Tag Archives: jobs

Subsidize This: US Eyes Tariffs on Chinese Solar Panels, But What Gets Protected?

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Inside SolarWorld's Oregon manufacturing plant. (photo: OregonDOT)

While trade is often a bone of contention between the United States and China, this week’s visit by Chinese Vice President Xi Jinping threw the spotlight on one subset of that battle that could have far-reaching effects well in excess of the raw dollar amounts at stake.

At issue is a complaint filed by a solar industry trade group, the Coalition for American Solar Manufacturing, or CASM, asking that the US government impose tariffs on Chinese solar panels. CASM wants the duties for what it claims are unfair subsidies by China that make Chinese solar products substantially cheaper than those offered by many US competitors.

Language in President Obama’s State of the Union, along with comments made during Xi’s visit, would seem to indicate that the federal government is set to weigh in on the side of US solar energy companies in this brewing trade war, and so make a stand for domestic green energy manufacturing and good-paying American jobs.

It seems like a political slam-dunk. The president, after all, campaigned in 2008 on the promise of a growing alternative energy sector, and protecting jobs from being off-shored appears to be the perfect play at a time when unemployment is still unacceptably high. But the reality is, to put it in diplomatic speak, more nuanced.

First, that solar trade group, the Coalition for American Solar Manufacturing, claims to represent seven solar manufacturers, but the only company publicly identified as a CASM member is SolarWorld. SolarWorld is actually not a US company, but a German one, though it does employ about 1,000 at its Hillsboro, Oregon factory.

And even that number is nuanced. SolarWorld is considered the largest producer of solar panels in the US, and so it is used as a sort of case study in this trade dispute. Several stories on the topic note that SolarWorld shuttered its Camarillo, California plant, and with it went 100 jobs. The implication is that Chinese pricing caused the California closure, but a quick step through the Google looking glass will reveal that SolarWorld moved all its manufacturing to Oregon after that state offered it millions of dollars in tax breaks.

There is nothing inherently wrong with what Oregon did (unless you are one of the newly unemployed in California), but it should be part of the discussion. Not all jobs lost are part of the international trade war; in a low-growth economy, state governments are increasingly generous with the private sector as they try to secure precious jobs.

And not all “American” solar manufacturers actually do their manufacturing in America. SunPower, a San Jose-based solar company that has said it is “neutral” in this trade row, manufactures most of its solar panels in the Philippines.

Measuring the US solar sector by manufacturing alone is also a faulty yardstick. A majority of domestic solar-sector jobs–52%–are actually in installation. . . and there’s the rub. . . well, a rub. . . potentially, a really big rub.

Oregon’s two Democratic Senators, Ron Wyden and Jeff Merkley, are obviously quick to jump in on the side of a company that provides their state with 1,000 jobs (and solar manufacturing across all companies might provide Oregonians with something like twice that number). US Representatives, like Democrats Jackie Speier, Barbara Lee and Pete Stark, who have solar startups in their California districts, have also called for the federal government to investigate Chinese trade practices.

The Department of Commerce is scheduled to rule on CASM’s complaint by March 5, but if it takes what looks like the politically smoother path and sides with SolarWorld and their invisible friends, the next step would be for the US to impose tariffs on Chinese-made solar components, thus halting the rapid downward trend in prices for solar panels, and quite possibly driving prices up again here in the United States.

And that could actually spell big problems for America’s solar sector. Though it is hard to find an “expert” without some vested interest in some side of this dispute, there seems to be consensus that the recent substantial drops in the price of solar equipment have spurred a vast expansion in the numbers of homes, schools, businesses and government buildings that have installed solar cells to meet some or all of their electric power needs. Those installations, as noted above, mean jobs, and they also mean energy savings–both immediate and sustainable–for both individuals and municipalities. And while there are tax breaks for retrofitting buildings with solar panels, those breaks are mostly available for private buildings (not public schools and municipal buildings, where alternative energy could make a quick and substantial impact), and the savings do not make up for the price difference between Chinese- and American-manufactured products. The tax breaks are also scheduled to expire in 2016.

And there’s a multiplier effect that makes the basic savings seem small in comparison. Every home, hospital or school using solar power is that much demand that is not being placed on the conventional electrical grid. Depending on the region, that means less demand for coal-, gas, or nuclear-powered generation. And that means less demand for disappearing resources and less need to build costly, new power plants. It could also mean lower costs to society in the form of fewer pollution- and radiation-related health problems.

Then there is the obvious metric: Carbon-based power generation is guaranteed to grow more expensive as time marches on; the same has proven true for nuclear power. Solar prices are on a steady downward path, and solar power, if allowed to grow in market share, will continue to grow cheaper and more competitive.

And competition is what this is all supposed to be about, right? CASM has accused China of unfair trade practices that make it impossible for American manufacturers to compete. Proponents of 19th and 20th Century power-generating technologies love to remind advocates of alternative energy that fossil and fissile fuels are just “more competitive.” All things being equal. . . the market will decide. . . if there is a level playing field. . . or so the argument goes.

Fair enough, let’s look at that playing field.

Right now, without trying to estimate any possible solar tariffs, the alternative energy sector does get some help. According to a study from the Environmental Law Institute, renewables received $29 billion in federal subsidies from 2002 to 2008. Remove ethanol form that number, and you are down to $12.2 billion.

But during that same period, fossil fuel production received $72.5 billion in subsidies. That number excludes general energy sector subsidies–and it also excludes nuclear. The amount that nuclear receives is harder to calculate in the aggregate–loan guarantees are just guarantees until there is a default, and the Price-Anderson indemnity act has a value, but quantifiable payouts only come with disasters–but it is believed that for the second half of the 20th Century, nuclear consumed 10 percent of all US subsidies to the energy sector, something well in excess of $100 billion since the industry’s start.

But the numbers for fossil fuel and nuclear power are ridiculously low-ball. Not included there, what the federal government has to spend to clean up a polluted river or an oil spill in the gulf; nor does it include what the US has and will have to spend on behalf of the nuclear industry to transport and store its dangerous radioactive waste for as far forward as anyone can imagine.

Still, a “level playing field” sounds inherently fair, so why should domestic solar manufacturing have to suffer for the sins of legacy energy production?

Indeed. Wouldn’t it be amazingly convenient for gas producers or nuclear power concerns if the downward move in solar panel prices were arrested by a US tariff?

Instead, what if the federal government leveled that playing field by increasing its subsidies to domestic solar production?

Do more subsidies somehow sound too extravagant in these times of supposedly tight budgets? OK, then maybe the gas industry should be made to pick up the tab for trucking in fresh water to communities that have had their natural water supplies poisoned by hydro-fracking. Maybe the oil industry would like to pay to register its offshore rigs in the United States when they are drilling in US waters. Or maybe the nuclear industry should be required to find their financing without federal loan guarantees.

That last point is of special interest here. Take, for example, the two Chinese companies said to be providing the most competition for US solar manufacturers. According to SolarWorld representatives, “Trina Solar received a $4.4 billion loan from the China Development Bank, and Jinko Solar got a $7.6 billion loan from the Bank of China.” As regular readers of this space probably recognize, both of those figures are eclipsed by the $8.3 billion loan guarantee given by the Obama administration to the Southern Company for two recently approved nuclear reactors in Georgia.

So, fair is fair, level that playing field, but level it all over. If the US wants to move to make its solar companies more competitive with Chinese manufacturers, then make other energy sectors have to compete on similar terms. Rather than protect entrenched, disappearing, dangerous and dirty sources with duties that will render the entire solar sector less competitive, grant solar and other promising renewable alternatives the same level of help the US has habitually handed to fossil and fissile fuels. Rather than constrain domestic job growth by making solar power more expensive, pave the way for more good jobs with greater subsidies for both solar manufacturers and consumers. Rather than blow current and future resources on fuels that will only grow more expensive, spend now to expand the contribution of energy that continues to improve its cost-to-kilowatt ratio. Rather than use taxpayer dollars to pay for more pollution, more global warming, more cleanups and more adverse health outcomes, invest in clean, green technologies that not only pay immediate dividends but also have the potential to place America at the forefront of the next economic revolution.

If the Commerce Department does move toward imposing tariffs on Chinese solar manufacturers, the Obama administration and others in the government–as well as parts of the solar industry here–will now doubt call it a move on behalf of American manufacturing and the American worker. But will it be a move on behalf of America? The government might very well need to get involved to further the growth of this renewable energy sector, but if they do, manufacturers, workers and consumers should all insist that the intervention is done in a way that is truly in the public interest.

Occupy Innovation

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Actress Anne Hathaway marches with demonstrators on the two-month anniversary of Occupy Wall Street. (Photo: Elana Levin)

Two days after thousands of police broke up the around-the-clock occupation of New York’s Zuccotti Park, tens of thousands of demonstrators converged downtown to celebrate the two-month anniversary of Occupy Wall Street and stress that with or without Zuccotti, the protest and its message remained strong and relevant.

One of those in the march, the actress Anne Hathaway, carried a sign that read “Blackboards not Bullets,” and though much attention was predictably paid to the 29-year-old star’s presence, the message she carried that day shouldn’t be ignored.

A month earlier, shortly after a company called Boston Dynamics unveiled a prototype of its “Legged Squad Support System” AlphaDog, a walking robot financed by DARPA, the Defense Advanced Research Projects Agency, Rachel Maddow featured the technological marvel in a segment contrasting current advances in military hardware with what is currently on offer for consumers.

Her featured guest in that segment was US Rep. Rush Holt (D-NJ). Holt had, a month earlier still, gone on record in the midst of Washington’s deficit hysteria arguing that the government should actually spend more on scientific research, writing that the framing of the budget debate set up a false choice between basic science and elementary education.

Nothing demonstrates the effectiveness of the young Occupy movement more than the rapid shift in frames. The “cut, cut, cut” of the manufactured deficit crisis that Holt had to fight against has been largely drowned out by the chant of “banks got bailed out; we got sold out” and the reevaluation of spending priorities that came with nationwide demands for an accountable government acting in the service of the 99 percent.

But, to state the obvious, four months of Occupy has not been enough to really transform the way the federal government prioritizes spending, nor has the movement yet transformed the way the country evaluates real progress.

For instance, with December’s formal end of US military operations in Iraq, and a promised drawdown coming in Afghanistan, as well, has anyone in official Washington (or in the commentariat, for that matter) started talking about what America will do with its “peace dividend?”

In fact, the beneficiaries of profligate wartime spending are marshaling their surrogates to warn that cuts in Pentagon spending will actually subtract valuable research dollars from the economy. Citing large contractors like SAIC, Computer Sciences Corporation, and CACI International, a recent New York Times story tried to make the case that massive military spending in the last decade has been an important catalyst for the economy and for innovation in the broader marketplace. If these companies–all three of which have been involved in major scandals over the last several years–stand for anything, however, it is that the unchecked expansion of the defense budget is a catalyst for shameless corruption. (An observation glaringly absent from the Times piece.)

Indeed, for all the sincere excitement that might spring up around robot dogs, or a stream of other “war dividends” that might find some purpose in the consumer marketplace–from high-resolution cameras to improved prosthetic limbs–the wow factor not only obscures the full cost of the innovation, but distorts the measure of innovation itself.

A marketplace of ideas?

Many conservatives (and neo-liberals) love to argue that the marketplace is the best judge of winners and losers. Competition is the key to innovation, they argue. But in the consumer market, innovation isn’t always about providing a better product. Just as often, “innovation” means exploiting a leverageable point of difference or streamlining the manufacturing process in pursuit of better profit margins.

Was Coke Zero an innovation over Diet Coke? Was Nexium an innovation over Prilosec? Certainly, marketing said “yes,” but the research, at least in the case of the pharmaceuticals, stated otherwise:

It’s expensive to produce an innovative drug. On average, the bill runs to more than $400 million. So drug companies often take a less costly route to create a new product. They chemically rejigger an oldie but goodie, craft a new name, mount a massive advertising campaign and sell the retread as the latest innovative breakthrough.

This strategy has shown great success for turning profits. Nexium, a “me-too” drug for stomach acid, has earned $3.9 billion for its maker, AstraZeneca, since it went on the market in 2001. The U.S. Food and Drug Administration classified three-fourths of the 119 drugs it approved last year as similar to existing ones in chemical makeup or therapeutic value.
….

Nexium illustrates the drug makers’ strategy. Many chemicals come in two versions, each a mirror image of the other: an L-isomer and an R-isomer. (The “L” is for left, the “R” is for right.) Nexium’s predecessor Prilosec is a mixture of both isomers. When Prilosec’s patent expired in 2001, the drug maker was ready with Nexium, which contains only the L-isomer.

Is Nexium better? So far, there’s no convincing evidence that it is. . . .

The study goes on to point out that the money spent on developing and marketing a “me too” drug is money not spent researching truly new treatments.

The energy sector practically turns the notion of marketplace innovation on its head. From underpriced leases for drilling on federal land to underwritten loans for construction of new nuclear reactors, “innovation” has been about finding ways to preserve the status quo.

Take, for example, a so-called “next generation” reactor design, known as the AP1000, certified by the Nuclear Regulatory Commission just before Christmas. Though touted as a “radical” new design, in reality, the new model represents little more than a riff on 50-year-old pressurized water reactors. While manufacturers contend the AP1000 offers improved options for backup reactor cooling in an emergency, the real “innovations” for plant owners are the number of systems and components that do not differ from what has already been licensed and manufactured – shortening the approval process – and the promise that the new model requires fewer components, far less concrete and rebar, and smaller staffs to operate, thus saving on construction and labor costs.

Nothing about the new reactor design has actually impressed “the marketplace” one iota. No bank will indulge the risk – without billions in federal loan guarantees, none of the reactors now approved and fast-tracked for construction and operating licenses would ever come close to getting built. In addition, the federal government is still paying to clean up after mid-20th Century uranium mining, decades of nuclear fuel processing, and numerous radiation leaks of varying size, and will remain saddled with the burden of providing a long-term storage solution for nuclear waste. The Price-Anderson Act also shields the nuclear industry from the full liability of any accident. None of these costly government investments supports innovation – indeed, it could be argued they prevent it.

The military innovation complex

But as costly as it is to backstop the nuclear industry, it pales in comparison to the military model for innovation. Far from being tested in the “marketplace,” military innovations seem to go through a “spaghetti test” – throw multiple options at the wall, and see if any stick. This is a phenomenally expensive model, and can also cost dearly in terms of lives, but it is a system born of the “cost is no object” approach encouraged by the shock of war, and sustained by the Military Industrial Complex and its enablers.

As a result, as Rep. Holt observed, “The military spends a lot more on development than research. More on the ‘D’ than the ‘R.'” Tax dollars spent in this sector contribute little to primary research, the kind that has the potential to radically shift paradigms. Instead, military innovation focuses on incremental improvements, usable in theater as soon as possible.

And the incremental approach is notably desirable for military contractors. There is so much more profit in producing an assortment of tweaked prototypes and modest upgrades than there is in having a few scientists or engineers work on models. A war–and the war frame for thinking about innovation–might get you many relative improvements, but it rarely produces radical inventions.

In addition, Holt points out that military R&D is often less fruitful for the greater economy because much of the research is kept secret.

Military spending is also much more capital intensive than investments in other vital sectors – and a new study from the Political Economy Research Institute (PERI) quantifies just how much more.

The study, titled “The US Employment Effects of Military and Domestic Spending Priorities” (PDF), calculates the number of jobs created by a set amount of military spending, and then contrasts that with what the exact same amount would do when invested in four non-military alternatives: tax cuts for personal consumption, clean energy and efficiency, health care, and public education. The differences are staggering.

PERI found that $1 billion in military spending produced 11,200 jobs, which sounds impressive until it is placed next to the alternatives. Tax cuts, no reputable economist’s favorite way to create jobs, still outpaced military spending – $1 billion in tax cuts would create an estimated 15,100 jobs. But even that looks weak when compared with more direct government investment in crucial alternative sectors. A billion dollars spent on clean energy and improved efficiency would result in 16,800 new jobs. The same amount in the health care sector would mean 17,200 jobs. And $1 billion of government investment in education would create 26,700 jobs – well over twice the jobs created by the same amount spent on the military.

It is often argued that military jobs are better compensated than others – mostly because of the superior health benefits – however, the money spent in the private sector is so much more efficient at job creation that more jobs are created across the spectrum, even in the upper tiers. (Indeed, for jobs in the upper brackets, clean energy investment leaps ahead of health care – though, in every category, education is the leader in dollars-for-jobs effectiveness.)

Such numbers have major and obvious implications at a time when, in Washington, anyway, leaders talk of the need to cut government spending, but paradoxically also warn of the consequences – especially with regard to employment – of cutting the military.

Innovation and its discontents

So, while it is probably human nature – and an admirable part of it – to get excited about an agile and intuitive robot, the rapid improvements in mechanical dog technology raise important questions: What if the US had the same level of commitment to innovation outside the military? What if the government took just a fraction of the money it poured into Iraq and Afghanistan – wars arguably fought to help preserve America’s access to cheap oil – and instead invested it in renewable energy innovations and improvements in energy efficiency? What if some of the $2,200 spent by every resident in the United States on the military in 2010 (to use the most recently available figures) had been repurposed for education? How much lower would the jobless rate be? How many innovations and improvements equal to or better than AlphaDog would now be receiving the oohs and aahs of an amazed public?

Or is it, as Ezra Klein observed in a response to the Times story, that military R&D is “economically inefficient but politically efficient“–that there might be better ways to spend a research dollar, but the one that Beltway thinking can sustain goes through the Pentagon? Not only is that construct what Klein calls “depressing,” it makes several assumptions about the values of extravagant wartime budgets while ignoring the known and numerous downsides. (The Times piece itself includes two professors who posit without any apparent irony that the biggest economic benefit of inflated defense spending is “what it prevents”–presumably, war and other threats to domestic security.) But, worst of all, Klein’s take on realpolitik is myopic and shortsighted.

If the US fought for the post-carbon economy the way it fights for nebulous state-building goals in foreign wars, the future would be brighter, cleaner, safer and cheaper, with more jobs and perhaps – because it would need to secure less of that foreign oil -fewer wars. If the country built new classrooms with the same urgency it built armored vehicles, more American teens could be choosing between colleges instead of choosing between minimum and sub-minimum wage jobs – and fewer would eventually need public assistance. If the government spent more on blackboards and less on bullets, it would create more jobs today and more innovation in the future.

Neither the military nor the marketplace has proven to be the great incubator of innovation that proponents of defense spending and free markets wish to believe. Instead, both facilitate what author Malcolm Gladwell calls “tinkering” – refinements that might improve upon a big invention, rather than the big invention itself. This is not to slight tinkering: Edison’s light bulb and Apple’s iPod represent the kind of tinkering that can markedly affect everyday life. But those were improvements on earlier discoveries, not the world-changing discoveries, themselves (and, as has been demonstrated, not every tinkering innovation is for the benefit of the end-user).

No, if the United States truly wants to “think different” (as Apple’s advertising once implored), it needs to once again embrace the innovations upon which the country was founded: Real representative democracy, transparency, accountability, checks and balances of three co-equal branches of government, no taxation without representation, trial by jury, a wariness of foreign military entanglements, and, as was added soon after Independence, access to free public education as a right. They are ideals remarkably similar to those embraced by the Occupy movement – if not assumed by most Americans to be part of their national identity.

But they are precepts that have been tarnished by the masters of the marketplace and the adherents of the military industrial complex. Perhaps they don’t need re-invention, but it appears some serious re-dedication is in order. If the innovation in public discourse known as Occupy Wall Street can continue to re-frame the crisis, rethink the role of government and reinvigorate the democracy, then maybe America can re-occupy itself.

* * *

(A version of this story previously appeared on Truthout under the headline Occupy Innovation: Neither the Military Nor the Market Does)

Energy Innovation: Obama’s State of the Union a Frothy Mix of Promise and Prattle

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It’s an election year, another presidential campaign is upon us, and since it is going to be so very much upon us every day from now until November, it would be nice to find something about which to get excited.

There is nothing to get excited about on the Republican side of the aisle. The knock-down, drag-out contest between the stupid, the rude, and the just plain offensive may provide the Democrats with the best gift since, oh, you know, the last Republican president, but for the American people, none of the GOP contenders is a prize. It will be truly hellish to have to listen to any one of them for the duration of the campaign.

So, when I turned on the TV last night, I wanted to stand up and cheer. While watching President Obama’s State of the Union address, I felt much like I did when I watched his 2008 acceptance speech at Mile High Stadium in Denver. OK, that’s not true–not hardly. Reality has not been kind to Obama’s rhetoric, after all. But when Obama got to the energy section of the speech, I found much to applaud, not unlike in 2008. . . with some obvious caveats for his praise of dirty, dangerous, failed or flat-out fictional forms of energy production.

During the 2008 campaign, candidate Obama always made a point of touting “clean coal” in his energy policy stump speech. As president, he included this nonsense phrase in both his 2010 and 2011 State of the Union speeches. This year, however, though Obama extolled an “All of the above” energy mix, and then went into some detail about what that “all” should include, there was no reference to coal, “clean” or otherwise (AKA “dirty,” AKA “the way coal actually is”).

The ’08 campaign contained frequent references to nuclear power, too. Obama also would clean those up, often by calling for “safe nuclear.” It was, to my ear, just as imaginary–and just as dishonest–as “clean coal,” and it made me wary of a candidate that I already knew was heavily dependent on nuclear industry contributions to fund his campaign. But last night, “nuclear” only came up three times–twice while talking about Iran, and once more when discussing nuclear proliferation, in general. There was no reference to nuclear power.

Funny that. I guess with 44 domestic coal mine fatalities since Obama took office, and with approximately 20 percent of US coal-fired power plants failing to meet clean air standards, maybe coal doesn’t sound so much like “winning the future.” And after nuclear power’s 2011–with Japan’s Fukushima disaster still metastasizing and dozens of smaller events at aging plants here raising important questions about safety–touting atomic energy is not how you fuel “an America built to last.”

And therein lies the big, flashing yellow caution. For while Obama’s speech did much, again, to sing the praises of investment in clean, green, renewable energy sources, I know that whatever the president allots to alternatives in his next budget (we still do budgets, right? not just hostage-taking, continuing resolution kabuki stand-offs), it will be but a tiny fraction of what he has already given to and will continue to shower upon the fossil and fissile fuel lobbies.

There are several examples of this rhetorical shell game in the State of the Union speech. While Obama did make this admirable call:

We have subsidized oil companies for a century. That’s long enough. It’s time to end the taxpayer giveaways to an industry that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising.

It was only moments after the president said:

Over the last three years, we’ve opened millions of new acres for oil and gas exploration, and tonight, I’m directing my Administration to open more than 75 percent of our potential offshore oil and gas resources.

I worry, too, that when Obama says, “I will sign an Executive Order clearing away the red tape that slows down too many construction projects,” that what he means by “red tape” is what many call “environmental protections.” Or “workplace safety rules.” Or “worker rights.” Just as I worry that when I hear, “I’m directing my Administration to allow the development of clean energy on enough public land to power three million homes,” it is opening a door to more private development on public lands.

Is this cynical? Perhaps, but it is hard not to be when you hear the president claim, as he did last night, “I will not back down from making sure an oil company can contain the kind of oil spill we saw in the Gulf two years ago,” when just a day earlier it was revealed that the Obama administration actively worked to downplay the size of the BP spill.

And so what is the public to make of Obama’s section on natural gas?

We have a supply of natural gas that can last America nearly one hundred years, and my Administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade. And I’m requiring all companies that drill for gas on public lands to disclose the chemicals they use. America will develop this resource without putting the health and safety of our citizens at risk.

So many questions. First off, it is important to note that Obama is talking about fracking without ever using the word. That’s what it means when the president says he will require drillers to disclose the chemicals they use–these are the chemicals that make the “hydro” in hydrofracking heavy enough to do its job. And these are the chemicals that have likely poisoned some aquifers and promise to befoul even more.

But the poisonous and all-too-secret chemical composition of the injection liquid is only one of many problems with fracked natural gas. There is mounting evidence that fracking is responsible for increased seismic activity in the US and abroad. And, of course, there is the $64 question of whether we should be investing in and smoothing the way for a finite resource that will contribute to CO2 emissions at a time when the world is fast approaching irreversible climate change.

But push that aside, and the president’s fulsome gas promises are still mostly hot air. That name-your-chemicals rule? It only applies to drilling on public lands. And the president doesn’t say if it will apply to projects already approved, or just future leases. And those 600,000 jobs? I need the administration to show its work, for that number sound suspiciously like the trumped up job figures floated in the push for the Keystone XL pipeline–where it turned out that every year of a job counted as a separate job, and that many positions were low wage or instantly redundant.

With so much so easily picked apart, it is hard not to hear “America will develop this resource without putting the health and safety of our citizens at risk,” as the 2012 edition of “I promise this won’t hurt a bit,” or “the check is in the mail”. . . or “clean coal.”

But, as I said, I want to stand up and cheer, and so let me close by cheering this:

Innovation also demands basic research. Today, the discoveries taking place in our federally-financed labs and universities could lead to new treatments that kill cancer cells but leave healthy ones untouched. New lightweight vests for cops and soldiers that can stop any bullet. Don’t gut these investments in our budget. Don’t let other countries win the race for the future. Support the same kind of research and innovation that led to the computer chip and the Internet; to new American jobs and new American industries.

Nowhere is the promise of innovation greater than in American-made energy.

. . . .

Take the money we’re no longer spending at war, use half of it to pay down our debt, and use the rest to do some nation-building right here at home.

Yes, I will admit, that internal ellipsis mark covers many, many paragraphs, but though the execution laid out within is mixed, the overarching sentiment should be one of the clarion calls of this election year. As I recently explained at some length, real innovation is essential to America’s future, and basic research is essential to real innovation. And government money spent on basic research provides much more bang for the buck than money spent on propping up out-dated energy sources and the military industrial complex.

Obama doesn’t say “peace dividend,” but that is what he is talking about. It is a dividend that could grow if the president follows through with his drawdown of forces in Afghanistan, and it is time to start building into the discussion the idea that this money will be repurposed to spur innovation, rebuild our infrastructure and invest in education. This is a wealthy nation, and the US should spend its wealth on programs and projects that benefit the vast majority of its people–say, 99 percent of them–and not just use the current lull in foreign incursions to fund more tax cuts for the richest one percent.

For reinforcing that frame, and for at least sowing the seeds of a re-prioritized economy, I applaud the president. Now it is up to him to play on the pitch he has planted. Given the scores of disappointments that have trailed after so many of Obama’s lofty speeches in the past, I am wary that this is little more than another field of dreams–but guess what, with alternative energy, education investment, and a modernized infrastructure, if you build it, “an America built to last” will quite possibly come.

Too hopey-changey? Well, at least he’s stopped shilling for “clean coal.”

The Party Line – August 12, 2011: Obama, Drew Westen, and Me

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Watching Barack Obama deliver his jobs speech Thursday in Holland, MI, I couldn’t help but wonder if the president had read Drew Westen’s critique in last weekend’s New York Times.

Under the headline “What Happened to Obama?” Westen, an Emory University psychology professor and Democratic communications guru of a sort, tried to divine the source of the Obama administration’s trouble. The seeds were sown, Westen explains, in the opening minutes of the presidency, as Obama delivered his inaugural address.

As Westen recounts (in words remarkably similar to ones I’ve used in the past), Obama’s speech failed to tell the story of the disaster that had befallen America during the Bush years:

That story would have made clear that the president understood that the American people had given Democrats the presidency and majorities in both houses of Congress to fix the mess the Republicans and Wall Street had made of the country, and that this would not be a power-sharing arrangement. It would have made clear that the problem wasn’t tax-and-spend liberalism or the deficit — a deficit that didn’t exist until George W. Bush gave nearly $2 trillion in tax breaks largely to the wealthiest Americans and squandered $1 trillion in two wars.

And perhaps most important, it would have offered a clear, compelling alternative to the dominant narrative of the right, that our problem is not due to spending on things like the pensions of firefighters, but to the fact that those who can afford to buy influence are rewriting the rules so they can cut themselves progressively larger slices of the American pie while paying less of their fair share for it.

In fact, Westen and I use the exact same phrase for the core message that Obama needed to communicate out of the box: “your government has your back again.”

That would be as opposed to Wall Street’s back, or the Banksters’ backs, corporations’ backs, or the wealthiest of the wealthy’s backs.

Westen reminds us that narrative—a structure for understanding the world around us as old as humanity itself—needs opposing forces. Narrative honors heroes, yes, but in order for there to be heroes, there also has to be a villain—and Obama’s seemingly obsessive refusal to name the villains not only undermined his administration’s narrative, it communicated that the architects of America’s misfortunes would not be held accountable.

This (again, as I have often said) created the space for the various TEA parties, and their sympathizers and sycophants. Yes, this so-called populist anger has been nourished, exploited, and in some cases manufactured by some of the very people and organizations—let’s go ahead and call them villains—that helped tank the economy, but it would have been a much harder task to gin up this “movement” if Obama had dared to call out these villains from the get-go.

But he didn’t then, and he continues to spare the rod and spoil the spoiled today. Even with popular opinion overwhelmingly favoring higher taxes on wealthy individuals and windfall corporate profits, President Obama bent over backwards to again avoid naming names.

As witnessed Monday by NPR White House correspondent Ari Shapiro, this avoidance is comprehensive and conscious:

It was striking how far they went to try not to point fingers. As a matter of fact, just before the president began speaking today, I was able to see the printed text of his comments on the teleprompter, and I watched a last minute edit that may give some insight. One passage of the speech referred to asking for sacrifice from those who can most afford to pay their fair share. And as I was looking at the teleprompter, the phrase wealthy Americans and corporations was highlighted and deleted from the text.

Because of that failure to finger, and a striking lack of proactive ideas in general, Obama’s Monday White House matinee served up a nothing-burger deluxe—not at all rare these days, I’m afraid, and also not well done. He wasn’t selling the steak, he wasn’t selling the sizzle, and he wasn’t telling a very good story in structural terms, either.

But the president very much needs to tell a story—to construct a narrative—because he very much needs to sell something: himself.

And so, in what was very clearly a campaign-style appearance at the Johnson Controls factory in Holland, president/candidate Barack Obama tried his hand at crafting a Drew Westen-style traditional narrative:

We know there are things we can do right now that will help accelerate growth and job creation –- that will support the work going on here at Johnson Controls, here in Michigan, and all across America. We can do some things right now that will make a difference. We know there are things we have to do to erase a legacy of debt that hangs over the economy. But time and again, we’ve seen partisan brinksmanship get in the way -– as if winning the next election is more important than fulfilling our responsibilities to you and to our country. This downgrade you’ve been reading about could have been entirely avoided if there had been a willingness to compromise in Congress. See, it didn’t happen because we don’t have the capacity to pay our bills -– it happened because Washington doesn’t have the capacity to come together and get things done. It was a self-inflicted wound.

So, “brinksmanship” is the big, bad wolf? Washington is the villain? Well, as Obama tells it, yes, but more specifically, it has been decided by the White House political team that the Lex Luthor to Obama’s Superman (if not his kryptonite) is Congress:

They’re common-sense ideas that have been supported in the past by Democrats and Republicans, things that are supported by Carl Levin. The only thing keeping us back is our politics. The only thing preventing these bills from being passed is the refusal of some folks in Congress to put the country ahead of party. There are some in Congress right now who would rather see their opponents lose than see America win.

And that has to stop. It’s got to stop. We’re supposed to all be on the same team, especially when we’re going through tough times. We can’t afford to play games — not right now, not when the stakes are so high for our economy.

And if you agree with me –- it doesn’t matter if you’re a Democrat or a Republican or an independent — you’ve got to let Congress know. You’ve got to tell them you’ve had enough of the theatrics. You’ve had enough of the politics. Stop sending out press releases. Start passing some bills that we all know will help our economy right now. That’s what they need to do — they’ve got to hear from you.

I will give the president a tiny bit of credit in that, instead of the wholly empty pleading for a similar call to Congress that he stroked during the debt-ceiling circle-jerk, Obama did list a series of actions he’d like Congress to approve (as meaningless, dangerous or counterproductive as many of them may be). But Obama also bragged about what he was able to get done without having to go through Congress. And Obama made it clear throughout: America, you’ve got problems, and those problems have their provenance on Capitol Hill.

Running against the “Do-nothing Congress” may have worked well for Harry Truman, and running against Washington is a time-tested tactic for many aspirants to higher office, but where does this get us?

It might work out OK for Obama. He has pretty much made being “above it all” his raison d’être, and by avoiding direct engagement with the big issues of our day, he might be able to slough off some of the Beltway taint. But where does it leave the rest of the Democrats? We really don’t have to ask because we have an example, it’s called the midterms. Obama did plenty of Congress-bashing during the summer of 2010. He railed against establishment Washington, even though he and his party had been that establishment for the previous twenty months, and when the dust cleared, America had the “divided government” Obama likes to point out “America voted for.”

Except they didn’t. America doesn’t elect our government on a national proportional basis. America votes state by state and district by district, and if voters in those specific races voted at all, they voted against a disappointing two years, not for a political concept.

And if the antagonist in Obama’s campaign narrative is Congress, then, in practice, the villain he wants Americans to rally against is elected government itself.

And that’s not only dangerous to sitting members of Congress, that’s dangerous for the democracy. It affirms the agenda of the elites, it confirms the fears of the TEA parties, and it will make voters across the board more cynical and less inclined to get involved.

So, did the president or his political team read the Westen piece, and did they decide to refine this Congress-as-villain narrative as an answer? I have no way of knowing, of course, but if they did, I do know they’re doing it wrong.

But in crafting his critique of the president’s path, Drew Westen also might have made some mistakes. First, Westen doesn’t allow himself to take the next step—beyond story-craft to actual belief. In wondering “What happened to Obama,” Westen can’t bring himself to conclude the answer might be “nothing.” It is possible, sad though it may be, that while America thought it was electing a man from the party of FDR, it instead got a confirmed Hooverite. So much of Obama’s language of late seems to point that way, not to mention his policies, and let us not forget the time he spent raising elbows with the magical marketeers at the University of Chicago.

Second, Westen also bemoans the “dialing for dollars” culture that pervades and pollutes national politics. Huffington Post senior Washington correspondent Dan Froomkin also tried to explain it earlier this week:

Progressives say Washington’s governing class absorbed its bias toward austerity — and, implicitly an agenda favoring the wealthy — by osmosis.

“The people who do fundraisers are the people who don’t want to pay taxes,” [Roosevelt Institute fellow Rob] Johnson said.

Politicians “spend an awful lot of time calling people with assets,” said Robert Borosage, co-director of the Campaign for America’s Future, a liberal think tank. “You don’t spend a lot of time with people who aren’t affluent, and you certainly don’t have extended discussions with them about economic policy.” Over time, Borosage said, “you develop a set of self-justifying rationalizations,” he said.

Westen makes it seem like it is virtually impossible for the president—or any president, really—to both single out Wall Street and Corporate elites for blame and simultaneously ring them up for campaign cash. But Westen doesn’t call out the president for failing to capitalize (as it were) on his ability to change that culture.

Obama has hinted at wanting to be a transformational figure (and others have assigned that role to him, outright), and one of the things that once made that seem possible, at least to me, was the way he ran his 2008 campaign.

Prior to Obama, from Bill Clinton’s 1992 campaign onward, the prevailing logic in national campaigns was that they had to emulate the Republican successes of the 1980s—chase big-donor money, and you can effectively buy all the votes you need. However, with Hillary Clinton having locked up much of the early establishment money in ’08, the Obama campaign set up an unprecedented (dare we say “transformative?”) structure for collecting small-donor contributions. . . and then they set out to motivate those potential small donors. Yes, in time, big-donor bucks did fund half of Obama’s awesome campaign coffer, but initially the strategy was seemingly the opposite of the Terry McAuliffe-Bill-and-Hillary Clinton tack—instead of chasing the money to woo the voters, Team Obama chased the voters to woo the money.

But that is not what the Obama campaign is doing this time. Publicly hostile to his liberal political base, and privately nervous about his Obama for America, small-donor fund-raising base, the president is heading straight for the big money for 2012. The Chicago campaign staff is already bragging about its bankroll. Obama has been courting classic big-ticket bundlers at old-school four- and five-figure-a-plate fundraisers, and, in fact, on his way back from Michigan, the president stopped off in New York for just such a soirée.

It is in this case where Obama once proved that he could change the game—that he could be a transformational figure—and it is here where he has pointedly chosen not to. There comes a point where we have to stop looking for outside factors that prevent the president from accomplishing what we want, and admit that Barack Obama might be accomplishing exactly what he wants.

What happened to Obama? He was elected president. All other answers are based more on hope than change.

The Party Line – July 29, 2011: Those Who Can’t Teach, “Compromise”

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I seriously cannot believe I am again writing a post with one eye on the wire, still waiting for a conclusion to the debt-ceiling debacle, looking for real news to read, instead of just thrice re-boiled tea leaves. But here I am—here we are—sweating out a crisis that is as malicious as it is manufactured, knowing that when a “resolution” comes, no matter which version/option/compromise we get, it will be both terrible and impermanent.

That’s not easy to think about, but it is quite easy to say. There are no smart options on the table. There are not even smart planks left to use as bargaining chips. America, with its economy gasping for air, is left having to choose from a trio of plans that are all (as best as we are allowed to glimpse them) comprised of draconian cuts to so-called discretionary spending, no serious attempts at increases in revenue, and seismic blows to the bedrock programs of our social safety net—and none of which do a single, solitary thing to stimulate job creation. The only resemblance to a life preserver here is that all the plans look like a big, fat zero.

That the federal budget deficit is not even our real problem is a message completely absent from the national “debate.” That there is a difference between the debt ceiling and the deficit has been lazily obscured or purposefully ignored. And, again, the interests and desires of vast majorities of the American people—that jobs are more important than deficits, that a higher percentage of taxes should be paid by the very wealthy, and that the military should be cut before Social Security and Medicare—are marginalized as “extreme,” “not serious,” “unreasonable,” or (horror of horrors) “not adult.”

And who is out in front of this march to mindless mayhem? Believe it or not, as flawed and feckless as Congressional leaders seem, as uncompromising or unhinged as TEA Party sympathizers (T-simps?) appear, the guy that must bear the lion’s share of blame is the one with the bully pulpit.

When President Barack Obama took to the primetime air on Monday, many a Beltway pundit huzzah-ed the appearance of “the educator-in-chief.” We were told that the president went over the heads of the Washington elite to explain the complexities of the debt-ceiling debate to the people. We were told that Obama’s continued “eat your peas” tone was just the sort of talking-to that the unruly brood in the people’s house (you know, the House) needed to hear. And we were told that when the president asked folks to call Congress and say they expected compromise, he had scored a political victory (even as some poopooed his “politicizing” the moment).

And no doubt the president believed his own press, for as the week draws to an end and we are no closer to any kind of meaningful arrangement (good, bad, really bad or otherwise) to raise the debt ceiling, there is nothing new coming out of 1600 Pennsylvania Avenue.

Well, this might come as a bit of a news flash to President Obama (not to mention the DC press corps), but being “reasonable,” or “unflappable,” or even behaving as the “adult” is not the same thing as being a leader.

Former Labor Secretary Robert Reich noticed this “abject failure” on Wednesday, calling Obama “seemingly without a compass. . . an inside-the-Beltway deal-maker who does not explain his compromises in light of larger goals.”

Perhaps this is because the president has no larger goals. It has often seemed that, to Obama, compromise—like “bipartisanship”—is goal enough, an end rather than just a means to an end. Perhaps, as Reich puts it, it is more important to the president that he be “seen as a reasonable adult rather than a fighter.” Or perhaps the larger goals are so singularly unpalatable that he dare not explain them. It is bad enough that the White House is stripping Democrats of a solid campaign issue by joining the GOP in its pursuit of cuts to Social Security and Medicare, if the president had to call such cuts a “goal,” as opposed to a “compromise,” his own re-election might be in peril (or even more in peril).

But the “why” is not as important as the “what”—and what is going on is deplorable, in both practical and political terms. As Reich notes:

[Obama] is well aware that the Great Recession wiped out $7.8 trillion of home value, crushing the nest eggs and eliminating the collateral that had allowed the middle class to keep spending despite declining wages—a decrease in consumption that is directly responsible for the anemic recovery. But he doesn’t explain this to the American people or attempt to mobilize them around a vision of what should be done.

Instead, even as unemployment rises to 9.2 percent and at least 14 million people look for work, he joins the GOP in making a fetish of reducing the budget deficit over the next decade and enters into a hair-raising game of chicken with House Republicans over whether the debt ceiling will be raised. Never once does he tell the public why reducing the deficit has become his No. 1 economic priority. Americans can only conclude that the Republicans must be correct—that diminishing the deficit will somehow revive economic growth and restore jobs.

Instead of powerful explanations, we get the type of bromides that issue from any White House. America must “win the future,” Obama says, by which he means making public investments in infrastructure, education, and research and development. But then he submits a budget proposal that would cut nondefense discretionary spending (of which these investments constitute more than half) to its lowest level as a share of gross domestic product in over half a century.

Reich is kind in phrasing this as a situation into which Obama has “allowed himself to be trapped,” but I fear he is being too politic. Two-and-a-half years removed from inauguration day, the president has enough of a track record to deserve the label of “active participant” in the trapping.

When the will and wisdom of the electorate has threatened to interrupt what we used to think of as a Republican narrative of “austerity for the many and rewards for the few,” it is President Obama that has time and again jumped in to shore up and shape his theoretical opponents’ frame. It was the new president that negotiated with himself a too-small stimulus and then over-promised what it would do. It was the White House that hamstrung healthcare reform with secret deals, an artificial maximum price tag, and long delays for the start of most programs, and then forced Democrats in Congress to embrace it and defend it straight through disastrous midterm elections. It was Obama that created the Catfood Commission when Congress itself failed to appease the deficit peacocks—and it was Obama that stacked the commission with members predisposed to disemboweling the social safety net. It was the president that forced his caucus to embrace his December budget deal that extended Bush-era tax cuts for the wealthy and slashed the estate tax—two major factors in our current budget shortfall. And it is Obama that continues Bush’s wars of choice—justifying them with Bush’s climate of fear—another giant drain on federal coffers.

And it is Obama now, throughout the months that this debt-ceiling circus has continued to send in the clowns (along with high-wire acts and performing seals), who has served as ringmaster.

Obama, as I have described in the past, could have argued that we have more than enough borrowing capacity, and that, with interest rates so very low, now is the time to strengthen our economy by creating jobs, expanding our safety net, and stimulating demand. He could have used this crisis to build on the New Deal, to improve his flawed healthcare law, or to help power the next great engine of American economic expansion (by perhaps giving a Kennedy-esque “moon landing” speech declaring we will replace carbon and nuclear fuels with renewables by a date certain, and then funding R&D)—and he certainly could have used all of this to draw a sharp contrast between Democrats and Republicans. But instead, the president has embraced the austerity meme, argued only for “compromise,” and has turned the entire debate into a contest over whose plan has more cuts. Obama has failed to explain to anyone how compromise, in-and-of itself, will help create a job or put food on the table, but he has succeeded in enhancing a dangerous and growing cynicism among voters well on their way to dropping out of the political process to devote more time to just making ends meet.

It might not be hard to “mobilize” people around a tactic—Congressional phone lines were jammed the day after Obama’s call to call—but a week (or two?) later, when government services have been sacrificed in the name of saving the country’s bond rating, will any of this telephone army feel like they won the fight?

It’s hard to imagine they will—certainly not the next time unemployment numbers come out, or a bridge falls down, or their kids are forced into a more crowded classroom. It is those real-life “lessons” that will do the teaching absent any true leadership from the “educator-in-chief.”

(A version of this post also appears on Firedoglake.)

The Party Line – July 22, 2011: Fixing a Hole

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Focusing on broad, long-term goals while ignoring obvious, near-term problems is order of the day, be it in the Fukushima reactors or deficit-obsessed DC.

I feel like I am saying this every week, but tear yourself away for a minute, if you can, from the daily deficit follies—I promise we’ll get back to them.

As I detailed last week, a study called the Near-Term Task Force Review listed a set of suggestions for ways the US nuclear power industry could improve safety in the wake of the meltdowns and continuing crisis in Japan’s Fukushima reactors. The recommendations were a mixed bag of mostly regulatory tweaks–nothing particularly bad, as far as they go–but obviously missing from the report was any program that would effectively improve the way spent fuel rods are stored.

Earlier this week, the task force officially presented its report to the Nuclear Regulatory Commission, and NRC chair Gregory Jaczko said the full commission should move to accept or reject the recommendations within 90 days, and implement any new rules within five years.

That sounds glacial, especially given the ongoing Japanese crisis and many US plants of similar design facing the possibility of similar problems, but even this cautious approach to some cautious recommendations was more-or-less opposed by three of the five commissioners.

The commissioners reacted much like the Republican leadership on the House Energy and Commerce Committee did a day earlier, asking for a “full and deliberate process of review”—a rather naked demand that the NRC slow-walk these recommendations with an eye toward weakening or killing them. The ECC has yet to schedule any hearings on the task force report.

On the Senate side, I am told that the Committee on Environment and Public Works will hold hearings in August, but nothing as yet is listed on the committee website. (EPW is chaired by Barbara Boxer; if you want, give her a call and express your interest in a timely hearing.)

Sadly, it seems like the US takeaway from the triple meltdown and massive environmental disaster in Japan is that we need to stick up for our domestic nuclear industry. In fact, just yesterday, the NRC approved a 20-year operating license extension for Hope Creek in New Jersey. Hope Creek is a boiling water reactor, just like Fukushima Daiichi 1, and stores spent fuel in above-ground pools, just as was done in the now-crippled Japanese plants.

Conveniently, practically no one in the US has any time to devote to nuclear concerns—after all, we are facing a debt-pocalypse!

I write that with a healthy degree of sarcasm, but it seems to me more than a happy accident that absolutely nothing else can get done in Washington because of the never-healing, self-inflicted wound that has tied our governing in knots and threatens to cripple the entire government. Forgive the cheap allusion, but it is a meltdown of accountability.

An easy turn of phrase, but I have been feeling like there is some deeper connection—or, if not connection, parallel—between the ongoing crisis in Fukushima and the never-ending “crisis” in Washington.

Earlier in the week, TEPCO (the power company that owns Fukushima Daiichi) and the Japanese government updated their plans for cleanup and containment of the disaster area. They announced that their goal is a cold shutdown of the crippled reactors in three to six months, and with that, they hope to reduce the radiation level around the plant to one millisievert per year by mid-January. That would be substantial. Officials even talk of allowing some to return to the quarantine area if that goal is met.

But for that goal to be met—for any of the goals to be met, really—the crews at Fukushima will have to do something else first. Namely, emergency workers must find and fix the cracks and holes in the containment vessels of the damaged reactors that continue to allow contaminated, radioactive water to leak into the reactor buildings, the surrounding tunnels and neighboring facilities, and onto the ground, possibly into the ground water, and, almost certainly, into the sea. Yet, the problem of fixing the holes, a goal that was part of the previous plan of action, a goal that has not been met, is not in the latest Japanese report.

When asked about the omission, officials said that they expect progress to be made on the leaks. They did not say how. They did not say when. But, you know, obviously, that will be addressed. The main thing is, though, focus on the big, happy, longer-term goals.

Is this starting to sound at all familiar?

In the current context, I can certainly find fault with many of the details, but let’s say, OK, long-term deficit reduction is not a bad goal, in and of itself. It would, in theory, be good to spend less on interest, and more, say on education or infrastructure. . . .

But that is not how I hear President Obama addressing this. Instead, I hear him mimicking self-interested deficit hawks, blurring the difference between debt and deficit, allowing the Tea-OP to frame budget cuts as linked to the debt ceiling, and purposely dragging entitlements into the mix when they don’t have a bearing on the matter at hand. And, worst of all, the president and practically every other leader in DC has made deficit reduction the stand-in for the warm, fuzzy goal of rebuilding the economy—which is, at best, putting the cart before the horse, but is more likely a damaging and dangerous lie.

Before we get to jump in to the magic happy balanced-budget pool, perhaps there are a few holes and cracks the administration might want to spackle. And the cracks are legion, aren’t they?

Of course, there is the war. . . the wars. . . the three, three-and-a-half, or four wars, sucking trillions out of the economy.

And, of course, there are the very-much-still-here-even-though-they-should-have-already-expired Bush-era tax cuts for the wealthiest of the wealthy. And there is the hedge-fund-manager’s loophole and any number of other breaks for the rich that deprive the supposedly going-up-in-flames system of a cooling river of cash.

But I want to talk about an even more obvious, immediate, gaping hole, a hole that should be goal one in any discussion of the economy, and yet is embarrassingly absent from the beltway back-and-forth:

Jobs.

Before we spend another breath of air or drop of ink on the goal of deficit reduction, the federal government should be focusing on the goal of decreasing unemployment—focusing on the goal of creating jobs. It is, in fact, the obvious first step, the obvious hole you plug on the way to broader economic health. With more and better-paying jobs, you pump more money into the marketplace, increase demand, and spur expansion. And you also create a more robust revenue stream for the government. Almost every new job is a new taxable income.

And right now, when interest rates are so extremely low, when money is cheap for the government, now is an excellent time to invest in the country by spending. You know what would make this a less-good time for borrowing? Defaulting on our debt.

If the jerk circus in Washington fails to raise the debt ceiling, sends a message that it is some degree less than a sure thing that America will honor its obligations, then the cost of borrowing could go up, and then maybe we have a real problem.

Now, if you were president, what frame would you rather be forced to defend?

Why not take advantage of this situation—which has the added advantage of being the truth—and demand a clean vote, and only a clean vote, on the debt ceiling? Why not tell the American people that if we do this, and keep the money supply cheap and fluid, then government can do what it is supposed to do—what it can do: care for its people, create jobs in a time of need, repair aging infrastructure, research and develop new, greener energy sources (hint, hint—which will not only wean us off of expensive oil and nuclear power, but it could help build the economic engine that could power the US economy for the next decade), and provide a better life for every level of society?

Then, when we are back on terra firma, when we have plugged the gaping hole, we can re-examine the big rosy budget goals. But then we can do so from a place of strength, do so from a place where we are not trying to bail out a sinking ship with a perforated bucket, do so without running from crisis to crisis like terrified citizens in some Japanese horror film.

Let’s at least try to learn one thing from the Fukushima crisis: Make our goal to fix the hole.

 

(A version of this post also appeared at Firedoglake.)

The Party Line – July 8, 2011: A Broadside? That’s Rich

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By now, many of you have probably read Frank Rich’s inaugural piece for New York Magazine. Freed from the bean counters and word counters of the New York Times, Rich pours forth pages (and pages) on what he calls “Obama’s Original Sin.”

That sin, as the story explains, is that the Obama administration’s failure to properly investigate the causes of the financial crisis, its failure to hold anyone accountable, and its embrace of some of the very people that helped push the US economy into the, uh, ditch have left the president’s reelection prospects on shaky ground.

Matt Taibbi (who is quoted in the Rich piece) has called the NY Mag article “Rich’s broadside,” and cites it as one of a growing list of “not quite mainstream media” stories on the epic failure that is the president’s approach to Wall Street. Taibbi sees Rich and raises him, but both are playing roughly the same hand: Frank Rich is being tough on Barack Obama.

I am not going to say that Rich is not being tough, per se, just that he isn’t as tough as he thinks.

I am sure that Frank thinks he is being tough now because he was once much less so. As Matt notes in his post, Rich was once one of Obama’s biggest cheerleaders. In fact, if I may add a personal note, I had always enjoyed reading Rich during the Bush years, but as the November 2008 election drew near, even I started to blush from the Times columnist’s overt man-crush on the Democratic nominee.

In other words, Frank Rich’s opinion of Obama has fallen a long way because Rich’s opinion had a long way to fall.

To be fair, Rich does point out that Obama has a truly dreadful record on jobs creation. Rich also bemoans how many Robert Rubin acolytes the president appointed to his economic team. And, the article rightfully chastises Obama’s embrace of the deficit peacocks and their TEA-infused austerity framing.

But Rich spends a good chunk of his piece trashing GOP presidential hopeful Mitt Romney. Now, Romney deserves trashing—he is an even bigger jerk than he is a phony—but focusing on the big, bad Republican that waits in the wings plays into the Obama team’s own defense strategy—things might be bad, but they would be worse under President Jerkoff. And that not only lets the current president off the hook a bit, it hampers those that want to organize to push Obama leftward (as in, at least somewhere back near the center).

What Rich misses is that the birth of the Tea Party (or the TEA-colored parties that we lump under that one rubric) owes something to the very positions Obama has taken with regard to the economic crisis. The Tea Party that Obama and his defenders blame for his difficulties in governing, that O & Co. warn us about as the hellish alternative to “four more years”—though in many ways incubated and manipulated by rightwing corporate interests—found fertile ground in a scared and angry population that saw a president who promised change and delivered more of the same.

That Obama ran with the Bush bailout of the banks, demanding nothing in return, while shorting his own stimulus package and marginalizing the voices that clamored for pump-priming and accountability—failing to a) produce enough jobs, while b) trying to sell the “how much worse it would have been” argument, and c) holding no one accountable—sent a message that if Obama was on a sinking ship with too few life boats, it would be Wall Street first, not women and children. . . or any of the other inhabitants of Main Street. Obama may have started as a poor kid from Hawaii, but he has cemented himself in many Americans’ minds as just another eastern elite.

I know Rich thinks he is being rough on the president—partly because, a few months back, I overheard Frank telling a table of bold-faced dinner companions sitting near me at a midtown restaurant how tough one of his columns (one of the last he’d write for the New York Times) was going to be on Obama. . . only to read the column that Sunday and find it not so tough at all. I also know Rich thinks he is being tough because he ends with a warning that no one but Obama can save Obama (and so, save America from Mitt). But only four paragraphs before that, Rich writes that “There’s not much Obama can do about the economy by 2012 given the debt ceiling fight. . . and nihilistic Capitol Hill antagonists opposed to any government spending that might create jobs. . . .”

Granted, this was written before the Thursday bombshell about Social Security being put on the table by a president eager to make a deal—any deal—on the debt ceiling, but anyone paying attention saw that (along with hits to Medicare and Medicaid) coming weeks if not months or years ago. But even so, even if Rich, like so much of the liberal establishment, has been willfully ignorant to that, the declaration that the President of the United States is fated to just sit on his hands and watch Americans suffer for the next 17 months because the big banker elites and the tea-party rabble won’t let him help America and so help himself—well, so help me, how is that being tough on Obama?

Let me be a little tougher: I never expected a hero or a real progressive when I voted for Obama in 2008, but I expected some kind of leader. I hoped that, though not my idea of a liberal, Obama was smart, would see what the great crisis of our time demanded, and would rise—at least in part—to the occasion.

Obama might think he has done that. Obama might think he is a leader, or if not quite that, at least a transcendent, post-partisan facilitator, but, if I may borrow from Apocalypse Now, Obama is neither. He is an errand boy, sent by grocery clerks—in this case, Wall Street and the corporate elite—to collect a bill.

What’s on that bill? Yes, there is real money—in the trillions. Perhaps Obama’s own downfall, too. (How ironic.) Quite possibly, the bill also demands the destruction of the Democratic Party, and even more likely, the destruction of the social safety net that Democrats have built and defended for over two generations. That’s what Team Obama has put on the table.

That’s my humble take on being “tough on Obama.” But, be it Rich or me, no matter—what Obama has delivered will be tough on all of us.

(A version of this post has been crossposted to Firedoglake.)

The Party Line – June 10, 2011: Hope Floats

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The Obama administration has a problem. As much Republican good will or corporate campaign cash as they expect to gain from their reinforcing of the deficit hysteria meme (which, let’s face it, will not be very much at all), even the most cynical of the president’s economic team realizes that all this budget cutting isn’t going to do squat for the current economy. Without something directly stimulative, the recovery likely stalls. Without some sort of jobs program, the unemployment picture continues to look grim. There is no “car” to worry about putting in reverse—it has been spinning its wheels for some time now, and, as most Americans see it, it never did drive out of that ditch.

Yes, with 2012 shaping up to be another “it’s the economy, stupid” election year, O & Co. has a problem—but with the same deficit hawks and scorched-earth partisans controlling Congress, what is a president obsessed with bipartisan-like process to do?

A natural place to look would be the deal the White House cut last December with House Republicans—and indeed, Obama went to that well earlier this week. During an appearance with German Chancellor Angela Merkel, the president floated the idea of extending a central part of that deal, the two-percent payroll tax cut for employees, for another year. Then, never failing to miss an opportunity to negotiate with itself, the White House later posited an employer-side payroll tax break (instead of the employee-side cut? in addition to? hard to say, but it is fairly easy to guess which would be favored by the GOP) as an incentive to business for some sort of job creation.

Payroll taxes, however, are not some sort of rainy-day fund the government puts aside when it can, there to use if it needs a new washing machine. . . or the economy is in a ditch. These payroll taxes—the ones Obama is offering to cut—go to fund Social Security and disability. The 2010 deal cost roughly $112 billion, and it figures extending the cut another year will cost the same. If the employer-side cut is comparable, and it is paired with an extension of the employee-side holiday, Social Security could be out close to $400 billion by the end of next year.

The Obama administration has assured us that the Social Security shortfall will be made up from the general revenue, but if the White House does not think it has the political capital to push through a more straightforward (and almost certainly more effective) money-for-jobs stimulus plan, why are we to grant that they can engineer a repayment of the Social Security fund? And even if that transfer were politically possible, what $400 billion cut in the federal budget will have to be made to appease the deficit peacocks?

All of this—or any of this—puts additional pressure on Social Security, or, more accurately, lends ammunition to those already taking pot shots at the long-term viability of the program. If there are already “serious” people trying to shock-doctrine in changes to the retirement plan, how much more shocking could they make things seem after taking a two-, three-, or four-hundred billion-dollar bite out of its reserves?

None of these cold calculations likely come as a big surprise to the White House. In fact, this is all possibly part of the political calculation—that one of the reasons Hill Republicans might go along with an Obama-proffered plan of any sort is the resulting dent it puts in the Social Security trust fund.

That might seem like a successful trade to administration insiders, buying themselves some small bit of help for an economy on the skids and sure to suffer from any “deficit reduction,” but it comes at a heck of a price. Not only does the economic upside of this bargain look relatively small, the political downside is potentially huge. As both the recent Medicare scare and the 2005 Social Security privatization push have taught us, American voters hate it when you threaten their “entitlements.” If Republicans can muddy the waters, or actually drag the White House into the mud with them, on Social Security “reform” (read: benefit cuts), they will have taken away one of the Democrats’ most effective salvos for the coming campaign.

And that will come in addition to a litany of “wins” for the corporatists, deficit hawks, party hacks, and TEA-totaling ideologues—more tax breaks, less federal spending, a dead-weight economy, and a damaged social safety net. To counter all of that, the Obama administration offers its float of payroll tax cuts and the hope that this and a little economic luck will change things for the better. . . or at least keep enough voters from noticing how they have gotten worse.

(A version of this post appears today at Firedoglake.)