President Obama got to be President because he had his Mojo on, the phase from African Americans which can be interpreted in many ways, but I prefer “mastery of his game.”
Obama showed it in the campaign and brought millions of people who had never voted before along with him. He inspired them; he gave them a dream.
Then, shockingly, in July, Obama, pulled his first consensus move and voted to immunize the Telcos in their spying on Americans, something he said in the campaign he would not do. Clinton said the same and held true to her word, voting not to immunize.
The US unemployment rate for January was announced on Friday, and it had jumped to 7.6%, representing more than 11,600,000 people out of work. The actual January job loss of 598,000 jobs was the biggest loss in 34 years.
As I explained in my earlier blog, this rate is a gross understatement of those out of work. The underemployment rate of 13.9% is comprised of those who work part-time but desire full-time work and workers who have given up looking actively for work because the outlook is negligible.
But Obama continues to act as if consensus is the key to running the country.
This economic crisis is far beyond consensus.
It calls for bold leadership, and sometimes leadership is exercised alone.
As Obama famously stated a few weeks ago, “I won,” but then he acted as if American is being run by a unity government, half of which seems to want to see a return to the failed policies of the Bush years.
As I noted in my earlier blog, the Harris Poll proved decisively that Bush’s Spring 2008 stimulus payments were not used in a manner that stimulated the economy. The payments were used instead to pay down credit card debt or saved against the very real possibility that a family member would lose his or her job or have hours cut back.
The stimulus package, whether the House or the Senate version, is doomed to failure.
1) It is targeted towards the wrong issues.
2) It is far smaller than necessary (it should be, let’s say, $2 trillion).
3) It is concentrated on tax cuts or rebates, infrastructure, and support to state government programs (like Medicaid).
Why will it fail?
1) Infrastructure jobs hire highly skilled workers using high technology equipment. The word “shovel ready” is part of the sales job. Shovels imply people. Shovels were used to build the Interstate system in the 50s: 2000 people build a leg of the Maine turnpike using shovels. Hardly a shovel was used to rebuild a portion of I-295.
2) Tax cuts or rebate or credits are likely to be used as they were in Spring 2008: to pay off credit cards or to build savings. There will be no consumption spree.
3) Increasing eligibility for Medicare is a good idea, but it will not stimulate the economy. It will serve as a backstop for those millions of workers who have lost their jobs; but it will not create new jobs.
4) It is far too small. The Gross National Product of the US in 2008 was $14.3 trillion. To spend 2 trillion to get the economy back on track would not be a mistake; to spend only $800 billion is a serious mistake; if the $800 doesn’t cut it, it is gone, and it will cost much more because the economy will be further gone. Desperate times require bold actions.
Obama needs to be a leader. Saying “I won” is not enough. He has the votes. He needs to do it right the first time. We are in the fourth quarter and there is no overtime.
He needs to forget consensus. He needs to appeal directly to the American people. He needs to remind them that they voted him into office 52-48%, and that he is going to lead the country the way he sees fit. If he makes a mistake, they can vote the Republicans into Congress in 2010 or him out in 2012.
He needs to put people back to work.
The depression of the 1930s ended not because people were put to work building the national parks and painting murals on post office walls, but because the Federal government built war ships and subsidized the wages of workers in the defense industries. The more workers that were hired, the more the companies made.
Since the vast majority of jobs in America are created in small businesses, Obama needs to give a generous Federal tax credit to each small business that creates a new job and keeps that job in place for, lets say, three years.
When ordinary people are working, those people buy goods, they buy cars, they even buy houses.
Forget rebuilding schools, those school repairs can be put off until after the recession; let’s get ordinary people to work.
Small businesses are the back bone of America and we need to ensure that they prosper.
A green revolution is nice, and green energy is nice, but when your corner store has just closed because it can’t get the credit to buy inventory, something is wrong.
When a car dealership in Maine, which has never missed a payment, has to close because its bank is no longer going to lend it money to keep its cars on the lot, something is wrong.
When there are 524 job applications for six full-time and nine part-time job openings at an Oxford store, something is wrong.
The banks need to start lending to businesses again, and if they do not, the government needs to fund banks that will. This is as much a crisis of liquidity as it is of customer confidence. If it takes nationalizing the five largest banks in the US and the five largest in each state so the funds flow again, it must be done.
Obama needs to defer the dream that he ran on, he needs to step up to the plate, get his Mojo on, and spend to save the American economy. We spent billions on Iraq; let’s spend money to get America back to back to work, to get the banks lending and to get the economy working.
We can do it; this is America; we need to think bigger; and we need to jettison the naysayers.
Patton and Eisenhower did not run their armies on consensus, and Obama cannot either.
Copyright © 2009 Peter B. Hayward. All Rights Reserved
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