Obama’s Challenge and Opportunity: Building a Strong Economy

by Seth Michaels, Oct 5, 2008

If the efforts of union members and progressives across the country are successful, Sen. Barack Obama will be elected president this fall. He’d take office in January and face a set of extremely serious challenges and promising opportunities. Would he be able to turn the country around and make it work again?

Obama’s Challenge, a new book by Robert Kuttner, looks at the policy agenda and outcomes of the past eight years to answer this question. Kuttner asks how previous presidents have transformed the nation and what policies can be implemented to move us forward.

Only a president, Kuttner says, can assert a robust policy agenda and fix the failures of our economy through broad, comprehensive solutions. Small, micropolicy shifts are inadequate The next four years are an opportunity for real leadership—an opportunity that is as challenging as it is necessary.

Kuttner, co-founder of The American Prospect and author of The Squandering of America, discussed his new book this week at the Economic Policy Institute (EPI) with Washington Post columnist E.J. Dionne and EPI President Lawrence Mishel.

Mishel says the financial crisis of recent weeks has proven the bankruptcy—no pun intended—of the conservative agenda that has dominated the nation for the past several decades. The crisis also sets up a climate that allows for, and demands, a new set of ideas about the economy and government.

This is a transformational moment in the world economy. What happens in an economy is in our hands—it’s a human institution that can be shaped to our values and needs. We need solutions that address the scale of the problem, and we need solutions that work.

The first action the next administration and Congress must take, Kuttner says, is to shore up the economy by securing the housing market—not just bailing out banks, but helping homeowners directly, and passing an economy recovery package to help working families and shore up purchasing power.

A financial crisis is sitting atop decades of slow bleed, and in order to be credible, Obama will need to address both. We have to restore the link between productivity and income.

Mishel says that economic growth based on bubbles—like the stock market bubble and the housing bubble—must end. The stable, fair and sustainable way to build an economy is “the old-fashioned way”—through making sure workers are getting a fair wage.

Kuttner says we can accomplish this by making investments in a new energy economy and infrastructure, which will create jobs immediately but also support communities and the economy in the long term. And every human service job, he says, should be a well-paid, professional job.

Kuttner, Dionne and Mishel agreed that the views of experts and the public are rapidly shifting away from the Bush-era ideological rut. There’s more comfort now than in more than a decade, Mishel says, with ensuring labor standards in trade agreements, reforming health care and, in particular, expanding workers’ ability to form unions so they have power on the job.

The very first thing you ought to do is advocate for the Employee Free Choice Act….In Obama’s first State of the Union address, he should invite workers who have braved getting fired in order to form unions.

Dionne agreed that unions are an essential part of building an economy that’s fair to workers. There’s no inherent reason why, he said, any job has to be a low-paying job. Dionne said the steel and auto industry was able to provide its workers with good wages and a secure life not because of anything inherent to those jobs, but because those industries were unionized and unions could fight for those wages and benefits.

For most people, Dionne says, theories about government essentially are a set of tools. Wage stagnation, job loss and the housing market collapse show that in the modern economy, the Bush-era tools of the conservative movement just don’t work. The social compact has been broken, says Dionne, with health coverage, pensions and economic security disappearing. We need to implement new ideas and new policies that rebuild that social compact.

Kuttner’s book sends a strong message to the potential next president, his advisers and all of us that we’re in a serious crisis—not just on Wall Street, but in the workplaces and homes of working families. The next president will need to address these ongoing economic challenges, building prosperity from the bottom up.

Print This Article | E-Mail This Article |Comments (0)