The 2010 election campaign is in full swing, and the White House says President Obama is in "all economy, all the time" mode. That’s good, as nothing has plagued his presidency more than the economic mess George W. Bush left behind. Obama isn’t going to finish cleaning things up between now and November 2, but he can renew confidence in his ability—and that of Congressional Democrats—to get America back to work. He got the rhetoric and focus right on Labor Day, bringing thousands of Milwaukee workers to their feet with a promise to invest $50 billion in an "infrastructure plan to expand and renew our nation’s roads, railways and runways," a clean-energy electric grid and broadband Internet for everyone. He got it even more right a few days later, with a blunt rejection of calls to keep Bush’s tax breaks for the rich. But he can’t stop now. Obama must be much bolder if he hopes to take charge of the central election debate.
The $50 billion figure drew an immediate screech from House minority leader John Boehner. But no one should mistake GOP talking points for an indication that Obama’s new commitment is sufficient to tackle an official unemployment rate of 9.6 percent and a real rate of roughly 17 percent—let alone to reverse what the American Society of Civil Engineers describes as a "woeful" neglect of infrastructure needs.
Obama and other top Democrats have operated for too long on the theory that economically necessary moves are politically risky. They have fallen for conservative claims that federal spending is a greater concern than unemployment. But it’s both economically and politically unwise to pull punches. The 2009 Recovery Act included enough stimulus spending to avert a depression and to save or create 3.5 million jobs, but it was too cautious about public works and too compromised with tax cuts to jump-start the economy and create the demand that could spur private-sector hiring. As a result, only about 40 percent of Americans rate Obama’s management of the economy a success. That puts Democrats at a disadvantage this November. If the president wants to change the debate—and there’s still time to do that—he must stop listening to infrastructure-phobic advisers like Larry Summers and start taking counsel from Laura Tyson, a member of his Economic Recovery Advisory Board who argues that $1 trillion in infrastructure investment is needed over the next five years.
Tyson and other economists have developed "shovel ready" ideas as part of the New America Foundation’s "Readying a Plan B for Economic Recovery" project. James Galbraith is proposing a three-year window during which workers 62 and older could retire on full Social Security, thus opening jobs for young workers. Robert Pollin would create 3 million jobs and generate Treasury revenue by freeing $1.1 trillion in cash reserves in the Federal Reserve accounts of private banks—with a carrot-and-stick approach that expands federal loan guarantees for small businesses by $300 billion while taxing excess reserves held by banks (for more from Pollin, see "It’s Not the Party—It’s the Policies" in this issue ).
These are aggressive plans for forging a real recovery. Of course, Republicans will attack them. But Obama and Congressional Democrats should worry about attacking double-digit unemployment, not about "Party of No" obstruction. If Obama adopts bolder proposals, he will be able to win the jobs debate. And he and the Democrats can renew not just the economy but their popular appeal in a defining election year.
