There was a time when a $200+ billion reduction in the federal budget deficit would have been big news and hailed as a singular achievement worthy of either fiscal sainthood or a dance-on-the-table party…or both.

Yet yesterday’s Congressional Budget Office report showing that the fiscal 2013 federal deficit will be $642 billion, $203 billion less than CBO’s previous estimate of $845 billion, did not create any spontaneous cannonizations or celebrations. It also didn’t change the still-stalemated and crisis-oriented federal budget debate by even a small amount.

The bottomline: It’s in almost no one’s interest to be happy about the budget news that should have made everyone happier.

Here’s why.

1. The $642 billion estimate is indeed an overwhelming reduction from the 2009 $1.4 deficit and a substantial change from CBO’s February projection. But it is also $642 billion more than no deficit at all. That means that all sides in the budget debate will still be able to use even this much lower number to “prove” whatever point they were making before the new estimate was released.

2. The White House couldn’t take a victory lap because anything it said would have been mischaracterized by congressional Republicans as the president supporting a $600+ billion deficit.

3. Even though they could take some credit for keeping the sequester in place and, therefore, lowering spending, the congressional Republican leadership couldn’t take a victory lap because that would have been taken by some tea partiers as an indication that the speaker and majority leader were not going to demand additional reductions.

4. There’s anything but universal agreement among economists that reducing the deficit in the current economic environment is the right fiscal policy and, therefore, that the reduction in the deficit is good news. Given the still-slow corporate and consumer spending, the continuing cutbacks by state and local governments and the continuing economic problems around the word that are limiting trade with the U.S., Americas austerity-like fiscal policy that has been in place for several years may well be the exact wrong plan at this time.

5. The year-by-year deficit is quickly being replaced by the national debt as the number one fiscal issue. This isn’t surprising: the deficit is falling while the debt is rising and the deficit is in billions while the debt is in trillions. The fact that CBO projects the debt will soon be in a range that most economists would call insignificant makes no difference when the multi-trillion dollar debt sounds so scary.

6. In the wake of the report, the deficit hawk groups are still saying that the deficit is as much of a problem as it was before and pushing for a grand bargain. This too isn’t a surprise. After all, these groups would have less reason for being and far less ability to raise funds if the deficit didn’t exist as an issue.

7. Although the CBO forecasts show the deficit falling from 2013 to 2015, it also shows it rising in nominal terms each year thereafter. Even though that is far less meaningful than the deficit as a percent of GDP, which stays in the low 3.5 percent range, it still allows everyone to cherry-pick the results that best “prove” what they want to say.

So…Do the new CBO numbers mean that there won’t be a fight this fall over the debt ceiling and a continuing resolution? Absolutely not.

Originally published at Capital Gains and Games.

The deficit is now down 60 percent as a percent of gross domestic product. It is down more than the deficit hawks Alan Simpson and Erskine Bowles asked for. This rapid reduction is seriously hurting the economy and jobs, but demands for cuts continue. It is time for Congress and the President to “pivot” to focusing on our real problems: the jobs gap, the wage gap and the trade gap.

Mythical Deficit Problem Solved

The “deficit problem” is man-made. When Bill Clinton was president we were paying off the debt. George W. Bush turned Clinton’s budget surpluses right around, calling deficits “extremely positive news” because they would later force cuts in government. Ronald Reagan’s “strategic deficits” began a strategy to make the borrowing appear so bad that the public would be panicked into allowing cuts in the things government does to make our lives better – so the wealthy few could have even more wealth and power. (Reagan tripled the national debt, Bush doubled it again.)

So after Bush we had a problem. When ‘W’ left office the budget deficit was $1.4 trillion. Then after Obama took office Wall Street and the right started terrifying the public about deficits and outlining their “solutions”: Cut government, cut regulation of the giant corporations, cut entitlements, cut investment in infrastructure, privatize public assets, cut the safety net, etc… Cut the things that government does to make our lives better (government spending) and cut the things government does to protect us from the immense power of the insanely wealthy and their giant corporations.

But something got in their way. The deficit started coming down before all of the “solutions” could be forced on us. The deficit is now down 60 percent as a percent of GDP from the level Bush left behind (see the chart in this post).

The 2010 “Simpson-Bowles” plan called for austerity to lower our budget deficit to 2.3 percent of GDP by 2015. But the latest CBO budget projections say the deficit will be 2.1 percent of GDP in 2015.

Ezra Klein, in “CBO says deficit problem is solved for the next 10 years,” writes, “…the debt disaster that has obsessed the political class for the last three years is pretty much solved, at least for the next 10 years or so.”

Problem solved – austerity and the sequester can go away. For those of us outside Washington and in the real world we’ve been saying all along this isn’t the problem, the problem is that there aren’t enough jobs, people’s wages are stagnant or falling and the country is losing more than a billion dollars a day from bad trade deals. We have real problems to solve, so let’s get to it. Let’s address the job gap and the wage gap and the trade gap.

The mythical budget deficit is problem gone; let’s worry about our real problems.

The Economy Can’t Recover Without An Emphasis On Fixing Jobs, Wages And Trade

The economy can’t recover until housing recovers. Housing can’t recover until people can afford to buy houses. People can’t afford to buy houses until they can get jobs, and those with jobs can’t afford to buy houses until wages go up. Wages cant go up until the trade problem is fixed. And the trade problem is killing jobs.

Explained a different way:

1. The economy can’t recover until housing recovers.
2. Housing can’t recover until people can afford to buy houses.
3. People can’t afford to buy houses until they can get jobs,
4. and those with jobs can’t afford to buy houses until wages go up.
5. Wages cant go up until the trade problem is fixed.
6. And the trade problem is killing jobs.

They say that housing is the key to recovery from recessions. Forbes: Buffett Says Housing Is Key To Recovery, USA Today: Housing holds key to full job growth rebound, Time: Can the Economy Get Healthy Without a Housing Recovery? CAP: A Strong Housing Market Is Critical to Our Economic Recovery and so on. But on NPR Monday, in Is The Housing Recovery Just A Mirage?, they made the key point: “What we really need to do is focus on jobs and unemployment to get people able to have the money to spend on a house.”

Yes, jobs are being created. We were losing 800,000 jobs a month when President Obama took office, and now we are gaining just enough jobs each month to keep up with and get a little bit ahead of growth in the labor force. But there are not enough new jobs and too many of the new jobs are low-wage jobs. So the middle class is still shrinking, and people can’t afford to buy houses to get a real housing recovery underway.

We need more jobs. We have a jobs emergency.

The Jobs Gap

The Hamilton Project explains the jobs gap as “the number of jobs that the U.S. economy needs to create in order to return to pre-recession employment levels while also absorbing the people who enter the labor force each month.” They say:

If the economy adds about 208,000 jobs per month, which was the average monthly rate for the best year of job creation in the 2000s, then it will take until April 2020 to close the jobs gap. Given a more optimistic rate of 321,000 jobs per month, which was the average monthly rate of the best year of job creation in the 1990s, the economy will reach pre-recession employment levels by December 2016.

One more thing: “As of April, our nation faces a “jobs gap” of 10.0 million jobs.”

10 million jobs still needed just to catch up to where we should be. That is huge.

Where did the jobs go?

The Trade Deficit

According to economist Dean Baker the trade deficit represents American consumers spending their money overseas rather than here. And that means those dollars are “creating jobs” there, not here. His point was driven home last year when he wrote that, “The main factor leading to job loss [in the 2000s] was the growing U.S. trade deficit.”

The trade deficit represents millions of jobs. That more than $1 billion per day we send out of the country represents how many jobs at $50,000 per year? That’s good jobs sent out of the country every day of every week of every year. That is the trade deficit.

We can start by fixing currency manipulation. A “strong dollar” is a lot of the problem because it means things made here cost more and things made elsewhere cost less. So we aren’t able to sell as much and we are buying more than we should.

A February report from the Economic Policy Institute, “Reducing U.S. trade deficit will generate a manufacturing-based recovery for the United States and Ohio,” written by Robert E. Scott, Helene Jorgensen, and Doug Hall, looked at the job-cost of the portion of the trade deficit that is caused by currency manipulation. The report concludes that fixing just this problem would reduce the trade deficit by between about $190 billion and $400 billion over the course of three years and bring us between 2.2 million and 4.7 million U.S. jobs. Doing this would lower the unemployment rate between 1 percent and 2.1 percent and increase GDP between 1.4 percent and 3.1 percent.

That is just the portion of the trade deficit caused by currency manipulation and you can see the immense cost. Imagine if we took that step as well as other steps to eliminate the trade deficit.

The Wage Gap

A trade deficit also means that our workers not only face high unemployment but are also pitted against exploited workers in countries where those workers don’t have a say in how things are done. This inevitably drives down wages as employers move jobs offshore and remaining workers compete for jobs, all the while afraid to make waves and ask for raises lest their job be shipped out of the country as well.

American workers face high unemployment and then on top of that they face competition from people who are paid a fraction of what Americans earn. The trade deficit represents a significant contributor to this problem.

Fixing the trade deficit also fixes some of the wage gap. But we also need strong unions and strong government to combat the power of the giant corporations and demand that regular working people a fair share of the proceed of our economy.

The “Sequester” And Other Budget Cuts Just Make Things Worse

On top of this, our own government is aggravating the problem, with this wealthy-donor driven focus on deficit reduction instead of job expansion.

For example, Politico: Sequestration gets real for furloughed workers,

Sequestration went from wait-and-see to here-it-is Tuesday when the number of furloughed federal workers hit an eye-popping 820,000. Defense Secretary Chuck Hagel told 680,000 civilian workers they’d have to stay home 11 days without pay. About 140,000 workers from other government agencies have already been given furlough notices.

The number is expected to grow …

The deficit is not a problem. The Simpson-Bowles target has been reached and passed. The austerity is harming the economy and hurting people. Congress and the President should pivot to jobs. They need to fix the jobs gap, the wage gap and the trade gap, and if they continue to ignore these real problems it is up to We, the People to apply the necessary pressure to make them do it.

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You will be hearing a lot about the upcoming Trans-Pacific Partnership (TPP) agreement. TPP’s negotiations are being held in secret with details kept secret even from our Congress. But giant corporations are in the loop.

TPP is a “trade” agreement between several Pacific-rim countries that is actually about much more than just trade. It will be sold as a trade agreement (because everyone knows that “trade” is good) but much of it appears to be (from what we know) a corporate end-run around things We the People want to do to reign in the giant corporations — like Wall Street regulation, environmental regulation and corporate taxation.

One-Sided Process

The TPP process appears to be set up to push corporate interests over other interests. The TPP is being negotiated in secret, so what we know about it comes from leaked documents. Even our Congress is being kept out of the loop. But 600 corporate representatives are in the loop while representatives of groups that protect working people, human, political and civil rights and our environment are largely not in the loop.

This one-sided participation unfortunately indicates that the interests of giant corporations are likely to override the interests of working people and those who want to protect non-corporate interests. Otherwise there would be more representation by representatives of organizations representing these concerns, and greater transparency into the process.

TPP Is A Very, Very Big Deal

The coming TPP is a very, very big deal. If it is agreed to by the Senate and signed by the President it will override American laws in many areas. We won’t be allowed to enforce laws and regulations that impede the “rights” granted to big corporations under this agreement, and it will be very hard to rescind the agreement once signed, no matter how much damage might result. Just look at how NAFTA, China’s entry into the WTO and other agreements are causing huge trade deficits and sending jobs, factories and industries out of the country while dramatically increasing income and wealth inequality.

Making the TPP work for We, the People should be up there on our “litmus test” of things we require of our elected officials — right along with pledging no cuts to Social Security and Medicare.

TPP Not Just Trade

It looks like TPP will go way beyond what most of us would consider to be in a normal “trade” agreement. TPP — negotiated by giant corporate interests — appears set to give giant corporations a veto over a country’s ability to set many laws and regulations that are designed to reign in those corporations. Quelle surprise!

Leaked documents appear to show that negotiators are writing provisions that will set rules that are binding on Congress and our state legislatures tell us what laws and regulations our own country can pass or enforce in areas like:

• intellectual property rights like patents and copyrights,
• government procurement like Buy American which would be banned,
• investment and land use,
• service-sector regulation,
• food and product safety,
• corporate competition,
• labor,
• even environmental standards.
• Leaks show that TPP even limits government regulation of financial services!

Dean Baker explains that non-trade items like patents in an agreement like TPP can have a huge effect on us by dramatically increasing prices of items like pharmaceuticals, in Political Corruption and the “Free Trade” Racket,

Tariffs and quotas might raise the price of various items by 20 or 30 percent. By contrast, patent and copyright protection is likely to raise the price of protected items 2,000 percent or even 20,000 percent above the free market price. Drugs that would sell for a few dollars per prescription in a free market would sell for hundreds or even thousands of dollars when the government gives a drug company a patent monopoly.

Again: There are over 600 corporate representatives participating in the TPP process, but few if any representatives of human rights, environmental, civil rights or worker rights organizations. And the resulting agreement will be binding on governments! The corporate powers apparently granted in the TPP can override domestic laws on environmental health and safety, and labor and citizens’ rights. If this agreement becomes law multinationals can claim that those domestic laws and regulations hamper free trade and can sue for millions of dollars in “damages.”

Bad History Of Trade Agreements Harming Economy, Democracy

Our one-sided, corporate-negotiated trade agreements have dramatically enriched Wall Street and a few CEOs. But the devastation that is apparent in many regions of our country along with the hollowing out of our middle class tells the real story of what these agreements can do to an economy. For example, we all know what has happened since China was allowed to enter the WTO. In the 2000s we lost 50,000+ factories and at least 6 million jobs just to China. Because of the massive cost of building a manufacturing infrastructure it will be very difficult to restore even key industries. But the 1% who pushed this made out extremely well.

Even the just-signed Korea Free Trade agreement is already hurting our economy. It has increased the trade deficit, increased imports and decreased exports! A recently-released fact sheet from Public Citizen looks at the damage our economy is already experiencing from the Korea, Panama and Columbia agreements. The section on Korea tells the story: exports to Korea down 10%, trade deficit up 37%:

“One year into the Korea FTA, U.S. goods exports to Korea have declined by 10 percent (a $4.2billion decrease) in comparison to the year before FTA implementation. U.S. meat producers lost a combined $206 million in beef, pork and poultry exports in the first year of the Korea FTA relative to the year before FTA implementation, while the U.S. auto and auto parts industries suffered a 16 percent increase in the U.S. auto trade deficit with Korea. Overall, the U.S. trade deficit with Korea has swelled 37 percent under the FTA.”

Just one of many examples in the fact sheet:

• Imports of cars and auto parts from Korea have soared 15 percent (more than $2.5 billion) under the FTA, driving a 16 percent increase in the U.S. trade deficit with Korea in autos and auto parts relative to the year before FTA implementation.

Also from the fact sheet — loss of 12,000 jobs:

“The combined U.S. trade deficit with Korea, Colombia and Panama under the FTAs has jumped 11percent above pre-FTA levels for the same months as exports to Korea have declined and imports from Korea and Panama have risen substantially. Using the same ratio employed by the Obama administration, this $2.3 billion combined trade deficit expansion implies the net loss of more than 12,000 U.S. jobs in just the first several months of the new FTAs.”

And that’s just the recent Korea agreement, and in just a few months since it went into effect.

Trade Can Be Good Or Bad, Depending…

No question about it, a good trade deal can boost exports, boost the economy, boost employment … And of course this promise is how these trade deals are sold to us.

But the bad trade deals we have gotten ourselves into have instead boosted the trade deficit, boosted unemployment, boosted income and wealth inequality, boosted the loss of factories and industries, boosted the hollowing-out of our middle class and boosted the domination of our politics by the large corporate interests.

All trade deals have winners and losers. NAFTA and letting China into the WTO were obviously big winners for Wall Street, the 1%ers, and their giant multinational corporations. But these and similar trade deals helped break the back of the unions, the middle class and our economy — especially manufacturing and its supply chains. The result of these changes has been that all of the gains from our economy as productivity increases have increasingly gone to fewer and fewer people who are higher and higher up the food chain.

We need an open, democratic process that ensures that We, the People are the winners from our trade deals.

Needed Fixes

The TPP negotiations should not just be negotiated to serve the interests of giant multinational corporations. The process should be opened up to the public and democracy, so people and groups with a huge stake in the outcome — like labor unions, environmental organizations, human rights groups and consumer organizations — can participate. With only corporate participation, only corporate interests will be served. Funny how that works, isn’t it?

The process of democracy should not be subverted by a “fast track” rule that keeps our Congress from fully considering the implications and effects of such an agreement. “Fast track” just extends the lack of citizen involvement in negotiations into a lack of citizen involvement in the finalization!

Last June 130 members of the Congress wrote a letter to the US Trade Representative asking for transparency in the TPP negotiations and consultation with members of Congress. In addition, more than 400 organizations have asked Congress to replace the “Fast Track” system that limits Congress’ (democracy’s) ability to get involved in the process, and to call for a new direction for TPP as well as other trade agreements.

We also need strong tests and irrevocable language about withdrawing from the agreement if it is harming our economy, environment, smaller businesses, tax base and/or our working people.

TPP and all future trade deals must include clear and enforceable rules covering currency manipulation and other ways that countries game the system.

Elizabeth Warren Drives It Home

Watch Senator Elizabeth Warren (D-MA) asking about trends in trading patterns with Korea since the new “free trade” treaty went into effect, and about how TPP looks like an end run around Wall Street regulation.

Get Involved

The next round of TPP talks will be held May 15–24 in Lima, Peru. It is time to start making sure that your voice is heard in DC. Trade deals can lift people on both sides of trade borders. But only if a true open and democratic process is used to reach agreement. Otherwise these agreements will continue to be gamed to enrich the few at the expense of the many.

One of the best comprehensive sources of information on TPP is at Public Citizen and their Global Trade Watch. They have a landing page just waiting for you: TPP: Corporate Power Tool of the 1%. Go take a look.

The Electronic Freedom Foundation has a TPP page, explaining their concerns about the sections involving Intellectual Property (IP) as well as the general lack of transparency and openness.

Public Knowledge has a TPP landing pageo expressing similar concerns.

The AFL-CIO has a TPP detail page and offers Trans-Pacific FTA Outline concluding:

“Although not all the news coming from APEC was good, it is too early to tell if the TPP will live up to its promise to create great opportunities for America’s working families. Now is the time to speak up. If you have concerns about some of these announcements, too, now is the time to speak up—the TPP is still being negotiated.”
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Looking for a quick fix to the deep inequality that so afflicts us? Stop your searching. We need to strategize instead for the long-term. A riveting new work from a leading historian helps us see how.

The 79-year-old corporate gadfly Robert Monks, the former top federal regulator over America’s pension system, earlier this year opined that Corporate America operates “for the personal enrichment and glorification of its manager-kings.”

Too harsh a judgment? Hardly. Current standard corporate operating procedures only make sense if we acknowledge that America’s biggest private enterprises have essentially become the private preserve of an elite executive class.

How else to explain today’s most routine corporate behaviors? The endless rush to mergers that create little more than chaos in newly consolidated workplaces. The ongoing corporate refusal to invest significantly in research and development and employee training. The billions of dollars corporations spend to “buy back” company shares of stock on the open market.

All these moves leave corporations less equipped to succeed in the long term. But all these moves generate multiple millions, sometimes even billions, in the here and now for the corporate executives who make them.

Corporations, of course, have always done well by the executives who run them. But a half-century ago the United States had institutions that kept this enrichment within somewhat reasonable bounds. Trade unions acted as a brake on executive greed grabs. A progressive tax system — with rates as high as 91 percent on income over $400,000 — discouraged the greed grabbing in the first place.

But both these institutions — trade unions and progressive taxes — have atrophied over recent decades. Income and wealth, without these institutional checks in place, have concentrated at America’s economic summit. Below that summit, daily life for average Americans has become ever more insecure.

The United States, in effect, has slid into what University of Maryland historian and political economist Gar Alperowitz calls a “systemic crisis.” For the nation’s vast majority, America has simply stopped working. Daily life has turned into an ever-faster treadmill. And no real relief looms anywhere on the near horizon.

In this dreary environment, an understandable disillusionment — with our political leaders — runs deep. So does a decapacitating cynicism. Why bother struggling against an unjust status quo when nothing ever changes?

Historian Alperovitz has a new book out that aims to rouse us from this suffocating political stupor. In his new What Then Must We Do? Straight Talk about the Next American Revolution, he endeavors to show that societies in “systemic crisis” can change. Revolutions do happen. Indeed, he suggests, “we may now be well into the prehistory of the next American revolution.”

Just what does Alperovitz mean by that? In any social order, he explains, political power reflects the ongoing distribution of wealth. Meaningful change only begins when that existing distribution starts coming under challenge.

Alperovitz sees the challenge needed today as much more than any single campaign for a candidate or cause. He has something deeper in mind: an “evolutionary reconstruction” of our society, a decades-long shift that aims to democratize wealth, to build “a community-sustaining economy from the ground up.”

Pie-in-the-sky fantasy? We already, Alperovitz stresses, have the seeds of an alternate, wealth-democratizing economy in place. Well over 100 million Americans belong to credit unions and co-ops. Ten million Americans labor in worker-owned enterprises. Millions more Americans live in municipalities where public institutions generate electric power — or even provide Internet service.

Alperovitz envisions a steady expansion of wealth-democratizing institutions like these. Over time, over decades, the people these institutions touch begin to see from their daily experiences that alternatives to our dominant corporate status quo do exist. They begin to hold “clear ideas” about what can be done.

In times of acute crisis — say another banking failure — people with clear ideas about democratizing wealth won’t let their tax dollars bail out billionaires. They’ll demand public banks. They’ll carve away at private corporate power, bit by bit.

What Then Must We Do? mixes these intoxicating visions of a future yet to be with concrete descriptions of wealth-democratizing efforts already underway all across the nation, from Cleveland and Chattanooga to Portland and Sacramento.

These descriptions can surprise. One example: In Texas, the heart of red-state America, Dallas has opted to build a city-owned convention center hotel. Quips Alperovitz: “Everyday socialism, all the time, American-style.”

The pages Alperovitz has penned here hold a promise that goes beyond the compelling clarity of his prose. National networks are already working to advance his strategic vision, efforts like the community wealth-building initiative of the Maryland-based Democracy Collaborative and the New Economy Working Group, a center for both local and global thought and action.

America, Alperovitz reminds us, has become the wealthiest nation in the history of the world. The nation’s annual income, if divided equally, would be enough to bring each family of four $200,000. We can, in other words, do far better for average Americans than we do today. Why not try?

Labor journalist Sam Pizzigati, an Institute for Policy Studies associate fellow, writes widely about inequality. His latest book, The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970, has just been published.

We give away our jobs and factories and industries to China. Some geniuses apparently thought that meant we should also let our military security be contracted out to China as well.

A new report from the Alliance for American Manufacturing (AAM), Remaking American Security, Authored by Brig. Gen. Adams (US Army, Retired) looks at supply chain weaknesses and chokepoints, to see how vulnerable our security is to disruption by China and other “potentially unreliable” foreign suppliers.

Yes, we farm out critical defense supply contracts to that China, the country that has been hacking into our computers.

Take a look at AAM’s landing page for the report, Report Says U.S. Military Dangerously Dependent on Foreign Suppliers to see the Executive Summary and links into the report.

Conclusion: Our “over-reliance on foreign suppliers for critical defense materials” means that the country is dangerously dependent on “potentially unreliable” foreign suppliers for the raw materials, parts, and finished products needed to defend America.

Here is just one example from the report: “The United States is completely dependent on a single Chinese company for the chemical needed to produce the solid rocket fuel used to propel HELLFIRE missiles.”

Solutions: This is so important that I am going to list the entire summary of conclusions, details are available in the report and condensed on a separate PDF.

But first, I want to point out that following these recommendations will also increase our own job base, reduce our massive trade deficit and strengthen our economy.

• Increasing long-term federal investment in high-technology industries, particularly those involving advanced research and manufacturing capabilities;
• Properly updating, applying, and enforcing existing laws and regulations to support the U.S. defense industrial base;
• Developing domestic sources of key natural resources that our armed forces require;
• Ensuring that defense industrial base concerns are considered at the highest levels when formulating the U.S. National Military Strategy, National Security Strategy and throughout the Quadrennial Defense Review process;
• Building consensus among government, industry, the defense industrial base workforce, and the military on the best ways to strengthen the defense industrial base;
• Increasing cooperation between federal agencies and between government and industry to build a healthier defense industrial base;
• Strengthening collaboration between government, industry, and academic research institutions to educate, train, and retain people with specialized skills to work in key defense industrial base sectors;
• Crafting legislation to support a broadly representative defense industrial base strategy;
• Modernizing and securing defense supply chains through networked operations that provide ongoing communications between prime contractors and the supply chains they depend on; and
• Identifying potential defense supply chain chokepoints and planning to prevent disruptions.

Please visit AAM’s page on this report, and if you can please read the report.
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Republicans are refusing to do their part in governing the country. They say “do it our way or we won’t let anything get done at all.” Their agenda is all ideology, all the time (and of course helping the wealthy). As a result We the People are on our own. We get no jobs programs, and no infrastructure: no dams, roads, bridges, high-speed rail or even highways. It’s “My way and no highways.”

Republicans Took House In 2010

Since taking the House in 2010, “Tea Party” Republicans have passed a flurry of bills that are not about governing, but about destroying government. They have continually held important items hostage – the budget, the debt ceiling, etc. The House keeps passing bills designed not to get through the Senate, but to make supposedly ideological points, while Senate Republicans continue to filibuster pretty much everything the Senate has before it.

(Note that many of these House bills appear at first glance to be “ideological” but are actually bills that help specific industries and companies at the expense of other companies. For example, several bills help oil and coal companies fight companies that want to introduce innovative alternatives.)

Now, in order to keep the Congress non-functional, Republicans are even refusing to let the House and Senate set up a conference committee to work out differences in budget bills. The Hill explains, in “GOP blocks Reid from creating conference committee on budget”:

Senate Republicans on Tuesday prevented Senate Majority Leader Harry Reid (D-Nev.) from setting up a budget conference. [. . .] A Republican aide said there was no reason to create a conference because President Obama won’t drop his demand for tax increases.

Brian Beutler at Talking Points Memo has his own take on why Republicans are blocking budget negotiations, in “Republicans Are Blocking Budget Negotiations Because The Debt Limit Is Too Far Away”:

… What’s left after you strip away all that obfuscation is that Republicans don’t want to go to conference unconditionally because they’re concerned their position won’t hold politically and they’ll ultimately be forced to swallow a compromise that includes tax increases — unless the whole process gets swallowed by another debt limit fight.

No Serious Legislation

Republicans have passed very few bills — only nine bills have become law so far in this session of Congress, according to GovTrack – and the ones they are offering and passing are not about solving the country’s problems. They are ideological, designed to score points. (Unless you really think tax cuts and deregulation will solve the country’s problems…) Here is Eric Cantor’s list of bills in the “House Republican Plan for America’s Job Creators.” (“Job creators” in Republican jargon means really, really rich people.) Here is a summary of the list:

• Bills to cut tax cuts for rich people and giant corporations
• Bills to cut regulations that protect working people and the environment,
• Bills that help certain huge companies at the expense of other companies (disapproving of Net Neutrality, killing regulation on Wall Street and oil & coal),
• Bills that keep government from doing its job to protect working people (gutting NLRB, etc.)
• Trade agreements that help giant multinationals and Wall Street at the expense of American companies and workers

In December 2011, The Washington Post summed up the first year of the Republican-controlled House: In 2011, fewer bills, fewer laws and plenty of blame:

Congress is close to wrapping up one of its least productive sessions in recent memory, as the House and Senate have passed a scant number of bills compared with other non-election years, and President Obama has signed the fewest measures into law in at least two decades.

Through Nov. 30, the House had passed 326 bills, the fewest in at least 10 non-election years … By comparison, the House approved 970 bills in 2009 and 1,127 in 2007.

Then for 2012, USA Today wraps up this 2-year stint of the Congress: This Congress could be least productive since 1947,

Just 61 bills have become law to date in 2012 out of 3,914 bills that have been introduced by lawmakers, or less than 2% of all proposed laws, according to a USA TODAY analysis of records since 1947 kept by the U.S. House Clerk’s office.

In 2011, after Republicans took control of the U.S. House, Congress passed just 90 bills into law. The only other year in which Congress failed to pass at least 125 laws was 1995.

Keep The Congress Non-Functional

Republicans understand that they gain from keeping government dysfunctional. In 2011 Mike Lofgren, a former Republican Senate staffer, spilled the beans, writing in “Goodbye to All That: Reflections of a GOP Operative Who Left the Cult”:

A couple of years ago, a Republican committee staff director told me candidly (and proudly) what the method was to all this obstruction and disruption. Should Republicans succeed in obstructing the Senate from doing its job, it would further lower Congress’s generic favorability rating among the American people. By sabotaging the reputation of an institution of government, the party that is programmatically against government would come out the relative winner.

Repeat: the more they make government look bad and dysfunctional, the more they gain politically. Lofgren goes on to explain that “low-information” voters don’t know who to blame, so they turn to the anti-government Republican party, and the media is complicit, doing little to help voters understand what is going on.

Lofgren’s entire piece is a must-read for people who want to understand what has been happening to our government. It gives the inside story from someone who was involved in the day-to-day decision-making that led to the current dysfunctional state of government.

Public Wants Government Functioning

The American electorate wants these things worked out. Even with our misinforming media the public has figured enough of it out. They reelected President Obama, they increased the number of Democrats in the Senate and they voted for a Democratic House by a 1.4-million-vote majority. Only gerrymandering kept the House in Republican control.

The public wants the country to move forward. Republicans are not interested, and are holding everything back.

Until the voting public is able to express its will it will be “my way and no highways.”

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MORNING MESSAGE: Stop High Stakes “Common Core” Testing

OurFuture.org’s Jeff Bryant: “Ratcheting education standards ever higher at the same time we cut supports that schools and students need to reach those standards never made any sense to begin with. And the value placed on testing isn’t yielding the return promised in terms of significantly better results for children and improved evaluations of teachers and schools. Nevertheless, new tests with even higher stakes are being rolled out across the country … But curriculum materials aligned to the new tests are generally not available for teachers, and educators complain they’ve not been trained in how to teach to the new standards.”

Deficit Down

Budget deficit slashed after “fiscal cliff” tax deal. CNN: “The annual deficit has fallen 32% over the first seven months of this fiscal year compared with same period last year, according to Congressional Budget Office figures … Tax collections rose by $220 billion — or 16% — between the start of the fiscal year on Oct. 1 through April 30 … The tax haul rose sharply primarily because wages and salaries were higher, the payroll tax cut of the past two years expired on Jan. 1 and the fiscal cliff deal brokered over New Year’s raised tax rates on high earners.”

Declining deficit reduces pressure for “grand bargain.” W. Post: “The sunnier outlook means that President Obama will be able to pay the nation’s bills for months without seeking additional borrowing authority from Congress — probably until Oct. 1, according to independent forecasts. That might seem like good news, but it is unraveling Republican plans to force a budget deal before Congress takes its August break.”

Republicans Can’t Decide On Ransom

Republicans can’t agree on why they should take the debt limit hostage. The Hill: “Some Republicans say … they’ll need spending cuts as well as tax reform to raise the debt ceiling. Others in the conference say that only the full enactment of tax reform will be enough to raise the nation’s borrowing limit and that incremental progress toward completing tax reform is not enough … The problem with that stance is that finishing off a tax overhaul by October — about the time officials expect the debt limit will need to be raised — would be a monumental tas
k.”

W. Post edit board wants carbon tax as part of tax reform: “…Republicans should want to replace economy-sapping taxes on labor or business in return for a much more efficient tax on pollution. Democrats should be pushing for some of the revenue to pump up programs such as the Earned Income Tax Credit to ensure the carbon tax doesn’t sting consumers, particularly those least able to afford it.”

Speaker Boehner expresses opposition to Senate online sales tax bill. WSJ: “‘Probably not,’ Mr. Boehner told Bloomberg Television on Tuesday, when asked whether he could support an online sales tax bill that has cleared the U.S. Senate. ‘Listen, I just think that moving this bill where you’ve got 50 different sales tax codes, it’s a mess out there. And what you’re doing is you’re going to make it much more difficult for online retailers to be able to comply.’”

Immigration Bill Faces Slew Of Amendments

300 amendments filed to Senate bill. W. Post: “The Senate Judiciary Committee will begin considering the amendments Thursday, and the fate of the 844-page bill will be tested by a process that is likely to stretch through several days of hearings in coming weeks. Immigration advocates fear that an extended amendment process will derail the legislation by breaking apart a fragile, bipartisan coalition of eight senators that negotiated the package over several months.”

“Conservatives Expect Immigration Bill to Move Right” reports Roll Call: “Conservatives exiting a private meeting with Sen. Marco Rubio to discuss immigration reform predicted that legislation pending before Congress would move significantly to the right as it proceeds toward President Barack Obama’s desk.”

Sen. Rubio slams Heritage study on immigration. NYT: “‘Their argument is based on a single premise, which I think is flawed,’ he said. ‘That is these people are disproportionately poor because they have no education and they will be poor for the rest of their lives in the U.S. Quite frankly, that’s not the immigration experience in the U.S. That’s certainly not my family’s experience in the U.S.’”

Breakfast Sides

Obama administration releases hospital price data, exposes widespread discrepancies. HuffPost: “Administration officials said they offered up the data with hopes that its release would administer a market corrective, forcing hospitals to take greater heed of competitors while arming ordinary people with information they could use to seek a better deal. The data could also spur health insurance companies to negotiate with hospitals to seek lower prices.”

NLRB rule protecting union rights struck down by federal appeals court. NYT: “A federal appeals court on Tuesday struck down a National Labor Relations Board rule requiring most private sector employers to post a notice informing employees of their right to unionize … the United States Court of Appeals for the District of Columbia Circuit concluded that the N.L.R.B.’s rule violated a federal law that bars the board from punishing an employer for expressing its views so long as those statements do not constitute threats of retaliation or force … ‘The Republican judges of the D.C. Circuit continue to wreak havoc on workers’ rights,’ [AFL-CIO] president, Richard L. Trumka, said.”

Sen. Warren worries that trade talks could undermine bank regs. Politico: “Warren didn’t detail which rules could be weakened through trade deals [with Asia and Europe], but some consumer advocates have warned they could provide new avenues for corporations to appeal regulations at home and abroad and have questioned whether trade agreements could limit the ability of countries to ban certain financial transactions or instruments.”

By now it’s become clear to anyone willing to pay attention that our nation’s obsession over education standards and testing has gotten out of hand.

Ratcheting education standards ever higher at the same time we cut supports that schools and students need to reach those standards never made any sense to begin with. And the value placed on testing isn’t yielding the return promised in terms of significantly better results for children and improved evaluations of teachers and schools.

Nevertheless, new tests with even higher stakes are being rolled out across the country. The tests are purported to align to new curriculum standards called the Common Core that are strongly backed by the Obama administration and many education advocates from across the political spectrum.

But curriculum materials aligned to the new tests are generally not available for teachers, and educators complain they’ve not been trained in how to teach to the new standards.

In a moment of sanity last week, a leading proponent of the new standards-aligned tests, Randi Weingarten, leader of the American Federation of Teachers, defected from the run-up to implementation and called for a moratorium on the high stakes associated with the Common Core and its new tests.

“We aren’t saying students shouldn’t be assessed,” Weingarten declared. “We aren’t saying teachers shouldn’t be evaluated. We’re not saying that there shouldn’t be standardized tests. We’re talking about a moratorium on consequences in these transitional years.”

She called for an “implementation plan” with more time and input from frontline teachers and “field testing” of the new tests to gather data on the results without punitive “high-stakes” consequences attached.

AFT’s stand quickly got the approval of The Nation’s Katrina vanden Huevel who wrote for The Washington Post, “In today’s high-stakes climate, families have come to dread the endless parade of bubble sheets that now dominate their kids’ lives. Many feel that the emphasis on standardized tests has focused instruction on how to answer multiple-choice questions instead of how to reason and think critically.”

Of course, we all remember taking tests during our school years. And education standards for public schools are nothing new – most states have had them for years.

But testing today is different. Teachers’ and principals’ jobs – indeed the entire existence of the school – can hinge on the results, creating a super-charged atmosphere for the students that stresses them and robs them of valuable instructional time.

Testing and standards have their place for sure, but current education policies have crossed a line and given standards and testing more emphasis than they deserve at the expense of other important initiatives.

Test Obsession Runs Wild

If you hadn’t noticed that America’s obsession with testing students has gotten out of hand, maybe this will get your attention.

Last week, a CBS outlet in upstate New York reported that a “4th grader, hooked to medical machines and IV’s, undergoing pre-brain surgery screening was asked to take a New York State test from his hospital bed.”

The boy has “life-threatening epilepsy” and, according to his mom, was “hooked up to an EEG . . . an IV in his hand and he’s wearing a pulse oximeter in case something happens with his oxygen levels.” Nevertheless, a teacher was dispatched by the state to administer the test.

New York State’s test obsession was perhaps an attempt to outdo Florida where, last month, a local reporter in that state noticed that the state was determined to get a test score from a 9-year-old boy who “has never attended school . . . . was born premature at four pounds with only a brain stem and can’t speak or see.”

In an update of this story, Valerie Strauss reported from her blog at The Washington Post that the boy indeed was made to complete the test, “meaning that a state employee sat down and read it to him, as if he could actually understand it.”

If these stories seem to be just extreme examples, not at all representative of what states are doing to emphasize the tests, then why does at least one state have a protocol for what to do when students vomit on the test? Astonishingly, should the student be judged capable of resuming the test, the procedure is to “give their testing materials back to them to continue testing” – and if not, “secure the testing materials in a plastic bag.”

Elementary school teacher Dan Brown reported at The Huffington Post that test-security procedures at his school caused a student to wet himself during the test. “Several students in my class, as well as others around the school, vomited on the day of the test. One boy, Dennis, could not stop shaking,” Brown wrote.

A running commentary from New York teachers who recently administered the new English Language Arts tests has been posted online, which conveys a consensus view that the exams were too long, students didn’t have enough time, students were visibly stressed during the tests, and test questions did not reflect what teachers had taught.

As students stress out about the emphasis placed on the tests, they’re also being robbed of valuable instructional time. In addition to the hours and hours of test prep teachers increasingly conduct, schools also devote more time to motivating students to do well on the tests. In Washington, D.C., “school staff stage academic pep rallies, produce rap videos and raffle off prizes,” The Washington Post reported.

The same sorts of elaborate motivational strategies to psych students up for tests have been reported in Pennsylvania, New York, New Jersey, Texas and Florida.

Now, connecting these tests to new nationwide standards has the potential to make the stakes even higher.

Does Common Core Make Things Worse?

The fact that the new tests are aligned to the Common Core has gotten many people particularly riled. As The Wall Street Journal recently reported, “the Common Core effort is under attack” from political factions of all kinds – especially conservative Republicans.

Journal reporter Stephanie Bachero noted, “Indiana’s Republican-controlled legislature . . . legislatures in Michigan, Alabama and several other states . . . and the Republican National Committee” have all sought measures to curb funding and implementation of the new standards.

The supposed advantages of the standards were summed up by a reporter in The Washington Post, who wrote, “The standards are designed to ensure that, for the first time, third-graders in Maine will acquire the same knowledge and skills as their peers in Hawaii. Once states begin testing against the new standards, it will be possible for the first time to compare test scores across communities and states.”

But the transition from “theory to reality,” the Post reporter noted, is what’s bringing out the “critics.”

At FairTest.org, the website for The National Center for Fair and Open Testing, there is an ongoing tallynews of “Testing Resistance & Reform News” related to the tests, including parents opting out their students from the tests, teachers refusing to give the tests, students walking out of school in protest of the tests, and pundits and leaders of all stripes raising objections.

The fact that some of the voices protesting Common Core and its related testing can at times sound extremist – that the standards teach “communism is good,” for instance – should not be a rationale to dismiss reasonable objections to the standards and the tests.

Education journalist Sam Chaltain observed that there is a “growing willingness to publicly acknowledge . . . that tests do not align well with the latest research into how people learn; that they prevent adults from measuring higher-level thinking in children; and, most importantly, that there are better ways to evaluate student learning and growth.”

Chaltain singled out “mini-rebellions” against testing around the country including a Montgomery County Maryland superintendent who has called teacher evaluations based on test scores “insanity,” teachers in Seattle who have boycotted the tests, and legislation in Texas to reduce testing.

Chaltain looked at “specific and realistic alternatives” to the current thinking, but these alternatives simply won’t do for those bent on “education reform.”

The Status Quo Objects

Many who were quickest to object to AFT’s moratorium resorted to conventional wisdom that has ruled education policy for nearly 20 years.

These views tend to be grounded in deep suspicion that teachers will only do the “hard work” when they are “held accountable.” What the status quo crowd wants for teachers to be “accountable” to, of course, is test scores – the very thing being over-emphasized by the current policies.

An even stranger argument is to object to the AFT moratorium based on the timeline benchmark used to implement failed NCLB policies – hardly a yardstick worth measuring up to – and the fact that a lot of time and money has already been invested in these Common Core tests, which is again, not a persuasive call for more time and money.

However, the real danger to the standards and testing regime is not that they “won’t work.” As the Shanker Institute’s Matt DiCarlo recently observed, a far more dangerous outcome is that they will.

“We most certainly should hold schools accountable for their results, and there are, at least at the moment, relatively few feasible alternatives to standardized tests,” DiCarlo wrote.

But, Di Carlo cautioned, “Educational outcomes, such as graduation and test scores, are signals of or proxies for the traits that lead to success in life, not the cause of that success.” (emphasis original)

What our current emphasis on standards and testing is doing is to “mold policy such that livelihoods depend on increasing scores” rather than molding it to what really matters: the teaching and learning of “skills – including the critical non-cognitive sort –” that are critical to success in work and in life. (again, emphasis original)

“I’m troubled,” DiCarlo concluded, “by the possibility that, if we don’t pull back the reins, this research may eventually show that we pushed the pendulum to its ultimate breaking point and structured a huge portion of our education system around measures that were only useful in the first place because we didn’t use them so much.”

That outcome would be terrible for education and the wellbeing of children. But it’s what’s becoming the norm in education policy today.

Time For A Pause

What should be noted is that most teachers actually see some reason to proceed with implementing of the Common Core, according to a survey of the AFT membership.

Indeed, in a recent editorial in the education trade newspaper Education Week, a classroom teacher defended the standards, saying, “The common core can be an opportunity to shift the work of learning from our own backs onto the shoulders of our students, where it belongs – and that’s the heart of progressive education.”

But at a time when our education system is being so starved of the resources it needs, should we be funneling ever more cash toward a “pig in a poke” like standards-based testing while research-proven remedies such as early childhood education continue to go unfunded?

Even the most ardent devotees to the standards and testing regime should be convinced of the need to pause and reflect on what kind of results this “movement” has wrought, consider why no other country in the world is hurtling down this path, examine the evidence with the skepticism it deserves, and, yes, support a moratorium.

A century ago, workers were a lot more “flexible” than they are now. Veritable Gumbies in the mills and mines and factories they were, distorting their lives to slog 10 or 12 hours a day, six – even seven – days a week.

Then came the 40-hour week. And weekends. And eventually sick days. And paid vacation days. Now, bosses at mills and mines and factories regard these rules as coddling and consider the workers accustomed to them as unyielding to corporate demands.

The GOP has an app for that. It’s called the Working Families Flexibility Act. This legislation that the Republican majority in the U.S. House is expected to pass this week would force some old-time flexibility into 21^st century workers. The forced flexibility act would award bosses the power to “offer” compensatory time off instead of overtime pay. Bosses, not workers, would determine when the comp time could be taken. The proposal puts control in corporate hands, obliging wage earners to bend over backward for bosses exactly like their Gumby ancestors were compelled to.

Trade unionists and labor rights activists died to achieve the goal of eight-hour days and 40-hour weeks. They were shot and beaten in the streets during demonstrations organized by the eight-hour movement. Their slogan was: “Eight hours for work; eight hours for rest; eight hours for what we will.”

Finally, in 1938, President Franklin Delano Roosevelt signed the Fair Labor Standards Act (FLSA) as part of the New Deal, which gave workers and families rights and security that previously had been exclusive to the wealthy.

FLSA enforces the 40-hour week with a simple measure. It requires employers to pay time and a half to wage earners for each hour worked beyond 40 in a week. That creates a financial disincentive for bosses to order work beyond 40 hours. That also creates a financial incentive for companies to avoid overtime pay by hiring more workers. That was a significant bonus during the Great Depression.

Employers still could require overtime when they needed it, but it cost them, the way it costs workers who must pay extra for child care or miss coaching a Little League game or forego Sunday dinner with parents.

Now, Republicans want to relieve corporations of their share of the cost. In fact, the GOP scheme enables corporations to profit on overtime at the expense of workers. It would reduce the financial disincentive of requiring work beyond 40 hours, which means it would also reduce the financial incentive to hire more workers. That would be a tragedy during the Great Recession.

The forced flexibility act would enable employers to give workers comp time off instead of overtime pay. Republicans contend it would be the worker’s choice, but in reality bosses foreclose options when they make it extremely clear they want comp time selected.

And they’ll want workers to “choose” comp time. That’s because workers won’t be able to specify when they’ll take the compensatory time off. Bosses will have veto power on those requests. And as workers accrue more and more hours of overtime – up to 160 a year – to be compensated later as time off, the corporation retains an increasing share of the value of their labor.

With overtime pay, the worker gets the money in the next paycheck and spends or saves it as he pleases, earning interest if he banks it. Under the GOP forced flexibility proposal, the boss can deny time off requests for as long as a year, after which the company must pay the wage earner for the extra time worked. By then, the corporation has kept the workers’ earnings, and the interest on them, for 12 months.

And if the company goes bankrupt before paying for the accumulated overtime, the GOP provides no protection for workers. Workers would lose the earnings that they would have received immediately if they had been paid time-and-a-half in the next check.

The GOP is hyping their forced flexibility bill as a measure to help women. On websites and blogs popular among women, the GOP bought ads asking Democrats if they will “stand up for” working moms by forcing women to contort themselves to employers’ whims. The same party that defeated equity measures for women like the Equal Rights Amendment and the Paycheck Fairness Act now wants the women who voted against them big time in the last election to believe the GOP forced flexibility act is good for them.

Republicans are right that women need flexibility it their work lives. The flexibility to earn 100 percent of what men do in the same jobs, instead of 23 percent less, would be great. But not so great would be a federal law giving bosses the flexibility to force women to work extra hours with a vague promise of compensatory time off some day in the future if the boss feels like granting it.

The GOP forced flexibility act is part of a list of proposals House Majority Leader Eric Cantor, R-Virginia, calls “Making Life Work.” That’s right, Republicans intend to make life nothing but work. No eight hours for sleep. No eight hours for anything you will. Just work, Gumby, just work.

This week, President Obama will travel to Austin, Texas to call for action on jobs. The proposals the president put forth in his State of the Union address – investing in infrastructure, expanding preschool, bolstering manufacturing assistance centers, raising the minimum wage – have been blocked in the Congress, and disappeared from the public debate.

The president wants to revive his jobs agenda while still touting the economic recovery. In his commencement address at Ohio State University last weekend, he reassured students:

“While things are still hard for a lot of people, you have every reason to believe that your future is bright. You’re graduating into an economy and a job market that is steadily healing.”

The White House points to 38 straight months of private sector jobs growth, but in reality, jobs have been largely left behind in the recovery. The stock market is setting new records, but over 20 million people still are in need of full-time work. The labor force participation rate – the percentage of workers who have a job or are looking for one – is down to levels not seen since 1979. The jobs being created pay less with fewer benefits than the jobs that were lost.  As a result, inequality is still growing; the middle class is still sinking. And young people are graduating into one of the worst jobs markets since the Great Depression.

In many ways, the fact that the economy is “steadily healing” back to the old economy is the problem, not the solution. That economy featured growing inequality and a declining middle class. It was built on debt and speculative bubbles. Trade deficits hit new records as multinational companies shipped good jobs abroad.

In his first year in office, President Obama argued that we couldn’t go back to that economy and shouldn’t want to. We had to build a new foundation for growth. But in fact, gridlock in Washington has virtually ensured that we would drift back into the old economy.

Once more the Federal Reserve offers the only ballast for the economy by holding interest rates at record lows. The big banks have emerged from the recession bigger and more concentrated than ever. That virtually ensures a reach for increasing risk as we wait for the next bubble. The trade deficit is back over $1 billion a day, despite the natural gas explosion that reduces U.S. dependence on imported oil. The assault on unions has escalated. Part-time minimum-wage jobs proliferate. The richest 1 percent of the country captured a staggering 112 percent of the income growth in the first two years coming out of the recession. The 99 percent on average lost ground.

It will take a dramatic change in policy to build a new foundation for growth in this economy. The president’s proposals are but modest markers on the path forward, but barely get notice in a Washington still focused on a debate about austerity – about what to cut and how deep. This will only change if citizens organize independently and demand that Washington move. Voters will have to identify and punish those legislators who are standing in the way.

The core elements of a jobs agenda for the U.S. now are not particularly controversial. Consider a three part program:

Smart Investment

With interest rates at record lows and the construction industry still moribund, we should be grabbing this opportunity to rebuild our aged infrastructure – everything from airports to sewer systems to the electric grid – to world-class competitive standards. This is vital both for public health and for the economy. The Federal Reserve is now spending $45 billion a month buying mortgage-backed securities. This bolsters the banks and helps keep interest rates low, but it only feeds the casino economy. Why not create an infrastructure bank, and have the Federal Reserve buy its bonds? This wouldn’t add to the national debt, would build things we need and put people to work.

Any smart investment agenda would also insure that we are providing the basics in education to every child – infant nutrition, preschool, smaller classes in the early grades, after school and summer enrichment programs, good teachers and affordable college. Instead we are laying off teachers, locking kids out of Head Start and making college increasingly unaffordable. No nation can afford to waste a generation.

An American Global Strategy

The world cannot afford to go back to the unsustainable imbalances in trade that contributed directly to the financial bubble and collapse.  The nation cannot afford to let multinationals define our global strategy.  We should announce that we will balance our trade over the next five years. That will put multinationals on notice that if they want to sell in the U.S. they should build in the U.S. We should crack down on currency violations and treat mercantilist nations as they treat us.

Balanced trade should be accompanied by an aggressive industrial policy to capture a lead in the green industrial revolution that will sweep the world. We should be expanding, not cutting investment in research and development. We should seed regional renewable energy strategies, set renewable energy standards that will accelerate changes that are already beginning. The U.S. should be leading, not lagging, in the industrial frontiers, from biotechnology to nanotechnology to 3D printing.

Fair Share Strategy

Finally, we need to insure that workers capture a fair share of the profits and productivity that they help to create.  Lift the minimum wage and index it to inflation. Empower workers to organize and bargain collectively. Pass immigration reform to bring millions out from the shadows. End perverse CEO compensation policies that give executives million-dollar incentives to plunder their own companies.

This isn’t rocket science.  It isn’t comprehensive.  It is a sensible beginning to creating good jobs and reviving a middle class.  We can pay for it through progressive tax reform, with particular focus on the trillions now sheltered abroad to avoid taxation.

The president’s plans provide markers on this path. He’d invest in preschool and infrastructure, provide assistance and tax breaks to domestic manufacturers, raise the minimum wage. What’s clear is that “recovering” the old economy is a path to ruin. The broad middle class that made America exceptional will disappear. A nation of haves and have nots, of bubbles and busts, of private wealth and starved public services will be nasty, brutish and without hope.

At this point, Washington isn’t debating how to create jobs and rebuild the middle class. It is arguing only about who bears the pain in the decline. This will change only when citizens demand it. The only question is how much damage will be inflicted before that begins.