Job Creation: Obama Pinned Down Like Gulliver by the Lilliputians

by on June 20, 2011 · 18 comments

in American Empire, Civil Rights, Labor, Popular

By John Lawrence/ Will Blog for Food / June 18, 2011

The Republicans have Obama exactly where they want him: a failing economy with no chance for any significant job creation program. Why isn’t there any chance for a job creation program? Because Republicans control the House and have veto power in the Senate.

Obama would just be spinning his wheels even to suggest one. What he could do is to take an ideological stand decrying supply side economics, tax cutting and deregulation for the failures they are, but that would just turn off his campaign donors who are the same ones who supply Republicans with cash so why even bother. So Obama is fenced into a corner hoping that the economy will recover on its own when all indicators are that it won’t.

There are two main things that are tanking the economy: joblessness and the continued erosion of the real estate market caused by record numbers of foreclosures. In fact the housing market is worse than the Great Depression in terms of the reduction in value of houses. And there is no upturn in sight. Obama should have made the HAMP (Home Affordable Modification Program) program mandatory instead of leaving it up to the discretion of the banks whether or not to make mortgage adjustments in order to keep people in their houses.

Now it’s too late. Another mistake Obama made was to make a bargain with Republicans to extend the Bush tax cuts for two years while extending unemployment benefits for only one. Now starting in 2012 the rich will still be enjoying their extended tax cuts while the unemployed will fall off the rolls creating even more misery among the populace just as the campaign season begins. Obama’s goose is essentially cooked. He doesn’t have any room to operate. He’s tied down with the Republicans playing the roll the Lilliputians played with Gulliver.

What Obama could do even at this late date is to say the hell with it and come out and take a strong ideological stand which is opposed to the Republican tax cutting, deregulation small government nonsense. He could devote himself to educating the American people even though he’s not in a position to do anything about their plight. The country needs to understand that the Democrats represent a clear choice in contradistinction to the Republican ideology. That clear choice is that the government should be the employer of last resort.

The clear choice is that deficit reduction should mean not only spending cuts but revenue increases. The clear choice is that corporations should be regulated. Revenue increases mean more taxes on the wealthy and corporations, closing loopholes, a financial transaction tax and above all elimination of the Bush tax cuts on the wealthy. At least Obama has pledged to end the Bush tax cuts in 2013. Too bad he probably won’t be in office to see it. By the time they end he will have lost the election.

The die has been cast. Obama chose to have economic advisors that represented Wall Street instead of the Robert Reichs and Paul Krugmans of the world. He chose to be Republican “lite” instead of representing a clear ideology on the left. He placed his bet that the economy would recover on its own. If it had, he would be sitting pretty for next year’s election. At this point the best we can hope for is that Democrats will retake the House and hold onto the Senate. This will ensure four more years of gridlock as a Republican President would veto any constructive job creation legislation, but at least Medicare and Social Security will be safe.

Meanwhile, the economy will continue to deteriorate as lobbyists chip away at whatever constructive legislation the Democrats passed during Obama’s first two years in office. Case in point: the banking regulation that demanded that the Commodity Futures Trading Commission (CFTC) put position limits on commodity speculation by January 2011. What has the CFTC done in fact? Nothing. It has completely ignored this mandate citing its need to further “study” the situation. The result is that speculators have added $30 – $40 to the price of a barrel of oil and consumers are paying a dollar or more per gallon of gas at the pump.

Senator Bernie Sanders has recently sponsored legislation that would order them to put the position limits in place, but c’mon Bernie, do you think it will really pass in the Republican controlled House? Bernie Sanders, God bless him, is whistling Dixie past the graveyard.

The best the Democrats can do at this point is to take a strong ideological stand against the Republicans in an attempt to educate the American people even though they don’t have much of a prayer of getting any meaningful legislation passed in the near future. Why don’t they do it? Why don’t they support the middle class “awakening” in Wisconsin where there is a movement to recall state Senators who supported Governor Walker’s union busting policies? There’s nary a mention of this budding movement from the White House or Halls of Congress.

Again they don’t want to turn off their campaign donors. Remember that Obama’s largest campaign donor in 2008 was Goldman Sachs. There are only a few honest voices crying out in the wilderness like Dennis Kucinich, Anthony Weiner and Bernie Sanders, and they will be eliminated by one means or another as Weiner recently has. Kucinich is in the process of being redistricted out of his safe constituency.

The net result of the antediluvian, archaic and gridlocked system of government known as the US Constitution is that more efficient and singleminded nations are going to eat our lunch until it is plain and obvious to all that the US is clearly not any longer a superpower. All Obama’s brave talk about winning the future, investing in education and high speed rail is only a lot of hot air.

The future is what is happening in Wisconsin, Michigan, Ohio, Texas and Florida where ideological Republicans are snuffing out unions and balancing their budgets on the backs of the poor and middle class. A Republican controlled Federal Government will only serve to make those state policies into national policies and end democracy as we know it. Money will rule absolutely, and the middle class will wake up some day and realize that they have been transformed into a bunch of serfs fighting for a place on a freeway exit in which to hold up their sign which says “Will Work for Food.”.

{ 18 comments… read them below or add one }

avatar RB June 20, 2011 at 12:14 pm

First, where were the job programs when Nancy ruled the House? To blame the Republicans for no job programs is just a current talking points to cover over the failure of the last congress. Independent voters will not be fooled.

The Robert Reich’s and Paul Krugman’s theories of the world wasted trillions of dollars on state, union and special interest payoffs rather than shovel ready, concrete projects, and the building of the infrastructure. Independent voters will not be fooled.

“There are only a few honest voices crying out in the wilderness like Dennis Kucinich, Anthony Weiner and Bernie Sanders” Honest voice?…Weiner…honest voice?, you mean this documented liar? Independent voters will not be fooled.

The way to stimulate the economy is to bring the overseas, trillions of dollars of profits of large corporations back to the U.S. by suspending the tax on those foreign profits, if they are used for production and jobs in this country.


avatar John Lawrence June 21, 2011 at 6:56 am

“Where were the jobs programs when Nancy ruled the House?” As you know Republicans in the Senate filibustered over 200 pieces of legislation that Nancy Pelosi got through the House. It takes two to tango, namely the House AND the Senate. Passing stuff in the House is meaningless if the Senate won’t go along with it, and Republicans saw to it that nothing got past the Senate.

As far as the stimulus bill Republicans wasted most of it by demanding that a big part of it be tax cuts instead of shovel ready projects.

Anthony Weiner was a strong voice for progressives until his own foibles and the New York media silenced him. Can’t blame this on Republicans.

You advocate another tax break for corporations. Give me a break.


avatar OB Joe June 20, 2011 at 1:57 pm

RB – I’m calling bullshit on most of your points. When “Nancy ruled the House” we didn’t have the economic shut-down that we’ve experienced since the last few months of Bush’s wreckage of an administration. The Reichs and Krugman’s are still some of the sanest voices out there and it’s disingenuous for you to say they wasted “trillions” (?). When Reich was Labor Sec under Clinton, they left millions in the black – for Bush to waste on wars and tax breaks for his (yours too?) cronies. And just how did Krugman “waste trillions”?

Now, you want to have all those large corporations not pay any taxes as your solution. Dude, you have some serious problems. Although, I guess you’re still trying to think of solutions. Bring, no, force those large corporations and their rich executives to pay taxes at a rate that is fair and historic.



avatar RB June 20, 2011 at 2:47 pm

What I just proposed is a plan used in Germany. They tax goods produced and sold within Germany, including a value added tax, but their is no tax on the profits of goods produced in Germany but sold as exports. The result of this plan is more production for export, more money and profits returned to be invest in their economy, and more jobs.


avatar RB June 20, 2011 at 2:52 pm

Nancy took control in 2006. The downturn started in 2008 and peaked in 2009. Nancy lost control of the House in 2010, two years into the recession. We have been in a jobless recovery for a year (We are not in worst of the recession.)


avatar OB Joe June 20, 2011 at 3:01 pm

Not saying the Democrats are blameless. The big corporations and banks and the tax cuts to the rich however are much more to blame. Your original rant didn’t sound as reasonable as what you just wrote. You intially blamed everyone but Bush, and heaped it on Nancy, Reich, Krugar, giving a pass to the big companies. Let’s return to the tax rates of the past. How about that?


avatar RB June 20, 2011 at 5:44 pm

Bush and the easy Fed policy caused the housing bubble, with help of Congress through Fannie and Freddie (no doc and no down loans) and the repeal of Glass Steagall (bank deregulation). Bush conducting wars without paying for them was just insane. ( I am against all our long term nation building wars.) Unlike both parties in DC, I don’t give passes or bailout money to big business. AIG, GM, Fannie Mae, Freddie Mac, Washington Mutual, GMAC, etc should have been reorganized or closed in bankruptcy court.

Going back to BOTH the tax rates and level of government spending during Clinton’s term works for me, and would be a compromise position not unlike the Simpson Bowles plan.


avatar tj June 21, 2011 at 9:19 am

Get serious.

Obama wasted his political capital on a stupid, o’bama-care scheme – to force everyone to buy into the Horrible, Status Quo, Cut & Drug pushing Medical Establishment.

He wouldn’t know how to facilitate job creation if it bit him.

Appointing the same tools to his cabinet – those largly responsible for sending away American fanilies jobs while under Clinton – proves it.

o’Bama = all: Book Smarts, Super-Jumbo EGO, & Flash = Absolutely NO Understanding or Substance.

Sorry. So very, very sorry.


avatar Shane Finneran June 21, 2011 at 4:13 pm

I don’t agree with RB’s bashing of Krugman and Reich, two of the most sensible economic voices we’ve got. But I think he’s right that this article — which is otherwise solid — lets the Congressional Dems of 2009/2010 off too easy.

In the primaries leading up to the Nov 2008 elections, Rahm Emanuel worked to torpedo the campaigns of many progressive candidates in favor of Blue Dogs who went on to win, and then wreak havoc. This was one of the biggest Obama red flags, missed by most progressives at the time, me included.

It’s of course true that the Repubs in the Senate used filibuster mercilessly as soon as Dems swept into control. But couldn’t the Dems have changed the filibuster rules and neutralized that weapon at the outset of the 2010 Senate session? Their failure to do so — indeed, failure to even threaten to do so — suggests they were either incompetent or in cahoots. The paper trail of campaign contributions suggests the latter.

Also, Obamacare was signed, sealed and delivered by health insurance industry, with massive concessions to big pharma — whereas a simple expansion of Medicare to all Americans (supported by a clear majority of the nation) would have elegantly provided coverage to everyone, and would have been a tremendous achievement the Dems could have drawn on for years if not decades.

To paraphrase the frightening Rick Perry, we’ll never win over the Repubs, so we should focus on making sure the Dems we elect are true progressives, not DINOs like the prez and so many others.


avatar Ian June 22, 2011 at 3:10 pm

Krugman and Reich, are playing the same shell game as most of our country (and this article). What we have is not a tax problem (even though our tax system is fvcked, and could use a major overhaul), what we have is a monetary problem. Those who control the money supply take most of it…. duh.

Until people get past the simpleton arguments, that this article (Krugman and Reich) perpetuates, the problem will not be solved.

I wish people could look past their partisan belief systems, but that is not the human way.


avatar Shane Finneran June 22, 2011 at 5:59 pm

Ian, “I wish people could look past their partisan belief systems, but that is not the human way.” Does that make you super-human? lol

Outside of you and Ron Paul and maybe a few million libertarian voters, there aren’t too many Americans of any political stripe willing to get behind a return to the gold standard. So even if that is the cure-all, it doesn’t seem realistic to abandon less drastic, more practical solutions (like a government jobs program focused on upgrading nation’s infrastructure, paid for by combo of higher taxes on wealthy, reduction in military spending, and switch to single-payer health care).

With that in mind, it might make sense to think about a plan B that might not satisfy your Wizard of Oz dreams but could help millions of your fellow Americans escape economic agony.


avatar Ian June 22, 2011 at 9:39 pm

Shane, I would never make such a silly proposition. I fight the knee jerk everyday, and am often unsuccessful, but at least I am aware. Give it a try…

As far as your proposed solutions, there is a gigantic universe (an entire alphabet) in between, but maybe I shouldn’t expect you to recognize anything but the extremes.


avatar Shane Finneran June 23, 2011 at 9:29 am

no need to get huffy, amigo. civility oils the gears of constructive debate.

could you clarify what you mean with the universe-alphabet bit? and which prop strikes you as silly — the gold standard thing? I assumed that’s what you had in mind with your monetary comment, given your Paul praises in previous posts, but if it was something else, I’m curious what that might be.


avatar Shane Finneran June 23, 2011 at 12:39 pm

btw PIMCO’s investment superstar Bill Gross agrees about the need for more stimulus in the form of govt-driven hiring. any thoughts on his thoughts?


avatar Ian June 25, 2011 at 10:21 am

Not huffy here….the silly proposition was that I think I am superhuman. People naturally view the world through the prism of their belief system, it is very hard to view the world differently. Have you ever read Robert Anton Wilson?

As for the universe-alphabet thing, what I mean is there are a whole lot of options between a gold standard, and the continued centralized government control that you proposed (as a solution to our economic problems). The first step would be simply auditing the Fed, so that our government, and people actually knows the details of the Feds dealings. Other options include giving the power to create new money to congress, so that the people have recourse; or implementing other controls on the Feds ability to control interest rates. Granted, these options come with their own sets of problems.

I don’t think that the gold standard is a crazy idea, and it is not simply one option, there are many ways to implement a gold standard, and there have been various implementations in the past. The basic idea behind the gold standard is to provide a monetary balance, so that the people in power cannot take control of the money supply like they are currently doing.

I do think that the time will come, that we change our monetary system back to something closer to the gold standard. The change will not come from within the political system, it will be forced by the people because of the failure of the current monetary experiment.


avatar Ian June 25, 2011 at 10:31 am

As far as my thoughts on Bill Gross, I don’t agree with the idea that the government can create net demand. But, I do think that it is a much better option than funneling money to the elite through manipulation of interest rates.

The reason we need to get government spending, debt, and deficits under control is because if we continue down this path we will have to drastically raise taxes (on everyone, not just the rich), to finance the debt. He is right that it is a Republican fantasy that reducing the debt will create jobs.

I found this quote that I think demonstrates the point I am trying to make:

“By a continuous process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some. The process engages all of the hidden forces of economic law on the side of destruction, and does it in a manner that not one man in a million can diagnose. ”

I think you will be surprised who it is from…..


avatar Shane Finneran June 26, 2011 at 8:15 am

Quoting Keynes to refute Keynesian economics, eh? I’d point out that he used the word “can,” making his statement subjunctive, not indicative. I’m not familiar with the context of the quote (context being key) but I’d guess he was issuing a warning versus condemning monetary intervention.

I think Gross has a bit more credibility than you or I when it comes to economic analysis, but I respect your opinion there.

As for “failure of our monetary experiment,” I’d point out that the US economy was free of crashes and steadily grew from the Great Depression up through the Reagan years, providing large gains in standard of living for huge swaths of the population. To me, this suggests that — in the hands of capable, ethical people — economic ups and downs can be smoothed out to some extent, for the common benefit.


avatar Shane Finneran June 26, 2011 at 8:20 am

oops, in my last paragraph, I meant “up TO the Reagan years,” as domestic-driven economic meltdowns returned with Ronnie and his deregulation.


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