Main Street Recovery

Main Street Recovery Program

OurFuture.org Staff — Tue, 23 Dec 2008 12:07:47 -0800

Our economy now faces the most serious crisis since the Great Depression. The financial crisis that was triggered by the bursting of the housing bubble has now spread to the real economy, and we face a sharp downturn that is spreading across the globe. A serious recession now seems unavoidable in the United States, as well as Europe and Japan. The developing world is already struggling with financial turmoil and economic decline. For the first time since the 1930s, we face a real risk of deep worldwide economic contraction.

Restoring economic growth will require a bold, multifaceted plan. This must begin with a recovery program for Main Street — substantial fiscal expansion to revive the real economy.

Main Street Recovery Program

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Obama's Green Labor Secretary

OurFuture.org Staff — Fri, 19 Dec 2008 09:19:45 -0800

City Recovery Is National Recovery

Isaiah J. Poole — Fri, 12 Dec 2008 07:42:57 -0800

The incoming Obama administration has promised to bring cities out of the federal policy wilderness to which they have been exiled for the past eight years. And, given the scale of the economic crisis facing the country, it must, for the sake of the country.

Mayors have largely had to make do on their own the past eight years with no real support from the conservative ideologues in the Bush administration and Congress. The results have been uneven. For a time, major cities were able to ride the upside of the real estate boom, and a combination of high gasoline prices, demographic changes and local leaders working hard on quality-of-life issues in their communities helped some cities reverse the population declines of previous decades. But working people—including teachers, police officers and the thousands of service workers in central-city hotels and restaurants—who could not afford skyrocketing housing prices were left behind. So was the rickety infrastructure supporting the newly reviving cities, which could not on their own make up for decades of deferred maintenance on public facilities.

PODCAST: Highlights of a conference call with economist James Galbraith, Steelworkers President Leo Gerard and Robert Borosage about the Main Street Recovery Program.

ALSO:

This week the Institute for America's Future is asking public officials and grassroots activists to endorse its Main Street Recovery Program, which calls for a two-year, $900 billion investment program to jump-start the real economy.

Also in the past week, the U.S. Conference of Mayors has issued two reports that offer a window into the unaddressed needs cities have.

On Friday, the organization released its annual survey of hunger and homelessness in 25 major cities. In that survey, 19 of the cities reported an increase in homelessness over the past year, with 12 of those cities tying the increase directly to the foreclosure crisis. Also, 20 of the cities reported an increase in the demand for emergency food assistance over the past year.

Also, the Conference of Mayors issued a list of $71 billion worth of "ready-to-go" projects that would, if fully funded, produce more than 874,000 jobs over the next two years. The projects span several areas that have been neglected during the past eight years, including streets, water mains public housing, schools, public transportation, public safety and intercity rail. Funding for energy conservation and retrofitting for new green technologies is prioritized throughout.

Metropolitan areas account for 86 percent of national employment,, 90 percent of labor income and 90 percent of gross domestic product (GDP), the Conference of Mayors notes. It is obvious that we can't pull the economy out of its current death spiral without a coherent urban revitalization policy. But it is only been since the Obama transition team has taken shape that there have been meaningful moves in that direction, with its announced intention of creating an office of urban policy and, on Saturday, Obama's appointment of Shaun Donovan, New York City's housing commissioner, to run the Department of Housing and Urban Development. In New York, Donovan not only managed the nation's largest affordable housing program but also, as The Washington Monthly notes, had foreseen the looming bursting of the housing bubble as early as 2004.

On Saturday, Obama indicated that he appreciates the urgency of get HUD out of the backwater to which it was relegated under President Bush:

We need to approach the old challenge of affordable housing with new energy, new ideas, and a new, efficient style of leadership. We need to understand that the old ways of looking at our cities just won't do. That means promoting cities as the backbone of regional growth by not only solving the problems in our cities, but seizing the opportunities in our growing suburbs, exurbs, and metropolitan areas.

The Main Street Recovery Program gives the Obama administration an opportunity to address some long-simmering problems highlighted by the Conference of Mayors and other urban organizations. It implicitly adds urgency to the need to reshape the fragmented thicket of housing and community development programs, but in a process driven by making the programs more effective, not solely driven by cost. It encourages job creation though public works projects that will leave cities greener and better positioned to support future growth. It allows for mayors and local elected officials to prioritize the projects that make cities more livable, such as better school facilities and safer streets.

Having a president who cut his political teeth in a big city is in itself a big change from the past. But that president will have to fight against conservatives who kept telling cities to "drop dead." That they have doggedly refused to do so, in spite of the program cuts of the past eight years and the campaign-trail slurs that cities aren't populated by "real Americans," is a testament to the tenacity of hundreds of progressive mayors, local elected officials and activists who have struggled this decade to keep cities viable. Now is the time to build on their struggle with policies that address their needs—and acknowledges than when we help cities, we help the nation.

Updated 7 a.m. December 15 to add Obama's announcement of the Housing and Urban Development appointee and the Conference of Mayors hunger and homelessness report.

Spend, Obama, spend! And save jobs

OurFuture.org Staff — Wed, 10 Dec 2008 08:08:50 -0800

Post-Partisan Progressives

Robert Borosage — Wed, 10 Dec 2008 06:50:54 -0800

Conservatives hail the incoming Obama administration appointments; progressives express misgivings. Democratic Senator Claire McCaskill celebrates Barack Obama as "pragmatic," which she says may dismay some "on the left." David Corn says this isn't the change progressives voted for. The media wallows in the "disappointment of the left."

Welcome to the new "post-partisan" world, in the silly season on political punditry. Turns out the center has triumphed once again. But that, of course, depends on what you mean by center.

Last weekend, pragmatic centrist Obama called for a bold recovery plan, grounded on strategic public investment rather than tax cuts to "help save or create" 2.5 million jobs, "while rebuilding our infrastructure, improving our schools, reducing our dependence on oil and saving billions of dollars." Elements that would include a "massive effort" to make federal buildings energy efficient, the "largest investment in roads and bridges since the creation of the federal highway system in the 1950s, "the most sweeping" program to upgrade and repair the nation's schools; and a new push to extend broadband to every corner of the country. While refusing to talk numbers, Obama pledged to "do what's required to jolt this economy back into shape," with anonymous advisers suggesting $500 billion to $700 billion as a possible price tag.

PODCAST: Highlights of a conference call with economist James Galbraith, Steelworkers President Leo Gerard and Robert Borosage about the Main Street Recovery Program.

ALSO:

In scope and substance, Obama's plan tracks the elements of the Main Street Recovery Program, released by the Campaign for America's Future, and endorsed by more than 100 union, citizen action, women's, environmental and other progressive groups, and some 120 progressive economists.

Now Republicans are reinventing their Keynesian heritage. Emil Henry, an assistant Treasury Secretary under Bush, writes that "investment in key infrastructure is consistent with Reagan principles," and that investment in "renewable energy will be key in our future." William Kristol suggests "small government Republicans" are virtually extinct, and suggests that Republicans support a "huge public works stimulus plan," only insist on directing the dollars to the "underfunded defense procurement rather than to fanciful green technologies." (Now that's a winning agenda: Apparently spending about as much as the rest of the world combined on our military isn't enough.)

Bill Scher, in his invaluable "progressive breakfast" memo, writes that now rabidly anti-government conservative business lobbies like The Chamber of Commerce and National Association of Manufacturers are climbing on the infrastructure bandwagon.

Welcome to the new center: post-partisan progressivism. "We're all Keynesians now," Richard Nixon once famously announced. And now the catastrophic failures of conservatism have set the stage for a new era of progressive reform. The election gave Obama a mandate and a majority for progressive reform: an end to the war in Iraq, health care for all, investment in new energy and education. He doesn't seem to have backed off on any of his major commitments yet. And the economic crisis is forcing an ever bolder response, driving the entire "center" to the left.

So to all the newborn progressives— the DLC émigrés, the Third Way centrists, the Blue Dogs and abashed Cons—welcome to the new center. And get ready for the most intense period of progressive reform since the Great Society. Only one thing: As the economic crisis gets worse and goes global, don't settle in. We've only begun to define the new economy which will come out of the collapse of the old.

Welcome, Conservatives!

Rick Perlstein — Tue, 09 Dec 2008 10:47:28 -0800

Ideology is a supple instrument, especially in the hands of conservatives. We know, all of us, in our bones, that the most bedrock principle in the conservative firmament is that low taxes are always and everywhere good. Except, you know, it was only invented as a bedrock principle the day before yesterday (before then the "principle" was that balance budgets are always and everywhere good; you should hear how the right squealed over JFK's tax cut proposal in 1963!). In England, Tory prime minister Stanley Baldwin responded to the Great Depression by immediately ordering up socialist-style nationalization of industries and capital controls, without a second thought; "small government" simply wasn't a principle baked into the tea cake of British "conservatism."

The one ideological constant: conservatism doesn't do contrition. But I'll take it. They're on board. As Ronald Reagan loved to say, "There is no left and right. Only up and down."

"Government is not the solution; government is the problem"? Yesterday, in the Washington Post, former assistant secretary of the Treasury Emil Henry called the kind of New New Deal we're calling for here at CAF alongside hundreds of prominent economists, activists, and public officials pure and simple Reaganism. How's this for Owellian: "Conservatives should stay true to the Reagan legacy in the coming infrastructure debate. Unimaginative adherence to a historical orthodoxy that ignores economic realities and global competition may simply extend the Republican stroll in the wilderness."

Conservatives of the Weekly Standard vintage, of course, have long had a love affair with big-spending government; before they discovered Iraq, they had "national greatness conservatism," which was all about building big stuff. So William Kristol cries Small Isn't Beautiful." (His heart's desire is bigger and better military bases; all the "schools and airports" he's visited lately, he says, "seem to be to have been refurbished more recently.") David Brooks has been able to make the pirouette to complaint that the only problem with Obama's stimulus dreams is that they're not "imaginative" enough. (His solution: suburbs that work more like cities. He cites neocon geographer Joel Kotkin for backup; when last we heard from Kotkin on this humble blog he was celebrating the exurbs—"the de facto headquarters of the American dream"—as an unmitigated good. Patio Man, we hardly knew ye.")

I, for one, thank God for conservative flexibility. In 2009, it will be the hand-maiden of center-left consensus.

Mobilize For A Real Recovery

Isaiah J. Poole — Tue, 09 Dec 2008 08:42:06 -0800

What could be the most important test the progressive movement will face in decades starts now.

With the economy facing a historic crisis, the question is whether progressives can unite around a plan to make the economy work for working people again. If progressives succeed, not only will there be fundamental and profound changes in the nation's economy—and the lives of ordinary Americans—but progressives will have successfully restored in the majority of Americans the belief that government can successfully work on behalf of the people.

The Institute for America's Future is today launching a "Main Street Recovery Program," a call for a substantial, strategic and sustained effort to rebuild an economy wrecked by decades of conservative ideology.

The recovery program is the first of a series of economic reforms we will be putting forward in the coming weeks. In early 2009 there will be policy proposals on such recovery-related issues as reducing the number of foreclosures, restructuring the financial regulatory system, and revamping the flawed Troubled Asset Relief Program, known as TARP.

The challenge of repairing the damage done by the deregulation, disinvestment and wrong priorities of previous conservative administrations is an opportunity to show that it is the progressive movement that has the bold ideas and smart policies that can renew the nation's luster as an economic power and a force for good in the world.

Hundreds of progressive leaders representing a broad spectrum of constituencies and interests have already rallied around this recovery program. That's a strong start. The next step is to broaden that support into a force of millions of people that has the power to keep both the Congress and the incoming Obama administration focused in what we believe must be the mantra for recovery: substantial, strategic and sustained.

You can help broaden that support by becoming an endorser of the Main Street Recovery Program and encouraging your friends and colleagues—and your elected officials—to do the same. Use the form on the right column of the Recovery Program page.

We know what's at stake. The conservative clarion call for more tax cuts for corporations and the wealthy may be muted, but it is still very much alive. An even bigger concern is the still broad lack of faith in the ability of the federal government, after being run for so long by people with a disdain for government and a lack of respect for the people they were supposed to serve, to make smart spending decisions and carry out those decisions efficiently and effectively. Then there is the ever-present circle of corporate lobbyists waiting to tear into the recovery funding like buzzards on a carcass.

Still, this is an opportunity to change how Washington does business, and perhaps how we as progressives do business as well as we move into the role of policy shapers at the same time as an administration that has challenged us to be the wind at its sails.

What do you think? How should we as progressives make sure that this program lands on President-elect Barack Obama's desk once he officially takes office? And how can progressives use it to move the nation through a sustained transition into a 21st-century economy of shared prosperity?

How to Make Sure the Stimulus Stimulates Our Economy, Not China's

David Sirota — Tue, 09 Dec 2008 07:28:53 -0800

President-elect Barack Obama and the incoming Congress seem poised to pass a massive economic rescue package filled with the public spending that progressives have been pushing for years. That's great news, and they are going to need all of our help passing the package over the inevitable obstruction efforts by conservatives.

But as the debate over the rescue package begins, I suggest you read Businessweek's cover story this week. It looks at "How much of Obama's mammoth fiscal stimulus will "leak" abroad, creating jobs in China, Germany, or Mexico rather than the U.S?" It's an important read, and a critical issue that explains why progressive trade policies must be part of a broader economic development strategy.

The article implicitly smacks down the right-wing frame that says tax cuts to boost consumer spending is the best way to rescue our economy, noting that the right kind of public spending better ensures the money remains in our country:

What about spending on infrastructure, health-care modernization, and green technology? All these tend to produce less leakage overseas than consumer spending. But even jobs in these areas have a tendency to slip over the border unless carefully constrained. Spending on infrastructure such as rail transit is more likely to create domestic jobs, in part because it is already covered by federal legislation that mandates a certain level of purchases of U.S.-made goods.

For example, new public transit vehicles generally must have 60% domestic content and be assembled in the U.S. Electric streetcars—a mass transit option to cut pollution that's favored by cities such as Denver and Salt Lake City—would likely be imported from other countries if it weren't for the "Buy American" requirements attached to federal funding.

The "Buy American" laws have been around in federal procurement since the Great Depression, and they embody one of the founding principles of the broader trade policy reforms that progressives have been pushing for a while now: Namely, that when our government spends public dollars, we should do our best to make sure those dollars stay in our country.

The first problem is that many of our trade policies have subsequently pre-empted or weakened these key Buy American statutes (for instance, subjecting some of them to court challenges in international tribunals on the grounds that they violate "free trade" principles). The second and even bigger problem is epitomized in the article's note that "Paying someone to better insulate a home will clearly create a domestic job. But how much of the insulation will come from China, a major producer?" That's a good question, and it speaks to a trade policy that has decimated America's core manufacturing capacity.

Our own economic policies have created an incentive for corporations to eliminate manufacturing industries here at home and troll the world for the cheapest labor, worst human rights conditions and most lax environmental laws. Not surprisingly, that race to the bottom has crushed our manufacturing industries - ie. those that make stuff - and therefore it becomes harder and harder to make sure spending on said "stuff" like infrastructure projects stays here.

So, while fixing the NAFTA trade model and reforming the WTO may at first glance seem insignificant, it is anything but - it will be a decisive factor in making sure all of the efforts over the next many years to fix and sustain our economy aren't done in vain.

The good news is that in floating fair-trade advocate Rep. Xavier Becerra (D-CA) for U.S. Trade Representative, the Obama team is suggesting it understands the significance of trade reforms in an overall economic strategy. The more troubling news is highlighted by the Wall Street Journal today, which notes that top experts who study job outsourcing have noted that "Almost every member of the economic advisory board who has worked in business has been involved in significant outsourcing actions." These observers are subsequently voicing "worry that [he] may de-emphasize his commitment to get business to stop sending jobs offshore."

The concerns are certainly valid - personnel always plays some role in policy. But as I wrote in a column a few weeks ago, emergency circumstances can radically change the thinking of even the most Establishment actors, and with Obama pledging to create 2.5 million jobs, he now has a political incentive to use every means at his disposal - including trade policy reform - to reach that promised goal.

The fact is, you can't have an effective industrial policy without a trade policy that supports it. Leveling the trade playing field with better labor/environmental standards, better trade enforcement, and an end to the provisions undermining Buy American laws will in the long run be a major factor determining whether American taxpayer dollars truly rescue our economy, or head overseas.

The Change We Need

Robert Borosage — Wed, 03 Dec 2008 08:19:47 -0800

Does President-elect Obama represent the change we need? His mainstream appointments — largely veterans of the Clinton administration — have sparked a clamor from worried supporters. But in one of the critical challenges facing the country — how to get the country out of what will be the worst downturn since the Great Depression — Obama is calling for dramatic and long overdue change. While President Bush continues to oppose any major plan for Main Street, Obama has been calling for a substantial recovery program, focused on public investments rather than tax cuts.

His chief economic advisor, Clinton's former Treasury Secretary Larry Summers, suggests a "speedy, substantial and sustained" fiscal stimulus, at levels of $350 billion a year or more. A key question is whether the stimulus will be strategic — investing in areas vital to our future, rather than in simple one-off expenditures for temporary effect.

On this Obama seems clear. The centerpiece of his plan is a down payment towards moving to energy independence and dealing with global warming. He'll generate green jobs by investing in retrofitting buildings for energy efficiency, in modernizing the electric grid, in pushing renewable energy, mass transit, and retooling the auto industry.

He could also sensibly use the crisis to make college more affordable again. The cost of college has doubled under President Bush. Grant programs haven't kept pace. States have been limiting their support. Students have had to take on more and more debt to pay the bill.

Now in the crisis, all will get much worse. Tuitions and costs are increasing, as states cut even more costs. Teachers are getting laid off; construction projects stalled; class sizes will increase. As private lenders abandon the student loan area, loans are still available — but the costs and debt burdens are likely to rise.

For this country to prosper as a high wage society in a global economy, we will need greater education for students, particularly in the skill oriented community colleges that are being hit hardest in the downturn. Obama would be wise to raise Pell grants — the grants that go to neediest students back to the level they once were, when the maximum grant covered about 75% of college costs. That would cost $35 billion a year. The money would be spent immediately — and it would keep kids in college and off the unemployment rolls.

Critics argue that the spending program should be temporary — one-time tax rebates, or one-off investments that involve no long term commitments, and can be ended when the economy starts to grow. If we make a downpayment on strategic investments now, they warn, we'll have to find a way to pay for them when the economy recovers.

Exactly. The fact is that we've been starving vital public investments for decades. Just as conservatives pushed for massive tax cuts as a back door way to force cuts in government spending, Obama should be making vital investments as part of the deficit-funded stimulus as a backdoor way to strengthen the argument for paying for these investments in the long run.

A big time recovery plan for Main Street focused on the investments we need is one key element of the change we need. And one that President-elect Obama surely supports.