Editore"s Note
Tilting at Windmills

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November 24, 2009

PELOSI GETS IT.... If more policymakers embraced House Speaker Nancy Pelosi's approach to economic recovery, we'd all be better off. Here's the Speaker this morning, during a conference call:

"We're never going to decrease the deficit until we create jobs, bring revenue into the Treasury, stimulate the economy so we have growth. We have to shed any weakness that anybody may have about not wanting to be confrontational on this subject for fear that we'd be labeled not sensitive to the deficit. … The American people have an anger about the growth of the deficit because they're not getting anything for it.... So if somebody has the idea that the percentage of GDP of what or national debt is will go up a bit, but they will now -- and their neighbors and their children -- will have jobs, I think they could absorb that.... If we pull our punch, as they did in the mid-30's, we shouldn't be surprised if history repeats itself."

By "history," Pelosi was no doubt referring to the 1937 effort on the part of FDR's administration to move away from stimulating the economy and towards deficit reduction. The shift was a mistake -- when policymakers should have kept spending, they instead started bringing down the deficit. Economic conditions quickly deteriorated again, after several years of progress.

And now, we're poised to see this happen again. Recovery efforts rescued an economy on the brink, leading to widespread talk within the establishment to shift away from job creation and economic growth, and towards spending cuts and deficit reduction. The talk has already convinced far too much of the public to believe nonsense, which in turn has rattled anxiety-ridden political leaders.

Pelosi's assertion couldn't be more accurate: "The debate between deficit reduction and job creation is not a real choice, because we'll never have deficit reduction unless we have job creation. Of course we have to be sensitive to how this is paid for, but that doesn't mean we don't do it."

Given the ongoing economic difficulties, there's no reason in the world for so many in the political establishment to want to take their foot off the gas. For politicians, this should be an especially easy call -- voters tend to be happier when the economy and job market are stronger.

This ain't rocket science, folks.

Steve Benen 1:15 PM Permalink | Trackbacks | Comments (13)

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All Democratic leaders, especially the President, should be repeating this constantly using simple language and homely analogies. That way, the media might get it right, and voters can feel--as they need to--that they have a grasp of the problem and that adults are in control.

Posted by: karen on November 24, 2009 at 1:24 PM | PERMALINK

I guess it also needs to be said that there's a reason why 1937 may repeat itself. We have a rabidly conservative Republican party that wants the Obama Administration to fail on all fronts. They haven't exactly made it a secret. And while the GOP won't mind sacrificing economic growth in the short term to consolidate support for their idiotic agenda in the long term, they're not comprised solely of idiots. There's enough kinda smart people in the Republican party to know that spending on job will stimulate growth, and they're the ones beating the drums loudest to stop spending, pretending that's the key to begin deficit reduction.
They're liars. And it needs to be said by as many people as possible that they're liars. The supposedly-liberal-but-bought-and-paid-for-by-conservative-dollars media can not be counted on to do this. Krugman will do it, but he's dismissed as not-serious by the same people who are ruining this country while no one else says boo about it. We need to spend now to stimulate the economy. We didn't do enough with the stimulus package, and everyone knows it. Our window to right that wrong is extremely narrow.

Posted by: slappy magoo on November 24, 2009 at 1:27 PM | PERMALINK

And let's not overlook the other part of getting the deficit under control -- keeping the Bush tax cuts from becoming permanent. You can bet the Repubs will do all they can to keep them from sunsetting.

Posted by: martin on November 24, 2009 at 1:34 PM | PERMALINK

What amazes me is to hear people still screaming, after the free market Repukes destroyed this country, that only tax cuts and deregulation can work. It is a religion -- totally non-falsifiable.

Posted by: Obama Won on Change on November 24, 2009 at 1:40 PM | PERMALINK

Job creation will be equated with socialism.

We don't do socialism, therefore more tax-cuts for the rich and bailouts for the banks.

Ask not what you can do for your country, just do to your country whatever it takes to make it fade into the dust-bin of history.

Posted by: Tom Nicholson on November 24, 2009 at 1:41 PM | PERMALINK

Pelosi is great, and this is the best thing I've read in days from the Washington zoo.

Now, Mizz Nancy, Kindly jerk a knot in the heads of Mister Harry and Mr. Barack.

(and a couple of face slaps to the 3 stooges, Timmy, Larry and Rahm just to keep 'em quiet.)

Posted by: neill on November 24, 2009 at 1:51 PM | PERMALINK

You can almost see a bunch of Republicans sitting around a room saying: "Ha, ha, ha. We fucked up the economy so bad there is no way Obama and the Democrats can jump start the economy again, get credit moving, people working and consumers consuming without MASSIVE new government outlays and debt -- much more spending in fact than even a radical, socialist, communist, fascist would be comfortable doing. And that's our opening. Our path back to power is to take full advantage of the mess we've made of the world. We can do that by making sure Democrats can't do what is necessary to fix things. And we do it by hitting them on hard on government spending. That way, we win two ways -- we make sure there isn't the political will to do enough government spending to create the jobs we need. And, we hit them on the "fiscal recklessness" of the deficit they are creating that people are nervous about. It's a win, win -- for everyone except the American people. But who gives a damned about them."

Posted by: Ted Frier on November 24, 2009 at 2:11 PM | PERMALINK
Given the ongoing economic difficulties, there's no reason in the world for so many in the political establishment to want to take their foot off the gas.

There is one thing more powerful than an idea whose time has come, and that's a shibboleth whose time has passed -- like "Run the government like a business" or "Balance the budget, like families do at the kitchen table every month"

Posted by: Davis X. Machina on November 24, 2009 at 2:12 PM | PERMALINK

This ain't rocket science, folks.

Apparently to you it is. Remeber the projections of unemployment with the stimulus plan and where it is now? Stimulus jobs are by definition unsustainable, in this case even non existent. Bob Kraft is getting $9m to build a foot bridge at Gillette Stadium. This isn't stimulus - it's the equivalent of foreign aid - money goes from the middle class in this country to the rich in this country.

Posted by: bandit on November 24, 2009 at 2:25 PM | PERMALINK

Several thoughts, none in line with bandit. Agree that Pelosi understands macroeconomics and that the GOP is laughable in continuing to trot out the totally discredited supply side theories. I think Obama is about to ratchet up the heat on the GOP by increasing the troop levels in Afgahnistan AND trying to pay for it with some sort of war tax. as long as the tax hits upper income folks hardest, that should not be a recovery killer. passing health care reform with a robust public option would do wonders to ease unemployment. There are a lot of folks in their 60's who would consider retirement if there was affordable health insurance--lowering the age to qualify for Medicare to 60 would accomplish the same thing. Some tax cuts might be appropriate. The two I have in mind are reducing the corporate tax rates for those companies which do not outsource jobs to foreign countries. There has been much wailing and knashing by the right that we are less competitive because of out relatively high corporate taxes. If you do all production in this country and derive no income from overseas operation except the sale of U.S. made exports, I would have no problem in reducing the corporate tax rate to 10%. exempt the first $20K in every employee's salary from the 6.2% social security tax paid by the employer--pay for it by lifting the cap on the employer share of social security. Any further stimulus should be directed specifically at jobs even if it means resurrecting things like the Civilian Conservation Corps. Increase military pay and stop outsourcing military functions to private quasi military groups like Blackwater. It would save money in the long run (by cutting out the profits those folks make) and would give us a better product for our buck.

Posted by: Terry on November 24, 2009 at 2:47 PM | PERMALINK

Damn, I love that woman.

Posted by: low-tech cyclist on November 24, 2009 at 4:10 PM | PERMALINK

Finally, someone who hits the nail n the head. It's a simple formulation that most Americans get: "We won't reduce the deficit unless we get people back to work again." Somehow, Democrats have the idea they can push for jobs while also bowing abjectly to the know-nothing deficit hawks, thinking that stupid Americans will not see the inconsistency.

Remember: every $100 billion devoted to reducing the deficit is 2 million jobs not created directly. I'm sure the indirect job creation from adding 2 million new jobs with direct spending vastly exceeds any indirect job creation from modestly reducing the deficit and the national debt.

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Posted by: Zelia on February 20, 2010 at 11:46 AM | PERMALINK
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