Obama: A New Beginning?

Brendan Smialowski/Bloomberg via Getty Images
President Obama arriving to give a speech on the economy at Stromberg Metal Works Inc., Beltsville, Maryland, October 29, 2010

President Obama’s plainspoken speech on jobs was delivered to Congress on September 8 in what for him was an almost impossible setting. Public trust of government is in tatters and many people believe that elected officials ignore them. Ever since the TARP bailouts of financial institutions and the large bonuses paid to executives of failed companies, we have entered an almost surreal atmosphere reminiscent of the aftermath of the European financial crisis of 1931. Many citizens are so disheartened that they do not believe government has the capacity to be responsive to their needs. Although our transportation systems, schools, and other infrastructure are in a sad state, these citizens have no faith that their tax dollars will be used to repair them. In short, while America is rapidly deteriorating, there is a widespread fear that Washington, D.C., is indifferent to its plight.

Many Americans see government as an insurance agency for rich and powerful people and corporations, who deploy lobbying dollars and campaign contributions to take care of their interests but not those of others. Faced with the choice of having their tax dollars spent for the benefit of elites or demanding that taxes be radically reduced, they see cutting taxes as the only rational course of action. Our nation appears to be caught in a downward spiral where lack of trust leads to dysfunction and disappointment, which, in turn, reinforce distrust and set our society on an ever lower trajectory.

The current frenzy for austerity in Washington, D.C., and Europe reinforces and reflects this despondency.1 When one in six Americans is unemployed, underemployed, or so discouraged that they are no longer seeking employment, the country is in a profound social crisis. In response, elected officials from both parties have engaged in rituals of deficit reduction. At a time when our borrowing costs are at historic lows and there are plenty of unemployed workers and resources in the construction sector, a “congressional super committee” is being formed in Washington to cut social programs so we can continue to afford the costs of wars, future bailouts, and tax cuts for the richest one percent of the country.

That committee’s responsibilities do not include formulating a broad-based investment program for the American economy, including its crumbling infrastructure, for the years to come. Nor is it charged, as it should be, with cutting long-term contingent liabilities.2 For example, strengthening financial regulation and supervision to prevent future bailouts and their side effects would be a major potential savings. The committee should also be charged with bringing down US health care costs to levels comparable with other developed nations. US health care costs are double the average of the OECD countries. Reductions could be largely accomplished by…

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