Sunday, November 9, 2008

Krugman for a economic progressive Obama/ What progressives must do

{{First: a Times reader put it very succinctly: "Barack Obama does not need to move to the center. He needs to MOVE the center. The times demand it." Artie Gold, Austin, Texas}}

Friday, NY Times economics columnist Paul Krugman, in "The Obama Agenda" defended the interpretation of the election as a mandate for progressive change:
"Bear in mind, also, that this year’s presidential election was a clear referendum on political philosophies — and the progressive philosophy won."
"Since then [2004], Democrats have won back-to-back victories, picking up at least 12 Senate seats and more than 50 House seats. They now have bigger majorities in both houses than the G.O.P. ever achieved in its 12-year reign."

And --excepting LBJ's 1964 victory-- this was the biggest Democratic presidential victory in the last 60 years.
(Robert Borosage and the Campaign for America's Future have
documented how voters gave a mandate for progressive change.

Here is the link to the entire CAF report.)

And Krugman gave the pitch for Keynesian economics to restore the nation's economy:
"What about the argument that the economic crisis will make a progressive agenda unaffordable?" . . . .
"But standard textbook economics says that it’s O.K., in fact appropriate, to run temporary deficits in the face of a depressed economy. Meanwhile, one or two years of red ink, while it would add modestly to future federal interest expenses, shouldn’t stand in the way of a health care plan that, even if quickly enacted into law, probably wouldn’t take effect until 2011.
Beyond that, the response to the economic crisis is, in itself, a chance to advance the progressive agenda."

Click here for link to the entire column.

Recalling the Clinton administration-supported legislation that led to financial troubles
The Clinton administration supported the Financial Services Modernization Act (FMSA, or in its legislative form, Gramm-Leach-Bliley) in 1999. The act essentially repealed the Glass-Steagall Act of 1933. The act served to put up a wall separating investment banking and commercial banking. And it mitigated against insider trading.
(Incidentally, the Center for Responsive Politics noted that there was large gap in financial industry contributions to the Congressmen that supported the act and those that opposed the act: "[T]he Democrats who supported the Financial Services Modernization Act had received an average of $179,920; . . . the 59 Democrats who opposed it received just $83,475.")

From Daniel Gross, "Shattering Glass-Steagall: Lehman's failure marks the end of an era" in Newsweek, Sep. 15, 2008:
Glass-Steagall was one of the many necessary measures taken by Franklin Delano Roosevelt and the Democratic Congress to deal with the Great Depression. Crudely speaking, in the 1920s commercial banks (the types that took deposits, made construction loans, etc.) recklessly plunged into the bull market, making margin loans, underwriting new issues and investment pools, and trading stocks. When the bubble popped in 1929, exposure to Wall Street helped drag down the commercial banks. In the absence of deposit insurance and other backstops, the results were devastating. Wall Street's failure helped destroy Main Street.

* * *
What Progressive should do: take pages from the New Deal and the 1960s
Let's clearly recall the history of the passage of progressive legislation under Franklin D. Roosevelt (Social Security, ending child labor, public works programs) and Lyndon Johnson and civil rights and the "Great Society" (desegregation, restoration of voting rights, Medicaid, Medicare) came after activists outside of those administrations advocated change. Those activists were not cowed by fear of being called radical, they did not buckle under obligations to be nice centrists or moderates. We got Obama elected. It is activists' task to press Obama to have the progressive economics that America voted for.
It is about doing the right thing, not buckling under to tradition and convention. We need leaders that will hew to principle, rather than to expediency. Let's recall Johnson's signing the Civil Rights Act of 1964: "We lost the South for a generation." He signed the bill, doing the right thing, even though he suspected that this would hurt the Democrats for decades.
The current crisis is the product of center-right economics. George W. Bush was not the only figure responsible. The patterns of policy reach back deep into Bill Clinton's administration. The new president must depart from the center-right policies of both of those presidents.
Again, "Barack Obama does not need to move to the center. He needs to MOVE the center. The times demand it."

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