Jeff Immelt, the CEO of General Electric so succinctly said "This economic crisis doesn’t represent a cycle. It represents a reset, It’s an emotional, social, economic reset." He is quite right. The economy is collapsing because of its internal contradictions; rising asset prices and increased spending despite lower wages (even though the economy was more prosperous) all supported by reckless lending.
Obama himself described the current crisis as "an Economic crisis unlike any in our life time". During the campaign he described the vote as the "final verdict of a failed economic policy". Given the magnitude of the crisis is the offering up of a plan that was presented two years before it happened the "emotional, social and economic reset" or is it just slapping a coat of paint on failed economic model.
If we are at one of key moments in history here is a quick question- what part of Obama's stimulus program requires a PHD in economics to develop? Put another way is any of this not found in an economics 101 text book?
Timidity is not judged by the amount of dollars involved in the package but rather whether it recognizes that the economic model is broken; that the foundations of economy rest on quick sand and that future growth will be based on a fundamental restructuring of our economy. A re-set moment requires a fundamental re think of our economic structure. The simple truth is that we have decided to build our entire civil society on the back of employers of American labor and in turn their workers- health care, pensions, working conditions, environmental protection. This made sense when there was life time employment and American workers were so much more productive than their competitors- akin to a father with his hand tied behind his back boxing with his young son. The only problem the young son (foreign competition) has grown up- to expect employers of American labor to compete with their hand tied is shear madness.
The logical conclusion is that we have to find another way of financing our civil society rather than counting on employers. I would propose a sales tax or any other consumption based tax-that way imports would bear that cost equally with domestic production and our exports would no longer have to carry the burden. Change the competitive dynamic and you change the downward pressure on wages.
Obama should have made it clear that one reason American consumers are spending so much and seeing their wages depressed is because of a failed health care system. The average insurance premium for a family of 4 is about $14,000 (between 26-33% of the median wage) which requires us to move towards universal coverage and rationalized medicine. This kind of change is not a moral imperative it is an economic imperative.
Obama should have made it clear that our education system is not producing a work ready work force. We need to think of alternatives to sending children to college. Although we are sending many more children to college many small business owners who have posted on Kos have complained that their workforce is not ready. Perhaps we need to start thinking of lifetime; is a continuous 4 year college experience necessary.
I could go on. But it is issues like this that need to be considered if in fact this is a "Re-set" moment. Progressives should be terribly disappointed that this moment of pain is not being used to push through the changes that will benefit us in the long run even at the expense of more short term pain. (does anybody have any doubt that is exactly what the Republicans would have done- although privatizing Social Security makes a whole lot more sense with the stock market down 50%). Unfortunately rather than a reset the plan seems to be more asprin. It truly is "slapping lipstick on a pig". For those who would argue that things need to be done in steps- ironically the effectiveness of the short term fix will make the long term changes more difficult. We can't make these changes in good times and we can't make them in bad times then when exactly do we make them?