Posts Tagged ‘Bernanke renomination fight’

Martin Kenney
by Martin Kenney
Sat Jan 23rd 2010 at 9:18pm UTC

Pollyanna Revisited

Saturday, January 23rd, 2010

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On July 13, 2009, I wrote this comment Pollyanna Has All the Friends…. Here we are exactly six months later and my premonitions have been born out. The Senatorial election in Massachusetts was an earthquake – make no mistake about it – and unless there is change there will be many more. Massachusetts was not just tea-baggers or the health care debacle — the level of anger on Main Street is rising. This can be seen in the Bernanke renomination fight, which, though likely to be approved, is probably the last stand for what I believe is a Chicago School of Economics-driven flawed analysis of the current crisis. The anger will dramatically grow if, as I expect, the market takes another terrible fall during 2010.

The Obama victory was as fundamental as that of Franklin Roosevelt. Roosevelt’s victory heralded the appearance of the mass production industrial working class on the political scene. He galvanized their demands into the New Deal. The result, after World War II, was U.S. global leadership. I suggest everyone read Roosevelt’s first Inaugural Address. It is a statement of vision, leadership, commitment to change, and a recognition that a new order was in birth.

Many of us, me skeptically included, saw Obama as the harbinger of a different sector of the U.S. economy and polity, what Rich has called a “creative class,” moving into power. We all know what has happened since. Essentially, Obama felt it necessary to succor the old order, while not clearing the way for a new sensibility.

In my estimation, President Obama has about one month to dramatically change course or I fear his presidency will, for all intents and purposes, be finished and the nation will have three years of dangerous drift, while a hurricane rages around us. These are the things I think he must do now:

  1. Military spending must be cut massively and the two wars in Central Asia must be rapidly wound down. Iraq appears quiet, but Afghanistan is ramping up and will be far more costly than Iraq ever was. As an example, it costs $400 to deliver a gallon of gasoline to our troops there, and $1 million per year for every soldier there! This is unsustainable.
  2. Money must be withdrawn from bailouts, maintaining unsustainably low interest rates, and subsidizing mortgages in a vain effort to keep home prices high.
  3. The funds saved must be redirected toward jobs programs of all sorts, a Greentech roll-out, the arts, infrastructure renewal, education, and research. Most of these are low-cost, high labor-intensity.

Do you think my July premonitions are that far off where we are today? What is it that will be required to create a transition to a new order?