Democrats have their strut back.
The Republican assault on Medicare handed Democrats a club to pummel them with — as demonstrated by Democrat Kathy Hochul’s remarkable special election victory Tuesday in New York’s 26th congressional district, a longtime GOP stronghold.
Suddenly, 2012 is looking up for Democrats. President Barack Obama was the most popular national leader in the U.S. — even before he got Osama bin Laden. Republicans seem to be longing for the presidential candidates that left, not the ones that are left.
But before re-measuring the White House drapes, Obama would be well advised to answer one question: What is the Democratic plan for jobs?
Once he returns from Europe, the president will no doubt turn his focus to the economy. His argument is clear. His policies saved an economy in free fall, and now we are “poised for progress,” as he said in his State of the Union address. More than 1.5 million jobs have been created in the recovery — more in the last year than President George W. Bush created in eight years.
Now, Obama says repeatedly, we have to “win the future” by investing in vital areas – innovation and new energy, education and infrastructure — even as we make sacrifices to get our books in order. The president has been making his case, visiting “green shoots,” the companies in the new energy economy that are expanding and hiring. He’ll also likely steal some conservative lines by scrubbing regulations and championing free trade accords.
Any incumbent president wants to sell progress. But by focusing on “winning the future,” Obama is in danger of losing the present. Voters are liable to think that he is out of touch with the scope of the calamity and their daily grim reality. The more Obama tries to sell a slow-growth, mass-unemployment economy, the more out of touch he looks. And borrowing deregulation and corporate trade accords from the conservative playbook may blur differences, but doesn’t create jobs.
Moreover, the president is about to be trapped in a months-long wrestling match with Republicans about doing with less – how much and what to cut. The eventual GOP presidential nominee will not have been mired in this debate – and from day one, will indict Obama’s failure to produce jobs – as Pawlenty and Gingrich already have.
The election in 2012, like any with an incumbent president on the ticket, will largely be a referendum on the job he’s done — as voters decide whether he should be rehired or fired. The one factor that informs that decision more than any other will be voters’ perceptions about jobs and the economy.
There, the numbers are ugly and the precedents worse. Nearly two years after the recovery officially began, 25 million Americans still need full time work. Wages aren’t keeping up. Half the voters think the country is on the wrong track, according to recent polls. Only 37 percent approve of the job Obama is doing on the economy — while 58 percent disapprove.
There’s little reason to think things will be noticeably better in a year. States and localities continue to lay off workers. While manufacturing has rebounded a bit with the cheaper dollar, the trade deficit is going up, costing jobs. Home values continue to fall; nearly 30 percent of homes with mortgages under water. So families are still tightening their belts. The Federal Reserve is ending its “qualitative easing” effort to flood the financial system with dollars. Europe is cratering; China slowing. Growth estimates being adjusted downward. Sober economists like Brad DeLong argue it is “time to panic;” Paul Krugman warns of the “Third Depression.”
With the economy not generating sufficient jobs, the country desperately needs a serious strategy for putting people back to work – in addition to the idea of “winning the future.” Politically, it becomes all the more important to have a plan to create jobs. Voters will be looking for someone who offers hope — and a way out.
The Republican argument is clear: Obama has failed. He ran up the deficit, but didn’t create jobs. He bailed out the big banks, but stifled small business with regulation, health care mandates and taxes. Then they ladle out the conservative staples: cut spending, cut corporate and top-end taxes, , roll back regulation and let the market work. The argument has obvious political strengths – appealing to the conservative faithful, while arguing that that spending cuts not only reduce deficits, but generate jobs.
It has two big shortcomings, however. First, we’ve been there and done that – and voters are more than a little skeptical about people who would gut Medicare while cutting taxes on the rich. Second, it won’t work — since it’s based on a falsehood and a fantasy.
The falsehood is the argument, repeated by House Speaker John Boehner (R-Ohio) in his Wall Street speech this month, that government spending is “crowding out” private investment. That’s risible — with interest rates near zero and companies sitting on trillions of profits.
The fantasy is the belief in what Krugman has dubbed the “confidence fairy” — the belief that if spending and regulations were cut and taxes ruled out, the confidence fairy would boost economic confidence and unleash a flood of investment. In fact, poll after poll shows businesses say the biggest problem they face is a lack of customers — not a shortage of confidence.
So if the GOP plan is unconvincing, what’s the Democratic plan? The president appears to be assuming that the current economy will generate enough economic momentum that he can focus on “winning the future” — while indicting Republicans for cutting basic investments even as they defend corporate subsidies and the rich.
Reality, however, increasingly calls this optimism into question. And the human costs of mass unemployment – with 25 percent of high school graduates under age 25 unemployed – can’t be ignored. So why not use reality to make the case for action? Tell Americans the truth: This level of unemployment is not economically sustainable or morally acceptable. Lay out a big program to get the economy going: Call for putting young people to work with a public service jobs program – a green corps or expanded AmeriCorps. Bolster the investment agenda with a big push for an infrastructure bank that can mobilize hundreds of billions in private investment to rebuild America.
Add a bold “Make it in America program” — combining a push for new energy; buy-America provisions to insure jobs stay here; a pledge to balance our trade, beginning with treating Chinese exports the same way they treat ours. A housing plan to write down underwater mortgages and keep long-term homeowners in their homes. Pay for it with taxes on speculation, a rollback of big oil and other corporate subsidies and taxing income from wealth like we tax income from work.
None of this would pass Congress. It would elicit howls of outrage about big-spending Democrats — if not impending socialism. But it would address society’s real needs – and present a clear plan to put people to work.
The president has consistently shown that he sees no advantage in proposing policies that he knows can’t pass. So perhaps House Democrats need to act independently here.
They have been grousing that Obama is triangulating against them — like Bill Clinton — presenting himself as the adult in the center, against the extreme partisans of Congress. But, instead of complaining, maybe Minority Leader Nancy Pelosi (D-Calif.) and House Democrats should triangulate off Obama.
Why not lay out a solid four-point Democratic plan for jobs? The Congressional Progressive Caucus now plans a summer jobs tour. Spread that to 200 districts — and have members stump through on weekends, laying out the plan and challenging the GOP cuts.
The president can join or not. But at the very least, voters would have a choice between two arguments about how to get the economy going – and eventually, the president would have to offer his own plan or join that of the Democrats.
One thing is clear: You can’t win the future if the present isn’t working. Nor will the strong hand that Republicans have dealt Democrats — by deciding to dismantle Medicare while opposing any tax hikes on the rich or corporations – be enough, to get the economy moving or to win the 2012 election.
Voters in 2012 will want to know who has the best chance of getting out of the mess we are in. Democrats should make certain they have a compelling answer.