Two Thoughts On Returning
May 23, 2005 - 12:24pm ET
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After a glorious week away in St. Kitts (whose cane sugar, state-owned, plantation economy is giving way to private tourism and a massive land sell-off) I spotted two items of interest as I've been catching up. First, Tony Blair is going to start pressing for progress among the G8 on Africa and climate change. Second, Robert Rubin's NYT op-ed from May 13, Attention: Deficit Disorder shows that a single-issue focus, even from such a giant as Rubin, can lead to bad policy prescription.
Tony Blair's G8 initiative is interesting in its proximity to the revelations around the Downing Street memo. To fill folks in, in the recent UK parliamentary elections, a top-secret memo was leaked to the press that revealed that the UK's war cabinet was aware that by summer of 2002, the Bush administration was preparing to "fix facts" around the policy of war—in other words, to lie to the American people in order to fight an illegal war.
Tony Blair, re-elected for what will be the last time, is now in legacy mode and it is clear that he wants to be known for his work on Africa and climate change rather than illegal war. That puts him in a rather interesting position vis-a-vis the Bush administration. The Bush administration obviously has no real interest in African development or in addressing climate change. And yet, Blair obviously has the goods on Bush.
Blair is now in quite a position to do good either way, if he chooses to use his leverage. We've all been scratching our heads over here as to why Blair decided to back Bush on Iraq. We know that they knew the intelligence didn't make the case. They were not fooled by the CIA's phoney estimate like our senators can too easily claim.
The other item that caught my attention was Robert Rubin's op-ed, Attention: Deficit Disorder. In it, Rubin identifies a number of real, major issues facing America and then argues for why it is important to address deficit reduction through both revenue increases and spending restraint.
But the problem facing America is not rooted solely in the budgetary balance. If it were, then I'd say Rubin was spot on. Rather, equalizing revenues and outlays, even creating an annual surplus, will not get America onto a sustainable track. Energy security, climate change and ecosystem depletion in the context of rising Chinese economic strength are still more than enough to drive the Repbulic off the cliff, even before a deficit reduction program would really take hold.
America needs a new source of sustainable growth, it's that simple. If we balance our federal budget and and our economy is neither sustainable nor growing, then we will only be putting off the inevitable. Now, that might be the favorite pastime of many here in Washington, but it's not exactly the political message you want to sell. "Vote for ME, I'll put off the economic armageddon at least four years!"
So, as Democrats and the media begin to realize that the working class in America has enough clout to stop Social Security reform, they also better realize that the working class needs to be working. But jiggering budget line items without fundamentally rethinking our fossil fuel, consumer debt, corporate subsidy economy won't provide jobs. China's going to do fossil fuel, consumer debt and corporate subsidies and has 1.1 billion people wanting jobs in the cities. We can't compete and the environment will collapse if we try.
That means we need to build deficit reduction around a sustainable growth plan, not the other way around.
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