Rebooting Our Republic

Perhaps those who settle for major network television and newspaper-news are not feeling any difficulty keeping up these last few weeks. But it's hard not to feel like the crises we are looking at (aside from global warming, much worse) are no-less-than 50-year events, and multiple ones at that, if you actually go out pursuing Actual News lately. The brownshirt-wannabees who have occupied those formerly-revered formerly-statesmanlike offices are obviously due for subpoenas and sworn testimony, if our system of government, with implicit assumption that they must obey the law no less than you and I is to persist. I'm far from confident that essential work is going to happen, alas. But hope is not dead. And, in recompense for the appalling small-minded insult Laura subjected the Obamas to when it came to their pre-WH digs, my New Year's wish is for her to spend the entirety of her 2009 vacation ensconced in her name-sake hotel. I single her out because it is my impression that she has become the sole repository of the few remaining human empathetic feelings for the both of them.

I am having to force myself to stop and actually post rather than do a proper job of poking through the entrails of the last couple days tonight.

Among the too-numerous-to-even-list recent topics, PEBO's stimulus package is certainly pretty high on the list. Josh at TPM recently shared his concern that Obama may be deferring too much to the pack of losers known as Congress.

Over almost two years, I've learned not to underestimate Barack Obama or assume reflexively that if he's not following my idea of the best way to proceed that he hasn't thought up a much better one I hadn't considered. But it does look to me like he's ceding the initiative to Congress, which is odd since he's immensely popular and Congress is wildly unpopular.

Let's review the stakes. If Obama can pass a big, well-thought-out and clean stimulus bill in the first weeks of his administration, he will have already placed a deep imprint on the course of American politics for years and even decades into the future. If he doesn't, if it starts dragging out, not only will that not happen, which is bad in itself. But he'll also signal to a lot of people that he can be stymied even at the height of his power.

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There are a lot of reasons President Obama doesn't want to be like President Bush, who repeatedly bum-rushed the Congress into passing his legislation by ramping up hysteria over manufactured crises. But the current situation actually happens to be a genuine crisis, which must count for something. And even though the stabilization of the stock market has calmed political tensions a fair amount, there's a lot of economic data out there suggesting we're still in the midst of a profound economic crisis.

[ed: actually ever-so-many reasons not to emulate the drugstore cowboy with his consistent record of failure, initiated, ever-so-ironically, by his regime's dogmatic insistence that whatever Clinton did, they would do the opposite]

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Now, perhaps they're being much cannier than I realize, working out of the camera's gaze to get the Hill kingpins invested in this legislation and do the heavy lifting for him rather than taking a more visibly forceful approach. I hope that's true and part of me thinks it may be since they're no fools. But, alas, hope is not a plan.

Late Update: One other point. To get a sense of the my implicit pessimism about the stimulus bill we're going to get, read Paul Krugman's recent posts on the topic.

I gave up on the The New Republic years ago. I remember actually subscribing for a number of years (early '70's?), but there's no There there anymore. However, I did find this article of interest (h/t TPM):

Does Barack Obama understand the seriousness of the economic crisis? Yesterday, he laid out his economic agenda, and it was filled with all sorts of important exhortations and proscriptions. He appropriately condemned the "anything goes" policies of the last administration. He declared that government is now the solution to our woes, not the problem. Still, I worry that the president elect is underestimating the problem he and the country faces.

We may not simply be facing a steep recession like that of the early 1980s, from which we can extricate ourselves in a year or two, but something resembling the Great Depression of the 1930s. For starters, the current crisis is global, which means that one part of the world can't lift the other out of its misery; everyone will go down together, which is what happened in the 1930s. Secondly, the downturn has combined an unusual decline in the real economy--employment in durable-goods manufacturing fell by 21.9 percent from 2000 to 2008--with a financial crash precipitated by the bursting of the housing bubble. The bubble resulted from an attempt to sustain growth and employment in the face of an underlying decline, which, too, is what happened in the late 1920s.

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There's much to like in Obama's plan. But there are two important ways he may have to go further. Most economists agree that what finally pulled the U.S. out of the Great Depression was military spending for World War II. Some liberals argue that if the Roosevelt administration had not abandoned a Keynesian stimulus strategy in 1937-38, the U.S. might have gotten out of the depression without a war. But in 1936, unemployment was still at 16.9 percent; by 1942, after two years of war spending, it was 4.7 percent, strongly indicating that it was war spending that did it. I am not suggesting that the United States start a world war in order to solve the world's economic problem. But I am suggesting a strategy that could be called the fiscal equivalent of war.

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One area that is ripe for such investment--and that is not, from what I have seen, a declared priority of the Obama administration--is high-speed rail. Amtrak's Acela trains--the closest thing we have to one--average less than 100 mph between Washington D.C. and Boston, whereas trains in Western Europe and Japan go more than twice as fast. Many of them also run on electricity. They would be the most energy-efficient and quickest means of getting between places like Boston and New York, or Los Angeles and San Francisco. But they would require a massive investment. For instance, installing high-speed rail in the Northeast corridor could cost about $32 billion, while California's high-speed rail system would require up to $40 billion. A system that would address the other areas of the country could easily raise the cost to the hundreds of billions. The House transportation and infrastructure committee has currently proposed $5 billion in stimulus funds for intercity rail--not even a down payment on what it would cost to convert the U.S. to high-speed rail.

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The second arena that needs radical action from Obama is international. One reason that the depression of the 1930s endured and deepened was because the international monetary system, which had been based on gold, broke down; and one reason that the world economy enjoyed reasonable prosperity between 1945 and 1971 was because the International Monetary Fund--created as part of the Bretton Woods system in 1944--ensured a measure of international monetary stability. Countries controlled their capital inflow and outflow, and the IMF oversaw--if imperfectly--surpluses and deficits, and devaluations and revaluations. Currency exchange was regulated by nations, not by private companies or speculators. And the only country that ran a large surplus after World War II--the United States--took it upon itself to spend much of it helping the other countries to revive their industries.

Since 1971, the breakdown of Bretton Woods has given way to a perverse anti-system that combines floating rates, fuelled by speculation, and behind-the-scenes currency manipulation by counties like China and Japan that don't want their exports priced out of foreign markets. The result, as Martin Wolf and others have argued, has been decades of financial crises, which began on the fringes of the system but have now engulfed the center. This system, which features huge surpluses in China and Japan, and huge deficits in the United States, has not proven viable, and is breaking down right now. If China is "losing [its] taste for debt from the U.S.," as a recent New York Times story reported, the U.S. will have trouble financing its deficit expenditures. Interest rates will go up, investment will go down, income will sink, and more Americans will be out of jobs; on the other side of the Pacific, China will be able to sell less goods to the U.S., its investment will fall, its workers will be jobless, and so on. It's not a pretty picture.

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Obama is certainly right to abandon the "anything goes" mentality of the Bush administration and to promote an $800 billion stimulus program. But to reverse to current economic collapse, the new administration may have to go even farther than this in the direction of a fiscal equivalent of war and a new Bretton Woods.

Glenn Greenwald continues to exemplify New Journalism and both celebrate and himself demonstrate what I consider true patriotism (vs. kneeling before King Dubyah and Emperor Dick and their velvet-swathed cronies and sycophants). Here he excoriates the DOJ for their continuing harrassment of the key whistleblowing hero on the illegal NSA spying program, who did what he felt he had to when he found our government engaged in a major criminal enterprise:

There are few viewpoints, if there are any, which trigger more fervent agreement across the political and media establishment than the view that George Bush, Dick Cheney and other top officials should not be criminally investigated, let alone prosecuted, for the various laws they have broken over the last eight years. Conversely, in the Beltway world, few things will render you "Unserious" as quickly and irrevocably as arguing that Bush officials should be held accountable under the rule of law for their multiple violations of criminal statutes. Everyone from Cass Sunstein and Ruth Marcus to David Broder and Stuart Taylor valiantly stands up and defends the President and his top aides against the terribly uncouth and disruptive suggestion that their crimes merit investigation and prosecution.

But those who are outside of -- below -- those lofty levels of Beltway political power enjoy no similar protections. The "we-must-look-forward-not-to-the-past" excuse is only for high political officials, not lowly no-names.

Thomas Tamm is the mid-level, career Justice Department lawyer who, in 2004, blew the whistle on Bush's illegal NSA spying program by alerting The New York Times' Eric Lichtblau to the fact that Bush was eavesdropping on Americans without the warrants required by law. He then watched his life be virtually destroyed by the FBI's ensuing -- and still ongoing -- criminal investigation into this disclosure. Last month, Newsweek's Michael Isikoff wrote a detailed account of what Tamm did and why, and how his life has unraveled as a result. I had been exchanging emails with Tamm for several months prior to that and the extent to which his life has been shattered as a result of his heroic whistle-blowing is truly amazing.

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Contrast Tamm's heroic behavior with the complicity and cowardice of people like Nancy Pelosi, Jay Rockefeller and Jane Harman. It is not in dispute that those Democratic Congressional leaders were told -- repeatedly, over the course of years -- that the Bush administration was eavesdropping on Americans without the warrants required by FISA. They had the obligation to use their considerable power to put a stop to illegal intelligence activities when they learned of them; that is, after all, the whole point of why the law requires that Congressional leaders be briefed on intelligence activities. Indeed, that's the core function of the Congressional Intelligence Committees, the reason why they were created in the first place in the wake of the Church Commission. As the Senate Committee's Charter itself says, the Committee is "to provide vigilant legislative oversight over the intelligence activities of the United States to assure that such activities are in conformity with the Constitution and laws of the United States."

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