Category Archives: Great Depression

Obama, Can You Spare a Job?

One of the latest attacks on Obama’s failed policies claims that his economic stimulus created few jobs at exorbitant cost to taxpayers: $278,000 per job, to be exact. Fuzzy math aside, what these attacks omit to mention is that the stimulus, like all else these days, operated under the conservative creed that everything has to be done through the private sector. This ethos, firmly embraced by Obama
himself, prevents the government from taking the far more efficient route of simply employing people, which might have created many more good jobs for the same price tag.

Had Obama had heeded FDR’s experience during the Great Depression, we could have put unemployed people to work rebuilding American infrastructure—bridges, tunnels, railroads, roads–not to mention restoring and shoring up wetlands and carrying out other environmental projects. That’s what Roosevelt
famously did
with his Works Progress Administration and Civilian Conservation
Corps.

Such an initiative might conceivably have been possible, on some scale, prior to the midterm elections. But with the gridlock in Congress and diminishing confidence in the President and government, any such course now is hard to imagine. Instead, the austerity imposed by the debts deal will likely further impede any chance at real job growth–as Roosevelt himself found in 1937 when he briefly adopted austerity measures, only to see falling unemployment rates spike once again.

But even at this dismal stage, there are nonetheless a handful of realistic projects that ought to appeal to some fiscally minded conservatives as well as to Democrats.

Jonathan Alter, who is a historian of FDR’s New Deal as well as a journalist, has promoted an idea that involves allowing states to “convert their unemployment insurance payments from checks sent to the jobless into vouchers that can be used by companies to hire workers.” The amount of the unemployment checks would in effect become subsidies to the employers, so that “for instance, a position paying $40,000 might cost employers only $20,000, thereby encouraging them to hire…If a mere 10 percent of unemployed Americans persuaded employers to accept such vouchers, more than a million people would find work with no new spending beyond some administrative costs.”

Alter believes the plan, first suggested by Alan Khazei, a Democratic candidate for the Senate in Massachusetts, might appeal to “a Republican House  that loves the concept of voucher.” But so far there’s been no interest from either Congress or the Obama Administration.

Another option is the already much-discussed German experience with the short work week. As Kevin A. Hassett of the American Enterprise Institute explained this scheme back in 2009.

Firms that face a temporary decrease in demand avoid shedding employees by cutting hours instead. If hours and wages are reduced by 10 percent or more, the government pays workers 60 percent of their lost salary. This encourages firms to use across-the-board reductions of hours instead of layoffs. Here’s how the program works.

A firm facing the challenges of the recession cuts Angela’s hours from 35 to 25 per week, thus reducing her weekly salary to 714 euros from 1,000 euros. Angela does not work for the firm during those hours. As part of its short-work program, the government now pays Angela 171 euros–60 percent of her lost salary. Most important, she still has a job. Effectively, the government is giving her unemployment insurance for the 10 hours a week that she is not employed.

Senator Jack Reed and  Congresswoman Rosa DeLauro have put this program into legislation which so far has  gone nowhere, with only a handful of co-sponsors. This despite the fact that as Dean  Baker of the Center for Economic and Policy Research points out: “Twenty  one  states (including California and New  York) already have short-time compensation as an option under their
unemployment insurance system. In these states a governmental structure already  exists to support work sharing, although there would have to be changes to make  the system more user friendly so as to increase take-up rates.”

Steven Pearlstein in the Washington Post last week pointed to another way of immediately putting people to work, which harkens back to the idea of rebuilding the nation’s crumbling infrastructure:

Over the next decade, the federal government is slated to spend hundreds of billions of dollars building roads, schools, airports, trolley  lines and airport terminals, modernizing the air traffic control system, replacing computer systems and buying planes, ships, tanks, trucks and cars.  Moving up some of that spending from years 8, 9 and 10 to years 1, 2 and 3 won’t cost any more in the long run, or increase the long-term deficit any more, but could sure help put a floor under the economy in the short run. For those worried about pork, the actual spending decisions could be left to an independent Infrastructure Bank.

To spur private investment in equipment and research, the government could immediately allow companies of all sizes to deduct 100 percent of such expenses made in the next three years, rather than “depreciating” them over many years. That incentive to invest now will increase the deficit in the short run but have little or no impact on the long-term deficit.

As Suzy Khimm reports in the Washington Post, “The question of infrastructure funding will come up as soon as Congress returns from its August recess,” since “a bill reauthorizing  spending on surface transportation — which would help build roads, highways,  and the like — is set to expire in September. There’s a big gap between the House GOP proposal, which would slash federal spending to 35 percent less than Fiscal 2009 levels, and Democratic Sen. Barbara Boxer’s two-year plan to spend $55 billion a year. Boxer’s proposal would require revenue beyond what’s in the Highway Trust Fund, which receives money from the gas tax, promising yet another fight over which will be better for the economy — reducing the deficit or Keynesian spending on infrastructure.”

We all know how that fight is likely to turn out. And as Jonathan Alter points out, even these modest approaches to job creation call for an attitude of what Roosevelt called “bold, persistent experimentation” on the part of the government–and the leadership to back it up. And as we’ve seen all too clearly, Obama is no FDR.

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In the Social Security Debate, Today’s Democrats Are Worse Than Yesterday’s Republicans

Having “retooled’’ his Presidency for a more open accommodation of the center right, Obama will soon be overseeing the battle to launch a dismantling of the Social Security system.

His government has, from the start, been reminiscent of the Clinton years, so it’s safe to say that we can expect more triangulation. Clinton’s adoption of Republican tropes led him to fulfill some of the conservatives’ fondest dreams: His administration countenanced the demise of the banking regulations originally established by the Depression-era Glass Steagall Act, and the destruction of the welfare system established in the 1930s and expanded in the 1960s. Obama will provide much the same function on Social Security. Without entirely destroying the popular program, he will support cuts that go beyond anything that should rightly happen during a Democratic administration.

Of course, the Democrats will say that it isn’t their fault: It all happened because of that horrid Tea Party, dragging conservative Republicans even further to the right. This suggests that Democrats had no choice but to head them off at the rightward pass, as if standing and fighting simply wasn’t an option—and as if they didn’t still hold the Senate and the White House.  

What makes this especially disconcerting, for anyone who has lived long enough to remember earlier political eras, is how favorably the Republicans of the past compare to the Democrats of the present on many points.

Tracking back to the New Deal, one can find Senator Robert A. Taft of Ohio—the most prominent conservative Republican of his time, later identified by John F. Kennedy in Profiles in Courage as one of the five most important senators in history–registering his support for Social Security. A champion of private enterprise and enemy of labor unions, Taft bashed Roosevelt’s “socialistic” programs every which way, fighting to reduce runaway government and even opposing entry into World War II. But at the height of the Great Depression, he also supported the new Social Security program, as well as public housing and public education.

Taft embodied the tenets of Main Street middle western life before the Second World War. And he was not unreservedly laissez faire, nor was he anti-government. He believed in the intervention and utility of the federal government where he deemed it necessary, and that included providing an adequate, if not generous, public welfare system.

Taft ran for president three times and never made it. But Eisenhower, the war hero who became a popular Republican president, carried some of these same basic tenets into the postwar era. Eisenhower was not opposed to federal intervention in the economy and, for example, backed the creation of an interstate highway system, which became a vast public works program. And Eisenhower not only supported Social Security, but took steps to enlarge the program. According to the Eisenhower Memorial Commission:

Dwight Eisenhower was the principal force behind the greatest single expansion of Social Security beneficiaries in the history of the program. He led the legislative drive to add over ten million Americans to the system. Here’s how it developed.

When the Social Security Act became law in 1935 its purposes were primarily aimed at factory workers and other employees of business organizations. The legislative process leading to passage of the law was both lengthy and contentious. Large numbers of working American’s were left out of the original Old Age and Survivors Insurance coverage. No major changes in the Social Security law had been made since its initial passage.

During the presidential campaign of 1952, candidate Eisenhower made it clear that he believed the federal government played a rightful role in establishing the Social Security system, but he made no promises concerning its future. However, after the election it became clear that the Republicans would have control, by slim margins, of both the House of Representatives and the Senate. This changed the political and legislative landscape considerably.

Previously, expansion of the Social Security system or increasing the level of payments to retired Americans had been given no chance to succeed in the Congress because there were enough conservative Democrats (and the majority of Republicans) who would vote against such bills. With a Republican President it now appeared likely that the majority of congressional Republicans would honor their President and support his initiatives. Among the new legislative possibilities, action on Social Security now seemed possible.

Thirteen days after taking his oath of office, President Eisenhower delivered his first State of the Union message to Congress and, when discussing the need for greater effectiveness of government programs, he said, “The provisions of the old-age and survivors insurance law should promptly be extended to cover millions of citizens who have been left out of the social security system.”

The following week, during a White House meeting of the House and Senate Republican leadership, Eisenhower brought up the Social Security expansion proposal and asked America’s most famous living conservative, Senator Robert A. Taft, if he would support the initiative. When he received a positive reply he knew that the possible had just become the probable. Before the end of the month, Eisenhower appointed a presidential commission to study the Social Security system’s deficiencies and submit a detailed report on specific reform measures. In his public statement creating the commission, the President said, “It is a proper function of government to help build a sturdy floor over the pit of personal disaster, and to this objective we are all committed.”

Those opposed to the initiative stressed their belief that retirement income was the responsibility of every individual and the federal government should not be involved. One citizen should not have to pay for the old age necessities of another. President Eisenhower responded to this notion during his press conference on June 17, 1953 with these remarks: “A strict application, let us say, of economic theory, at least as taught by Adam Smith, would be, ‘Let these people take care of themselves; during their active life they are supposed to save enough to take care of themselves.’ In this modern industry, dependent as we are on mass production, and so on, we create conditions where that is no longer possible for everybody. So the active part of the population has to take care of all the population, and if they haven’t been able during the course of their active life to save up enough money, we have these systems.”

You know it’s a measure of how far this country has moved to the right that someone like myself could wax nostalgic for the likes of Dwight Eisenhower and Robert Taft. (Next stop: Remembrances of the Nixon years, when the richest Americans were taxed at a rate of 70 percent.) Yet now we see the historic approach of these two major Republicans figures—the icon of the Senate and the storied war hero—submerged beneath the threat of the Tea Party adherents. And it is all happening under the listless hand of Obama, while the Democratic mainstream sits passively back and watches the demise of the programs that made their party great.

In the end, history most likely will judge that the final blows against the New Deal came not from the Republicans, but from weak or opportunistic Democratic politicians–first Clinton, then Obama.

Roosevelt’s Thanksgiving Proclamation 1933

With unemployment insurance  about to run out for millions of people and the Congress and the President set to reduce our parsimonious social welfare system in the name of free enterprise, it is well to recall those dark days of the Great Depression when, on Thanksgiving Day 1933, Franklin Delano Roosevelt proclaimed the following:

May we recall the courage of those who settled a wilderness, the vision of those who founded the Nation, the steadfastness of those who in every succeeding generation have fought to keep pure the ideal of equality of opportunity and hold clear the goal of mutual help in time of prosperity as in time of adversity.

May we ask guidance in more surely learning the ancient truth that greed and selfishness and striving for undue riches can never bring lasting happiness or good to the individual or to his neighbors.

May we be grateful for the passing of dark days; for the new spirit of dependence one on another; for the closer unity of all parts of our wide land; for the greater friendship between employers and those who toil; for a clearer knowledge by all nations that we seek no conquests and ask only honorable engagements by all peoples to respect the lands and rights of their neighbors; for the brighter day to which we can win through by seeking the help of God in a more unselfish striving for the common bettering of mankind.

In witness whereof, I have hereunto set my hand and caused the seal of the United States to be affixed.

This from the President who got us through the Depression and charted a course to ensure safe passage for future generations.  Yet today, Wall Street bankers are richer than ever,the poverty class is growing, the elderly are about to see a reduction in their paltry dole, children starve and are sick, the health system is broken down. In answer to these dark times, the Congress and the President think not of bringing people together, but talk about money as they prepare to further dismantle Roosevelt’s New Deal. All this as  the United States slides into decline and prepares to enter the dark age.

The End of Retirement

American workers have little to celebrate on this Labor Day. That’s especially true for older workers, who face the end of any possibility of a secure retirement, so hard-won during the 20th century. In my recent Mother Jones piece on the subject, I wrote:

I contemplate my future at a time of deep recession with no pension and a depleted 401(k). And it occurs to me that the very notion of a comfortable, paid retirement may turn out to have been a temporary phenomenon, with a life span almost precisely the same as my own…And I have to wonder if someday the tale of a foolish generation of Americans, who imagined that a lifetime of work would be rewarded with a comfortable and secure old age, will become just another footnote in the annals of the market.

One commentary on the subject came earlier this year from AFL-CIO President Richard Trumka, speaking at the National Institute on Retirement Security. His conclusions regarding the possibility of change may be overly optimistic, but his analysis is sound. Here’s an excerpt:

Today’s retirement security crisis is just one of the many painful consequences of the failed economic policies of the past 30 years—policies of radical deregulation and corporate empowerment.  

They’ve culminated in the worst economic decade in living memory—job loss, wage loss, collapse of the housing and financial markets, enormous growth in inequality and the massive destruction of wealth.  

These policies allowed — and even encouraged — employers to walk away from what had been a system of shared responsibility.  The result?  Today, fewer than 20 percent of private-sector workers have real, defined-benefit pensions. 

As a country, our challenge now is to build a new economy on a solid foundation of good jobs, opportunity, a return to shared responsibility and a level playing field that allows both workers and business to thrive.

Keeping the promise of retirement security must be part of this great transformation in American life…part of the legacy we seek to build and the future we envision. 

Today only 13 percent of workers say they are very confident about having enough money for a comfortable retirement—that’s the lowest level in 16 years.  And this lack of confidence is justified.  The majority of America’s workers will face retirement with far less security than their parents.

That’s especially painful to me—because it was our union movement that created retirement in the United States.  Before the rise of the labor movement in the 1930s and 40s, elderly Americans were the most impoverished age group in our society, and only a privileged few received government or employer pensions.

With the enactment of Social Security and the growth of union-negotiated pensions, elderly Americans became the least impoverished age group.

After the New Deal, it was collective bargaining that set the pattern for labor markets—and not just for workers covered by union contracts.

These were the years that produced the three-tiered American retirement system:  Government provided a foundation with Social Security, employers provided defined-benefit pensions and individuals saved for their retirement. 

With this system, our parents could retire after a career of hard work, confident of a stable income they would not outlive.  They could sleep at night knowing that, should they die, their spouse would continue to have a dependable income. 

For millions of Americans—teachers and bus drivers, factory workers and flight attendants, construction workers and nurses—reliable, employer-funded pensions made their lives immeasurably better.

That was a legacy.  That was the world I grew up in back in Nemacolin, Pennsylvania.  A world where working people had real pensions they had won at the bargaining table and on the picket line…

…A world where retirement, which had been a dream realized only by bosses, had become a reality for tens of millions thanks to Social Security and collective bargaining. 

Today, all three tiers of that retirement system we built are in danger.  Employers are increasingly abandoning their pension plans.  Workers with lost jobs and stagnant incomes are unable to save.

In this bleak landscape, Social Security stands out as the one feature of what passes for our retirement system that works for all Americans.  But too many in Washington seem bent on perpetuating the Bush administration’s attacks on Social Security. 

The labor movement took on those people and beat them in the Bush era — and we will do the same in the Obama era.

When people lump together Social Security attacks with deficit reduction efforts, we have to remind the public of this basic fact: Social Security is NOT contributing to our budget deficit—in fact, the buildup of the Social Security Trust Fund is financing our budget deficit. 

And while the program faces a funding shortfall over the next 75 years, in pension plan terms, Social Security is 88 percent funded over that 75 year period of time and by any measure would be considered a healthy pension plan.  Relatively modest adjustments—WITHOUT benefit cuts—can address even this long-term issue. 

Social Security is the most important family income protection program and the most effective anti-poverty program ever enacted in the United States.  One-third of Social Security beneficiaries receive more than 90 percent of their income from Social Security.  Two out of three depend on it for more than half of their income. 

Social Security is the sole source of income for nearly one in five seniors.  The average Social Security benefit is just little more than a minimum wage income—meaning a typical retiree needs almost twice the average monthly Social Security benefit for a reasonable standard of living.

And if that’s not bad enough, growing Medicare cost-sharing means our seniors will need higher benefits just to maintain the replacement rate of the past 25 years.

Social Security benefits must remain at least as robust as they are today…quite frankly, INCREASING Social Security benefits would be a massive boost for our economy right now and for our long-term ability to provide all Americans financial security in retirement.

Social Security is the ONLY reliable and guaranteed benefit for the growing number of people without pensions.  But Social Security by itself cannot provide retirement security for most Americans.

And despite all the flashy new investment products the financial services industry markets, traditional defined-benefit pension plans remain the soundest vehicles for building and safeguarding retirement income security. 

If you are lucky enough to have a union, there is still a good chance that you have a pension plan.  Sixty-six percent of union workers have pensions, compared with only 15 percent of nonunion workers.  But unions are under increasing pressure at the bargaining table to allow employers to cut or eliminate real pensions. 

In the private sector, the funding rules for single employer pension plans in the Pension Protection Act of 2006, coupled with new accounting standards, have contributed to an environment in which even healthy companies are freezing their pension plans entirely or closing them to new hires.

Our current economic downturn has made this much worse.  In many parts of this country, public-sector workers have the right to form unions.  Not surprisingly, state and local government workers are four times more likely than private-sector workers to have defined-benefit plan coverage.  But public-sector plans are under attack through legislation and ballot initiatives.

In the private sector, over the past decade, many employers have abandoned their real pensions for 401(k) plans—plans with little or no employer money … plans with no protection for workers against market risk or outliving your money … and plans with high investment management fees.

We hear different reasons for this, but here’s the bottom-line problem:  Our current system lets employers off the hook.  They can refuse to provide any benefits at all.   If there ever was an implicit social contract, it has eroded.  My friends, that is NOT the vision I have for America. 

Unfortunately, the vision put forth by policy makers in both political parties and the White House is for tepid reforms that address only the shortcomings of the 401(k) system.  I think we were all glad that the president included retirement security as a national issue in his State of the Union address last week. But his remedies fall short.

Tinkering with 401(k)s by adding automatic enrollments as a plan feature will not bring about the change we need.  And what good is individual annuitization if you don’t have any money in your account and you are at the mercy of the insurance industry on pricing?

At best, I’m afraid, these proposals will marginally increase retirement savings for those who already can afford to contribute, and will do nothing to make employers take some responsibility in this crisis.

In this crisis economy workers can barely meet day-to-day expenses.  How much then can they save on their own for retirement?  Plainly put: There is no way that 401(k) plans can adequately substitute for the loss of a guaranteed lifetime benefit.

Look at the data: The median account balance in 401(k) type plans for 62-year-old workers is worth an annuity payout of about $400 a month.  $400 a month.  That just doesn’t cut it.  And most workers will outlive their savings.

A Time magazine cover story last fall on the failure of 401(k) plans about summed it up:  “This isn’t how retirement was supposed to be.”   After a lifetime of hard work, workers deserve to retire with dignity—with the economic security they have earned. 

It is imperative to strengthen and preserve what remains of the current private-sector pension system by working on two tracks—through collective bargaining and through legislation…

Roszak’s “Making of an Elder Culture”

Few may remember it, but before the advent of Social Security in the 1930s and Medicare in the 1960s, the old were widely viewed as a spent force. Nobody talked about happy retirement, in part because, these were people who remembered only too well the Depression. Few looked forward to leisure worlds because the poor house was too recent in so many people’s minds. Before old age entitlements, tending to the old was viewed as the job of the family. If you didn’t have a family, then it was charity–you joined the begging class. And even if you did have a family, you lived knowing that the young and middle aged couldn’t wait to get rid of you.

The same is more or less true today. Some days it seems the entire city of Washington, D.C., the nation’s capital, is on a mission against the old. Of course, nobody would ever say that. But there is a war against the old going on here in the form of a vigorous, largely uncontested attack on entitlements—a fighting word for conservatives and conservative Democrats who simply can’t stand Roosevelt’s New Deal, Johnson’s Great Society, and everything the stood for.

In his book The Making of an Elder Culture, recently published by New Society, Theodore Roszak, the cultural historian who more than three decades ago wrote The Making of a Counter Culture, sets out some of the grim history of old people in American society, and in doing so places elders within our current political world.

The old were in fact the worst victims of industrialism, primarily because they were not deemed worth saving. They belonged to that class of unwelcome dependents called the impotent poor—those who could not provide for themselves…as comfortable as many middle-class elders may be today, they share with all older people a long sad history of bleak mistreatment they would do well to remember. For generations the old have suffered wrongs inflicted on them by harsh public policy and often by their nearest and dearest….in the modern western world where the old have been seen as the claim of the dreary past upon the bustling forces of progress.

In the early days of the industrial revolution, Roszak writes, “aged workers became poor. The workhouse and county home were little better than the concentration camp. They were fed gruel, bedded down on straw or bare wood…they had no place to turn  save for their children…They were pictured as withered, toothless, bent, lean.’’

You must remember that as recently as 40 or 50 years ago, there was no senior lobby. The political pros never talked about a senior vote. Today all that has changed–yet Roszak sees in today’s entitlement wars a serious threat to the well-being of elders.

In the same way that organized labor was once regarded as a potentially tyrannical force able to achieve its own selfish ends, entitlement critics began characterizing seniors as a threat to the democratic process…

Nobody of any political stripe wants to risk the charge of granny-bashing,but the facts are clear. In the United States, gaining even  modest degrees of security in retirement has been a struggle against business leaders, political conservatives, and free market economists for whom money is the measure of all things.

Always remember, Roszak says, “the well-to-do are the first to tell us that there is not enough to go around.”

In his book, Roszak envisions a society in which rather tan cutting social programs for the old, we will extend them to younger people. Noone would resent Medicare, for example, if we had universal health care for Americans of all ages. He sees a future where the old and the young join to create a new world devoted to common humane goals: ending poverty at all ages, assuring education–laying the planks of a new society on the New Deal and LBJ’s social welfare project. Such ideas face an uphill battle in today’s political culture–but are no less inspiring for that fact.

I’ll be writing more about Roszak’s work in future posts.

GOP to the Unemployed: Drop Dead (You Bums)

Tomorrow, unemployment benefits will officially end for hundreds of thousands of Americans, thanks to maneuverings by Senate Republicans to prevent a vote that would have extended those benefits. Unless the extension is passed soon, some 1.1 million of the nation’s unemployed will see their unemployment expire in the coming month, and 5 million will lose benefits by June. 

The House finally voted to extend benefits on Thursday, after several days of stalling and posturing. But in the Senate, the measure was blocked by Kentucky’s Jim Bunning. Politico reported that late into Thursday night, Bunning held out against repeated Democratic attempts to pass the extension by unanimous consent. In response to entreaties from colleagues across the aisle, other Republican senators rose to defend Bunning’s right to obstruct the vote, and Bunning himself was heard to utter, “Tough shit.”  

Bunning said he wanted to see the cost of the benefits offset by other savings, to keep from adding to the deficit. But earlier in the week, Nevada Republican Congressman Dean Heller offered another objection to extending unemployment benefits: He believes it might create a nation of bums.

Think Progress relayed Heller’s remarks, which were made at a Republican Party function in Elko, Nevada, and reported in the local paper:

Heller said the current economic downturn and policies may bring back the hobos of the Great Depression, people who wandered the country taking odd jobs. He said a study found that people who are out of work longer than two years have only a 50 percent chance of getting back into the workforce.

“I believe there should be a federal safety net,” Heller said, but he questioned the wisdom of extending unemployment benefits yet again to a total of 24 months, which Congress is doing. “Is the government now creating hobos?” he asked.

Heller doesn’t seem bothered by the fact that he hails from a state with one of the nation’s highest unemployment rates–now more than 13 percent–as well as its highest foreclosure rate. In his speech, he managed to blame everything on the Democrats. “Six percent of Americans believe the stimulus package created jobs. More Americans believe Elvis is still alive,” he said. Never mind that the extended unemployment benefits Heller derided are in fact among the most effective components the stimulus package, according to the Congressional Budget Office, producing  $1.90 in growth for every $1 spent. 

What makes Heller’s statement really stupid, of course, is that people could become hobos if Congress doesn’t extend unemployment benefits, rather than if they do. Modest as they are, these weekly benefits are what’s keeping thousands–and perhaps millions–of families out of  poverty. The benefits that expire first are for people who have been out of work the longest, and are most likely to be living close to the edge already. 

The same is true for the other social safety net programs that Republicans tend to despise. For example, without Social Security, according to the Alliance for Retired Americans, ”55% of severely disabled workers and their families would live in poverty; 47% of elderly households would live in poverty; another 1.3 million children would fall into poverty; and 2.4 million grandparent-headed households caring for 4.5 million grandchildren would be deprived of [their] most important source of income.” Yet Social Security, too, has long been under attack by conservatives–a position that’s lately gained bipartisan ground, as reflected in Obama’s bipartisan “debt commission,” which is aimed at reducing entitlements.

The heydey of hobos was during the Great Depression, before the New Deal began to weave the social safety net. If Nelson and his fellow Republicans want to see Americans riding the rails, living in tent cities, and lining up at soup kitchens (even more than they already are), all they have to do is keep tearing that safety net apart.

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Obama’s Disappointing State of the Union

Obama’s State of the Union message offered little that was new, bold, or inspiring. He spoke about the need for jobs, but avoided any specific proposals for creating them. While the unemployment rate runs 10 percent overall, and over 15 percent for blacks in some states, Obama is focused on tax credits for the middle class. Just how an unemployed worker can benefit from such tax breaks is a mystery.

The president’s economic plans eschew dramatic government action in favor of the market and the private sector. The administration is proposing the Heritage Foundation’s automatic IRAs to encourage savings by workers. To make this idea more appealing, the administration has suggested that the government might put $500 into each individual account to jump-start the program. As I wrote earlier, this scheme promises to be another boon to Wall Street. If the Democrats were willing to to ignore Republican attacks on big government, they might choose to put the $500 into Social Security instead.

Continuing the government-cutting theme, Obama proposed a freeze on spending, starting next year. The freeze wouldn’t include Medicare or Medicaid. But in another proposal, Obama said he would create by executive order a commission that would propose cuts in entitlements. That’s how, in Washington, you can support one program by undercutting it at the same time.

As for health care reform, it looks like what’s in store is a further weakening of an already weak bill, perhaps reducing it to a ban on some of the worst abuses by insurance companies, such as denying benefits to people with pre-existing conditions. There is likely to be no meaningful reining in of the insurance or pharmaceutical industries, and no control over costs. All in all, a lackluster, disappointing speech.

What would I like to have heard the president say tonight? Earlier this week, I wrote about FDR, and the ambitious initiatives he undertook in his first year. I thought about his insistence–which today sounds almost quaint–that the government exists to help its people, and when they need more help, the government should do more, not less. I thought about this particular historical moment, when the ruthlessness of Wall Street and the folly of conservative economic policymaking have been laid bare. It was a moment that might have been siezed for the purpose of real change. But tonight’s speech tells us, once and for all, that the moment has come and gone.

The historian and humanitarian Howard Zinn, who died suddenly today at age 87, said this in a speech made a few days after the 2008 election, and broadcast by Amy Goodman earlier this year: 

Why is all the political rhetoric limited? Why is the set of solutions given to social and economic issues so cramped and so short of what is needed, so short of what the Universal Declaration of Human Rights demands? And, yes, Obama, who obviously is more attuned to the needs of people than his opponent, you know, Obama, who is more far-sighted, more thoughtful, more imaginative, why has he been limited in what he is saying? Why hasn’t he come out for what is called a single-payer system in healthcare?…

I was really gratified when Obama called for “Let’s tax the rich more, and let’s tax the poor and middle class less.” And they said, “That’s socialism.” And I thought, “Whoa! I’m happy to hear that. Finally, socialism is getting a good name.”…But still, you know, he wouldn’t come out for a single-payer health system, that is, for what I would call health security, to go along with Social Security, you see, wouldn’t come out for that; wouldn’t come out for the government creating jobs for millions of people, because that’s what really is needed now. You see, when people are—the newspapers this morning report highest unemployment in decades, right? The government needs to create jobs. Private enterprise is not going to create jobs. Private enterprise fails, the so-called free market system fails, fails again and again. When the Depression hit in the 1930s, Roosevelt and the New Deal created jobs for millions of people. And, oh, there were people on the—you know, out there on the fringe who yelled “Socialism!” Didn’t matter. People needed it. If people need something badly, and somebody does something for them, you can throw all the names you want at them, it won’t matter, you see? But that was needed in this campaign….

You know, I like him. I’m for him. I want him to do well. I’m happy he won….But when I saw Obama and McCain sort of both together supporting the $700 billion bailout, I thought, “Uh-oh. No, no. Please don’t do that. Please, Obama, step aside from that….I’m sure something in your instincts must tell you that there’s something wrong with giving $700 billion to the same financial institutions which ruined us, which got us into this mess, something wrong with that, you see.” And it’s not even politically viable. That is, you can’t even say, “Oh, I’m doing it because people will then vote for me.” No. It was very obvious when the $700 billion bailout was announced that the majority of people in the country were opposed to it. Instinctively, they said, “Something is wrong with this. Why give it to them? We need it.”…

Obama should have been saying, “No, let’s take that $700 billion, let’s give it to people who can’t pay their mortgages. Let’s create jobs, you know.” You know, instead of pouring $700 billion into the top and hoping that it will trickle down to the bottom, no, go right to the bottom, where people need it and get—so, yes, that was a disappointment. So, yeah, I’m trying to indicate what we’ll have to do now and to fulfill what Obama himself has promised: change, real change. You can’t have—you can say “change,” but if you keep doing the old policies, it’s not change, right?