Sunday, November 09, 2008

Who can save us from this mini depression?

John Nichols says the middle-class should be reassured by two people Obama picked to give him financial advice: David Bonior (former congressman from Michigan) and Robert Reich (Secretary of Labor under Clinton).

Nichols calls Bonior "one of the truest allies of organized labor" and said Reich "was a voice of reason" during the Wall Street bailout debate. Also noteworthy is this:
During his 2002 campaign for governor of Massachusetts, Reich scoped out a distinctly progressive vision for economic development -- emphasizing investment in the renewal of urban areas and the development of new uses for old factories. Long before others were speaking seriously about a green economy -- and the industrial policies that might make it work -- Reich was talking these ideas up.
Speaking on behalf of labor, David Bonior is encouraged by the results of the election because voters chose a pro-worker president and new pro-worker members of Congress, which is significant in light of the big business front groups that tried to use the Employee Free Choice Act as a wedge issue. According to Bonior, "Groups such as the Coalition for a Democratic Workplace and the U.S. Chamber of Commerce spent nearly $20 million on misleading ads in Senate battleground states." Voters weren't buying it though.
Newly-elected Senators like Mark Udall, Jeff Merkley, and Jeanne Shaheen withstood millions of dollars in attack ads criticizing their support for the bill. They managed to not only score victories, but actually improve their polling numbers despite the negative onslaught. Why? Americans know we can't continue the status quo of stagnant wages, rampant outsourcing, reduced healthcare coverage, and high unemployment. Unions make a difference in improving not only working conditions, but wages, access to medical care and job security. Through an aggressive public education and grassroots campaign, workers' rights advocates and unions were able to remind and convince the public that policies to help more workers join unions ultimately will help save our failing economy.
And about that failing economy, Robert Reich had this to say:
This is not the Great Depression of the 1930s, but nor is it turning out to be merely a bad recession of the kind we've experienced periodically over the last half century. Call it a Mini Depression.
Reich also says its important to understand that the main problem right now is not the supply of credit. The real problem is the demand side of the economy. The precipitous drop in consumer spending is causing the rest of the economy to shut down, and absent consumer spending, businesses aren't going to invest, so that leaves us with the government.
Government is the spender of last resort. Government spending lifted America out of the Great Depression. It may be the only instrument we have for lifting America out of the Mini Depression.
Reich believes the government may have to spend $600 or $700 billion dollars next year to reverse the downward cycle we're in, and spending should be targeted mostly on infrastructure, but also health care and child care. He calls these expenditures double whammies: they'll create lots of jobs and fulfill vital public needs.

Both men care about policies that help working class Americans instead of Wall Street. No wonder Nichols said Obama needs to listen closely to Bonior and Reich if he's serious about rescuing the middle class.

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