March 1 -
"In an effort to help American workers and businesses hard hit by the loss of manufacturing jobs, I'm happy to announce that soon our nationwide network of business assistance programs will be eligible to compete for up to $45.4 million in federal grants next fiscal year. These grants would be by the Commerce Department's Economic Development Administration. "
45 million dollars will fund 450 of the 1.2 million high tech jobs lost in the last 3 years.
The truth is that the major cost sinks for the American economy - and therefore the hurdles to national recovery - are not in the cost of manufacturing, nor in th minor government funding. Instead it is the collapse of the venture capital system which funded companies of ideas, and with ideas. It is here that the leading edge of American prosperity occurs.
In 1933, Franklin Roosevelt laid out a political plan: borrow some money immediately to get people moving again, and then attack the deep structural problems in the US economy. Eventually, he pointed out, that international prosperity would have to flower before there would be a final establishment of American prosperity. America had to soldier on until the time became ripe to do this. In 1941, he set us on a course of promising freedom, not just for Americans, but for everyone
The deal that modern liberalism offered Americans then was that we would lead the world to greater prosperity. What Americans would get was not an easy life, but that we would have it first. We, not the USSR, termed everything in terms of "races" - the arms race, the space race. America wanted to be first, to sprint the fastest, to be the best - to have it before others did.
This was framed to turn back isolationism and protectionism - then very strong in FDR's America. He beat protectionism with optimism, and isolationism with internationalism. The rewards for being first are psychic as well as physical - because it means being part of the active tribe of people who set the pace.
In our own time there are two parties. The Republicans are the party of people who feel they are in a strategically protected industry or job - something that can't be shipped overseas, or won't be. The Democrats are the party of people who compete in the world market. The Republicans have, through borrow and squander policies, taxed heavily the internationalist part of the economy, and sunk it into their pockets. The gag, of course, is that many of the people now getting ready to vote for Republicans on the belief that the "War on Terrorism" will protect the big military budgets, are going to find out that a vast round of cancellations is slated for after the election.
The pressure on the Democrats from people feeling pain is "we want the same deal the Republicans gave their people: protected jobs." Thus Kerry sounds more like Kucinich than he does like Clark, or even Dean, on the trade issue. The way to meet this pressure is not to give into it, but to provide leadership.
First, by showing how American leadership - in foreign and economic affairs - can put America back at the cutting edge of the world economy. Second, by showing how simple, achievable changes in our tax code and fiscal policy can bring about this leadership. Third, by telling Americans that we will make sure everyone is taken care of now while we regroup and pave the way for an American recovery, based, not on borrow and squander - but on invest and grow.
What is the first step? The same first step that FDR and Kennedy both took: get America moving again. Not by offering paltry grants backed by insubstantial promises - a goverment borrowing 2 Billion a day cannot be trusted on its future spending promises - but by showing Americans and the world that the US is on a new fiscal policy course.
The simplest way to do this? Change the mix of bonds offered by the federal government - including locking in a great deal of debt at 30 year rates. What would this do? It would move the availability of credit towards businesses, ending the "stealth credit crunch" that is part of what is hindering our national growth.
This would give an immediate hit to job creation, and slow down the current housing price bubble which is increasing the cost of hiring people.
