Sunday, November 30, 2008

The Great (Democratic) Divide


There may be a debate raging Inside the Beltway over whether America is a center right nation-- as espoused by self-serving, reactionary corporatists and money grubbers like Doug Schoen-- or a center left nation, the conclusion of Democrats who aren't putting personal self interest first, but the debate is anything but academic. With the greed and selfishness contingent of nominal Democrats from deep in the bowels of the Republican wing of the Democratic Party seeing another cash-in opportunity for themselves and their cronies-- the Robert Rubins, Rahm Emanuels and Doug Schoens of the avaricious side of Democratic politics-- the debate gets mighty personal.

And when idealism and social good go up against personal greed... well, greed usually holds its own pretty well. If that weren't the case there would be no Republican Party, let alone craven Blue Dogs and a Republican wing of the Democratic Party. But no one has framed the ultimate meaning of the debate better than former Labor Secretary Robert Reich in a HuffPo essay on the argument of the rebirth of Keynes. Like most people who put the needs of society ahead of self interest, Reich argues that Obama should get behind a massive stimulus package "focused on building and repairing the nation's crumbling infrastructure, providing help to states to maintain services, and investing in new green technologies in order to wean the nation off oil."

Most Republicans and their right-leaning Democratic fellow travelers don't see it that way, although even some right-wing economists like Greg Mankiw are slowly waking up to reality. Reich hopes they'll be open to the most basic lessons of Keyesianism, that "when the economy has as much underutilized capacity as we have now, and are likely to have more of in 2009 and 2010 (in all likelihood, over 8 percent of our workforce unemployed, 13 percent underemployed, millions of houses empty, factories idled, and office space unused), government spending that pushes the economy to fuller capacity will of itself shrink future deficits."
Conservative supply-siders, meanwhile, will call for income-tax cuts rather than government spending, claiming that people with more money in their pockets will get the economy moving again more readily than can government. They're wrong, too. Income-tax cuts go mainly to upper-income people, and they tend to save rather than spend.

Even if a rebate could be fashioned for the middle class, it wouldn't do much good because, as we saw from the last set of rebate checks, people tend to use extra cash to pay off debts rather than buy goods and services. Besides, individual purchases wouldn't generate nearly as many American jobs as government spending on infrastructure, social services, and green technologies, because so much of we as individuals buy comes from abroad.

So the government has to spend big time. The real challenge will be for government to spend it wisely -- avoiding special-interest pleadings and pork projects such as bridges to nowhere. We'll need a true capital budget that lays out the nation's priorities rather than the priorities of powerful Washington lobbies. How exactly to achieve this? That's the debate we should be having between now and January 20 or 21st.

Most of the Democratic members of Congress are right in the middle of this debate. On the one hand you have Democrats, like the Blue Dogs, who are basically almost as bad as Republicans-- your David Borens, John Barrows, Jim Marshalls, Heath Shulers, Gene Taylors, Chris Carneys, Joe Donnellys, Melissa Beans-- and on the other hand, real Democrats like Donna Edwards, Tammy Baldwin, Jim McGovern, Linda Sánchez, Jesse Jackson, Jan Schakowsky, Ed Markey, John Olver. But between Xavier Becerra and Hank Johnson on the left and Ron Kind and Dennis Moore on the right, you have about 150 Democrats in the middle, liable to swing in any direction depending on circumstances. Many of these will be eager to take a lead from Obama... at least until he does something drastically wrong. And if you want to know what direction he's going in-- well, we'll all have to wait and see... or just read a lot of Digby

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