Another View On Creeping Neo-Hooverism

by dday

I see that Donna Brazile signed up for neo-Hooverism on the Sunday chat shows this morning, seeking to constrain a potential Democratic Administration by suggesting we have to tighten our belts in the middle of a recession, which is nothing short of economic suicide. I can tell you that this is not a unanimous view inside the Democratic inner circle, based on what I experienced yesterday.

I was fortunate enough to see Bill Clinton at a small-group discussion in Century City for a group of entertainment industry professionals. This was not a campaign event, and indeed the President was somewhat constrained by campaign finance laws to really advocate for any candidate. But aside from Clinton announcing his preference for Gray's Anatomy and Boston Legal, what was most notable was his discussion of the hypothetical "first 100 days" for a new President. This is from my notes:

The next President is going to face much different challenges than what I faced in 1993, and he can't do the same things... he shouldn't try to fix the deficit right away, but he's going to have to stimulate the economy by paying for things that are useful... we have had too much risk and not enough legislation... we need a government strong enough to prevent the market from devouring itself... I was happy to see Senator Obama call for a moratorium on foreclosures, and we also need to do what we did in the 1930s by buying up these mortgages and giving homeowners the ability to stay in their homes, to minimize disruption and maximize confidence... so let's stimulate the economy, and give birth to a new economy based on old-fashioned financing and modern products. It cannot be based on finance.

Obviously Clinton is part of a different side of the Democratic Party than Senator Obama. But there's a significant amount of overlap, and to hear the President who ushered in deficit reduction and fiscal responsibility in the 1990s recognize very clearly the need for stimulus, in the areas of infrastructure, job creation and the new energy economy, makes me very much reassured and hopeful. And indeed, in the last debate Obama pushed back on the idea of reinstituting PAYGO during a time of recession. This idea of helping state and local governments, putting money into infrastructure and green energy and jobs is very much a part of Obama's stimulus policies. They need to be bigger, but there's no trace of neo-Hooverism there.

Obviously we have to get the surrogates back on the reservation (thanks Donna Brazile). I suggest that everyone gets put into a room with James Galbraith and they memorize this entire passage:

An amazing debate at National Journal. The journal asked, is there room for fiscal stimulus to respond to the crisis caused by the mortgage mess. David Walker, who’s been preaching the need to rein in entitlements, treated the crisis as a chance to push his favorite line:

My concern is, when will Washington wake up and start doing something to defuse the potential “super sub-prime crisis” associated with the federal government’s deteriorating finances and imprudent fiscal path?

And Jamie (Galbraith) let loose:

What is Mr. Walker’s approach to subprime crisis today? His comment above makes his approach clear. It is to use the crisis as a rhetorical springboard, in order to divert the conversation back to what he calls the “super sub-prime crisis associated with the federal government’s deteriorating finances…”

But the fact is, the subprime crisis is real. The collapse of interbank lending is real. The collapsing stock market is real. The disintegration of the financial system is real. The collapse of the housing sector is real. The credit crunch and the recession are real. You can see this in the interest rate spreads and in the credit that is unavailable at any price.

Mr. Walker’s “super subprime crisis” of the federal government is not real. It is a pure figment of the imagination. It is something Mr. Walker sees in his mind’s eye. He sees it in his budget projections. He sees it in his balance sheets, which are the oddest balance sheets I’ve ever seen, because they have all liabilities and no assets.

We have a progressive infrastructure now that wasn't there in the past, able and willing to help drown out the neo-Hooverists as long as our leaders are on the same side. You can look no further to what the Wall Street Journal considers the nightmare of a new Democratic Administration than to see that this moment is entirely possible. And also, of course, necessary.

Voters will be registered. Workers organized. Banks regulated. Health care provided for all. Government investment will drive a green revolution that generates millions of jobs. The wealthy will pay more in taxes. Guantanamo will be shut down; torture will end. Net neutrality will be mandated. Citizens may even be able to sue corporations that negligently do them harm. They don’t even mention the war in Iraq ending.

The horror of it all. Can the Republic survive? The editors hold out one slim hope. Perhaps Democrats will divide. Perhaps he entrenched lobbies, the interest of the corporations and the wealthy will buy enough support to stand in the way of the tumbrels.

And that defines our job pretty clearly: to organize engaged citizens to hold Democrats accountable to the promises that have been made and the agenda the country needs.

We work now until Election Day. But on November 5, the real work begins.