American Recovery and Reinvestment Plan

Obama’s First Year

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There are two ways to look at Obama’s first year – foreign affairs and domestic affairs. In foreign affairs, Obama actually has had a good year. Iraq is winding down, he committed thirty thousand more men to Afghanistan. He did not rush to judgment or over react about Iran, and he used Bill Clinton to get back two women from North Korea. He won the Nobel Peace Prize for basically not being George H.W. Bush. I would give him a B.

Domestically, I would give Obama an D-. It has not been a total failure here on the home front but it was close. A lot of his poor marks on domestic affairs stem from the fact he has let Congress set the agenda and the legislation. Be it health care or AARP, Obama has not taking the bull by the horns but rather stands on the sidelines as almost a cheerleader or an assistant coach. To look at the White House Website, you would think the amount of legislation passed was similar in size to FDR or LBJ. He has failed to make campaign promises come true from Guantanamo Bay to Transparency in Government. His executive orders, though not spectacular, have been worthy of some acclaim. His selection of Sonia Sotomayor was a good one. But that is about it here at home.

But in historical terms, there are very few Presidents who do not have a disastrous first year in office.
1. JFK – everything he touched that first year turned to crap. Case in point: Bay of Pigs
2. Nixon – invaded Cambodia
3. Carter – too many to mention
4. Reagan – he got shot
5. Clinton – health care and Hillary – Somalia, need I say more?
6. GW Bush – The largest terrorist attack in our nation’s history
7. Lincoln – A Civil War broke out and the Union lost the first battle

But if you want an apt comparison, Clinton might be the most similar. A lot of the comparisons can revolve around health care, but like Clinton, Obama also dealt with military obligations made by the previous president.

As for what Obama needs to improve on for his second year are few when it comes to foreign affairs but many when it comes to domestic affairs. The mess Obama inherited from Bush could not be cleaned up in a year. The stock market has gained back 3,000 of the 7,000 points it lost in 2007-2008 under Bush. However, Obama has to get the budget and spending under control. Much like Clinton did in his first term, he turned his attention  from health care to the economy and it made all the difference. Unemployment has to go down. For Obama, another trillion dollar deficit will not get it done. Health care reform and insurance reform is needed, but is the plan made Congress the best plan there could be? Even a $500 billion gap is not going to sit well with the American people let alone our creditors. In the end, Obama has to actually lead not only the country, but he needs to lead Congress and Washington. If Obama cannot stand up to Pelosi and Reid, then his second year will be as bad as his first.

The Edge of a Depression – 2009

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The signs are everywhere: Stock market drops, jobs lost, money and home devaluation, no credit going out, and no end in sight.  America has had several economic crises before and we will have them again. But what is it going to take to get through these? If we look at history – there have been several depressions, or panics in our history: most notably – 1837, 1857, 1870-1890s, 1929-1942, and a mild recession in the 1970s and 1980s. What things do they have in common? How were they solved? How could we apply what we learned from each one to help today’s economy?

There are some who say that America was born out of a recession. The British economy and treasury were both reeling from a seven year war with the French fought on two continents. To help pay for the cost of the war, the British passed a series of laws limiting Colonial settlement and trade and the British Parliament began taxing the colonists. The tax in and of itself was minuscule – about a $1 a year. But the colonists, who were free to govern and police themselves since 1607, disagreed. Smugglers, poachers, pirates, and the Sons of Liberty sprang in opposition to the British Laws. Some may say it was on the principle of taxation with representation, but the Americans wanted to be free to make a buck just as anybody else. After the British shut down the colony of Massachusetts, the battle cry was on. From here on you know the rest of the story.

Commonalities of Economic Hard Times in America
1. Banks and credits - Every single depression or panic was caused in part by the over extension of credit. Whether it was home loans, business loans, no regulation, deregulation, too much regulation, or just bad financial management, the economy went in the dumper because of it.
2. Consumerism vs. Manufacturing – Whenever our economy has become reliant on spending rather than manufacturing, we lose. I still recall President Bush asking people to go shop in the days after September 11, 2001. We can not be a consumer society no matter how much we want to be capitalists. How much stuff do we need? Really, that’s what it boils down to in a nutshell. How much crap are you going to bring into your house and why do you need it? At some point, you begin to have everything you could possibly want. My parents, and my wife parents, were all children of the great depression. To walk through their houses today is to walk through a shrine of plastic bags, tin foil, nails, screws, machine parts, and old clothes – nothing was thrown out. The depression could come again. Well, he we are on the verge and my parents saddled my wife and I with the same trait. Our basement is full of junk we thought we would never use. Well, here comes the time. Whenever America’s economy has boomed, it has been a result of manufacturing. We made it, the world bought it. Now, what does America make today that the world buys? Not much. Instead, they make and we buy. We have got it all backwards.
3. Rapid Population Growth – In all three time periods, massive immigration and birth rates ballooned the population beyond what it was ready to handle. When the baby boomers, like myself, began to graduate high school and college in the 70s and 80s, there were too many of us and too few good jobs. The same holds true for the 1870s through the 1890s. We had plenty of space. In fact we were giving land out west, but nobody wanted to live out there and they still don’t, save Las Vegas, California, and Phoenix.

Solutions
1. Massive Industry – Each depression ended with the buildup of massive industry. Unfortunately, three of the eras of massive industry happened as a result of war both here at home and abroad.
2. Ingenuity – New stuff – New ideas – new markets. Each depression ended and growth was sustained through the three previous things. And in each of these instances, the growth came from the private sector. Each growth period is sprinkled with new ways of doing things.We have to make something which will sustain our economy from years to come, make us more self sufficient, and create markets around the world. But rather than ship those jobs overseas, keep them here.

Americans wanted change in the last election. I don’t know if the ARRP and TARP were what they were looking for, but the reality of the matter is the American people are the ones who are going to have to do the changing if this near depression of 2008-2009 is to end. Government is not the solution, it is only part of the solution, and some of the problem. As we have seen in the past, it has always been the American people who have made the depressions end for the story of America is their story, not some guy in a White House in Washington, but the farmer, the banker, the factory worker, the technician, the carpenter, and yes, even the plumber. History is great for many things, but great things, ideas, and people make history. We are going to have to change how we heat and cool our homes, how we drive our cars, how we build our cars, how we fuel our cars, how we use our vast resources to our own advantage. We will have to change or others will change it all for us.

A New Gilded Age

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To gild refined gold, to paint the lily… is wasteful and ridiculous excess.” – William Shakespeare

From this one simple quote, Mark Twain coined a term, The Gilded Age, which now comes to mind whenever corruption arises in the halls of government.

As President Obama sat stone faced yesterday and issued a diatribe against the powers of Wall Street for givinng out billions of taxpayer monies as bonuses, one could only sit and wonder at the absurdity of it all: “Your company just lost billions of dollars. Your investors just lost billions of dollars. Yet, you are giving out bonuses?” I am glad Obama was upset and showed not only his anger, but the anger of the American people. But the behavior on Wall Street and in the halls of the Bush administration makes me only ask a larger question: Have we enetered a new gilded age in American History?

Looking back at the history of America, scandals and corruption have often been a part of our governance. Some might say they were inherent in a Democracy. But in reality, corruption and scandal are inherent in any form of government, not just a democracy. Back to the question…

There have been two gilded ages in American history. The first one in the 1870s and the second in the 1920s. What elements did the first two share? What do they have in common with today? And, what can be done to change the system? Are we approaching a third?

1. It is quite clear that money and politics don’t mix. Some might think they do, but they don’t. All they do is breed corruption and scandal. From Tammany Hall to Boss Tweed to the Grant Administration, the 1870s were nothing less than a horrid time in which the highest bidder got the best deal. The whole period malingered for until the early 1900s when the progressives came on the scene. Not only were deals done behind closed doors in the halls of government by political machines, but the power the machines and corporations held shaped the nation. In the 1920s, Harding’s administration (if you want to call two years an administration) was filled with scandal after scandal. The Teapot Dome Scandal only proved the Republicans thought the business of government was doing business in government – almost another corporation unto itself.

2. The role big corporations played in swaying the policies and procedures of government was staggering. Today’s lobbyists get paid hundreds of thousands of dollars to poke, prod, and cajole our current government in its policies. I wonder how much a lobbyist for Halliburton made during the Bush administration? But it does not stop there. From auto makers to pharmaceuticals to health care to oil companies to insurance to cable, phone, and internet, the number of lobbyists representing the business of America in Washington. In fact, I would go as far as saying that there are more lobbyists in Washington than politicians.

3. We could be on the verge of another gilded age or at the end of it. Part of me likes to think we are the end of it. With the impeachment of Blagojevich yesterday, there is hope. There is hope that the people will regain their senses on who they vote into office. As a lifelong resident of Illinois, it is shameful, appalling, and in the end, a hopeful feeling that government is beginning to do what it is supposed to. What is that you ask? To do things it cannot do for themselves? Who is to protect us from the corporations? Who is to protect us from corruption? Who is to protect us from government? The answer – we the people.

One could easily sit and spout Lincoln, but Thomas Jefferson is the more applicable quote.
“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is it’s natural manure.”

If we want our government to work for us, to not be corrupt, then we have to work at electing good men and women to do our business for us. That is the whole premise of democracy and the whole premise of voting. To be a free society, we can not sit idly by and do nothing. We have the power of the ballot box on our side. We not only have voting power, but we have a more powerful weapon – our money. To send these corporations a message, the Sons of Liberty showed us that boycotts have more power than any law possibly could. The Civil Rights movement did the same in Birmingham and Memphis. Our history is rich with examples of the country overcoming avarice and greed by demanding a just society. Now whether the blood of tyrants will be shed in this gilded age is another matter. Metaphorically speaking, it could do the trick. Heads will roll and the government of the people, by the people, and for the people shall return as it has done throughout our history.

Obama and Lincoln: Lincoln’s Lesson – Apples of Gold

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The media likes to draw comparisons of Lincoln and Obama. One reason is they are both from Illinois. Another reason is one is black while the other freed the slaves. Third is the power of the spoken word. But the connections end there. No President ever faced the challenges that Abraham Lincoln faced (and hopefully no one ever will again). A great Civil War tore apart families, communities, states, and a nation over a period of 4 years. It ended in the blood shed by the 16th President. But in those 4 years, Lincoln set a style for leadership which even Obama seems intent on copying.

In fact, Obama himself has been very open about his own love of Lincoln. After having read Team of Rivals myself, Obama clearly has taken several pages out of the Lincoln playbook already. From keeping your friends close and your enemies even closer, Obama seems intent on mastering the Lincoln style of politics from cabinet positions to Whig philosophy of internal improvements. But I can offer 2 lessons not discussed in the book.

Lesson One
1. The Declaration of Independence is just as important as the Constitution, if not more so. Lincoln understood the difference between the two. While the Constitution talked of a more perfect union, the Declaration spoke glowingly of life, liberty, and the pursuit of happiness along with equality. Lincoln would write:

“All this is not the result of accident. It has a philosophical cause. Without the Constitution and the Union, we could not have attained the result; but even these, are not the primary cause of our great prosperity. There is something back of these, entwining itself more closely about the human heart. That something, is the principle of “Liberty to all”—the principle that clears the path for all—gives hope to all—and, by consequence, enterprize, and industry to all.

The expression of that principle, in our Declaration of Independence, was most happy, and fortunate. Without this, as well as with it, we could have declared our independence of Great Britain; but without it, we could not, I think, have secured our free government, and consequent prosperity. No oppressed, people will fight, and endure, as our fathers did, without the promise of something better, than a mere change of masters.

The assertion of that principle, at that time, was the word, “fitly spoken” which has proved an “apple of gold” to us. The Union, and the Constitution, are the picture of silver, subsequently framed around it. The picture was made, not to conceal, or destroy the apple; but to adorn, and preserve it. The picture was made for the apple—not the apple for the picture.

So let us act, that neither picture, or apple shall ever be blurred, or bruised or broken.

That we may so act, we must study, and understand the points of danger.”

Clearly, if ever so clearly, the vision of America by the founding fathers has been eloquently transformed by Lincoln. The lesson is to let the vision of what America should be not be perverted by what is has become.

Lesson Two: A Domestic Agenda
Lincoln is seen as a war President and deservedly so. But his Domestic Agenda slips in under the radar and it is this domestic agenda which transformed a nation. Under Lincoln’s guise:
*The Homestead Act was passed.
*The Transcontinental Railroad was started.
*The Morrill Land Act was passed which set up universities through the nation.
*Paper Money (Greenbacks) were started.
*The Department of Agriculture was established.
As a Midwesterner, the legislation herein enabled the Midwest to thrive for a 100 years and transformed a nation economically from an agricultural base to an industrial giant in a matter of 35 years after Lincoln’s passing. The key aspect of the lesson is that many things go hand in hand. Industry cannot survive without agriculture. If we had no agriculture, our towns would dry up and fly away. If we had no railroads, how would our cattle, hogs, and grains be taken for processing and later consumption (it would be roads today). You can’t have one without the other. Let that be an economic lesson for today. Everything is part of the puzzle. Do not favor one over the other. The farmer is just as important as the banker, the creditor, or the investor, for they play their role in the economy. Invest in that.

Other Presidential Lessons for Obama Series
George Washington
Thomas Jefferson
Abraham Lincoln
Teddy Roosevelt
Woodrow Wilson
Franklin Roosevelt
Harry Truman
Dwight Eisenhower
John F. Kennedy
Ronald Reagan
George H.W. Bush

The American Recovery and Reinvestment Plan or Change: It Don’t Come Easy

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apple-logoGot to pay your dues if you wanna sing the blues, And you know it don’t come easy. You don’t have to shout or leap about, You can even play them easy. Open up your heart, let’s come together, Use a little love And we will make it work out better, I don’t ask for much, I only want your trust, And you know it don’t come easy. And this love of mine keeps growing all the time, And you know it don’t come easy.

Even though Ringo Starr sang the song, any one can tell George Harrison wrote this song. I thought of this song when I heard/saw PE Obama on his weekly address. I don’t know why but I just did. Anyways, we didn’t really get a lot of specifics this morning but we did get some broad strokes:
1. A Name – American Recovery and Reinvestment Plan -
2. An unofficial cost – $775 billion according to CNN – is this going to be the entire budget for 2009?
3. The vision behind the plan: Strategic investment with 80% in the private sector. He said he sees it “as a down payment on our long-term economic future.”
4. Job Created – 3 million
5. Areas for improvement – “double renewable energy, renovate public buildings (going green), rebuild roads, bridges, and schools, save jobs, money, and lives, update health care system with computers to cut red tape, build 21st century classrooms, labs, and libraries, and provide direct tax relief to 95 percent of American workers.”

That’s quite a plan. Although it is way too early to criticize such a plan, I, like many Americans, probably have more questions than complaints at this point. Until the plan is immortalized in black and white and the shadows of FDR,my mind drifts to a few things:
1. The Cost: Where is the money going to come from? How is it going to be paid back? Will the infrastructure built be cost efficient? Will it spur growth in and of itself?
2. 2010: If the economy is going to recover in one years time, why the need for such a big plan?
3. Sustainability: Will this sustain our energy needs and infrastructure for many years?
4. Is it too much in some areas and not enough in others?: That is my thinking. As an educator, I know the challenges many rural school districts face, and can only imagine the inner city problems, but how are today’s youth going to benefit from such a plan?
5. Is this the big vision thing?: I always expected a bigger, bolder vision. This is almost conservative. I expected this big sweeping plan that encapsulates energy, education, infrastructure, and credit – maybe even a manned mission to Mars. That would be too Kennedy-esque though wouldn’t it? I think that could be a good thing. Pragmatism – who would have thunk it? How long has it been since we had a pragmatist on day one? But I digress…

At this point it is normal to have more questions than answers. It is normal to wonder the hows, and whys and wherefores. Until we get more specifics from Obama’s ARRP, we can only wonder. Cause you know it don’t come easy…

“Patience padawans, patience. Be mindful of the future but not at the expense of the moment.”