Why "We're on the Right Track" Isn't Enough, and What Obama's Plan Should Be for Boosting the Economy 19APR12

ROBERT Reich is spot on in this piece. mitt romney isn't offering anything but criticism but Pres Obama must do more to show the American electorate he, and a Democratic Congress can lead us out of the recession. I hope someone at the WH and the campaign HQ in Chicago is paying attention....
President Obama's electoral strategy can best be summed up as: "We're on the right track, my economic policies are working, we still have a long way to go but stick with me and you'll be fine."
That's not good enough. This recovery is too anemic, and the chance of an economic stall between now and Election Day far too high.
Even now, Mitt Romney's empty "I'll do it better" refrain is attracting as many voters as Obama's "we're on the right track." Each man is gathering 46 percent of voter support, according to the latest New York Times/CBS poll. Only 33 percent of the public thinks the economy is improving while 40 percent say they're still falling behind financially -- an 11 point increase from 2008. Nearly two-thirds are concerned about paying for housing, and one in five with mortgages say they're underwater.
If the economy stalls, Romney's empty promise will look even better. And I'd put the odds of a stall at 50-50. That puts the odds of a Romney presidency far too high for comfort. Need I remind you that Romney enthusiastically supports Paul Ryan's wildly regressive budget, and as president would be able to make at least one or possibly two Supreme Court appointments, and control the EPA and every other federal agency and department?
The Obama White House should face it: "We're on the right track" isn't sufficient. The president has to offer the nation a clear, bold strategy for boosting the economy. It should be the economic mandate for his second term.
It should consist of four points:
First, Obama should demand that the nation's banks modify mortgages of homeowners still struggling in the wake of Wall Street's housing bubble -- threatening that if the banks fail to do so he'll fight to resurrect the Glass-Steagall Act and break up Wall Street's biggest banks (as the Dallas Fed recently recommended).
Second, he should condemn oil speculators for keeping gas prices high -- demanding that the oil companies allow the Commodity Futures Trading Corporation to set limits on such speculation and instructing the Justice Department to investigate and prosecute oil price manipulation.
Third, he should stand ready to make further job-creating investments in the nation's crumbling infrastructure, and renew his call for an infrastructure bank. And while he understands the need to reduce the nation's long-term budget deficit, he won't allow austerity economics to take precedence over job creation. He'll veto budget cuts until unemployment is down to 5 percent.
Finally, he should make clear the underlying problem is widening inequality. With so much of the nation's disposable income and wealth going to the top, the vast middle class doesn't have the purchasing power it needs to fire up the economy. That's why the Buffett rule, setting a minimum tax rate for millionaires, is just a first step for ensuring that the gains from growth are widely shared.
The president can still say we're on the right track. But he should also say he's not content with the pace of the recovery and will do everything in his power to quicken it. And he should ask the American people for a mandate in his second term to make the economy work for everyone, not just those at the top.
Such a mandate can be put into effect only with a Congress that's committed to better jobs and wages for all Americans. He should remind voters that Congressional Republicans prevented him from doing all that was needed in the first term, and they must not be allowed to do so again.
Robert Reich, Chancellor's Professor of Public Policy at Berkeley and former
Secretary of Labor, is the author of "Beyond Outrage." His widely-read blog can be found at www.robertreich.org.
 http://www.huffingtonpost.com/robert-reich/obama-romney-economy_b_1438652.html?utm_source=Alert-blogger&utm_medium=email&utm_campaign=Email%2BNotifications

An Offer to the President 14DEZ11

I wish the gop and tea-baggers were offering a credible slate of candidates and had a serious front runner to challenge Pres Obama for the presidency. Unfortunately their primary choices are creeps or clowns, some both, and so Obama may not feel enough pressure to listen to the majority of Americans who want the rich to pay more in taxes on their income and capital gains, who want corporate tax loopholes closed, who want the government to be more involved in reviving the American economy and ending this recession. Yet the opposition's candidates may be more of a threat than Obama's campaign wants to admit because if the President doesn't heed the advise of people like Robert Reich in this article then enough good people may not vote to reelect him next November, or may cast protest votes for third party candidates or for the gop/teabagger candidate. The American people don't just need the President to commit to the principles and policies offered in this article if he is elected for a second term, we need concrete action on them starting now to prove he represents the entire nation and not just the 1%.

Mr. President, we heard what you said last week in Kansas -- about the dangers to our economy and democracy of the increasing concentration of income and wealth at the top.
We agree. And many of us are prepared to work our hearts out to get you reelected -- as long as you commit to doing what needs to be done in your second term:
-- Raise the tax rate on the rich to what it was before 1981. The top 1 percent has an almost unprecedented share of the nation's wealth and income yet the lowest tax rate in 30 years. Meanwhile, America faces colossal budget deficits that have already meant devastating cuts in education, infrastructure, and the safety nets we depend on. The rich must pay their fair share. Income in excess of $1 million should be taxed at 70 percent -- the same rate as before 1981.
-- Raise capital gains taxes to the same level. It's absurd that the 400 richest Americans -- whose wealth exceeds the wealth of the bottom 150 million Americans put together -- should pay an average 17 percent tax on their incomes, the rate day laborers and child-care workers pay. That's because so much of the income of the super-rich is considered capital gains, now taxed at only 15 percent. Close this loophole.
-- Tax financial transactions. A tiny tax on every financial deal would yield billions of dollars more. It would also slow speculators and reduce the wild gyrations of financial markets.
-- Use the bulk of this money to create good schools, give our kids access to a college education, and build a world-class infrastructure, so all our children have a chance to get ahead.
-- Resurrect the Glass-Steagall Act, that used to separate commercial from investment banking. It was put in place after the Great Crash of 1929 to prevent financiers from gambling with peoples' bank deposits. But it was repealed in 1999 -- and its repeal contributed to the Crash of 2008. Wall Street lobbyists have made sure the new Dodd-Frank law has enough loopholes to allow financiers to continue to gamble with other peoples' money. The only way to stop this is to bring Glass-Steagall back.
-- Cap the size of Wall Street's biggest banks and break up the biggest. They were too big to fail before the bailout. They're even bigger now. And because of their huge size they get preferential treatment from the Fed, giving them an even greater competitive advantage over smaller banks. Cap their size and break them up before we have to bail them out again.
-- Require the big banks that got bailed out to modify the mortgages of millions of Americans now under water, who owe more than their homes are worth. It's not their fault the banks created a housing bubble that burst, causing home values to plummet.
Mr. President, we know nothing good happens in Washington unless good people outside Washington are organized and mobilized to make it happen.
So here's the deal: We'll reelect you. We'll stand behind you. We'll give you a mandate to do all this -- and more -- in your second term.
As long as you stand behind us.
Deal?
Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.

Stop the Austerity Train Wreck! 18NOV11

ROBERT REICH must feel like one of the Old Testament prophets crying out in the wilderness of political America and the government is not listening. I am afraid it will take us sliding further into recession, maybe depression, before the people actually rise up and force the government to act or take the government by force. It is not inconceivable to imagine things getting so bad economically that violence against the government and the 1% who own them occurs...

The biggest question right now on Planet Washington is whether the congressional supercommittee will reach an agreement.
That's the wrong question. Agreement or not, Washington is on the road to making budget cuts that will slow the economy, increase unemployment, and impose additional hardship on millions of Americans.
The real question is how to stop this austerity train wreck, and substitute the following:
First: No cuts before jobs are back -- until unemployment is down to 5 percent. Until then, the economy needs a boost, not a cut. Consumers -- whose spending is 70 percent of the economy -- don't have the money to boost the economy on their own. Their pay is dropping and they're losing jobs.
Second: Make the boost big enough. 14 million Americans are out of work, and 10 million are working part time who need full-time jobs. The president's proposed jobs program is a start but it's tiny relative to what needs to be done. It would create fewer than 2 million jobs. We need a big jobs program -- rebuilding America's crumbling infrastructure, and including a WPA and Civilian Conservation Corps.
Third: To pay for this, raise taxes on the super-rich. It's only fair. Never before has so much income and wealth been concentrated at the very top, and taxes on the top so low. Go back to the 70 percent marginal tax we had before 1980. And include more tax brackets at the top. It doesn't make sense that any income over $375,000 is taxed at the same 35 percent, even if it's a billion dollars. And tax all sources of income at the same rate, including capital gains.
Fourth: Cut the budget where the real bloat is. Military spending and corporate welfare. End weapons systems that don't work and stop wars we shouldn't be fighting to begin with, and we save over $300 billion a year. Cut corporate welfare -- subsidies and special tax breaks going to big agribusiness, big oil, big pharma, and big insurance -- and we save another $100 billion.
Do you hear me, Washington? Do these four things and restore jobs and prosperity. Fail to do these, and you'll make things much, much worse.

The American Jobs Act 8SEP11

FACT sheet and video of the speech from the White House on President Obama's jobs program

The American Jobs Act President Obama’s Plan to Create Jobs Now
1. TAX CUTS TO HELP AMERICA’S SMALL BUSINESSES HIRE AND GROW
• Cutting the payroll tax cut in half for 98 percent of businesses: The President’s plan will cut in half the taxes paid by businesses on their first $5 million in payroll, targeting the benefit to the 98 percent of firms that have payroll below this threshold.
• A complete payroll tax holiday for added workers or increased wages: The President’s plan will
completely eliminate payroll taxes for firms that increase their payroll by adding new workers or
increasing the wages of their current worker (the benefit is capped at the first $50 million in
payroll increases).
• Extending 100% expensing into 2012: This continues an effective incentive for new investment.
• Reforms and regulatory reductions to help entrepreneurs and small businesses access capital.
2. PUTTING WORKERS BACK ON THE JOB WHILE REBUILDING AND MODERNIZING AMERICA
• A “Returning Heroes” hiring tax credit for veterans: This provides tax credits from $5,600 to $9,600 to encourage the hiring of unemployed veterans.
• Preventing up to 280,000 teacher layoffs, while keeping cops and firefighters on the job.
• Modernizing at least 35,000 public schools across the country, supporting new science labs, Internet-ready classrooms and renovations at schools across the country, in rural and urban areas.
• Immediate investments in infrastructure and a bipartisan National Infrastructure Bank,
modernizing our roads, rail, airports and waterways while putting hundreds of thousands of workers
back on the job.
• A New “Project Rebuild”, which will put people to work rehabilitating homes, businesses and
communities, leveraging private capital and scaling land banks and other public-private
collaborations.
• Expanding access to high-speed wireless as part of a plan for freeing up the nation’s spectrum.
3. PATHWAYS BACK TO WORK FOR AMERICANS LOOKING FOR JOBS
• The most innovative reform to the unemployment insurance program in 40 years: As part of an extension of unemployment insurance to prevent 5 million Americans looking for work from losing their benefits, the President’s plan includes innovative work-based reforms to prevent layoffs and give states greater flexibility to use UI funds to best support job-seekers, including:
› Work-Sharing: UI for workers whose employers choose work-sharing over layoffs.
› A new “Bridge to Work” program: The plan builds on and improves innovative state programs where those displaced take temporary, voluntary work or pursue on-the-job training.
LEARN MORE AT WWW.WHITEHOUSE.GOV
The American Jobs Act President Obama’s Plan to Create Jobs Now
› Inno
vative entrepreneurship and wage insurance programs: States will also be empowered to implement wage insurance to help reemploy older workers and programs that make it easier for unemployed workers to start their own businesses.
• A $4,000 tax credit to employers for hiring long-term unemployed workers.
• Prohibiting employers from discriminating against unemployed workers when hiring.
• Expanding job opportunities for low-income youth and adults through a fund for successful approaches for subsidized employment, innovative training programs and summer/year-round jobs
for youth.
4. TAX RELIEF FOR EVERY AMERICAN WORKER AND FAMILY
• Cutting payroll taxes in half for 160 million workers next year: The President’s plan will expand the payroll tax cut passed last year to cut workers payroll taxes in half in 2012 – providing a $1,500 tax cut to the typical American family, without negatively impacting the Social Security Trust Fund.
• Allowing more Americans to refinance their mortgages at today’s near 4 percent interest rates, which can put more than $2,000 a year in a family’s pocket.
5. FULLY PAID FOR AS PART OF THE PRESIDENT’S LONG-TERM DEFICIT REDUCTION PLAN.
To ensure that the American Jobs Act is fully paid for, the President will call on the Joint Committee to come up with additional deficit reduction necessary to pay for the Act and still meet its deficit target. The President will, in the coming days, release a detailed plan that will show how we can do that while achieving the additional deficit reduction necessary to meet the President’s broader goal of stabilizing our debt as a share of the economy.
LEAR

It Looks Like the Stimulus Worked After All from MOTHER JONES 12AUG11

MORE proof the Stimulus Bill did work, and proof that we need another stimulus bill from the federal government, one that creates jobs in the U.S. and penalizes American companies that outsources jobs, one that includes an infrastructure bank, one that provides tax incentives for companies hiring American workers. From Mother Jones....
By Kevin Drum

Conservative economist Douglas Holtz-Eakin has a chart he's fond of that demonstrates just how ineffective the 2009 stimulus was. Basically, it shows that the stimulus cost $260 billion and produced only an extra $268 billion in GDP. Personally, I'd take even that, but his point is that the stimulus produced no Keynesian multiplier effect at all. It was just a 1:1 replacement of revenue from one source to another.
But as you may recall, the US Bureau of Economic Analysis recently revised its GDP estimates from late 2008 and 2009, and it turns out the economy was doing much worse than we thought. And if you don't recall this, Michael Linden wants to remind you about it today. He also wants to remind Douglas Holtz-Eakin about it. Because it turns out that when you redo Holtz-Eakin's favorite chart using the corrected data, it suggests that the stimulus bill produced about $544 billion in extra GDP. In other words, a multiplier effect of about 2x.

I suppose there are two ways to respond to this. Holtz-Eakin could admit that he was wrong. Or he could invent a reason that his old chart is no good and then scurry back to his computer to produce a brand new chart using a different methodology that, once again, shows that the stimulus didn't work. We'll see which way he chooses.

The President's Bold Jobs Bill (Maybe) from HUFFPOST 17AUG11

GOOD, solid economic advice. The question is, will the President even consider any of it? Maybe, if he hears from enough of us. Let Pres Obama know what you think at http://www.whitehouse.gov/contact 
The president is sounding like a fighter these days. He even says he'll be proposing a jobs bill in September -- and if Republicans don't go along he'll fight for it through Election Day (or beyond).
That's a start. But read the small print and all he's talked about so far is extending the payroll tax cut and unemployment benefits (good, but small potatoes), ratifying the Colombia and South Korea free trade agreements (not necessarily a job-creating move), and creating an infrastructure bank.
An infrastructure bank might be helpful, depending on its size.
Which is the real question hovering over the entire putative jobs bill -- its size.
Some of the president's political advisors have been pushing for small-bore initiatives that they believe might have a chance of getting through the Republican just-say-no House. They also figure policy miniatures won't give aspiring GOP candidates more ammunition to tar Obama as a big-government liberal.
But the president is sounding as if he's rejected their advice.
That's good policy and good politics.
Good policy because any jobs bill has to be big enough to give the economy the boost it needs to get out of the gravitational pull of the Great Recession.
Right now all the old booster rockets are gone. The original stimulus is over. The Fed's "quantitative easing" is over.
Combine the budget cuts state and local governments continue to make with the slowdown in consumer spending, the reluctance of businesses to expand or hire, and the magnitude of unemployment and under-employment, and you need a big new booster rocket. I'd estimate the shortfall in aggregate demand to be $300 billion to $500 billion this year alone.
A bold jobs plan is also good politics. With more than 25 million Americans looking for full-time jobs, the wages of people with jobs falling, and an economy on the verge of a double dip, the President has to come out fighting on the side of average people.
Besides, Republicans won't go along with any jobs initiative he proposes -- even a tiny one. Better they reject one that could make a real difference than one that's pitifully small and symbolic.
If Republicans reject it, Obama can build his 2012 campaign around that fight. Maybe he'll even call Republicans on their big lie that smaller government leads to more jobs.
What would a bold jobs bill look like? Here are the ten components I'd recommend (apologies to those of you who have read some of these before):
1. Exempt first $20K of income from payroll taxes for two years. Make up shortfall by raising ceiling on income subject to payroll taxes.
2. Recreate the WPA and Civilian Conservation Corps to put long-term unemployed directly to work.
3. Create an infrastructure bank authorized to borrow $300 billion a year to repair and upgrade the nation's roads, bridges, ports, airports, school buildings, and water and sewer systems.
4. Amend bankruptcy laws to allow distressed homeowners to declare bankruptcy on their primary residence, so they can reorganize their mortgage loans.
5. Allow distressed homeowners to sell a portion of their mortgages to the FHA, which would take a proportionate share of any upside gains when the homes are sold.
6. Provide tax incentive to employers who create net new jobs ($2,500 deduction for every net new job created).
7. Make low-interest loans to cash-starved states and cities, so they don't have to lay off teachers, fire fighters, police officers, and reduce other critical public services.
8. Provide partial unemployment benefits to people who have lost part-time jobs.
9. Enlarge and expand the Earned Income Tax Credit - a wage subsidy for low-wage work.
10. Impose a "severance fee" on any large business that lays off an American worker and outsources the job abroad.
Some of these won't cost the federal government money. Others will be costly in the short term but lead to faster growth.
Remember: Faster growth means a more manageable debt in the long term. Which means the President could tie this (or any other jobs bill of similar magnitude) to an even more ambitious long-term debt-reduction plan than he's already proposed.
A bold jobs bill is good politics and good policy. Let's wait to see what the President actually proposes.
Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.