Majority Leader obviously thought he had 50 votes. That is before the kabuki where Senator Dick Durbin refused to have a vote on any public option amendment during reconciliation ping ponging it back to Pelosi. He said she could put it back in(she already passed a public option and the Senate took it out) even though she was instructed to just pass the bill without it by the millionaire boys club in the Senate.

  • Myth 3: If a bill goes up for a vote and fails, it’s so damaging that it will never be able to pass again and cause the Democrats irreparable damage.

    The truth: Medicare failed a vote during the Kennedy administration in 1962. A few years later it passed during the Johnson administration in 1965. There’s no real way to tell how each Senator or Congressman will vote until one is held (even when they are whipped) so there should be no reason to not expect Democrats to try to pass meaningful legislation even if it fails. For more on this, I’m going to excerpt another great comment from my last diary by Big River Bandido.

    Once again, here's how a COMMITTED political party (11+ / 0-)
    acts when it truly wants to pass its agenda, even when it "doesn't have the votes":  
    1)  Introduce legislation.
    2)  Force votes on it, even if you lose.  
    3)  If you lose, make the opponents pay a deep political price.
    4)  Bring up the legislation for another vote.  
    5)  Rinse, repeat.  

    The pieces of the Democratic agenda of 2008 which affected the widest range and number of people — card check, immigration reform, financial reform, climate change legislation — none of these even got so much as a floor vote.  Democrats counted votes and said "hmmm, we don't have 60, we can't do this". They never even tried to make Republicans pay a political price for being assholes — and that's a check that would have been pretty easy to extract with voters.  Start talking on the floor of the House about how Republicans are obstructing popular legislation and you "whip" up support among your constituents to help you do your job.  The very constituencies that are the backbone of the Democratic Party were ignored when it came to policymaking.  

    The fact that Dems — on both ends of Pennsylvania Avenue — didn't even try to force their own 2008 campaign agenda into policy speaks volumes about how they really felt about it.  They just threw in the towel.  

    Shirley Chisholm was right. Our Republic is in deep trouble.

  • Myth 4: There is no such thing as the bully pulpit. This President is powerless yet we must not let Mitt Romney take his place and become the most powerful man in the world.

    The truth: Anyone who says there is no such thing as the bully pulpit is very ignorant of history, even recent history. Hell, President Obama used the bully pulpit on Dennis Kucinich to get him to pass the ACA. When he wants to do something he does use the bully pulpit whether it's defeating Byron Dorgan's reimportation amendment for Billy Tauzin and big pharma or getting the Progressive or Black Congressional Caucus to fall in line.

    The term comes from Teddy Roosevelt. There were monopolistic corporations in his day, particularly J.P Morgan's Northern Securities company which was a massive railroad monopoly and Standard Oil. The trust buster, as he was called,used the Sherman Anti-trust Act to break up of both of these massive monopolies.

    He didn't pretend states that are broke could regulate them. And I don't act as if the bully pulpit gives one magical powers, but Teddy Roosevelt used it at the right time and when done so it is effective. He didn't waste his crisis. A similar time might have been when the whole financial system crashed because huge TBTF banks pumped up the Housing bubble with securitized fraud bringing it crashing down on everyone's head.

    Public anger at the banks and conservative philosophy was as palpable as it ever was after the  Great Crash of 2008 and 8 years of GWB. Yet, unlike Teddy Roosevelt, this President made no effort to end TBTF coming into office. He even fought against Sherrod Brown and Ted Kaufman who tried to break the financial system up with Brown Kaufman during the Dodd Frank debate years later in 2010.

    He wasted his crisis. Just the action of not opposing Brown Kaufman, not reappointing Bernanke, or not talking about the deficit would have gone a long way. This powerless Democratic President/Congress meme has no basis in reality. Especially to have it thrown in my face over and over again causing me to lose my faith in the ability of many here to learn from history. After all, this is your history and your government should you choose to actually learn from it.

And I'm not even talking about the NDAA, drone strikes, and the endless war in Afghanistan(2024) while the importance of austerity is preached at home. To add insult to injury, this is done while using Medicare and SS to say we're broke as a nation which is an abomination. No, don't go acting like Amity Shlaes just because you don't like hearing about how this Congress and administration ignored warnings about how its hubris fell short, and let millions of people down.

I'm not going to stop advocating for the long term unemployed and those being terrorized by deficit terrorism of a thousand cuts because it makes campaign season uncomfortable for some. That means criticizing Neoliberal economic policies, national accounting fantasies, bond vigilante fantasies, and confidence fairy fantasies regardless of where they come from. These frames cause untold damage and unreported pain, especially during election season. It doesn't matter whether you can see it or like the way I described it. This is the reality.

So please leave the New Deal denial to the free market fundamentalists. Some of us still remember where the modern Democratic party platform came from before Tim Geithner, Robert Rubin, The Hamilton project, third way, Goldman Sachs, and everyone else who runs Obama's Treasury behind the scenes.

Originally posted to The Amateur Left on Thu May 03, 2012 at 01:37 PM PDT.

Also republished by Money and Public Purpose.

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