Vision: 5 Economic Ills That Demand We Go Beyond What We Think Is Possible

My friend, the late Mike Harrington, used to describe his politics as "on the left wing of the possible." It's a fine aspiration. But if anything, economic problems have become more politically intractable since Mike died in 1989.

Scanning the various economic ills afflicting our Republic and its citizens, it's evident that nearly all of the solutions lie beyond what is currently deemed thinkable in mainstream politics -- beyond the left edge of the possible.

It's not that my own views and values have become more radical in two decades. What has changed is that the American political center has shifted further to the right, while the twin assault on the good society by the private financial system and the organized right has become more intense.

There are only two possibilities: either we act to expand the boundaries of the possible, or we suffer the consequences.

Consider these five prime economic challenges:

Economic Recovery and the Budget. We are told by Beltway solons of both parties that the prime malady harming the economy is the budget deficit. But nobody can explain how fiscal austerity will promote economic recovery. On the contrary, the more we cut, the more we retard economic recovery and the more we remove the cushions that make the recession slightly more bearable for regular people.

Out here in the real world, the problem isn't the deficit; it's the recession, the high rate of joblessness and the stagnant earnings.

The solution? Significantly more public investment to get the economy on a faster road to recovery and to generate more and better jobs. In the short run, the deficit increases. But over time the economy grows faster and the debt burden recedes.

Unfortunately, both parties are mainly jousting over budget cutting. We have the party of cuts versus the party of deeper cuts. Neither is putting forth a serious recovery plan. The win-win solution that benefits Main Street is beyond the left edge of the possible.

The Health System. Once recovery comes and tax receipts return to something like normal (assuming that the right doesn't further gut the tax code), America doesn't have a deficit problem; we have a health system problem.

President Obama's Affordable Care Act insures more people, but does so through the private insurance system, and doesn't reduce overall health care costs. The Republicans would cut costs by cutting care.

Every other wealthy nation insures everyone for about 10 percent of GDP. Our system leaves out some 50 million people, and costs 17 percent of GDP. That's a difference of seven percent of GDP, far more than the structural budget deficit.

The solution? National health insurance, of course; or if you'd like to sound more like motherhood and apple pie, Medicare for All. Polls show that large majorities of Americans support it. But in mainstream politics, national health insurance is considered beyond the left edge of the possible (makes you wonder who controls mainstream politics.)

The Banking/Housing Mess. Seven million Americans are on a path to foreclosure, one home in three has more mortgage debt than the value of the home, and housing values declined last year in 18 of the top 20 metro areas. Home ownership as a ticket of lifetime asset accumulation is being denied to the next generation.

The Administration's relief program, the Home Affordable Modification Program or HAMP, is voluntary to the banks. It is helping less than one out of ten homeowners in trouble. Stronger medicine to keep people in their homes is rejected because it would force banks to recognize losses. So foreclosures continue and housing prices continue to sag.

The solution: give bankruptcy judges the power to order reductions in mortgage principal owed. Use leverage on banks rescued by government to insist on deep refinancings, so that distressed homeowners are not forced onto the street. In the long run, banks would incur less loss, neighborhoods would be less blighted.

Are you kidding? The banks would never sit still for this, and they own too many legislators of both parties. The common-sense solution is in the usual place -- beyond the left edge of the possible.

American Economic Competitiveness in the World. We are getting our clock cleaned by Chinese state capitalism. "We," in this case, is the American economy. American-owned business is doing just fine.

The rules of the trading system, as indulged by U.S. presidents of both parties, allow China and other mercantilist nations to subsidize their industry, and to make American business an offer it can't refuse -- locate in China on our terms, and you get state subsidies and docile workers. All you have to do is give sensitive trade secrets to your new Chinese partners, who will soon displace you.

The U.S., uniquely among western nations with the exception of Britain, doesn't mind if domestic industry gets hollowed out. Industrial policy is considered a sin, but it's okay for our fate to be an artifact of China's industrial policy.

The solution: one set of rules for all nations that benefit from the trading system, and strategic investments to rebuild U.S. industry.

Sorry, neither party will touch that one with a rake -- beyond the left edge of the possible. Business may complain a bit about intellectual property theft, but basically the business elite likes the present deal just fine.

Petroleum and Global Climate Change. Rising oil prices, reflecting revolutionary events in the Middle East, have dealt another setback to the shaky U.S. economy. Imported oil adds hundreds of billions of dollars to our trade deficit, and contributes to escalating global climate change.

You would think that investment in clean, domestic, job-creating, revolution-proof renewable energy, would be a no-brainer.

But that sensible policy is in the usual place, beyond the left edge of the possible.

Every one of these areas has in common this reality: the longer we delay the sensible solution, the more we suffer. Only bankers, corporate elites and oil companies gain. Tea parties benefit from the citizen confusion and frustration.

None of these alternative policies is extreme. They are simply impossible given the present constellation of American politics. Rather, it is the politics that pass for mainstream conventional wisdom that are extreme -- in the sense of extremely unhelpful.

I draw one simple conclusion. We need to take back our politics, so that what is sensible is also possible. Maybe, just maybe, events in Madison and elsewhere are the beginning of that process.


Understand the importance of honest news ?

So do we.

The past year has been the most arduous of our lives. The Covid-19 pandemic continues to be catastrophic not only to our health - mental and physical - but also to the stability of millions of people. For all of us independent news organizations, it’s no exception.

We’ve covered everything thrown at us this past year and will continue to do so with your support. We’ve always understood the importance of calling out corruption, regardless of political affiliation.

We need your support in this difficult time. Every reader contribution, no matter the amount, makes a difference in allowing our newsroom to bring you the stories that matter, at a time when being informed is more important than ever. Invest with us.

Make a one-time contribution to Alternet All Access, or click here to become a subscriber. Thank you.

Click to donate by check.

DonateDonate by credit card
Donate by Paypal
{{ }}