Thursday, January 31, 2008

Rebuild America - a great stimulus package!

By John Bachtell

Many pro-labor economists agree the current economic stimulus package being debated in Congress falls far short of addressing the deepening economic crisis. The tax rebate that this writer and his wife will get will surely go directly to the credit card company to pay off an old debt. So in this case it amounts to a subsidy to finance capital.

As progressive economists and organized labor have noted, massive public works program, extension of unemployment benefits and expansion of the food stamps program are needed to put money in the hands of people now.

There is an unusual amount of public discussion about the need for a "massive public works" jobs program to rebuild the nation's infrastructure beyond labor and progressive circles. This is new and lays the basis for the new president and congress to go further.

New York Times columnist Bob Herbert addressed it in his January 29, 2008 column:

"There is usually not much about infrastructure stories to turn readers or viewers on. But the catastrophe in New Orleans and the bridge collapse in Minneapolis are tragic evidence of the peril that goes hand in hand with neglect of the nation’s roads, bridges, levees, transit systems, water treatment facilities and so on.

Just two weeks before the Minneapolis bridge collapse, an underground steam pipe in Midtown Manhattan exploded, sending a geyser of filth and asbestos-laden debris into the air. A woman fleeing the scene died of a heart attack, and the area suffered millions of dollars in economic damage.

In South Carolina, where candidates of both parties competed in recent presidential primaries, there is a long stretch of grievously neglected rural schools that has been dubbed “the corridor of shame.” Some of the schools are more than a century old. Among the many problems are ancient plumbing, inadequate heating and sewage that backs up into classrooms, bringing in vermin and terrible odors.

The country could do itself a favor by paying more attention to the efforts of Senator Dodd, a Connecticut Democrat who is chairman of the Banking Committee, and Senator Hagel, a Nebraska Republican. They have co-sponsored legislation that would create a national infrastructure bank to promote and help finance large-scale projects across the nation.

Part of their mission is to generate a sense of urgency. In an interview yesterday, Senator Dodd told me: “At a time when we’re worried about rising unemployment rates and declining confidence in this country, infrastructure projects have the dual effect of putting people to work — and usually at pretty good salaries and wages — while also creating a sense of optimism, of investing in the future.

The country has been hit hard by lost jobs in manufacturing and construction. As government and political leaders are scrambling for ways to stimulate the economy in the current downturn, infrastructure improvements would seem to be a natural component of any effective recovery plan."

Now comes Chicago Mayor Richard M. Daley, mayor of the nation's 3rd largest city, as reported in the Chicago Sun Times:

"Giving every American a $600 tax rebate is not the right way to stimulate an economy on the brink of recession, Mayor Daley said Monday, arguing instead for a modern-day version of Franklin Delano Roosevelt’s New Deal.

Daley has long contended that, when the private sector economy slows down, it’s time for the public sector to speed up — by initiating massive public works programs that generate jobs and contracts.

He made the same argument hours before President Bush was expected to use his final State of the Union message to push for quickie approval of a $150 billion economic stimulus program that would send tax rebate checks to 117 million American families this spring.

“People want a job. They don’t want a handout. They don’t want welfare and they don’t want a handout of $500. It doesn’t answer anything. So you take the $500. So you spend it within two weeks. Then what happens after that?” Daley said.

“The answer has to be how do you get federal money out of Washington immediately into the construction industry…There has to be a longterm commitment [by] Democrats and Republicans of putting people to work. If Franklin Delano Roosevelt put people to work, why can’t we as a great nation decide to put more and more people to work…There’s nothing wrong with a public works project…We could rebuild our schools, parks, libraries [and] infrastructure.”

Of course, such a public works program would mean ending the Iraq war and slashing the wasteful military budget, and taxing the rich.

The People's Weekly World ran a very informative article last week about the needed response to the economic crisis.

To fix economy, put working class first
By Terrie Albano

While stock markets plunge and panic spreads in financial circles, what happens when the economy goes into recession?

What kind of stimulus package is needed that would help working families? One that creates good jobs and ensures workers and their neighbors can pay their house or car note, buy groceries, fill up their gas tanks or make college tuition payments?

On Capital Hill, with unemployment jumping to 5 percent in December, and other indicators of major economic illness, lawmakers are starting to consider stimulus ideas.

President Bush and fellow Republicans want to pump $150 billion into tax cuts and government spending geared to big business interests and the wealthy.

But labor and other progressive groups say the key is putting money into the hands of working people. It’s working people who are the nation’s consumers. They can spur the economy if they have the income to buy what they need.

The AFL-CIO and others are calling for extending jobless benefits beyond the current 26 weeks. The labor federation also calls for:

• increased food stamp benefits;

• tax rebates targeted to middle- and lower-income taxpayers,

• fiscal relief for state and local governments;

• immediate investment in school renovations and bridge repair.

Many of these measures are contained in proposals being advanced by Democrats in Congress.

Communist Party USA head Sam Webb underscored the importance of these steps, but said more is also needed.

In addition to extending jobless benefits, the amounts unemployed workers receive should be raised, and paid until a worker finds a job, he said in a phone interview this week. “Social Security benefits also should be raised.”

Webb also called for an immediate moratorium on foreclosures and a freeze on interest rates, and an end to the Iraq war, “freeing up billions of dollars for people’s needs.”

Beyond these measures, fundamental solutions are required and these must put the working class first, he emphasized

Webb, elected the party’s chair in 2000, has a Masters degree in economics. But he considers his main credentials to be his activism in the labor movement and people’s struggles over the past few decades.

“People are hurting,” he said. “Unemployment is rising, and even those figures cover up the long-term joblessness in different parts of the country and among different communities,” he said. “Wages are stagnant and now you have the mortgage


Tax breaks for big business and the super-rich will only increase the deficit and will not create jobs, Webb said. Interest rate cuts will likely have little impact.

Big business’ interest is not the well being of U.S. workers, or even the U.S. economy, he said. “Businesses will only invest if they are guaranteed a high rate of return — profit — on their investment. They won’t hire new workers and put money in people’s hands without that guarantee.”

This is the main dynamic of capitalism, which has become more and more apparent to millions as plants close, wages stagnate, and whole regions collapse economically, Webb said.

Even as the country experienced economic upticks like the stock market “exuberance” of the 1990s and the housing “bubble” of the past several years, greater and greater wealth went into fewer and fewer hands.

A growing problem, Webb said, is the role of “finance capital” — banks and financial institutions. Instead of spurring the economy, they invested in nonproductive sectors like currency speculation, “where enormous money was made” along with enormous crises felt around the world.

Corporate America and the super-rich, ever in quest of maximum profits, will not invest their ballooning wealth when and where our society needs it, Webb said.

Therefore, as in the 1930s, the federal government must act to create useful, good paying public sector jobs and get immediate relief into the people’s hands, he said. That is what’s needed to stimulate the economy.

“There are long-term unmet needs in the U.S.,” Webb noted. “Bridges, schools and water systems are collapsing. Many people realize that in both urban and rural settings infrastructure is long overdue for repair.”

He cited an Environmental Protection Agency estimate that 75,000 sanitary systems nationally have overflowed with raw sewage, flooding houses and polluting drinking water and natural habitats.

The labor-backed Economic Policy Institute has proposed a $140 billion stimulus package that calls for federal spending to repair and build schools and bridges, creating more than 1 million jobs.

Webb added that the elections provide an opportunity to create new political terrain to fight against economic crisis in the near and longer term.

“It’s going to take a broad coalition of labor, African Americans, Latinos, all people of color, women, young people — all people — coming together and demanding this kind of economic program,” Webb said.

“Struggle. That’s what it will take to move the country along on a different track and put a working-class imprint on it.”

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