Can the Democrats Think Big?

[Joanne98]

With the economic crisis becoming more dire by the day, Democrats will win on pocketbook issues only if they recover the imagination and nerve to offer remedies on a scale equal to the problems.

Robert Kuttner | February 25, 2008

By the time the general election campaign is in full swing, the economy is likely to be in much deeper trouble. Historically, one of the staples of political science research is that presidential elections are backward-looking referenda and that the party presiding over a recession in an election year is very likely to lose. Despite deepening economic troubles, however, this year things are more complicated.
For starters, George W. Bush is not running, so this election will not quite be a referendum—unless the Democrats effectively make it a referendum on 30 years of market fundamentalism promoted by the entire Republican Party. But there is a gap between what Democratic leaders have been proposing to date and what it will actually take to fix the economy. Events have somewhat emboldened Clinton and Obama—on health insurance, on the mortgage meltdown, and even on trade. However, this recession is different in its dynamics from every downturn since the Great Depression, and most Democrats have yet to grasp that.

This economic slide is driven by a massive credit contraction caused by structural damage to the financial system. It was entirely needless damage—an economic war of choice—caused by the ideology and practice of extreme deregulation. The damage is so severe that the usual medicines—low interest rates and modest deficit spending—are not sufficient to cure it.

The economic downswing is compounded by several other factors that make for a perfect storm. After more than a decade of America's escalating dependence on foreign borrowing to finance a structural trade imbalance, global financial markets are losing confidence in the dollar. Our friendly creditors in Asia and in the Persian Gulf are starting to use their dollar hoard to buy real stuff (and at fire-sale prices), not just U.S. Treasury bonds. And the cheap dollar only compounds the problem of rising inflation in sectors such as food and energy, limiting the Federal Reserve Board's room to maneuver with lower rates.

Most important, the current downturn intensifies forces that have been at work for three decades, a period when both parties turned away from the managed form of capitalism that produced the broadly shared postwar boom. That earlier era yielded not just high rates of growth but narrowing income gaps and increasing economic security for ordinary Americans. What vexes voters is not just the recession, which has barely begun to bite, but the 30 years of what CNN's Lou Dobbs calls the War on the Middle Class.

Thus the Democrats' task is to place the responsibility squarely where it belongs—on market-fundamentalist ideology and the related right-wing policies that have undercut mechanisms of security and opportunity—and to offer something dramatically better. This requires not just a repudiation of George W. Bush but a reversal of an entire philosophy of how to run an economy. That philosophy has now been revealed as a proven, practical failure both for working Americans and for the solvency of the system.

http://www.prospect.org/cs/articles?article=can_the_democrats_think_big

[skywalkerjlp]

1. and Bailing out the banks makes no sense either....

Since the banks don't hold the majority of these mortgages....rich people speculated (GAMBLED ) and bought up huge lots of mortgages and now that they are going to lose 9THEIR BET ) WE (the taxpayers ) are going to bail out rich people who lost ???????HELP......check this out for a real permanent change...................................................................................................................................................................................................................................................................................................................In the United States, voter registration has never been higher (70 % of the eligible voters ) and yet there has been a steady DECLINE in voter turnout. We had a more than 10 % spike last election after Bin Laden released his video 2 days before the election, and I'm sure there will be another spike this year when Obama becomes the next President. This may placate the masses for a while, but nothing has actually changed. In this day and age of modern technology, a NATIONAL POLL - instituted so the masses can be actively involved in their REPRESENTATIVE DEMOCRACY on a weekly basis, adding in their 2 cents on all the major issues of the week - is the best remedy for ailing voter discontentment. Of course there is probably not one elected official who would ever WANT such a thing, and that has more to do with the FACT that we are a FEDERAL CONSTITUTIONAL REPUBLIC ( google United States, Wikipedia, first sentence ) and NOT a representative democracy. The PEOPLE want to be heard, my most distinguished and learned gentlemen and ladies, or so many of them would not be registering. If you truly want the people to feel positive about politics in general, why not give them an opportunity to become actively involved, say once a week, allowing them to voice their opinions on the major issues. When that day comes to pass, you will have solved voter discontentment in the United States.