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  • Obama Wins, Economy is Paralyzed

    TRNN Panel: If next four years is like that last four, we are in for a much deeper recession -   November 8, 12
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    Gerald Epstein is codirector of the Political Economy Research Institute (PERI) and Professor of Economics. He received his Ph.D. in economics from Princeton University. He has published widely on a variety of progressive economic policy issues, especially in the areas of central banking and international finance, and is the editor or co-editor of six volumes.

    Jeff Faux is the Founder and now Distinguished Fellow of the Economic Policy Institute in Washington, DC. He is an activist, economist and writer, He has written extensively on issues from globalization to neighborhood development. His latest book is “The Servant Economy; Where America¹s Elite is Sending the Middle Class.”


    Obama Wins, Economy is ParalyzedPAUL JAY, SENIOR EDITOR, TRNN: Welcome back to The Real News Network. I'm Paul Jay in Baltimore.

    Now joining us for the final segment of our coverage of the U.S. presidential elections, starting first of all, is Jeff Faux; Jeff is joining us. He's the founder and distinguished fellow at the Economic Policy Institute in Washington, D.C. He's joining us from Washington. He's an economist and a writer. His latest book is The Servant Economy: Where America's Elite Is Sending the Middle Class.

    And also joining us is Gerald Epstein. He's the codirector of the Political Economy Research Institute, the PERI institute. He joins us from Amherst, Massachusetts, where he also teaches economics.

    And in the studio with us is Lester Spence, who teaches political science at Johns Hopkins University here in Baltimore, and Marc Steiner of the acclaimed Marc Steiner radio show in Baltimore.

    Thank you all for joining us.

    Jeff, kick us off. Where do you think—what do you think America will look like in four years?

    JEFF FAUX, AUTHOR: Well, first, I think that, you know, one of the realities of this election was that it wasn't so much an Obama victory as it was a Romney and Republican defeat.

    Given the economy, Romney should have won, the Republicans should have won this election. And they didn't because they have—in the past they've gone just too far to the right for the people to stomach.

    So here we are with Barack Obama reelected with an economy that still sucks, with no plans for a real job recovery, and, I think, with a White House that's going to feel that the last four years have been vindicated by this election. I saw Rahm Emanuel, Mr. Wall Street Democrat, on the tube about 15 minutes ago, and, you know, I think these guys at the White House are going to say, all you people carping on the left and all this progressive discontent with Obama, see, we won the election.

    And it's hard for me to see that despite the populist, you know, campaign-stop rhetoric, that there's going to be any real change in the way Barack Obama is going to go and operate the presidency. Certainly, the people around him are going to be either the same people who were there for the last four years or they'll be people who come from that same pool of Wall Street apparatchiks who have been running the economy. So I think while we dodged the bullet of a really reactionary group of people in the White House, we're still left with a Democrat much too influenced by Wall Street, much too intimidated by reactionary ideology of the Congress, and, by his own words, an agenda that is not going to get us out of the problems of the American middle class.

    His big priority is, one, to make a deal with the [Republicans] in Congress on a ten-year budget. Now, the difference between Romney and Obama is that Barack Obama wants the rich to contribute a little to this. He wants to raise tax or at least stop the—end the Bush tax cuts for the rich, and Romney didn't. So you're going to have a grand bargain, which I think all the evidence tells us is going to mean domestic cutbacks over the next ten years, which almost guarantees that we're not going to get back to full employment over the next four.

    JAY: Right. Well, I was going to ask Gerry, I mean, if there's this grand bargain on Social Security and some of the entitlement programs, and apparently President Obama told one of the newspaper editorial boards that for every $1 of tax increases on the rich, he's going to have $2 of tax cuts on social spending—.

    FAUX: Two and a half dollars.

    JAY: Two and a half dollars. So you combine, essentially, austerity policies with, again, nothing that's going to do anything about wage levels, which continue to be stagnant. So, Gerry, what America do we look like in four years? I mean, doesn't this recession get deeper?

    GERRY EPSTEIN, CODIRECTOR, PERI: It does. It gets much worse. And inequality gets worse. And the likelihood is that the Republicans would take a big victory, even larger victory in the midterms.

    So I think the key thing here—I agree with everything that Jeff said—all that's going to happen is those who mobilized to help Obama get elected this time don't do anything about it. Those of us who have mobilized and those people who are on the left and the labor unions and everybody else has to start treating Obama differently than they did after the first election [incompr.] completely switch and not think of Obama as our ally. We have to now think of Obama and the Democrats as people that we have got to use this mobilization to push, every minute of every day, to move towards the kinds of policies that we need to get this economy going again. So we completely have to switch gears on a dime, starting tomorrow.

    FAUX: Yeah, I think that's absolutely right. You know, the history is over the last decades—it was true with Bill Clinton—that as the campaign gets going, the progressives have to move to support the Democratic candidate and they mutter to themselves, this time it's going to be different, we're going to hold his feet to the fire, etc. But what happens after the euphoria of the election sort of dies off is there's a sense of, well, let's give him another chance, let's wait and see. But by the time you wait and see, the next election is on you and you start the cycle over again.

    I think Gerry's absolutely [right]: this has got to change tomorrow. And tomorrow, progressive Democrats, including members of the House of Representatives and Senate, senators who share our views, they need an agenda that's going to draw some lines in the sand with Barack Obama.

    JAY: So what are some litmus-test issues where those lines should be drawn in the sand? I mean, there was supposed to be a line in the sand drawn by the Progressive Caucus on the public option on health care, and it wasn't very long before the winds blew that line out of the sand.

    FAUX: Well, that's why Gerry's point is important about doing it right away. The fight has got to start now. It can't wait. By the time, you know, the new year rolls around, then there's going to be the big story of the struggle between Obama and the Republicans in the House over this grand bargain. And they're going to have some kind of deal, believe me. Wall Street's not going to put up with—.

    JAY: And, Jeff, how long before we're back into the debt ceiling fight again?

    FAUX: Well, you know, all of those things, if that's what drives the politics of the next year, that is, the Republican intransigence and the Democratic administration's effort to appease them, then we're back in the same soup. And the problem here is that, you know, these last four years have been tough. The next four years, the pain is going to accumulate.

    And I don't share the Democratic optimism that says, oh, listen, in the long run, we're going to be the dominant party because we appeal to the faster-growing population groups. You know, you look at minorities, you look at single women, you look at these groups and they are exactly the people who are getting it in the neck.

    And I don't think that this sort of euphoria can last. So we need to start right away. And the first demand is for more public spending in order to put people to work. I do not believe that the public cannot understand that. What happened with Obama is that he didn't make the case. And I think the progressive Democrats have to be all over this guy tomorrow morning and say, you've got to get out there now and we've got to spend some money on things that make the economy more productive, that provides for people's jobs, provides for careers. You know, this is not impossible to do. It's only impossible that if you get up in the morning and you say, well, the Republicans are still in control of the House, I guess we can't do very much and we have to lower our horizons.

    JAY: Marc?

    EPSTEIN: The second thing that we have to do is to—.

    JAY: Sorry. Gerry hang on just—. Yeah, go ahead Gerry. Go on, Gerry.

    EPSTEIN: The second thing we have to do is draw a very clear line in the sand about Social Security. They cannot touch Social Security.

    And the third thing is to demand that some of the top appointments on the economic team who are really progressive, progressives, progressive economists in the Treasury Department and in the Budget Office, in the capital's economic advisers, we have to start pushing for that immediately. We cannot any longer have a Wall Street team, [incompr.] people like Tim Geithner, Larry Summers, and so forth. Otherwise, there's simply not going to be any change. And the way to do this is to go to the House Democrats and the Senate Democrats and say, look, if you allow an Obama team to do this again for the next four years, you all are going to be out on your tails. And they understand that; they understand that they were lucky this time, they dodged a bullet. And we have to work with that.

    JAY: Marc?

    MARC STEINER, RADIO HOST, WEAA 88.9 FM: Well, I mean, I don't think you're going to see President Barack Obama change his team.

    The question whether the Progressive Caucus steps up is a real question. Conversations I've had with them is just about that. I mean, are you going to step up to the plate? Are you going to take on the president? Are you going to start doing beyond Congress? The progressives [incompr.] progressives need to do is to begin to organize around the country, use their power to do that.

    The problem is that a lot of people in the Progressive Caucus, a lot of people, members of that caucus, come from poor districts, working class districts. They don't have the money. They rely on corporate money a lot to get what has to get done. So they're all stymied as well. And so we'll see if they'll step up to the plate or they won't.

    I don't think President Barack Obama's necessarily going to change his stripes now. And we'll see, as I said.

    I just got a text that, you know, they're separated by 200,000 votes at this moment, Romney and Obama.

    JAY: In the popular vote.

    STEINER: In the popular vote, and that Florida and Virginia are still yet to be called, but Obama's leading in both places. So Barack Obama could yet and still pull out the popular vote. If he does, that changes the scenario for the next four years. But it's going to be very tight.

    I think Jeff is correct. I mean, I think you—people have to stand up and start fighting tomorrow morning for the America they want. They can't let Social Security go. They've got to begin to fight for investment in American infrastructure, fighting for jobs. That's got to be the push, and it's got to be loud and clear. And the question is whether it'll be done.

    We'll have to—you know, what role the Progressive Caucus is going to play we'll see. They've got a couple of new members now. Tammy Baldwin won. Elizabeth Warren won. See if that gives them some more impetus. We'll find out. It's really hard to call right now.

    But the question is whether or not progressives can be organized enough to do the job. And I think that is the big question.

    LESTER SPENCE, CONTRIBUTOR, WE ARE MANY: Yeah. I don't know what accountability for the president looks like on the ground after he gets in office, so the mechanism they're posing is us going through individual legislators, and yes, we need that. I would rather have a world where we had that.

    But the reason I focus on what's going on in cities in particular is because we can get a hold of cities, you know, we can get a hold of representatives in them. We can use cities as symbolic levers to make change that will then in turn shape the presidential agenda and the legislator agenda. So for your viewers this may seem like, you know, apples or oranges, but for me it's about, you know, where do we—where can we make the most immediate bang for our buck, and I think for me the struggle's about the city.

    JAY: Jeff, should people who want this kind of change you're talking about, you know, growth in terms of public sector investment, some kind of legislative framework that helps unions get organized and wages to go up and such, I mean, isn't it time just to come to the conclusion that this is not going to come from this political elite, period?

    FAUX: I think that's right, and I don't think it will. I think that progressives—the first thing—you know, James Baldwin once said, not everything that's faced can be changed, but nothing can be changed if it's not faced. And I think we have to face just that. Obama is not going to change. He's not going to deliver. And he's still president, of course. So we do need to organize. I think we need to organize in a number of ways, including not just, you know, mass demonstrations, but including, in the Congress, pushing for the hard votes that the administration has been able to duck before,—

    JAY: But the only way you could really—.

    FAUX: —something like single-payer and public option. I think the health care thing is a—well, I think Obamacare was clearly a victory for the insurance companies and the pharmaceutical companies. But I also think what's very, very important is to start grooming candidates for the next congressional election, start scaring people. We've got the ability, the way the Tea Party scared the Republicans, we've got the ability to do something that's—would be a disaster for them, and that is to take away, you know, their congressional position.

    JAY: I mean, if you're going to push them, you can't lobby them. You've got to defeat them, or they have to be scared about losing their job. If they're not scared of losing their job, you know, the administration has a lot more leverage over them than anybody else does. Marc?

    STEINER: I mean, the reality is, I think, one of the things that—as I was looking at some of these results, is I see the referendum on the local level, what's happening. That's where the future lives. It may not be immediately in changing Congress, 'cause I don't think we will. The power's going to be local and moving up from the bottom up now. And that can change things in the long run, maybe in the short term a little bit.

    JAY: Do we know where some of these other—.

    STEINER: Let's take Maryland right now, where we're talking from. The DREAM Act won.

    JAY: Maryland DREAM Act.

    STEINER: Right. Fifty—Latinos voted for Obama 52 percentages more, points more than they did for Romney. The future lies in that. That's where the change is going to come.

    I think, you know, that the fight has to be in Congress, 'cause that's in the headlines, but I don't believe you're going to change Congress in this nation. You're not going to—I don't think you're going to get most of the Progressive Caucus to stand up and fight the way they should. I just don't think they will. I think they had to be pushed from the bottom up. And that doesn't mean mass demonstrations, I agree, 'cause I think the problem is people are tired of mass demonstrations.

    SPENCE: [incompr.]

    STEINER: It's time to be in the communities and doing the hard work that has to be done. The fact that referendums that won around the country are calling for greater democracy, that's what people want, and that's where the fight's going to live. I think that the fight on Capitol Hill has to be waged, but I don't think that's where the front lines are going to be. It's just not.

    JAY: Okay. Lester?

    SPENCE: That's it. That's really it. And if you think about it—and I've been talking about cities, but going back to something Nader brought up in a earlier session, there are a number of issues. The drug war's starting to hit these rural areas, hit by the meth crisis, just like a number of cities, a number of, quote-unquote, inner city neighborhoods used to be hit by the crack crisis.

    So there are a number of ways in local spaces, a number of things that we agree on. It's just about pushing.

    And the referendum is labor-intensive and is difficult, but it's straightforward. Referendum is an easy way to get people to declare what their interests are. And if you do that, in a way, it's not going to matter who's in office, 'cause who's in office is going to have to support it. That's the reason Social Security is still in place, because even as conservative elites want to push on it, the Republican candidates, they can't move on it. They know they'll get no traction at all. That's the thing we have to do. That's the thing that we do.

    JAY: Jeff, you want a final word?

    FAUX: Well, as I said the last time I was on your show, I think if Obama wins, we've got four years just like we had the last four years. Again, we dodged a bullet, but if the euphoria tonight among progressive Democrats continues for more than 24 hours, I think we've already lost the game.

    JAY: And, Gerry, one final question to you. So, assuming the next four years is like the last four years or the grand bargain is made, where is the economy in four years? Like, where is unemployment?

    EPSTEIN: Well, I think the economy is stagnating. We've seen that. Unemployment rate is not going down quickly if at all. In Europe, we know that they haven't solved their problems over there. And we know that we're not dealing with the fundamental issues like global warming, which—we'll continue to have these costly weather events around the country. That's why we have to stay in the game about national and global economic policies. But rather than thinking of it as lobbying the Obama administration (I agree that that would be a mistake we made last time, and we're not going to make it again), we have to be organizing and demanding these kinds of changes that Jeff and others have talked about.

    JAY: Alright. Well, thank you all for joining us.

    And thank you for joining us. (I'm waiting for the camera to come back. Here I am.) And thank you for joining us on The Real News Network. And what happened? Two billion dollars later, we have chosen which section of the elite we want to rule us for the next four years, and it's the same one we had before. So this, I guess, is just a continuation of what we've been talking about.

    Over the next four years, we at The Real News, we're going to be doing something new. We're going to be digging in in Baltimore, and we're going to take up some of what's been said here tonight about taking on some local issues, and then connecting those to national and global perspective and seeing if something can't move here. And we hope you will join us in that endeavor.

    And sometime in the next few months, we'll be broadcasting from our new studio in Baltimore. And if you're coming by this way, let us know. Come for a visit.

    So thanks to everyone who participated tonight. And thank you for joining us on The Real News Network.


    DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


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