Through inaction and timid legislative negotiations, Congress just keeps letting the U.S. sink deeper and deeper into the economic abyss. Last week, Congress denied relief to the jobless and is currently poised to undercut a proposal that would rein in predatory lending. With unemployment out of control and banks pillaging citizens' pocketbooks at every turn, the economy is in dire need of serious financial reform and a major jobs package.
More than one million have lost unemployment benefits
As James Ridgeway emphasizes for Mother Jones, over a million people receiving unemployment benefits ran out of financial rope on March 1 thanks to Sen. Jim Bunning's (R-KY) self-righteousness. As a result of bizarre Senate procedural rules, Bunning's sole "no" vote was enough to stop a bill that would have extended unemployment benefits for those who are out of work. Of course, Bunning had plenty of moral support from his fellow Republicans. Ridgeway highlights a Think Progress post on Rep. Dean Heller's (R-NV) preposterous argument that it is time for the government to cut off unemployment benefits, since there are so many bums.
"What makes Heller's statement really stupid, of course, is that people could become hobos if Congress doesn't extend unemployment benefits, rather than if they do," Ridgeway writes. "Modest as they are, these weekly benefits are what's keeping thousands-and perhaps millions-of families out of poverty."
As Brian Beutler notes for Talking Points Memo, Bunning's economic insanity also triggered a 21% cut in the fees doctors receive for treating Medicare patients. That's a big "Screw you!" to seniors.
What happens when unemployment benefits dry up?
The degree of personal crisis attached to unemployment is also important. We're talking about access to basic necessities. As Roger Bybee notes for Working In These Times, when a family runs out of unemployment benefits, the result is an absolute personal catastrophe in which there is simply no money left to buy food, pay rent, or meet electricity bills.
Yet when a major financial institution finds itself on the verge of collapse, the government is quick to come to the rescue. In addition to the one million people ran out of benefits on March 1, four million more are slated to run out by June-that's roughly the combined populations of Los Angeles and Dallas. This is a tremendous national crisis. Here's Bybee:
"There is plenty of bipartisan compassion in Congress when it comes to bailing out the wealthy and their banks. But when it comes to spending federal money to bail out folks ... with unemployment compensation and a major jobs program, a bi-partisan consensus forms among conservatives in both parties eager to show 'fiscal discipline.'"
As Nobel laureate economist Joseph Stiglitz emphasizes in an interview at AlterNet, the jobs crisis is so severe that the government needs to go much further than simply extending existing unemployment benefits. At minimum, it also needs to send a major package of fiscal aid to states on the order of $200 billion to allow states to hire teachers and cops, as well as prevent further layoffs.
Making the jobs bill accessible to all
While a new jobs bill is critical, it's important to make sure everyone has access to its efforts, as Aaron Glantz explains for The Progressive. The economic stimulus bill that President Barack Obama signed into law last year has helped keep the economy from falling off a cliff, but it's overwhelmingly neglected communities of color. The unemployment rate for blacks is 16.5%, nearly the double the 8.7% rate for whites, while Latinos face an unemployment rate 50% higher than whites. Not all of that disparity can be blamed on the stimulus, but the federal contracts awarded for new jobs projects overwhelmingly went to white-owned firms. We have to make sure that the funds Congress dedicates to unemployment relief are distributed fairly.
Save the Consumer Financial Protection Agency
After watching the government hurl trillions of dollars at faltering banks, it's obvious that major financial reform is urgently needed. And one of the most important aspects of that reform is a new regulatory agency that defends consumers, not just bank balance sheets. As Tim Fernholz argues for The American Prospect:
"Shoring up our financial system to avoid new disasters remains popular with the public but only if it represents real reform. ...That means closing loopholes and making clear that this bill has what it takes to protect average citizens as well as restricting banks' bad behavior."
And yet astoundingly, Sen. Chris Dodd (D-CT), the current Democratic leader of financial reform negotiations in the Senate, appears ready to drop Obama's proposal to create an independent Consumer Financial Protection Agency (CFPA).
Instead, Dodd would house the regulator under the Treasury Department, and give the existing, failed bank regulators effective veto power over the CFPA's moves. It's a head-fake: We create a new regulator, but are instead giving that power to the same failed agencies who allowed the banks to pillage our pocketbooks, our retirement savings and our home values.
Failed negotiations with the GOP
This is supposedly all part of a set of negotiations with Republicans, but they aren't really negotiating in any clear sense. Negotiating means going through some process of give-and-take. Right now, Republicans are just seeing how far Democrats will bend, and so far, there has been no limit. Ferhnolz is right. Voting for the banks and against taxpayers and consumers will be a very bitter pill for Republicans to swallow. Dodd and the Democrats need to make them do it instead of caving to pressure and allowing Republicans to vote for a weak bill that doesn't protect the public from banker excess. Make the Republicans vote for real reform, or face the consequences at the polls for voting against it.
The public shame that is currently being heaped upon Bunning should prove that point. The American public wants jobs and financial reform. They want to go back to work and make sure that the bankers who tanked the economy can't keep getting rich by hijacking their savings. Woe unto the politician who opposes that.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Scott Brown just voted "yes" on the jobs bill in the Senate. Time to start teabagging him.
With Senator Lautenberg ill and unable to vote, Democrats needed at least two Republican votes to break the filibuster on health care reform. So far, there are four Republican votes for the bill. One Democrat, Ben Nelson, voted against it.
One year after President Barack Obama secured passage of his critical economic stimulus package, the U.S. Senate is finally taking anther look at how to create jobs and repair the economy. These issues are more important than ever, but absurd Republican obstructionism and timid Democratic negotiation are once again threatening good public policy.
Not really bipartisan, is it?
As Steve Benen notes for The Washington Monthly, the Senate Finance Committee reached a "bipartisan" agreement to supposedly spur job creation last week. Republicans demanded billions in tax cuts for wealthy people, but kept on caterwauling about the federal budget deficit. In exchange for $80 billion to dedicate to jobs-an extremely modest figure given the state of the labor market-Republicans asked for hundreds of billions in giveaways for the rich. And that's just to get the bill through the Finance Committee, much less the full Senate.
In a piece for Working In These Times, Michelle Chen notes that Senate Majority Leader Harry Reid pulled the plug on the Finance Committee "compromise," but stripped out a critical extension of unemployment benefits for laid-off workers in the process.
The Republican uproar over such modest job figures is an economically preposterous political ploy, and Democratic cave-ins to their demands are both bad politics and bad economics. Chen notes that 70% of Americans support a $100 billion jobs bill. And we know what kinds of programs help spur employment-many of them were passed in the stimulus bill last year and have saved millions of jobs.
Stopping the Bleeding
In an interview with Christopher Hayes of The Nation, Economic Policy Institute Fellow Josh Bivens explains that Obama's economic stimulus package has worked well, effectively stopping the job hemorrhaging that the economy was experiencing immediately before Obama took office. Here's Bivens:
"We haven't returned to growth on employment ... but the rate of contraction has slowed radically. Immediately before the Recovery Act is passed, we're losing on the order of 700,000 jobs per month ... In the past three months, we're now down to something like between 50 and 75,000 jobs lost per month, on average ... it really is a stark before and after."
Racial inequality and the recession
The trouble is, the stimulus was only big enough to prevent the economy from getting much worse. It was not large enough to return the economy to serious job growth. And the brutal effects of the recession are not being shouldered equally. As LinkTV's collaboration with ColorLines illustrates (video below), the Great Recession is hitting people of color much harder, but the story of racial inequality is being lost in stories about statistical economic recovery in the financial sector. The special profiles several families of color struggling to make ends meet in the worst recession since the Great Depression, which features Depression-era unemployment rates for African Americans.
"What we don't see on TV are the [people] who never had a home or a good job to lose in the first place. These are the millions of poor people whose chance to cross the line into middle class has always been cut short by another kind of line, the color line," says host Chris Rabb, founder of Afro-Netizen.
Rabb, ColorLines and LinkTV describe a social safety net that has been shredded by opportunistic politicians. Instead of focusing on ways to guarantee good jobs, politicians since the Reagan era have demonized black single mothers by exploiting racist stereotypes in an effort to justify slashing federal supports for the poor and unemployed. The result is a fundamentally unstable economy. Our society has weak demand for goods and services in good times, and that demand completely falls apart when economic conditions deteriorate. And while these socially destructive initiatives have been described as "pro-business," the truth is, businesses don't like societies where millions of people are impoverished. They don't have any customers.
Predatory lending strikes again
The recession hasn't exactly been a picnic for the middle class, either. In an article for Mother Jones, Andy Kroll profiles the mortgage mess that Ocwen Loan Servicing created for borrower Deanna Walters. Unlike millions of other borrowers dealing with mortgage headaches, Walters wasn't actually behind on her payments. She was making payments regularly, but Ocwen was misplacing them, and charging her thousands of dollars in improper fees. Walters even paid the fees, but Ocwen eventually foreclosed on her home and sold it in an auction without even informing Walters.
As Kroll emphasizes, Ocwen's antics aren't unique. There is an entire class of companies known as mortgage servicers that specialize in deceiving and bullying borrowers out of their money. They often use illegal tactics, and as I note for AlterNet, have been systematically exploiting a badly designed foreclosure relief program from the U.S. Treasury Department.
Funding projects that will put people to work
As prominent economist Dean Baker argues for The American Prospect, there are dozens of productive programs that would put millions of people back to work-if they could just get the funding. The government could quickly and easily provide money to improve public transportation, develop open-source software, fund objective clinical drug trials and (my favorite) support writers and artists, whose work would subsequently be available for the public to enjoy for free.
Taxing financial speculation
The federal government can afford these programs right now, especially without any additional tax revenue. But if we're really worried about the budget deficit, we can always turn to reasonable new sources for taxes. As Sarah Anderson details for Yes!, an obvious place to look is financial speculation. Since excessive and risky trading helped bring down the economy in 2008, a tax discouraging this behavior could make the economy stronger and reap as much as $175 billion a year for the public.
Our economy wouldn't face troubles of the same order as those it must overcome today if so-called conservatives had not spend decades pursuing a radical agenda to shred the social safety net. The stimulus package has not spurred job growth to date because of cuts demanded by Congressional Republicans, nearly all of whom refused to vote for the bill anyway. Our economy needs a jobs bill now. It'd be nice if Republicans would show some interest in governing, but if they continue to refuse, Democrats must act on their own.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Senate Majority leader has scrapped a deal forged by the Senate finance committee on the jobs bill, due to complaints from Democrats:
Senate Majority Leader Harry Reid (D-Nev.) is rewriting a jobs bill after Democrats complained of too many concessions to Republicans.
Reid announced Thursday that he would cut back on the jobs bill Senate Finance Committee Chairman Max Baucus (D-Mont.) introduced only hours earlier, essentially overruling the powerful chairman.
It is enough to make one ask--why didn't he just do this with health care? The 74 days the Senate lost while waiting for Baucus and Grassley on health care was enough to push the process past the Massachusetts special election. If Reid had just overridden Baucus back then, the health care bill would currently be law.
I guess even if Reid did not override Baucus then, at least overriding Baucus now shows that he valuing bipartisanship at lot less these days. Progress!
Debate, amendments and voting on this bill will take place next week. As I discussed on Tuesday, this bill is pretty weak tea compared to the House jobs bill. It is especially light on direct public infrastructure spending, and direct grants to state and local governments.
The deal between Baucus and Grassley that caused Democrats to balk included many other measures:
[A] short-term extension of the USA PATRIOT Act, flood insurance provisions, Small Business Administration loan provisions, and a $1.5 billion package of agriculture disaster relief provisions.
The Baucus version of the bill also included a tax extenders component very similar to the $31 billion Tax Extenders Act passed by the House, and a deal on unemployment and COBRA extensions.
While these measures will not be in the bill the Senate votes on next week, it is important to note that the Senate isn't scrapping any of these ideas. Rather, they will take up these ideas the week after next in separate legislation.
In response to my query on the content of the jobs bill and nature of the deal that earned Republican support for the bill, Senator Reid's office sent me a transcript of Reid's statements on the floor of the Senate this morning. The key graph (emphasis mine):
MR REID: I would also say that we are contemplating, if we can work out the procedural difficulties, not being in session tomorrow. We have some things we have to work out prior to that time because as most everyone knows, we have been working on a bill to end this work period. It's really a nice piece of legislation, started with a bipartisan jobs tax credit with Hatch and Schumer. We have a section 179 small business tax issue that small business is really looking for. We have a highway bill extension, and we also have build America bonds.
So, the four key components of the Senate jobs bill are:
A tax credit, proposed by Senators Schumer and Hatch, for small businesses that hire new workers (see more here)
More Build America Bonds, which make it easier for state and local governments to borrow money (see more here)
Section 179 Expensing: helps small businesses grow by allowing them to write off more of their expenditures
About $20 billion for the Highway Trust Fund.
Compared to the House jobs bill passed in December, the Senate bill has minimal new public spending. Here is what the House passed:
Shortly after increasing the debt ceiling, the House also narrowly passed a $150 billion jobs package, 217 to 212. The bill includes $48.3 billion in infrastructure projects, $26.7 billion for public sector jobs (teachers, fire fighters, police officers, etc), and $79 billion for social safety net programs such as unemployment insurance, COBRA, and Medicaid. Although it isn't in the legislation, Congress intends to pay for the jobs package using unspent TARP authorization funds, although it's unclear if the savings would cover the entire package.
Here are the key difference:
While the House jobs bill included unemployment and COBRA extensions, the Senate will deal with unemployment insurance and COBRA in separate legislation during the final week of February.
The House bill targeted $28 billion in highway funding, versus $20 billion in the Senate bill
The House bill had $20 billion in other public infrastructure projects, but the Senate is focusing on tax credits for small businesses.
The Senate bill makes it easier for states and local governments to borrow money through Build America Bonds, while the Hose bill gave $26.7 billion in direct grants to states.
Effectively, the Senate bill is relatively bare of public spending compared to the House bill. The difference adds up to about $55 billion in public infrastructure and direct grants to save public sector jobs.
So, yet another good, but already too small, bill has been further gutted by the Senate. The jobs bill coming out of the Senate is still better than nothing, but it will not make much of a dent in the broader employment picture.
On Feb. 1, President Barack Obama unveiled his 2011 budget proposal. While conservative pundits reacted with predictable, yet preposterous, wailing about the federal budget deficit, the short-term U.S. budget outlook is just fine. If anything, Obama's budget doesn't dedicate nearly enough funding to create jobs.
As John Nichols notes for The Nation, Obama budgets just $100 billion for jobs in fiscal 2011. The amount is nowhere near enough to make a significant dent in the epic unemployment rate. The government's fiscal 2011 calendar begins in October of this year, and by that time, the stimulus package Obama pushed through in February of 2009 will have been exhausted, leaving the labor market without serious support from the federal government.
The free market isn't going to take care of the jobs shortage on its own. While the unemployment rate fell from 10.0% to 9.7% during January, the "improvement" is really just a statistical mirage-the economy actually lost 20,000 jobs during the month.
If we had pushed through a bigger, or as Nichols notes, a better stimulus package in the first place, we might not be facing the same situation today. Part of the problem is that Obama redirected about $326 billion of the $787 billion bill away from direct job-creation efforts toward a set of tax cuts intended to appease Republican senators.
Tax cuts do not equal job growth
But as Art Levine emphasizes for Working In These Times, the $100 billion that Obama sets aside for job creation in 2011 appears once again to take the form of relatively inefficient tax cuts. Giving money to businesses, even small businesses, isn't really going to make them start hiring unless there's a real demand for what those businesses produce. When everybody is broke and out of work, that demand doesn't exist, since people don't have money to spend.
If the government wants to create jobs, it has to do it directly by hiring people to help rebuild the nation's infrastructure through institutions such as schools, transportation and green energy. Just as important, the federal government can provide funding to state and local governments to make sure that jobs that serve our communities-teachers, cops, etc.-don't disappear.
Sure, these things cost money. But the short-term budget deficit is nowhere near the current deficits of many European nations, or the deficits the U.S. ran during World War II. The budget deficit only matters to economics insofar as it raises concerns that the government will not be able to pay back its debt. But despite caterwauling from the right, investors just aren't worried about a U.S. debt default. If they were, they would demand very high interest rates on Treasury bonds, and Treasury rates are at their lowest levels in decades.
If policymakers want to keep the jobs bill from running the deficit higher, they could always raise taxes on somebody. Financial speculation on Wall Street seems like a good place to start, but just about any tax on the wealthy would work fine. Rich people don't get hammered by recessions. After all, they're rich.
Overzealous tax cuts hurt communities
In a piece for AlterNet, David Sirota details the budgetary disaster that has already befallen the city of Colorado Springs, CO., a conservative enclave where anti-tax extremists have managed to slash just about every basic government service imaginable. Rather than impose some modest taxes on the wealthy, Colorado Springs is going to lay off cops and firefighters, let its parks go to waste, shut-down rec centers and museums and even allow its streetlights to go out. This is the Republican plan for fiscal responsibility.
But several state governments recognize that shredding the social fabric just isn't a good idea. In Oregon, Sirota notes, voters just approved two ballot initiatives to raise taxes on corporations and wealthy individuals rather than allow their state to slide into social decay.
How to deal with a deficit
There are two ways to increase a budget deficit: You can either increase spending, or cut taxes. If you want to decrease the budget deficit, you can either cut spending, or raise taxes. As Kevin Drum notes for Mother Jones, Republicans both increased spending and cut taxes during the George W. Bush presidency. Now those same so-called fiscal conservatives are feigning outrage over the prospect of the government actually spending some money to put people back to work. These are not serious economic arguments-conservative politicians are just hoping to gut progressive policy priorities.
But while the attacks don't hold any water, conservative media outlets are latching on to them, and Obama isn't pushing back.
What caused the current crisis
Writing for The American Prospect, Robert Kuttner notes Obama's recent support for a proposal from right-wing deficit hawks to create a commission to evaluate the causes of our so-called fiscal crisis. But we already know what put us in the current fiscal situation: Rising health care costs, a brutal recession, and the Bush era. The commission is being pushed by radical conservatives for a reason-it's part of an effort to gut Social Security. It's bad economics, bad public policy and it badly misreads the real source of public discontent. Kuttner explains:
"Public concern about deficits is really a proxy for broader unease that government is not delivering enough practical help . . . . The president should be helping citizens sort this out, not caving in to the fear-mongers."
Fortunately, as Steve Benen notes for The Washington Monthly, Senate leaders appear committed to passing at least some kind of legislation to help put people back to work.
Whatever right-wing pundits say, the U.S. fiscal crisis remains a totally theoretical problem. Someday, if the U.S. budget does not come down, it is conceivable that investors would be reluctant to purchase U.S. debt. For now, that is simply not the case. But the crisis in the job market is very real and requires direct action. Put simply, the deficit is no excuse for inaction.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
Senate Majority Leader Harry Reid has apparently orchestrated a deal on a jobs bill with Senate Republicans. The bill will be introduced later today:
Senate Majority Leader Harry Reid (D-Nev.) will introduce a jobs bill on Tuesday that he said would have Republican support.
Reid told reporters the bill would be introduced on Tuesday, and that it would include an extension of the tax breaks, known as tax extenders, that expired last year.
"As of last night, there will be Republican support for this bill," Reid told reporters.
The apparent deal not only includes extensions on tax breaks, but also will allow a vote on the extension of the estate tax repeal. From a different article in The Hill, published two hours earlier than the one on the apparent deal:
Senate leaders are working on an estate tax deal to make it easier to move a bipartisan jobs bill.
The deal discussed by Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) involves moving an estate tax bill through the Senate that would prevent a huge hike in the tax from taking effect in 2011, staffers and lobbyists say.
It is unclear if the vote on the estate tax that has been promised to Republicans would require 60 or 51 votes in order to pass. Extending the repeal of the estate tax would certainly be a steep price to pay for a smallish jobs bill, so I will see if I can find out.
President Barack Obama invited leading economic thinkers to a job creation summit on Thursday to help combat the worst unemployment crisis in decades. The stakes couldn't be higher: If Obama can't build momentum for robust legislation that will create jobs, the unemployment rate could remain in double-digits all the way through 2011.
In Salon, Andrew Leonard highlights some positive comments Obama made at the jobs summit. In an exchange with The American Prospect's Robert Kuttner, Obama said that the long-term budget deficit is an issue, but that the best way to reduce that deficit is to spur economic growth. When the economy is growing, the same tax rates reap greater returns for the government.
If the U.S. dramatically slashes economic support programs to clamp down on the deficit in the short-term, the economy is going to shrink. About two-thirds of the economic growth in the third-quarter of 2009 came from intiatives related to Obama's economic stimulus plan. If we cut back on stimulus, we lose more jobs and make the long-term deficit worse by hampering growth.
We've faced this kind of dilemma before and seen what happens when you focus too much on the deficit, as Katrina vanden Heuvel emphasizes in a column for The Nation. "In 1937, just as there was some recovery from the Depression, the debt hawks swooped in and there was a return to the deficit reduction model," vanden Heuvel writes. "Things went south again. We don't need a repeat of that."
So Obama doesn't want to attack the deficit at the expense of jobs, which is good. But it's problematic that the President is still at the summit stage on the most politically pressing issue for Democrats, as Terence Samuel explains for The American Prospect. If the labor market doesn't start getting better soon, voter dissatisfaction with Obama's economic platform will impact other critical policy initiatives, from health care to climate change.
"The president is up against an unpredictable clock," Samuel writes. "With his approval rating hovering around 50%, he can't be sure how long Democrats in Congress will stick with him on anything if there is not some noticeable improvement in the jobs picture soon. The urgency on the job situation is not lost on Democrats in the House and Senate who must defend the seats of 18 Democrats in 2010."
Most of the pressure Obama now faces is to create jobs, not just save them. That's because his stimulus helped get the unemployment rate under control-we're still losing jobs, but not as fast as we were in January. But as Aaron Glantz notes for New America Media, the risk of heavier job loss is still present.
State governments are up against very difficult budget constraints, thanks to tax losses related to widespread layoffs and foreclosures. If they don't get help from the federal government, states will be forced to cut expenses, which means shedding more jobs. Glantz highlights a recent conference call with AFL-CIO leaders who warned that state and local governments could be forced to cut up to one million jobs in 2010 if Congress and President Obama fail to enact a major jobs bill.
David Moberg envisions an ideal jobs bill for Working In These Times. We need a major aid package to state governments, modernizing our schools and transportation network, a public-sector job program to fund important work in our communities, and a tax credit for companies that hire workers. The whole thing would only cost $400 billion and would create 4.6 million jobs. That could be enough money to move unemployment out of crisis-mode. Right now, about 15.4 million workers are out of a job. Half those workers have been put out of work over the course of the recession. Creating 4.6 million jobs would make an enormous difference.
And while the $400 billion price tag may sound like a big number, it's a drop in the bucket compared to our $9 trillion fiscal deficit. Going back to The Nation: As vanden Heuvel notes, the whole package could be paid for with a modest tax on risky Wall Street securities trading.
This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.
I'm taking a five day break from blogging for the holiday. There will be plenty of content in my absence, I just won't be writing it. Be sure to check in, if you need an escape from your holiday.
On Wednesday, Chris wrote a quick hit on Representative DeFazio's statement that there was "growing consensus" among Congressional liberals that Treasury Secretary Timothy Geithner should step down. He went on to say that Summers should go as well. Folks in the blogosphere have been saying as much for a long time now, but this seemed like something new, coming from a veteran Representative. The piece Chris linked to ended with DeFazio saying, ""We may have to sacrifice just two more jobs to get millions back for Americans," underscoring that it was not just a general criticism of Geithner and Summers, but one closely tied to the need for shifting from a Wall Street-centered economic policy to a Main Street-centered one. So I followed up by talking with Darcy Burner, Executive Director of the American Progressive Caucus Policy Foundation, to see what it might mean.
Open Left:On MSNBC Rep. Peter DeFazio (D-Ore.) said Wednesday that he and other liberal House members are becoming increasingly tired of the Obama administration economic policies that are too focused on maintaining the stability and health of Wall Street firms and largely ignore Main Street. There's been significant criticism of Geithner and Summers in the blogosphere since their appointments were first announced, and significant criticism of their policies as well. There's been scattered and occasional congressional criticism before, but this sounds like it's a good deal more serious. Is it? And if so, why is it different and why now? Let's take those one at a time.
Is it different?
Darcy Burner: My best guess is that it is more serious. Now the Progressive Caucus has not taken an official position. Congressman DeFazio was speaking on his own behalf, quite eloquently, I thought. I particularly liked the line about "losing two jobs to save millions." But I think that the indications are that there is growing dissatisfaction among the members of Congress who very much want to see a set of economic policies that are going to help main street, rather than just Wall Street. And a jobless recovering isn't particularly progressive approach to how we solve the economic crisis that we're in.
Now, it is the case, obviously, that we have some progressives who've been very active, particularly in the financial reform aspect, if you look at Alan Grayson, for instance. He is a member of the Progressive Caucus, he's been extraordinarily involved in asking the tough questions, and encouraging his fellow members on the Financial Services Committee to ask some really tough questions at the hearings they've held, about the Federal Reserve, about the banking system, about the banks, about some of the Wall Street shenanigans.
So there has been growing pressure from members of Congress. And, you know, we're seeing some traction around the idea of auditing the Fed, and finding out what's really going on there.
So I don't think it's particularly surprising that there would be an expression of real dissatisfaction with the Administration's economic policies and the economic advisors from progressives in Congress.
On Wednesday, Chris wrote a 