Saturday, August 28, 2010

Deficit and the October 2nd Rally

by Norman Markowitz
This is a quick commentary on a bad Internet connection but I thought I should post it now(that after all is the power of the Internet).  Paul Krugman had an article very recently calling upon President Obama to get rid of Alan Simpson, co chair of his deficit commission.  Simpson is the former somewhat secular conservative Republican Senator from Wyoming(I believe it is Wyoming; if it isn't it is some other right to work mountain state that usually goes for the Republicans)
It was a good article, although it got some nasty commentaries from investor types who read the Times online(one even suggested it was a "love note" to Keynes)
I made my own comments, suggesting that the issue really wasn't cutting social security to restrict deficits, but reforming the system seriously by changing its funding formulas, that is, moving away from regressive payroll taxes toward progressive income and corporate taxs(general revenues) which is what many of its original founders fought for in the 1930s
But that is not the point that I want to make.  Paul Krugman, who won  the Nobel Prize for Economics, was rightly criticizing the administration and Democrats for moving toward fiscal conservative policies. Actually, Paul Krugman, Joseph Stiglitz, and other progressive theorists in the study of economics should be in this administration helping to shape policy, not looking outside, criticizing  bad policies in the hope that the administration will reverse them before the Republicans offer something worse.
The economic crisis is not going away although the President's huge influx of public capital into the economy has so far contained it.  In the U.S. and in a number of European countries   there is a move away from the "new right" policies of Milton Friedman, Reagan, Thatcher, et al, to old fashioned fiscal conservatism---policies  of restricting deficits by cutting public spending for anything that governments can get away with.  These policies failed miserably in the early years of the Great Depression everywhere and they will inevitably fail again.  President Obama still has time to open his administration to progressive activists who fought against the reactionary policies in  all fields and provide leadership that will serously produce "change we{the working people and low income people} who elected him "can believe in."  
A good place to start would be for the administration to proclaim its support for the peace and social justice rally planned for Washington on October 2nd.  Instead of keeping silent on the rally, Obama would be wise politically to embrace it, even speak at it, and use it to mobilize millions for the coming crucial off year elections.  He could restate his campaign commitments and lay out a legislative plan for the upcoming Congress that would block tlhe Republicans from feeding politically on the high unemployment and social fears that grip millions of Americans today.  He could thu snatch victory from the jaws of either stalemate or defeat for himself, his party, and the people.

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