There Are No Simple Solutions To This Complex Economic Crisis. None.

[Yavin4]

I'm a Project Manager, and my first rule when taking over a troubled project is to itemize, in detail, all the fuck ups on the project. Let the stakeholders know the true status of how bad it is and give them an idea of how long and what it will take to turn it around. One criticism that I have about Obama is that he ignored this rule.

The Bush administration left us in an economic crisis, and there are no easy solutions to turning this thing around any time soon and without any pain, real pain. What's even worse is that the Republicans are using this crisis politically. Their only solution is tax cuts, and they're getting the bulk of the media attention because their solution looks simple and easy. Tax cuts won't do anything for an economy where no one is making or spending money. There are no capital gains to be had, so cutting capital gains to 0 makes no sense. Even worse, it would start a run on the few assets that are doing well.

Obama is doing everything that he can to turn around this economy. He's listening to expert opinion. He's pushing for the correct legislative measures. He's trying to work with Republicans. He's trying to solve the housing crisis, the banking crisis, and an economic depression, all with idiots like Rick Santelli grandstanding on CNBC.

Take housing. If he bails out the homeowners, then people will yell at him for creating a moral hazard and being unfair to the people who didn't partake in the housing bubble. If he doesn't bail out the homeowners, housing prices will collapse even further, worsening the banking industry and the overall economy. Damned if you do. Damned if you don't.

[MannyGoldstein]

1. Build Stuff, Raise Top Income Tax Bracket To 91%, Hike Capital Gains Way Up.

Spend the money on the middle class, and toughen up the unions. And lots of new infrastructure programs.

Heh heh... I'm also a project manager. One of my rules of thumb is "stuff that's typically worked in the past will typically also work in the future".

Massive government spending in WWII pulled us out of depression. After WWII and Korea had calmed down, President Eisenhower and both Republican-led houses of Congress set the top federal tax rate to 91%. Including capital gains (called "unearned income" back then), the wealthiest Americans paid 50% in federal taxes back then, the Middle Class paid well under 20%. Today, the wealthiest Americans pay less than 18%, the Middle Class pay 33%+.

America hummed along quite well under the socialistic paradigm of taxing the Rich a lot, and the Middle Class a little, and protecting unions and the Middle Class, until Ronnie Reagan started us down the road to catastrophe (taking from the Middle to give to the Rich) that we've recently completed.

I expect that if we go back to what worked before - massive government spending to take us out of depression (like WWII), followed by cultivation of the Middle Class, we'll be good.

[sandnsea]

2. Based on a green/alternate energy economy

Agreed.

But let's remember a couple of things about WWII. From a strictly economic standpoint, the standard of living for regular people was rough with shortages, etc. Second, unemployment was so low for the obvious reason. We would have been much better off to go straight to the GI Bill, suburb, auto era, which is what really created the 60s standard of living you're referencing. Innovation creates vibrant economies and government must always invest in the newest innovations. That's where the biggest Republican economic failure lies. They think the market will manage it all and the market never, not since the Old National Road, never has.

[Vincardog]

3. The 60s standard of living was make possible by the pent up demand (read savings) created by WWII .

WE do need to go right to the post war economy.

Build BIG Single Payer health care, a clinic in every school and a General Practitioner in every neighborhood.

Build light rail into every town powered by green energy.

Build a national grid to transmit all the green energy from geothermal to solar to wind and tidal.

Pay the people for using their land for generation and transportation.

The only thing that will turn this economy around is to give working people well paying JOBS

[Numba6]

4. it's not simple, & the facts have to be kept in mind to know what

's been done & what can still be done

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8215623

[rug]

5. There should be only one measure of the government's action: protect the vulnerable.

The rest can fall where it may.

[depakid]

6. "He's listening to expert opinion"

Trouble is, he's listening to the same experts who mucked up repeatedly and got us all into this mess- rather than those who saw it coming years ago.

Otherwise, I pretty much agree with your take- it's a complex, non-linear set of problems, with a whole lot of linear thinking (and emotionally irrational) folks screaming about one thing or another.

[Cha]

7. Thanks for bringing some

reality on board, Yavin.

[TheKentuckian]

8. Short -medium term nationalization of the banks

Rapid implementation of nationalized green energy and update of the grid, national healthcare, a free hand with food stamps as well as unemployment, cash infusions into the states, and every reasonable infrastructure investment.

Massive spending with multiplier effect that puts money into the hands of the people is what it is about. This kind of spending also leaves us with the foundations to reduce stress on businesses while building a springboard for future commerce, industry, savings, and builds layers of consumer confidence both from maintaining essential services and by putting most everyone that wants a job to work.

Energy first and foremost though, nothing else we do matters much if this environment destroying, progress zapping, money pit is fixed. Plus, we will need abundant and clean energy to deal with the upcoming water crisis effectively.

[jeanpalmer]

9. There is no politically acceptable solution

That's the problem. If there were one, they'd implement it tomorrow and voila the economy would turn around. But as a politician, Obama has to act like there is a solution. He has to do something. Otherwise people will say he is at fault.

The real solution is to let the economy deleverage and let asset prices adjust downward. That would involve economic pain, but that's our system. We didn't hear anyone complaining when prices were going up and people were taking on massive debt. That was the time to complain. But everyone loved it. Now, debt is deleveraging and prices are going down and boohoo all the crybabies are coming out.

People like capitalism only when it works in their favor. There's only one way to correct an excess of debt, and that is to let the system wipe it out. It's one of the problems with capitalism. It is dependent on ever increasing debt levels. Without those increasing debt levels, unemployment would rise to politically unacceptable levels. That's why politicians keep printing money, keep encouraging people to go into debt, until debt levels are unsustainable. And debt collapses. As it is doing now. The solution is to let the debt collapse, wipe the slate clean, and start all over. That is the solution, if you believe in the capitalist system.

[mikekohr]

10. HERE"S A SIMPLE SOLUTION: don't elect Republicans to office

A HISTORY OF RECESSION IN THE UNITED STATES 1950 TO 2008
Written by: mike kohr 2/12/2008
There is a pattern here that is plain to all but the most partisan. Nine of the last ten recessions have occurred under the direction of Republican economic policy. And history does repeat itself. Look at the three greatest slowdowns in US economic history, 1929*, 1982, 2008, all three were attributed to poor economic and tight credit policy, all three featured deregulation and lack of oversight of the financial markets, and all three were presided over by a Republican President.

Recession/Depression of 2008 George W. Bush(R) Greatest downturn since 1929, blamed on lack of regulation of financial markets and collapse of credit markets

Recession of 2001 George W. Bush(R) Began in April of 2001, marked the beginning of greatest deficit spending in all of recorded human history

Recession of 1990-1991 George H.W. Bush(R) Deregulation of Savings and Loan industry led to a collapse and panic, which led to election of Bill Clinton, who produced the greatest increase in jobs and wealth in all of recorded human history

Recession of 1981-1982 Ronald Reagan(R) At the time, the most severe contraction of economy since the Great Depression, massive deficit spending/deregulation of markets, and tight fiscal policy in an effort to kill inflation were blamed for this downturn **

Recession of 1980 2nd & 3rd quarters Jimmy Carter (D) Shortest and least severe slow down, generally attributed to Iranian Revolution and increase in oil prices, led to the election of Ronald Reagan

Recession of 1973-1975 Richard M Nixon(R) OPEC’s increase in oil prices and massive spending in the escalation of war in Vietnam led to stagflation, the second economic crash of Nixon’s administration

Recession of 1969-1970 Richard M. Nixon(R) Credited to Nixon’s escalation of and massive spending in Vietnam War and OPEC’s increase in price of oil

Recession of 1960 -1961 Dwight D. Eisenhower(R) Noted for high unemployment, low GDP, high inflation JFK ended the recession by stimulating the economy 10 days after taking office

Recession of 1957-1958 Dwight D. Eisenhower(R) Eisenhower achieved the dubious distinction of achieving a second economic downturn on his watch, a record later matched by Richard M. Nixon, and George W. Bush

Recession of 1953 Dwight D. Eisenhower(R) Increased outlays to National defense and restrictive credit policies blamed for this downturn
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*The Great Depression of 1929 Herbert Hoover(R) Lasted for 10 years, blamed on Hoover’s economic policy and lack of regulation of financial markets
** “The Reagan Recession” which ran from the 4th quarter of 1981 thru the 1st quarter of 1982 is often categorized as starting under Carter’s watch during the 2nd & 3rd quarters of 1980. By the end of the 3rd quarter of 1980 that brief recession had rebounded. Starting in the 4th quarter of 1980, 3 of the next 4 quarters produced increased GDP. Reagan’s tight fiscal policy and massive deficit spending contracted the economy again in late 1981, producing unemployment of 10.8% and prime interest rates that hovered between 15% and 20.5%

http://recession.org/history
http://en.wikipedia.org/wiki/List_of_recessions
http://www.sjsu.edu/faculty/watkins/rec1980.htm
http://en.wikipedia.org/wiki/Economic_history_of_the_United_States#Deregulation:_1974.E2.80.931992

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"THE PARTY WITH THE BEST RECORD OF SERVING REPUBLICAN ECONOMIC VALUES IS THE DEMOCRATS, AND IT ISN'T EVEN CLOSE!" -Michael Kingsley-


1). FEDERAL SPENDING: since 1960 Republicans increased Federal Spending by 71% more than have Democrats

2). FEDERAL DEBT: since 1960 Republicans have increased the National debt by 100% more per year than have Democrats.

3). GROSS DOMESTIC PRODUCT: since 1921, adjusted for inflation, Democrats outproduce Republicans by 43% . Starting in 1940 the Democratic advantage is 23% better.

4). REAL PER CAPITA INCOME: since 1960 Democrats have outperformed Republicans by 30%. (This is perhaps the most important economic statistic of all)

5). INFLATION: since 1960, Democrats outperform Republicans 3.13% to 3.89%

6). UNEMPLOYMENT: since 1960 it decreases in an average Democratic year by 0.3% to 5.33%, and increases in average Republican year by 1.1% to 6.38%.

7). JOB CREATION: from 1945 to 2003, Democrats produced 174,200 jobs per month, Republicans have only produced 60,600 per month. Every time a Democrat succeeds a Republican, job creation soars. Every time a Republican succeeds a Democrat job creation plummets. NO EXCEPTIONS!


8). DOW JONES AVERAGE: since 1921 the DOW has increased by 52% more under Democratic administrations

9). THE BOND MARKET: since 1940 the value of 10 year Treasury bonds rose 1.2% under Democrats and fell 0.5% under Republicans

SOURCES-Bureau of Labor Statistics, Economic Policy Institute, Christian Science Monitor, AThe Los Angles Times -Michael Kingsley-

by mike kohr 3/7/2006

RESULTS MATTER, VOTE DEMOCRATIC!

[PurityOfEssence]

11. A very good point

To adequately solve a problem, one must first define it. To conservatives, it's "the economy", that mythic being and its prime captains of progress the investors, owners and executives who are in trouble. To liberals, it's these people AND EVERYONE. Regardless of the tiresome mythologizing about the lonesome cowboy and the genius of the solitary individual with his/her sacred private pile, we are a collective of individuals and groups who rely on each other. When far too many who have far too little start losing ANY ground, it hastens the end.

The corporatism of Barack Obama and his administration betray a stodgy preconception and need to suck up to the reactionaries that government is inherently inferior to private enterprise. Repeatedly, our President says that private enterprise is an essential partner in all of the recovery plans. This is not only incorrect, it's wasteful. They're a COMPONENT, but not even a particularly big one.

We should spend all public monies in ways that directly pay wages to individuals. Yes, we don't want too many businesses to collapse, but we want individuals to not collapse, too. The best projects would be the ones with the least expenditures in "non-wages". Thus, many of the infrastructure programs that use expensive raw materials aren't necessarily the best.

Let's start an emergency counseling and training bureau. Let's put experienced individuals directly on the U.S. Government's payroll to counsel individuals on job re-training, skills building, teaching computer literacy, teaching writing skills, teaching economic and job-getting skills, and maybe even pay some people for getting some training. Make it cold-bloodedly achievement-oriented, and this will also go a long way to solving the REAL problem of a Depression: depression. People need human contact, new human contact, and positive movement.

Why not revive the WPA Theatre project in a modest way? The arts stir up a lot of money. If you make theatre, it is very low in raw materials and very high in salary outlay. Sounds crazy and the reactionaries will scream like the stuck pigs they are, but fuck 'em. It needn't be big, and it probably shouldn't be big, but it'll have big benefits.

Mr. Obama, for all his many strengths, is a middle-of-the-road kind of person, and his instincts are to please everyone and sustain the system as it is. These skills of reaching consensus are very handy and in many ways commendable, but this system is broken. We've gone too far to the capitalistic side; it's effectively a deregulated neo-feudalism after the last almost three decades of almost unbroken reactionary rule. Socialism in a pure sense is useless because far too many people won't get out of bed if everything's too safe and the dizzying hope of ridiculous wealth isn't dangled in front of them, but capitalism in this pure a state is ugly and primitive, leading to monopolistic conspiracy and flat-out human abuse. We need more controls integrated back into the system.

This is a time of crisis. By the very definition of such a period, atypical things need to be done. Even if our President needs to soft-soap and molly-coddle the monarchists at every turn with constant praise for the genius of the for-profit, privatized version of the quasi-libertarian fantasy, and even if he actually BELIEVES this immature obliviousness, this is a time for the Government to step in DIRECTLY and correct things precisely as one would in the crisis of a war. Sucking up to the failed system won't work anywhere near as well, and he can use the cover of extreme crisis for all it's worth if he needs be, but he has to get over his overcompensation bent. This seems to be his greatest weakness: the steadfast need to disprove others' contentions about him.

The government should be creating or expanding entities that hire people directly and pay wages to individuals; that's the most direct and fat-free way to use our new incurred debt.