Last week, Laura Tyson laid out what everyone knows is needed to get the economy properly on track: a second stimulus package:
The conventional wisdom about the stimulus package is wrong: it has not failed. It is working as intended. Its spending increases and tax cuts have boosted demand and added about three million more jobs than the economy otherwise would have. Without it, the unemployment rate would be about 11.5 percent. Because about 36 percent of the money remains to be spent, more jobs will be created — about 500,000 by the end of the year.
But by next year, the stimulus will end, and the flip from fiscal support to fiscal contraction could shave one to two percentage points off the growth rate at a time when the unemployment rate is still well above 9 percent. Under these circumstances, the economic case for additional government spending and tax relief is compelling. Sadly, polls indicate that the political case is not.
Richard Trumka of the AFL-CIO says the same thing. And he's far from alone. Everyone with a bare understanding of Keynesian economics knows we need a second stimulus -- and real leadership would make it happen.
Unfortunately, that's one thing we won't find with the Obama White House:
"There have been a lot of reports and rumors on different options being considered -- many of which are incorrect," said White House spokeswoman Amy Brundage.
"The options under consideration build on measures the president has previously proposed, and we are not considering a second stimulus package. The president and his team are discussing several options, as they have been for months, and no final decisions have been made," she said.
Great, that's just swell. As Susie observes, these kinds of half-assed measures are only going to ensure continued unemployment and economic malaise -- which also means there's going to be a lot of Democratic seats lost this November unless someone begins taking bold action now to reassure voters that jobs really are their highest priority.
Already, the DCCC seems to be treating this as a kind of eventuality. But it doesn't have to be that way.
This is about defending progressive policies because we know they work. Just because President Obama isn't willing to expend any political capital to make a difference in the coming elections doesn't mean the rest of us have to sit still.
Indeed, there is hope -- in boldness. Every progressive Democrat needs to read Drew Westen's analysis of the situation and take heart -- and heed:
The question today is whether Democrats can channel the populist anger we are seeing around the country this late in the game. The answer is that we'd better try. Having recently tested messages on economics and jobs, including how to talk about deficits and taxes -- widely assumed to be Democrats' Achilles Heel, particularly now -- there is little question that if Democrats and progressives from center to left simply say what they believe in ways that are evocative, values-driven, and speak to people's worries and anger, many stand a good chance of surviving November, particularly when their opponents have nothing to say other than warmed-over rhetoric about cutting taxes to millionaires and multinationals and fiscal restraint except where it cuts into profits of their campaign contributors. Even the most evocative boilerplate conservative messages fall flat against honest messages that speak to the need to get Americans working again. And on issue after issue, no message is more resonant right now than one that sides with working and middle class Americans and small business owners against special interests, big business, and their lobbyists.
On every one of these issues, a strong populist message trounces anything the other side can say. But Democrats need to play offense. They need to take up-or-down votes on bill after bill, including those they expect the other side to block, knowing that every one of those votes has the leverage of a campaign ad behind it. They need to change the narrative from what sounds to the average American like a whiny and impotent one -- "the Republicans won't let us do it" -- to a narrative of strength in numbers shared with their constituents. And they need to make every election a choice between two well-articulated approaches to governance -- and to offer their articulation of both sides' positions and values.
That leads to a final point. What Democrats have needed to offer the American people is a clear narrative about what and who led our country to the mess in which we find ourselves today and a clear vision of what and who will lead us out. That narrative would have laid a roadmap for our elected officials and voters alike, rather than making each legislative issue a seemingly discrete turn onto a dirt road. That narrative might have included -- and should include today -- some key elements: that if the economy is tumbling, it's the role of leadership and government to stop the free-fall; that if Wall Street is gambling with our financial security, our homes, and our jobs, true leaders do not sit back helplessly and wax eloquent about the free market, they take away the dice; that if the private sector can't create jobs for people who want to work, then we'll put Americans back to work rebuilding our roads, bridges, and schools; that if Big Oil is preventing us from competing with China's wind and solar energy programs, then we'll eliminate the tax breaks that lead to dysfunctional investments in 19th century fuels and have a public-private partnership with companies that will create the clean, safe fuels of the 21st century and the millions of good American jobs that will follow.
There are smart and powerful progressives in Congress who can champion this kind of stimulus package. Yes, they face an uphill battle, thanks to the Fox News/right-wing propaganda machine. But they face that anyway. Better to turn and face the fight than just timidly give in and surrender. Too much is at stake.