Sunday, August 14, 2011

Obama, Big Job Proposals, and The Two-Legged Stool

Why is Obama not proposing great big jobs programs like the commentators and economists are demanding? They keep pointing out that he should at least propose such programs even if they won't pass the GOP House. In fact, anxious Democrats are wild with frustration that he hasn't done an FDR and proposed creating things like the old CCC or the WPA.

Maybe his caution is understandable if we consider that we are now sitting on a two-legged stool. The missing third leg is the one Standard & Poors yanked away. Moody's and Fitch, the two other rating agencies, each have a hand on the remaining legs. They have cautioned that they are considering pulling those legs off, i.e. lowering our credit rating as S&P did.

If Obama proposes increasing our deficit and debt by launching new big, big job programs, won't that tempt Moody's &/or Fitch to pull off the other legs? Can the U.S. risk more credit-risk downgrading?

Sometimes presidents have to be very careful what they say and do because of the potential impact on the economic health of the country. This doesn't mean that a Democratic president has morphed into being a sellout to the corporations. Responsible, smart Democratic leaders realize  -  especially in times of financial instability  -  they should avoid the words or deeds that can be tipping points into economic catastrophe and hardship for the people.

An example. During the terrible Nixon recession of the early 1970s, Nixon staged the first of his infamous dirty tricks while campaigning in San Jose, CA for the re-election of a GOP senator, the movie actor & tap dancer George Murphy. Two of us Democratic campaign people found solid police evidence that the Nixon White House had directed the staging of the phony "riot" at the San Jose event. This was four days before election day, and we desperately needed a high-profile Democrat to present our evidence to the press before voters went to the polls. The logical one was Democratic Congressman Don Edwards of San Jose, whose right-hand man was a longtime friend of mine. The "riot" had occurred on Thursday night. I had the police evidence by Friday morning. So I called Edward's aide.

"Can't do it," he said. "We are going crazy over here trying to prevent the collapse on Monday of _______ (one of America's biggest stock brokerage firms). We can't deal with this Nixon thing right now."

This was the priority coming from one of the greatest liberals who have ever sat in the House. Edwards was one of the very first Congressmen to oppose the Vietnam War. He was also the Congressman who virtually single-handedly destroyed the infamous and power-mad House UnAmerican Activities Committee, thus helping end the McCarthy era. He also fought the reactionaries who wanted to criminalizing flag-burning and other free speech and assembly rights. The things Edwards did took guts!

Yet he put saving a brokerage house ahead of stymying a vicious Nixon dirty trick in a key election. If that brokerage house had gone down, it could have been the equivalent, for then, of the Lehman Bros. collapse in 2008.

Edwards, like Obama, was an extremely smart man who knew history. He knew that the greatest danger to our rights is economic instability. Witness today how the Tea Party feeds off economic fears and simultaneously rants about ant-Americanism. Recall how the facists arose from the European economic chaos of the Great Depression. Could it happen here if the economy plunged off that cliff we teetered on in 2008?

Let's not experiment with that one, shall we? After all, there were food riots in this country during the Depression. Americans are a patient people, but let's not push it.

However, if you want to risk it, how about buying stock in companies that make jack boots or brown shirts?

So a good Democratic leader can and should walk carefully when economic tipping points are lurking. If Obama is cautious now because Moody's and Fitch have their hands on the stool legs, it's more than understandable. It's being a responsible leader. Which is something his Democratic critics have no experience with whatsoever!

The real issue now isn't Obama's caution. It's how the hell these damn rating agencies have started running U.S. politics! But that's a whole other subject for another day.


  1. I think Barack also knows that a proposal for a big jobs program would go nowhere with this congress, especially with the election around the corner. It would be like when Bush said we were going to Mars. We're not going to Mars. Barack is also smart enough and patient enough not to get caught up in the passion of the moment. Two things are true about Americans in the 21st century: they love hyping the crisis of today, and they have zero interest, ZERO, in the news of yesterday. Barack knows that in the long run, the economy will come back because the investors will grow tired of sitting on their enormous piles of dormant cash. They'll regain their nerve and start investing again because that's the only way to make more money.