Fixing the Economy: Beyond Bailouts and Stimuli

As the year draws nearer to an end, and as economic data about the last several months has recently been released, there has been a plethora of critiques about the various federal efforts to turn things around. Analysts are all over the spectrum, from those who are convinced that the federal actions have prevented the crisis from becoming much worse, to those who feel that the programs have been entirely inconsequential—except for ballooning the budget deficit, to those who declare that the federal recovery efforts have deepened and prolonged the slump. Who is right? Beats me. I’ve seen very compelling arguments on all sides. I can’t pretend to grasp all the economic minutia enough to know for certain, and I don’t think anyone truly can.

I very cautiously and reluctantly wanted to support the various economic policies which were part of the stimulus package. I’m never fond of corporate welfare, but many of the arguments seemed potentially valid. While hardly unanimous, there was a fairly broad consensus that action needed to be taken, with a plenty of Republicans and conservatives jumping on the bandwagon. Reagan economic advisor Martin Feldstein enthusiastically supported the stimulus bill, as did Tony Blankley during the several months during which the stimulus was being debated—albeit far more cautiously—on the NPR show Left, Right, and Center, just to name two. While Mike Huckabee’s warning is well-worth considering (“when someone is in a hurry to pass legislation, you’d better slow it down because the reason to hurry a law is rarely urgency to help the citizens, but urgency to get it passed before people find out what the heck it really is” ), it is conceivable that without quick action, the economy would have plummeted into chaos. As distasteful as the notion of bailing out these bloated corporations was, it might be that without those bailouts, the financial markets would have collapsed, taking the rest of the economy down with it. It is very possible that the building and infrastructure projects funded by the stimulus will ultimately put people to work, providing them with the money necessary to rebuild demand and jumpstart the economy, and provide us the long term-resources necessary for future success. Heaven knows that there is a great deal of critical infrastructure in serious need of upgrading and maintenance due to years of neglect.

All of that is in some sense beside the point. Not that the ever ballooning deficit is irrelevant; I respect the grave concerns which many people have about the deficit and it’s potentially disastrous consequences. But even if I grudgingly accepted that the stimulus might be a necessary evil, I never saw it as any more than a bandage, a stop-gap means with which to keep the economy on life support while the nation re-evaluated the way in which the our economic system is constructed, determining the roots of the problem and make the necessary fundamental changes to our economy and financial system to prevent this sort of catastrophe in the future.

While not terribly surprised, I’m bitterly disappointed on that count. Little has been done to get at the heart of the economic problems. Obama campaigned on change. How is this sort of corporate welfare any different than the bailouts promoted by his predecessor? How are his economic policies any different from the largely corporatist policies so in vogue with both parties since the Reagan Revolution? If we should be looking to the future rather than back to the Clinton era, as he not-infrequently implied when campaigning against Senator Clinton, why is his economic team lead by Clinton administration retreads who are perpetuating the same basic policies?

Libertarians like Ron Paul have pointed to the actions of the Federal Reserve as a primary cause of the economic turmoil, advocating it’s abolition. I’m not yet convinced their argument is entirely correct, but they make some very compelling points. What harm could it possibly do to conduct a thorough investigation of that institution to see if the criticisms have merit? What could possibly be wrong with holding that institution accountable through the rigorous audit proposed in HR 1207 and S 604?

Our financial system suffers from a bizarre concoction of overlapping and competing regulatory agencies (for a good investigative report on the subject, listen to “The Watchmen” from This American Life, 06-05-2009; or read the transcript). Rather than adding yet another regulatory layer, we should overhaul the entire regulation system. We need robust regulation, but it should be streamlined and consistent, so that the financial players cannot so easily find holes in the system. The walls separating the different sorts of financial services which were destroyed by the Gramm-Leach-Bliley Act must be rebuilt. And we must ensure that the resulting regulatory entities maintain the funding necessary to remain vital, and prevent the sort of defunding under the banner of “small government” which has render them impotent over the past few decades.

Many of the problems we face may have been caused in part by the very nature of the corporate structure. The corporations which were bailed out because they were “too big to fail” are bigger than ever. We should introduce mechanisms into the corporate charters which prevent them from becoming so large in the first place. Those already bloated to the point of reliance on the government should be broken up into smaller units. The legal principle of corporate personhood should be emphatically overturned. Originally, corporate charters were granted by the state in very specific circumstances, with very defined limits, and with provisions for public accountability. We should revisit that earlier form of incorporation, consider whether it is more appropriate for keeping these powerful entities in check.

I doubt there will ever be a better time for fundamental changes. The public must demand more than staggering amounts of debt and some rearranging of deck chairs in response to the economic crisis.

Obama: Let the Sunlight In!

It appears to be an inherent risk of the presidential office that its occupants prefer to avoid public accountability for their actions. President Eisenhower coined the term “executive privilege” to avoid revealing government information to Congress and the public. Bill Moyers recalled that President Johnson so despised the ramifications of the Freedom of Information Act that “LBJ had to be dragged kicking and screaming to the signing ceremony,” and threatened a pocket veto. Nixon was notoriously secretive, often deliberately keeping members of his administration out of the loop, and vigorously opposed the publication of the Pentagon Papers and the release of the white house papers and recordings. The policy of the Reagan administration was to classify information at the highest level possible (a reversal of Carter’s policy to classify information as low as possible). Reagan also issued Executive Order 12356, increasing the longevity of information classification, and advocated the Freedom of Information Reform Act of 1986, restricting the original FOIA. While some administrations have been more forthcoming than those—the Carter and Clinton administrations both acknowledged to have taken steps towards greater transparency and access—Phillip Melanson notes in Secrecy Wars: National Security, Privacy, and the Publics Right to Know that virtually all presidential administrations have resisted full compliance with the FOIA and public accountability.

The recent Bush administrations hardly broke that mold. Denying the public information on key meetings on energy policy in which energy industry executives participated; covering up executive actions regarding detention, torture, and public wiretapping; attempting to keep presidential records private indefinitely with Executive Order 13233; administration memoranda encouraging bureaucratic obstruction to confound FOIA requests; a vice president who insisted he was exempt from accountability because he supposedly outside all three branches of government: They seemed to have a absolute passion for secrecy (excepting, of course, when it came to releasing classified identities for political purposes)—not particularly surprising given the illicit nature of their agenda.

Obama made quite a point of transparency during his presidential campaign, as a contrast to the Bush administration. Early in his administration Obama issued a memorandum about “transparency, public participation, and collaboration.” During his short term in office, is he on track to produce the change he promised?

Early results are not encouraging. I suppose one might forgive the administration for declining to release the FBI interview with Dick Cheney regarding the Valerie Plame incident. While I’d prefer to see the key members of the previous administration held to full account for their misdeeds, perhaps Obama is sincerely trying to avoid the appearance of partisanship by protecting Cheney from “embarrassment,” or believes that a Gerald Ford strategy of letting bygones be bygones and moving on is the best way for the nation to get over the past eight years.

But the Obama administration has also adopted the Bush administration’s policy on secret wiretapping. In a strange case of deja vu, Obama is refusing to release information on administration an energy policy meeting with coal executives. And most recently, he has denied an FOIA request for information related to meetings with health care industry executives. Obama’s repeated rebuff of Citizens for Responsibility and Ethics in Washington and his general reticence to live up to his memorandum show a distressing lack of concern or understanding for the change we needed.

Whether you take Obama to be the messiah or a commie-muslim-criminal mastermind is irrelevant. Government secrecy is dangerous to the nation irrespective of which party or what person is in power. Sunlight is the best protection against even the potential for corruption. Our democratic republic can only function effectively to the extent that the public has access to the data necessary to make informed judgments and hold our government representatives accountable. If Obama thinks we should simply trust him because of his integrity and of his commitment to change, then he is not the agent of change he claims to be.

Obama and the Iranian Election

Obama has been getting quite a bit of flack for the way he has handled the recent Iranian election fiasco. From the inflammatory neocon pundits like Limbaugh, Hannity, and Coulter, to the Republican politicians like Dana Rohrabacher, Richard Perle, Mitt Romney, Lindsey Graham, Charles Grassley, and John McCain are angry that Obama has not been more aggressive in responding to the Iranian tragedy. Even hawkish Democrats like Hillary Clinton and Joe Biden think that the president should be more forceful in his reaction.

Why? What purpose would it serve? No one has directly suggested military intervention, or even new economic sanctions. They simply seem to want the President to be more forceful in condemning the election results and the government crackdown, or in expressing support for the dissidents. Do these people think that simply by uttering his disapproval, Obama can undo the election? “If Obama would only disapprovingly shake his finger at them, they’d learn they’re lesson!” Have they caught Obamania that much?

While it is extremely unlikely to help the situation, stern words could make things worse. As Obama himself mentioned in his recent press conference, Iran’s government would have no hesitation to play up any US rhetoric for the extremist crowd which is their base. Worse, saber rattling by its very nature implies the potential for drawing that saber. Such a stance might well escalate and draw the nation into yet another Middle Eastern military fiasco. Yet if he refused to back his words with deeds, Obama would look weak and ineffectual.

(I suppose this might well be the strategy of the neocons attempting to goad Obama into a more belligerent stance; either they get the further interventionism they desire in order to create their “New American Century,” or they get the president to make himself look weak.)

In 1991, fresh of his victory in the first Gulf War, President H.W. Bush heartily endorsed dissident factions in Iraq and encouraged the overthrow of the Hussein regime. Emboldened by the implied support of the US, the Kurds and Shia began a revolt. The military support which they assumed backed Bush’s words never came. The revolt failed, and the dissidents were slaughtered.

Is it worth the risk of seeing the same thing in Iran just to satisfy the egos of those who want to see the US play John Wayne?

My thoughts, wishes, and prayers are with these brave Iranian protesters who are fighting for a nation which respects the will of the people and individual rights. I’m inspired, as I’ve been by the “Tank Man” and others at Tiananmen Square, by their courage and determination. But I am no less suspicious of the path of interventionism in Iran than I’ve been in Iraq, Afghanistan, or any other nation. We can not hope to impose democracy from without. We have not the capacity, especially now. Nor is it the role of the US to play nanny to the rest of the world. Obama has made essentially the right decision in this situation. Let’s hope that Obama is able to continue to ignore the taunting of the militarists, and that the Iranians are able to find the power within themselves to liberate themselves.

A Slightly Different Take on the Election…

Black Man Given Nation’s Worst Job

WASHINGTON—African-American man Barack Obama, 47, was given the least-desirable job in the entire country Tuesday when he was elected president of the United States of America. In his new high-stress, low-reward position, Obama will be charged with such tasks as completely overhauling the nation’s broken-down economy, repairing the crumbling infrastructure, and generally having to please more than 300 million Americans and cater to their every whim on a daily basis. As part of his duties, the black man will have to spend four to eight years cleaning up the messes other people left behind. The job comes with such intense scrutiny and so certain a guarantee of failure that only one other person even bothered applying for it. Said scholar and activist Mark L. Denton, “It just goes to show you that, in this country, a black man still can’t catch a break.”

Gotta love The Onion. It still doesn’t beat their all-time best Obama related report, “Black Guy Asks Nation For Change.”

Nov 5: Post Election Day thoughts

The seemingly interminable Presidential campaign has at last been terminated. Barack Obama will be our next president. With the day upon us, my wife and I breathed a collective sigh of relief. The relief only grew as drew on and the final results came in.

I was impressed by McCain’s concession speech. While it included many obligatory lines, I felt McCain made some very genuine, gracious statements. They recalled the man whom I admired in the 2000 campaign, for whom I voted in the primaries in 1999, and who has been absent far too often in the intervening years. I’m glad to have sighted him again. Hopefully he will reemerge in the new Senate.

I was rather confident that Obama would win this election, and I’m grateful that my confidence was not misplaced. I chose to vote for Nader as the best possible choice. But while I believe McCain would have been an improvement over the current administration (his choice for Vice President notwithstanding), Obama is the mainstream candidate under whom I have the most hope for a more progressive direction to our government.

Race is no reason to elect a President, but last night race certainly was a reason to celebrate a President. The ugly stains of bigotry were still dark and widespread in the fabric of our country not so long ago (it is within my lifetime that the LDS Church finally surrendered its own racist policies). Nor has racism been expunged from the republic. Yet this election is an enormous symbolic step for blacks and other minorities. We should relish that step and the jubilation of our minority sisters and brothers who feel empowered, inspired, and validated by this moment.

Obama’s acceptance speech was brilliant. I was moved by the humility, by the solemn tone, by the broader perspective of the task ahead. Of course, being a marvelous speaker does not make one a great president. I’ve been somewhat skeptical of the number of Obamaniacs who seem smitten solely based on his oratorical skills. Obama obviously has intelligence and incredible poise, but only time will tell whether he has the virtue, wisdom, and the fortitude to be a truly great president. We will see whether he has the character to bring people together to change course, or whether “Change” was merely a cynical political slogan. We will learn if he can make the honest political compromises necessary in government without being compromised.

But no matter how Obama turns out, we should take inspiration from his beautiful address last night. The focus of the speech was not “Yes I will,” but “Yes we can.” No matter how magnificent a president he may turn out to be, he cannot solve all of our problems. His wisecracks at the recent charity dinner aside, Obama is not Superman. Conversely, no matter how inept or unprincipled he might reveal himself to be, we are neither powerless nor incapable of reforming our nation from the grassroots up. As Obama pointed out, this nation has made remarkable steps towards overcoming its flaws—not without stumbles and serious deviations from time to time; but improvement nonetheless. That progress, slow as it may be, has only occurred through the determined effort of people throughout society.

In this period in which we face many serious challenges, we can and must harness the energy catalyzed by the Obama campaign before it fizzles out. We can mobilize the youth who supported Obama in such numbers to continue to follow the liberal impulses which drew them in. We can recognize that, despite what Palin and those of her persuasion believe, community activism and organizing are noble and meaningful pursuits. We can put aside the self-interest which has played such a dominant part of the nation’s ideology to instead focus on sustaining the community; looking to care for the earth which supports us all, as well as for the needy, the downtrodden, and “the least of these.”

Yes we can.