Can President Obama’s plan for economic and social reform succeed with two strikes against it? The first strike is the governing elites controlled Congress albeit with a Democrat majority. The second strike is his economic team consisting of leftover, or taught by, former President Clinton’s team of Democrats. With two strikes against him, will he hit a homer or strike out? Progressive elements of the Democratic Party are going to have to push both the President and Congress very hard for Obama’s presidency to be successful.
Except for the growth of consumer debt and two wage earner households, our economy has tended downhill for more than three decades. In 1972, all but the top 10 percent earned, on average, $30,174 dollars per year (in 2006 dollars). In 2006, more than three decades of growth later, that number had fallen to $29,952. President Obama proposes some tax relief for the middle class. Congress wants to limit it to two years. Ninety percent of American households need higher real income not more access to credit, the focus of Obama’s economic team. Geithner wants more credit availability and his toxic asset plan provides up to 88% government guaranteed credit. The one thing that most assuredly will happen under this plan is make a lot of rich people even richer.
What went wrong since the 1970‘s? In broad strokes, what are the measures by which U.S. economic potential has been squandered? From the Multinational Monitor, Robert Kuttner, author of The Squandering of America, responded as follows:
“For 30 years, policymakers have reversed the [Franklin D.] Roosevelt revolution. With the dramatic increase in the influence of corporate America on both parties, policy has turned away from a more mixed or managed form of capitalism in favor of market fundamentalism. This, broadly, has taken five forms.
"First, a weakening of all kinds of government regulation, which in turn reinforces the economic power of business elites over workers and consumers; second, a weakening of trade unions and other worker counterweights to the power of employers, which has made employment less secure and worsened the income distribution; third, a failure of social policy to change with changing family realities, increasing the stress on working families; fourth, a trade policy that serves the interests of industry and finance rather than workers and consumers; and most seriously, the dismantling of the system of financial regulation - resulting in the current credit collapse and the risk of a second Great Depression.”
Re-regulation seems an absolute requirement except for the continued market fundamentalists, read corporate America, amongst us. How much we really get and how long it might really last will depend upon who has the most influence on Congress, the people or the corporate-elite.
Market fundamentalism is free market capitalism. It is best described by it’s guru Dr. Milton Friedman in his article, The Social Responsibility of Business is to Increase its Profits, published in The New York Times Magazine. Quoted in part, Dr. Friedman said:
“When I hear businessmen speak eloquently about the social responsibilities of business in a free-enterprise system, I am reminded of the wonderful line about the Frenchman who discovered at the age of 70 that he had been speaking prose all his life. The businessmen believe that they are defending free enterprise when they declaim that business is not concerned merely with profit but also with promoting desirable social ends; that business has a social conscience and takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers. In fact they are -- or would be if they or anyone else took them seriously -- preaching pure and unadulterated socialism. Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.”
This is the philosophy that:
“…by forcing the export abroad of our manufacturing economy, leaving us with a service/managerial economy that simply cannot support the vast, healthy middle class our government used to work very hard to both foster and protect. The Democratic party that was once the impetus behind much of these changes, that argued so eloquently in the New Deal era that our society would be richer and more powerful overall if the spoils were split up enough to create a strong base of middle class consumers -- that party panicked in the years since Nixon and elected to pay for its continued relevance with corporate money. As a result the entire debate between the two major political parties in our country has devolved into an argument over just how quickly to dismantle the few remaining benefits of American middle-class existence -- immediately, if you ask the Republicans, and only slightly less than immediately, if you ask the Democrats.” www.alternet.com 7/19/08
Will re-regulation be successful? Who is going to run this country; the people or the corporate-elite? That is the decision facing President Obama and the Congress.