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Crossposted from Antemedius

Robert Pollin is Professor of Economics at the University of Massachusetts in Amherst, and is a founding co-director of the Political Economy Research Institute (PERI).  His research centers on macroeconomics, conditions for low-wage workers in the U.S. and globally, the analysis of financial markets, and the economics of building a clean-energy economy in the U.S. His books include A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the US and Contours of Descent: US Economic Fractures and the Landscape of Global Austerity.

In February 2010 Pollin talked with Paul Jay of The Real News Network and during the interview outlined a careful combination of job-generating public investments, incentives to mobilize private investment, and policies that protect economically vulnerable populations that can create the economic, regulatory  and policy environment that Obama could have already been using to create 18 million jobs and lower the unemployment rate to only 4 percent by 2012 - a proposal that has never been given any serious consideration by the Obama administration, policy makers, or mainstream media.

Instead the Obama administration chose to continue listening to people like Ben Bernanke whom Obama had re-nominated as Federal Reserve Chairman in August 2009, and who, as the top bank regulator in the country, had played a central role in the creation of the ongoing economic crisis we are experiencing.

In another interview published today, Pollin again talks with Paul Jay discussing Obama's speech the other day in which he made clear that he is more or less taking on the argument that the big problem is the debt and that austerity for the masses is his plan for reducing it, pointing out that Obama is accepting the notion of the debt being a bigger problem that a recession, that Obama's premise is "wrong to begin with", and that:

He's confusing two things.
it's really important to focus on this--there are two separate problems. One is the deficit problem created by the more severe problem, which was the recession created by Wall Street. number one ... we have to move the private financial system into job creation.
tax excess reserves of banks. They will scream bloody murder, but tax them. They've gotten the money for free. And tax them until they start moving credit into the economy. And number two, give them a carrot, which is to say, expand the Small Business Administration loan guarantees, because the argument of the banks is there's too much risk in the economy. So lower the level of risk by giving out loan guarantees that target the guarantees to job-creation activities. This is not that hard to do, it can be done, and, actually, we have the administrative apparatus to do it right now. And that will not be the whole answer
And part two is we've got to stop the cuts to state and local governments, period. I mean, that is pushing the economy back into recession. And there's some interesting research out of the National Bureau of Economic Research which finds that whatever the stimulus has done over the past couple of years--and, again, we can debate how good it was, but whatever it was done is completely counteracted by cuts in state and local governments. So the net impact: we've had no stimulus. The net effect has been zero.
my institution and many other institutions in universities and state and junior colleges just let their budgets expand. That's a direct jobs program. They're there. They're sitting there. They're strapped. Give them the money to grow at a reasonable rate. Direct jobs program. It's an education program. It's a community development program. We can do it tomorrow. But we have to stop talking about the necessity to cut for vital things that go on, for example, at the state and local level.

Real News Network - April 16, 2011
Obama Accepts Debt a Bigger Threat than Recession
Bob Pollin: Obama debt speech avoids recession and need for massive jobs growth
...full transcript here...

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Comment Preferences

  •  Can we start (7+ / 0-)

    listening to the smart people for a change?

    Antemedius | Liberally Critical Thinking

    by Edger on Sun Apr 17, 2011 at 10:23:08 AM PDT

  •  I think you can determine (5+ / 0-)

    ...from the selection of players at the financial policy levels at the top of the Federal Government -- that those areas of government are no longer in "public" hands. These parts of Gov-Co. (along with energy and defense) were fully privatized before President Obama came on the scene.

    He negotiates with them but he doesn't have any power over them.

    Sure, we can listen to the smart people. In my view, however, it is much simpler than that. We got into this debt crisis under Reagan through one fatal flaw:

    Cutting taxes and raising defense spending.

    We can get out exactly the same way:

    Cutting defense spending and raising taxes.

    Everything else is buttercream frosting on a turd.

    •  And Obama's listening to the people (4+ / 0-)
      Recommended by:
      Pluto, psyched, mike101, dkmich

      frosting that turd...

      Antemedius | Liberally Critical Thinking

      by Edger on Sun Apr 17, 2011 at 11:14:14 AM PDT

      [ Parent ]

      •  Great cartoon! (1+ / 0-)
        Recommended by:
        •  How would the employment/unemployment (1+ / 0-)
          Recommended by:

          slope over the same period look superimposed on it?

          Antemedius | Liberally Critical Thinking

          by Edger on Sun Apr 17, 2011 at 11:25:07 AM PDT

          [ Parent ]

          •  Wages makes more sense than unemployment (2+ / 0-)
            Recommended by:
            Edger, blueness

            Unemployment is a tool of market capitalism to force wages down. It ebbs and flows-- but achieves greater productivity while removing any share of ownership of the work product from the worker. Thus, enslaving him over time and reducing his standard of living. Tying health benefits to employment is another depraved practice to enhance the enslavement of workers.

            Don't forget, before Reagan, most US households had a single wage earner and the fast-food soup kitchens of America were not part of family life. People weren't fat either.

            •  All that buttercream frosting (1+ / 0-)
              Recommended by:

              makes people fat, and dumb. I guess that's why they use it....

              Antemedius | Liberally Critical Thinking

              by Edger on Sun Apr 17, 2011 at 11:45:57 AM PDT

              [ Parent ]

            •  Oh, and of course (1+ / 0-)
              Recommended by:

              ...the higher the unemployment remains, the richer the wealthy become.

              So, no one in America, at my level anyway, wants to see more jobs. We're in the "big-squeeze" cycle, making people work harder for less, in a state of constant terror to please.

              •  No one in America... wants to see more jobs (0+ / 0-)
                Candidate Barack Obama campaigned for the restoration of Glass-Steagall, and then put in place all the same people who'd destroyed it. He'd been made an insider. The day after a special election in Massachusetts to replace Senator Ted Kennedy, President Obama briefly pulled out his old rhetoric. Wall Street immediately shifted its "donations" from Democrats to Republicans, and that settled that. Obama pushed corporatized "health insurance reform," which distracted from his absolute subservience to Wall Street on matters financial. He drew on the "expertise" of those who'd created and collapsed these mega-corporations in building on President George W. Bush's accountability-free bailouts at public expense. It was the same pattern Obama followed in every department: Where he didn't leave Bush's people in charge he brought back Clinton's. Anything to be an insider.

                -- A Reminder: "Wall Street's Mercenaries Ride Donkeys"

                Antemedius | Liberally Critical Thinking

                by Edger on Sun Apr 17, 2011 at 12:12:09 PM PDT

                [ Parent ]

                •  Well, here's where we differ (2+ / 0-)
                  Recommended by:
                  Edger, BigAlinWashSt

                  All of these actions come from President Obama's superiors and employers. These arel all areas where he has absolutely no say-so whatsoever. He might be listened to, but he does not make the final decisions. Nor did Reagan, for that matter.

                  I think once Americans look at reality and stop blaming their presidents (like petulant sports fans); once they become post-political and see the kabuki for what it is -- only then can they have a hope of becoming citizens instead of colonists.

  •  I don't think the austerity bs is about the debt (3+ / 0-)
    Recommended by:
    Edger, dkmich, Pluto

    anyway.  Every nation owes money and in effect it's all to the bankers.  Only one real answer I suppose, wipe out all the debt and the international central banking system and start over.   If not, I haven't seen anything to convince me or even give hope that this is all going to be turned around.  But hey, doesn't Revelations says something about seven years of peace and prosperity before Armageddon?  

    S.A.W. 2011 STOP ALL WARS "The Global War on Terror is a fabrication to justify imperialism."

    by BigAlinWashSt on Sun Apr 17, 2011 at 11:31:43 AM PDT

  •  Restoring tax real fairness (0+ / 0-)

    would do even more. The reason we lost so many jobs in the last decade has far more to do with tax structure than competition from off shore manufactures. Less than two decades ago the financial sector of our economy accounted for about 6% of GNP, today it's almost 40%. This means that over a third of our GNP, that just a few short years ago was circulating in the main street economies across the nation supporting jobs and generating tax revenues, are now in the coffers of an elite few commercial banks on Wall Street. The reason this has happened so completely and quickly is it's just currently far more profitable to gamble on Wall Street than produce a product or service on Main Street. The tax rates are far less. Financial instruments do not contain any indirect included taxes like every other tangible main street product/service. If you add up the costs of all the taxes the average main street business pays you will see that the price everything we pay for is inflated by at least 15% by the cost of these indirect taxes even before sales taxes are added. Financial instruments like stocks carry absolutely no inclusive taxes. They do have a .004% inclusive fee imposed by the various exchanges to cover operational costs, but no tax revenues. Add to this the fact that profits earned on capital market transactions by the elite few uber-wealthy are most likely just taxed as capital gains and not as income earnings as the rest of us are required to pay. This distorts the entire economy and just by changing the tax code so that all earnings and profits are taxed at the same marginal progressive tax rates no matter the source then all the tax rates could be even further reduced. It would be a good idea to add a new upper tax rate on income over a million or two and add a small inclusive tax to financial transactions too. This would move tens of trillions back into main street economies to once again support living wage jobs and government revenues for all levels of government.  

    Really don't mind if you sit this one out. My words but a whisper -- your deafness a SHOUT. I may make you feel but I can't make you think..Jethro Tull

    by RMForbes on Sun Apr 17, 2011 at 01:40:53 PM PDT

  •  We don't have a debt problem (1+ / 0-)
    Recommended by:

    because we don't have any real federal debt.  Real debt is something you must repay with money you take in with income or taxes, like state governments do.

    The federal debt is phony because it all can be paid off with money the government simply "prints" or creates.  We have been doing this for 80 years with no problems at all despite much higher federal spending during WWII than now.

    Other countries do the same thing:  Japan has more than twice the debt to GDP ratio that the U.S. has, yet it has no inflation problems or difficulty financing its debt.  In fact, it is now rebuilding its country with even more borrowed money and has no problem financing that massive reconstruction.

    All the talk about some doomsday ahead when our economy will be destroyed by debt is just BS.  Ever notice that the doomsday prognosticators never say when this calamity will occur?  Ever wonder why they are so reticent?

    •  Well... (0+ / 0-)

      they need something to scare the public with to justify taking away social programs, I suppose. Sort of in the same way they use nonexistent "terrists" to scare the public into supporting resource wars.

      Antemedius | Liberally Critical Thinking

      by Edger on Sun Apr 17, 2011 at 03:55:22 PM PDT

      [ Parent ]

      •  Politics runs on fear (1+ / 0-)
        Recommended by:

        and our debt "crisis" is just the latest fear mongering from Washington.  Remember Saddam's WMD?  When I was a kid, it was all about the communist threat.  What happened to that?

        Why are people always suckered by this claptrap?  Do they want to be scared?

        •  I don't know, but (0+ / 0-)

          I'm often - still - reminded of an article Mark Morford wrote for SFGate in 2004...

          Fear is in. Fear is the new black. Spritz it on your face and neck, walk around the world all quivering and tremulous, waiting to be crushed by some dark massive throbbing wall of evil at any moment.

          Fear is everywhere. Classrooms, water coolers, truck commercials. Fear is our government's raison d'etre, the calling card of the GOP. It will be the prime motivator in this year's presidential election, as Karl Rove will command that Dubya beat the drum of fear loud and hard and nonstop, smirking all the way.

          Fear of terrorists fear of gay marriage fear of women and foreigners and the poor and environmentalists and progressives and Janet Jackson and hippies and commies and gul-dang liberals who want to take away your guns and make you think for yourself. We cannot have that.

          Vote for us, the GOP will scream, and we will make sure to slaughter all those evil hippie demons, all while keeping your fear at a fever pitch via a never-ending parade of freshly minted evils that threaten your numbed McDonald's-gorged diabetic asthmatic children who can't breathe due to all the air-quality laws we've gouged. Shhh.

          Fear has served the GOP beautifully. It won them the election and let them launch two full-blown wars and has pumped billions into the coffers of crony corporations and there is no reason to stop now.

          Fear is bombing Afghanistan, right now. Fear is why we are decimating Iraq. A massive murderous budget-busting U.N.-hating war on a nonthreatening nation would have been unspeakable and intolerable had the GOP not deliberately engaged in truly world-class fearmongering beforehand, all about leveraging the sadness of 9/11 and tying it to nonexistent WMDs and biotoxins and nukes and scary bearded foreigners who are all hell bent on slaughtering American babies with rusty machetes.

          Basic truism of politics, worldwide: Get the populace scared enough, and you can get away with anything. Fear yanks away your basic civil liberties, your intuition, your sense of dignity and humane behavior.

          Fear means not blinking an eye as you remove your belt and your shoes as you allow your carry-on to be dumped out and rifled through and your toddler to be groped and her teddy bear strip searched by some snickering security personnel.

          Fear means barely wincing as the utterly draconian USA Patriot Act gets reamed through Congress, twice, giving the FBI and police appalling new powers to monitor your e-mail and your Web-site visits and credit card usage and telephone calls sans warning or warrant or even probable cause. Fear means no longer saying hey, just what the hell is wrong with you people?

          Fear is a tactic. It is a calculated force, a strategic maneuver, a carefully constructed PR methodology.
          It is a poison in the air, a cancer in the national bloodstream, a media pastime and a cultural narcotic. And here's the biggest secret of all: Fear is a learned trait, a practiced habit. It is something you cling to and allow to fester. They are counting on it.


          Morford titled it -  What Are You So Afraid Of? : Gays? Terrorists? God? In BushCo's fear-drunk world, only one question really matters

          But it should have been titled "In America's Fear Drunk World...", imo

          Antemedius | Liberally Critical Thinking

          by Edger on Sun Apr 17, 2011 at 05:34:23 PM PDT

          [ Parent ]

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