Our deteriorating infrastructure is in obvious need of serious attention, and I am not just talking about the need to repair roads and bridges. Most municipal water and sewage systems need to be replaced or require other significant construction to upgrade these facilities; many schools need to be replaced or need other costly construction repairs; many municipalities need to upgrade their firefighting vehicles and equipment; most cities need to spend significant amounts for maintenance and repair of public housing; many dams and levees require substantial construction to avoid future disasters; many municipalities need to spend significant sums on construction to repair subway systems and/or to purchase new buses; and huge public expenditures should also be directed to repair and upgrade privately-held railroads as part of a national strategy to move freight much more efficiently. Due to the multiplier effect (i.e., jobs for contractors, jobs for manufacturers that supply contractors, and jobs for the small businesses that exist in the communities that host infrastructure projects and manufacturers that supply contractors), investing large amounts of money in badly needed infrastructure projects is the most effective method of creating jobs through government spending .
The Senate and the House of Representatives have reached an agreement on economic stimulus legislation, and because President Obama and Congress have wasted a golden opportunity to rebuild our economy by rebuilding our infrastructure, President Obama has failed what may become the most important test of his Presidency. Although it may seem reasonable for President Obama's supporters to whine that President Obama is not being given a proper honeymoon, the economic stimulus legislation was the only chance that President Obama had to spend an obscene amount of money (money that we do not have) with broad public support. Because of campaign promises, President Obama is under an obligation to implement some form of middle class tax cut as part of this economic stimulus legislation, and economic relief for the States and economic relief for individuals are also legitimate expenditures. However, the average middle-class taxpayer is unlikely to place a large order for steel I-beams, and an unemployed factory worker probably will not purchase a large new crane or a new fire engine.
President Obama is correct to stress the urgency of the economic stimulus legislation, but as we should have learned from the bailout/sellout legislation, urgency without focus does more harm than good. The American Society of Civil Engineers estimates that it would require more than two trillion dollars to provide adequate funding for necessary repairs and upgrades to our dilapidated infrastructure, but the economic stimulus legislation will devote only about 100 billion dollars (in the legislative package totaling 800 billion dollars) to infrastructure spending over the next two years. Over the next two years, this poorly-designed economic stimulus package will spend much less on our infrastructure than is spent every year on our wars in the Middle East. By marginalizing infrastructure spending in favor of ineffective tax cuts, President Obama and Congress have engineered economic stimulus legislation that will fail to address our infrastructure needs and also will fail to create sufficient jobs. This economic stimulus legislation is doomed to failure, and the failure will be blamed properly on the Democrats.
A few weeks ago, I read an article that criticized the New Deal because unemployment remained high until this unemployment problem was resolved ultimately by the workforce needs resulting from the U.S. preparations for, and entry into, World War II. This article suffered from two major flaws. First, although most objective observers have noted the inefficiency in many of the New Deal programs, unemployment was reduced dramatically (although unevenly) during the period from 1932 to 1940, and there is no way to determine the level of unemployment that would have existed in 1940 if the government had followed the advice of more traditional economists. And even if one acknowledges that Roosevelt's New Deal programs were sometimes only marginally effective, more traditional government indifference could have resulted in a more onerous form of fascism in the United States. Economists as a group have proven themselves to be incapable of forecasting the dismal results of their incompetent economic policies.
Presidential-candidate Obama had a long list of issues that he said he would address as President, and President Obama has encouraged people to submit their wish lists to his website for review by his gophers, but it would be more practical if President Obama does a few important things well rather than to dissipate his energy to achieve mediocrity on multiple fronts. I plead guilty to voting for Barack Obama to be President (for reasons which I considered to be pragmatic), but I have remained quite cynical about the prospects for meaningful change. Although I think that President Obama has made many horrible choices for members of his Administration, I tried to limit my criticism until he actually became President. No reasonable person should fault Barack Obama for using conciliatory language with respect to political rivals in the Democratic party and with respect to confirmed opponents in the Republican Party, but stockpiling the Republican wing of the Democratic Party within the White House will only hinder implementation of any progressive agenda, and left-of-center Democrats are not oblivious to the fact that President Obama's efforts to avoid confrontation with the Republicans in Congress will nullify any hope of substantive change.
During the Presidential campaign, many of Barack Obama's suporters were blaming those of us on the "Hysterical Left" for undermining then-Senator Obama's prospects for election due to our criticism of his reverse metamorphasis on the FISA legislation, but I was keenly aware that we were not a formidable political force. Even amid the FISA debate in July 2008, I thought that It was more likely that Barack Obama would stumble due to his failure to address the needs of average working-class Americans. Yes, Virginia, there has always been class warfare, and it took the Great Depression to temporarily slap the American public into a state of consciousness, but wealthy people have been winning most of the battles during the past 50 years. All of the Republicans in Congress, and many of the Democrats in Congress line up on the wrong side of the ball on most economic issues (including tax policies, spending priorities and trade legislation), and President Obama only pays lip service to populist issues. This is why we get healthcare plans to protect the insurance industry rather than to serve the public, trade agreements that favor multi-national corporations and international banks instead of the workers, election laws that protect the interests of manufacturers of electronic-voting technology at the expense of the integrity of elections, and a tax system structured to redistribute wealth from the shrinking middle class to the most affluent among us. President Obama may think class warfare is divisive, but for most Americans to be losing the class war is even more divisive.
People who are still awake have not forgotten that Barack Obama lobbied for and voted for the criminal economic bailout/sellout legislation in October 2008, and we have not forgotten the many lies about how this legislation would limit executive compensation for participating corporations. As the public begins to learn more about the rot within the bailout/sellout legislation for the financial services industry, the primary reaction in Congress has been to defend the failure of Congress to use any prudence in drafting this legislation. Instead of drafting remedial legislation to correct the lack of regulation in the financial services industry, Congress worries that regulatory reform will hinder the robber-barons. "There's not much we can do other than jawbone," sobbed Charles Schumer (the Democrat Senator from Wall Street) soon after the passage of the bailout/sellout legislation in October 2008, when it quickly became apparent that this legislation invited abuse by the financial services industry. One recent legislative proposal from Congress seeks to track the course of the bailout/sellout money as this windfall for criminals ineffectively winds its way through the sewer known as the financial services industry. If we were hoping for legislation that would restrict the corruption within the financial services industry, and if we were hoping for enforcement of the weak laws that have not been enforced previously, we should be advised to smell the coffee.
Rather than making changes to our tax structure that would help recover some of the money that has been stolen by greedy criminals within the financial services industry, Congress worries that taxing the rich will impede the ability of these criminals to complete the destruction of our economy. As a result of intentional misinterpretation of the Internal Revenue Code via Internal Revenue Bulletin: 2008-42, Notice 2008-83 issued on October 20, 2008, former Treasury Secretary Henry Paulson unilaterally nullified Section 382(h) of the Internal Revenue Code (which had limited the amount of losses that could be deducted by a corporation via acquisition of another corporation operating at a net loss) as it applied to banks, and we have heard nary a peep from most Democrats in response to this corporate theft of more than 100 billion dollars from the public. There is a provision in in the economic stimulus legislation that will repeal the official Treasury Department misinterpretation of Internal Revenue Code Section 382(h), but this correction is being made prospectively only.
Senator Max Baucus (D-MT) was a member of the House-Senate conference committee to reconcile the differences between the economic stimulus bills passed by the House and the Senate, and this conference committee further weakened the already-diluted provisions to cap compensation for executives of companies receiving government assistance. Senator Baucus helped initiate our economic collapse by supporting President Bush's 2001 tax cuts to redistribute wealth from working-class Americans to rich people, and Senator Baucus has smothered all remedial tax legislation during his more recent tenure as the Chairman of the Senate Finance Committee (the place where progressive tax reform legislation goes to die).
Senator Baucus has tried to play on both sides of the debate by criticizing offshore tax havens while he simultaneously helps to ensure that nothing is done to implement remedial legislation, yet he is in the best position to move such legislation forward. Offshore tax havens are only one source of lost revenue that is aided and abetted by the best Congress that money can buy, and the last refuge of tax evasion consists of merely not paying the amount of taxes that are due. During the confirmation hearing for Timothy Geithner to become Secretary of the Treasury, Senator Charles Grassley (R-IA), the ranking Republican on the Senate Finance Committee, told Mr. Geithner that there is a $290 billion gap between the taxes owed to the IRS (including $30,000 owed by Mr. Geithner until he was offered a job in the Obama Administration) and the amount of taxes collected by the IRS; Senator Grassley asked Mr. Geithner what the IRS could do about this lost revenue. Without dissolving into hysterical laughter, Mr. Geithner replied: "The President is committed to working with the Congress on an effective program to close the tax gap."
Many people may question why I am not more harsh in denouncing the Republicans in Congress. It is true that the Republicans deserve any scorn which is heaped upon them, but it is the Democrats who campaign as populists and then betray all of their campaign rhetoric after election day. The chattering class in the mainstream media is constantly reminding us about the Republican threat of a filibuster in the Senate. If this economic stimulus legislation were worthy of support, the rational approach would have been to force the Republicans to hang themselves via a filibuster, but the current legislation is not worth the effort. President Obama and the Democrats in Congress have forged bad legislation in an effort to entice support from the Republicans in Congress, and the sole result of this bipartisan effort is bad legislation.
The debate over the economic stimulus legislation has revealed that the Republicans are still in control of Congress. If there were only one Republican left in Congress, that lone Republican could outmaneuver the Democrats in Congress because the Democrats are always anxious to find a way to betray their constituents in a manner that will still provide them with political cover for their complicity with the criminals in the financial services industry. I would prefer to campaign for the destruction of the Democratic Party rather than to endure two more years of lies and broken campaign promises. I am sure that the Democratic Party does not have much to fear from me personally, but by 2010, there may be many other people whose tolerance for the Democratic Party has reached the end.
Fool me once, shame on you. Fool me year after year after year, shame on me.