Here Comes the Hard Part

Back in July of 2008 I wrote a blog, “Cool It on Obama.” At the time there was a lot of criticism from the left that he wasn’t fighting hard enough and needed to take off the gloves and so forth. His campaign strategy was to present himself as someone who could be trusted with his fingers on the trigger of the planets very existence. And guess what? I believe that’s exactly what worked. With the world in an economic meltdown he was seen as the good steady hand needed at the tiller. The economic meltdown was probably the number one issue that got him elected. The number two issue was the idiocy of Sarah Palin and her dumb-speak. As one Republican reporter put it, “How could McCain possibly see her as a President?” That did it for him. Andrew Sullivan was going to vote for Obama.

The expectations that ordinary people have about what the Obama victory means to them has me concerned. Elevated expectations can lead to very serious social unrest. I am reminded of the Johnson Administration’s War on Poverty. At that time I was Deputy Manpower Commissioner for Youth Employment during the Lindsey years. I had a first hand involvement with people in the Ghettos.They really expected that poverty and all its horrors was somehow going to end. And when it didn’t, as their frustration boiled over, I watched their anger erupt in the streets. I was glad to hear Obama say that change will take time and even a second term. That’s good, but I sure hope that message gets to those whose expectations are way up there.

There have also been numerous comparisons of the present situation to previous recessions and the great depression of the thirties. In some ways the solutions offered in the thirties were easier than those offered today. To begin with, there were no safety nets. That meant we could organize and agitate for Home Relief (now called Welfare), Unemployment Insurance, the right to organize into unions, and Old Age Insurance (Social Security). All of that helped F.D.R create “The New Deal.”

Obama has far less choices. And based on his campaign promises he has a huge agenda. He needs to sift out a couple of priority issues and concentrate his efforts. He can’t spread himself too thin or nothing will happen. Yes, of course his administration can extend Unemployment Insurance. He can help people stay in their homes through a “Reconstruction Finance Corp,” another New Deal invention. But what does he do about banking, auto, credit card, health care, and the rising unemployment crisis? These are complex issues and not subject to easy solutions. His administration will control the House and almost control of the Senate. This will give them an opportunity to create a whole new role for the government in running the economy.

The Bush Administration has been bailing out the banks in order to keep credit markets functioning. Okay, that’s just fine, but that bailout should result in the Government sitting on the Board of the bank it bails out in exactly the same way as if Warren Buffett or Carl Icahn bought a couple of million shares. After all, it is the taxpayers’ money and they should have a say as to how the bank spends that money.

That brings me to the crisis in the auto industry. If we were to follow the ideology of the free marketeers, we would let them sink or swim the best they can. That would make General Motors a sick patient heading to the bankruptcy ward. My concern is for the thousands of GM employees who, through no fault of their own, would be the ones to suffer the most. GM’s top executives and managers have already milked that golden calf to assure their own lifetime security is lived in the manner they are accustomed to. It’s the poor guy or gal on the assembly line or the retired auto workers who are really going to get the shaft. Again, through no fault of their own. It’s not the auto workers who decided to make Hummers while Toyota was making the Prius.

I believe the Government should make every effort to keep the auto companies in business as they did in the banking crisis. If there is any meaning at all to the talk about saving manufacturing jobs, the two million jobs in the auto industry should be a top priority. These are some of the best manufacturing jobs in the country. If Obama is serious about helping the middle class, these are the folks most in danger of losing that status. (They used to be called “the working class,” but people did not like that designation so we changed their designation to “middle class.” I am not quite certain who is now left in the working class?)

So what should the government do? As in the banking or housing crisis any money the government puts up should give them that many seats on the board of GM, Ford or Chrysler. When Ross Perot bought a bunch of GM stock, he got himself on the Board and raised a lot of hell. The free marketeers will go berserk when they hear such a proposal. It violates their ideology of letting the sinking free-market boat float to eventually right itself. And well it might, but in the meantime it will be the hourly employees who will do the drowning. And of course there will be the right-wing nuts who will accuse the administration of drifting toward socialism. Well, if every time the government steps in for a rescue it’s considered socialism, then we are pretty far down that road already. For example, here are some of the institutions that are totally run by the government: the military, the fire fighters, the postal service, Medicare, Medicaid, Veterans Administration, etc., etc. Maybe that’s what we are doing, “slouching to Socialism.” What a great idea.

I was glad to hear that the Obama’s are going to take a new puppy to the White House. Another great idea. Maybe all of us just need a puppy to help us through some tough days ahead. The trouble is that puppy also needs to eat. Okay, second thoughts. How about a Gold Fish?

Thanks Kate. N.H.W.Y.