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Jan 16, 2009

Should Barack Obama be thinking less about FDR and more about MLK?

By Alan Stoga

This week’s FLYP video editorial explores the state of the nation’s economy, and how the middle class is hurting. So what should Barack Obama do? We’ve got some ideas. Watch the video here.

The country is a mess.
Eleven million are unemployed. All told, 21 million people who want full-time jobs already can’t find them.
Middle-class incomes are falling, while more than 40 million people live in poverty. That means that a family of four are trying to make ends meet on less than $21,000 a year—or $14 per day per person in a country where a Big Mac combo meal costs approximately $5.
But Big Macs aren’t on the menu. Food banks throughout the country are reporting dramatic increases in families lining up at their doors. In Michigan, for example, the Food Bank Council reported almost a 40 percent increase in distributions last year.
Forty-five million Americans are without health care—including one-third of all Hispanics, the country’s fastest growing minority group.
For millions of Americans, George Bush’s “ownership society” has been morphing into a “foreclosure” society where 1 in 10 borrowers are having trouble making their payments.
One result is that the mayors of the country’s 25 largest cities recently reported a 12 percent increase in homelessness last year (PDF).
The point is that the economy is bad, and is getting worse. How bad the downturn will last and how bad it will be is the only debate among economists, few of whom actually predicted the slump.
Ironically, Barack Obama is one of the few Americans who actually has a job because of the economic disaster. According to exit polls, two-thirds of voters who described the economy as “bad” voted for him. In December, 80 percent of respondents told CNN pollsters they were confident that Obama could end the recession.
The inconvenient truth, however, is that he probably can’t, at least if he sticks to the conventional playbook. Bush’s tax rebates, Henry Paulson’s bailouts, and Ben Bernacke’s interest rate cuts have left us with more than a trillion dollar deficit, but haven’t even slowed the pace of economic collapse.
Obama’s first instinct has been to continue the same strategy: more spending, lower taxes, bigger deficits, a little more regulation. However, if that didn’t work last year, will it work this year?
Not since 1932 has a president had as big a mandate to do whatever it takes to 
stop the economic rot. Franklin Delano Roosevelt’s answer was the New Deal, which laid the foundation of American economic, financial, regulatory and social policy for the last 75 years. But the New Deal wasn’t built for a post-industrial economy or globalization or sophisticated financial markets.
Maybe FDR’s New Deal can’t solve Obama’s new problems.
Forty years ago, Martin Luther King, Jr. began talking about fundamentally redrawing economic and social priorities. Consume less. Put people before profits. Seek human development, not just higher economic growth rates. Reduce inequality in the name of basic justice. Take care of the environment. He was talking about a whole new economic model.
That sounded like a radical solution then, and—fleshed out into actual policies—it would be radical now. It might soon be bad enough that we will need radical.


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