New President Will Need to Offer a New Deal
Recently the airwaves have been replete with pundits and economists debating whether we are in a recession. Even worse, some of those same soothsayers are starting to drop the “D” word.Suddenly FDR’s New Deal is relevant again, and the Great Depression is more than just a chapter in the history books. No doubt most government officials are optimistic about turning the corner but, at the risk of sounding like an alarmist, perhaps we should be lacing that optimism with a dose of reality. Perhaps this is a good time to study the past and reflect upon how we might prevent a similar disaster from occurring in the future.
Franklin Roosevelt is either worshipped or vilified depending upon whom you talk to. Most Republicans over the age of 60 and most conservative media pundits blame FDR for setting us on a path toward socialism and creating a modern-day welfare state. Roosevelt’s defenders point out that he pulled America out of the Great Depression. The truth is probably somewhere in between. After all, the depression didn’t officially end until 1941, and that was due more to the industrial demands of World War II than to any of FDR’s so-called “alphabet” initiatives, such as the CCC, the WPA and the NRA. Still, Roosevelt took radical and innovative pre-war actions to put America back to work, and to insure a more secure future for those workers, including establishing the Social Security system.
Now, nearly 70 years after we recovered from that economic nightmare, President George Bush and his buddies have thrown us into perhaps an even more complex kind of crisis. Here are some of the problem areas:
47 million Americans have no health insurance, and millions more are hard pressed to make their rising premium payments. Meanwhile, the government won’t allow us to buy cheaper drugs from Canada, so many people are doing without much needed meds.
The value of crude oil went from $33 dollars per barrel before Bush, to more than $140 per barrel seven years later. Gasoline at the pump is nearing $5 per gallon, and millions of families are having to cut back on driving and make tough choices between food, fuel and medicine.
Our unemployment rate is climbing. Since January alone, more than 350,000 people have lost their jobs. True, many people have been laid off as an indirect result of rising oil prices (example: cutbacks by major airlines). But the bulk of our unemployment crisis can be blamed on abuses of NAFTA and CAFTA, not just by greedy foreigners (like China), but by greedy American CEOs who use trade agreements and global competition as an excuse for laying off American workers and replacing them with slave-wage laborers in third-world countries.
Meanwhile, the cost of waging an illegal war in Iraq is approaching $3 trillion, and experts say that could double over the next few years if we don’t start pulling troops out soon.
Our borders are overflowing with illegal immigrants who sneak in, don’t assimilate and drain our local and state coffers. Yet instead of keeping the National Guard on border duty, they’re over in Iraq serving as policeman in a civil war that we fueled.
We’ve continued to subsidize oil companies to the tune of $1 trillion per year, yet last week Bush and the Congress killed investment tax credits for development of solar and wind power, and issued a two-year moratorium to prevent solar plants from being built on federal lands. The government wants us to believe that alternative sources of energy are futuristic. But according to the Natural Resource Defense Council, we have enough harnessable wind energy from Kansas, North Dakota and Texas to meet all of America’s electrical needs. And while we squander opportunities to be efficient, Israel has just signed a deal with A Better Place to get that nation free of gasoline cars within three years.
Jon Shibley, CEO of Lenox Financial, says that 70 percent of his customers are now “upside down,” and some experts believe that nearly 10 million homes are already worth less than the amount owed on them.And Princeton economist Paul Krugman says that if that figure rises to between 15 and 20 million, we will be in a full-bore depression.
All of this brings me back to FDR, who was forced to take drastic measures in drastic times. That’s what is called for now. But even if Bush suddenly grew a brain and a conscience, he hasn’t the time left in his term to effect necessary reforms. That will be the challenge facing our next president.
If elected, Sen. John McCain will maintain the status quo and become a modern-day Herbert Hoover. Ralph Nader could pull us out of our mess, but he is a long shot. Sen. Barack Obama talks the talk, but seldom walks the walk. He has no substantive accomplishments to his name, and is running as a motivator not an implementer.Still, let’s say for the sake of argument that Obama wins, and that he can break free of machine politics and grow a spine. On his first day in office he should enact a series of executive orders and emergency actions to get us through the short term, and establish a template for long-term economic stability.Obama’s New Deal should include the following:
1.Order an immediate withdrawal of troops from Iraq and Afghanistan.
2.Repeal all trade agreements and re-evaluate them on a country-by-country basis, then reinstate the revised agreements with trading partners who abide by our economic and safety requirements.
3. Institute a two-year moratorium that would bar US-based corporations from building new plants overseas, and prohibit them from transferring any additional American jobs to existing foreign factories.
4.Prohibit any state or locality from offering incentives for a company to move from one locality to another, but offer tax credits to companies who re-open plants that they have previously closed.
5.Freeze gasoline prices at $4 per gallon.Eliminate all tax credits and subsidies for US oil companies and initiate a windfall profits tax which will be re-distributed by the federal government to companies who have developed wind, solar, tidal and geothermal technologies.
6.Freeze all health insurance premiums for two years, and make it illegal for insurance companies to deny coverage for any existing customers for any reason.
Meanwhile, use the monies that were being spent on the war in Iraq to subsidize medical coverage for those who cannot afford insurance.
7.Freeze foreclosures for the calendar year 2009, but only if the borrowers participate in a federally recognized credit-counseling program that will assist them in setting budgets and making token payments to the lender.
8.Place a two-year moratorium on all immigration, and give illegals a one-time-only, three-month grace period to apply for legal status (which would involve some payment of fines), or else face immediate deportation.
FDR was a visionary, but he was also lucky. His exit plan to end the Great Depression worked because of a war, whereas our current economic crisis has been exacerbated, in part, due to a war.And FDR also didn’t have to fix so many multi-tiered problems all at once.True we aren’t in a depression yet, but we’re not far from it.That’s why we must initiate a comprehensive program for recovery, triggered by a series of executive orders from the new president.
This plan is far more radical than the New Deal and will, no doubt, prove controversial. That’s why its chief architect must have thick skin, and must not worry about how he will be judged by future generations.
Who knows? Perhaps these drastic measures will work, and we’ll want to repeal term limits so that we can keep electing the new president over and over again.
It worked for FDR.Maybe it will work for BHO.
Jim Longworth is the host of “Triad Today,” airing on Fridays at 6:30 a.m. on ABC 45 (cable channel 7) and Sundays at 10 p.m. on WMYV (cable channel 15).