http://www.salon.com/news/politics/war_room/2011/09/15/blue_state_bailout/index.htmlThere are a couple of reasons why any positive action on unemployment is practically impossible. One is stupid, stupid Democrats who think hypothetical future political attacks are a bigger threat than the rapid dissolution of the American middle class. The other is that popular and commonplace government stimulus policies suddenly become controversial and horrible once a Democrat president proposes them.
Take direct state aid. States can't run budget deficits, and they tend to have regressive tax systems (because they need to "attract business" by placing the tax burden onto working people instead of corporations and the wealthy), so a burst housing bubble, massive recession and ongoing unemployment crisis basically means a whole lot of states that need to slash essential services to balance the budget. Federal aid allows them to keep the lights on.
The Wall Street Journal today has a column by Hoover Institution fellow Paul E. Peterson reframing the concept of aid to cash-strapped states as a "blue-state bailout," because "bailouts" are unpopular and it is more fun to imagine that Obama is rewarding his "most fervent supporters" with free money than it is to think that the president just wants to help big states avoid massive layoffs.
It is sort of brilliant. Just imagine how thrilled the memo-writers at Fox News must be to have this talking point. "Blue-state bailout." "Federal money for healthcare and education" versus "blue-state bailout." Which one makes you madder?
More at the link --