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Come the Dawn

You wake up in the middle of the night for no apparent reason.  There are simply too many things going through your mind to be able to sleep through the quiet hours of the night.  A trip to the kitchen and a few moments staring out the window at a dark and peaceful world aren’t quite enough.  The stillness envelopes you and your world as a threat, not a moment of peace warm in bed.

Nothing really changes at that time of night – it’s always up to the next morning to make something happen.  Welcome to a new kind of Morning in America, the day after a sleepless night.

A central argument put forward by Barataria for the last three years has been that this economic situation is not like anything else that we have experienced in a very long time.  While labels aren’t always useful, this one has had an obvious handle that describes the last ten years very well – a Depression.  As frightening as that term is, ignoring it has only proven scarier yet.

Waiting for this reality to sink in has been a difficult time, but the dreaded “D” word is starting to be used commonly in Op-Ed pieces as well as general discussion.  The last six weeks or so since the debt ceiling debacle have crystallized the public’s attention and illuminated the stakes of the situation into a blinding shimmer.

That’s when Obama stepped in.

The American Jobs Act was only the start, but it appears that it is indeed a start.  The president is apparently willing to take dramatic action, now proposing to increase taxes on the wealthy as part of his deficit reduction plan.  This is far more than “tax the rich”, it is a signature change in the way taxes and the economy are viewed.  A Democrat is finally standing up to the idea that investment income should be taxed at a lower rate because it supposedly creates jobs.  There has been no evidence that this has worked in the last ten years and less reason to think it will work in the future.  Military spending is also on the table for the first time as well.

What really changed?  The last Unemployment Initial Claims number came in at 428k for the previous week, a level that tells us that there is no net jobs growth.  It’s the only real-time indicator we have, coming well in advance of the unemployment report that comes out the first Monday of every month.  We know what the September report will say, and it will be bleak.  Obama is getting his plan in place to use that report for added momentum – not just another piece of bad news for us all to stare at like scared animals.

What will happen to this plan? It’s hard to say just how the reaction will play out in the press and the public, but it’s clear that there is now a bias for action in government.  This matches the Bernanke approach which has been the one true source of activity for more than three years now.

No one can tell us just where we will go from here, but things are moving.  There is progress and the fight is finally going to be engaged.  We are still not talking about actions that transform our economy from the old one that failed into the next one we can see arriving, but we are getting there.

It’s morning again in America.  It may not be the happy rush-the-kids around and bask in the warm glow of the sun kind of morning, but it’s a great start.  This is a day that comes at the end of a sleepless night full of focus and determination.  It has the energy of adrenaline and the promise that things can be put right with heart and arm and brain working together.

It may not be anyone’s idea of a great day ahead, but it beats staring out of the window at 2AM on a still and dark world.

What do you think?  Are you ready?

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14 thoughts on “Come the Dawn

  1. I don’t know if this will get anywhere but I agree it is progress. Interesting though on the initial claims numbers. I suspect you are right that this is being watched closely but they may have more information than we do that correlates with the same numbers.
    What matters to me is that there are proposals coming out nearly every week to deal with things and that is important. Where they all go is another story and we will have to wait and see.

  2. Anna: There probably are more numbers in the White House and they probably are all pretty bad – but this is what we have. We’ve known for a year now how well Initial Claims correlates with the next unemployment report but the last six weeks it’s correlated very well with Obama’s action. :-)

    I agree that action is what is important. As much as I’d like to see us moving to transform the economy there are political realities and immediate needs. If people start to respond well I hope we move on to the stuff that will really make s difference, tho.

  3. The current GOPT, besides their stated goal of making Obama a one-term president have, since January, 2011, obstructed, filibustered, blocked appointments and all the while trumpeted failed supply-side economics. Now the “professional left” folks have been attacking the president as weak and a corporatist; most recently the never elected to anything Robert Reich. The left needs to take a lesson from the right and trumpet a unified message (and work hard to get more actual progressives elected to congress to give this president something to work with).
    I’ll just step off my soapbox now and let you get back to your regular program.

  4. Jack: I agree. The fight has been engaged and it’s time for action. We’re starting to get somewhere and this is no time to back away from our leadership – if anything, it’s time to reward Obama for his action with our support.

  5. I voted for McCain in 2008 and given the trajectory of Obama’s policy proposals, including foreign policy, I intend to vote for him in 2012. I don’t know why it is hard to see that, if there is a lack of private demand, then the government should step in and take action. Back in 2009 one health economist noted that the health sector was sector to spend in, since it can handle additional spending more quickly as it is large and can be used as an engine of growth. I support that view. Health care politics is nasty of course. But as a conservative I actually like the health care bill. I like an individual mandate. And the idea of treating health insurance as sort of a public utility that needs rate regulation is more attractive to be than national health insurance. Here’s an interesting summary from the Dallas Fed.
    http://dallasfed.org/research/eclett/2011/el1102.html
    It’s hard to say if there are legions of Obama Republicans out there. Republicans tend to see things more in terms of microeconomics. So I think the strategy is to do some of the policy things Republicans like, but also do a huge jobs bill. Some Republicans talk endlessly about tax burdens, regulation, tort reform. There’s some truth in their concerns. We should at least avoid denying the big problems and learn from Japan. http://curiouscapitalist.blogs.time.com/2011/08/25/six-lessons-japan-can-teach-the-west/
    Here’s an interesting paper on the world economy. It is saying we need to redress an imbalance. Some are countries are exporting too much and lending too much. That creates deflationary pressures. Bad. Other countries consumed too much and now we don’t have the means to repay the loans. Keynes to the rescue, please. http://www.levyinstitute.org/pubs/wp_675.pdf

  6. Smithson: Great stuff, as always! Glad you agree that we have to do something. I still say that once we get through survival mode we have to work on transforming the economy – something that government can only kick start at best – but we do have to survive first. Also like what you said about the Health Care plan – I never did understand how businesses got stuck with the tab for health care in the first place, let alone that anyone would attempt to defend such a sill system (I know, no one really defends it, they just ignore it to criticize the other guy they don’t like).

  7. I just want to highlight this article that Smithson left that I re-read more carefully.

    When the problem isn’t money, then more money can’t solve the problem. http://tinyurl.com/3kxomhd Time article, “Lessons from Japan”

    This is good stuff, it’s a lot of what I’ve been saying all along but it uses Japan’s “Lost Decade” (really two now) as an example. There’s a lot to learn here.

    We need an engaged political system that is capable of trying new things and, yes, sometimes failing before we can really implement all the lessons we have to learn. That’s the hard part. But I want to encourage everyone to be engaged, whether I agree with you or not, and make your contributions A Democratic Republic is made of this stuff, and it’s the strength that we need to get past this and into a new era of progress and growth for all.

  8. In my live world, family, friends, neighbors, the economy is not all that bad. I know of a few people underemployed and one house in the neighborhood was foreclosed, but mostly people seem to be continuing their middle class lifestyles, eating out, vacations, etc without feeling much impact from the great recession. The economy in depression does not fit what I know first hand.

    What keeps me interested in this topic is what I read in the news, Having experienced periods of unemployment, I am empathetic with millions who have been looking for work for a long time. I feel even worse for all who have lost their homes. Lastly, I am also concerned with where we are headed with this new economy and what opportunities my kids and my students will have when they complete their educations not too far down the road.

    I find that I am most interested in the political side of these issues and how to help get voters engaged and knowledgeable enough to elect leaders in 2012 whose policies will make things better rather than worse. I have low expectations for what will be accomplished in the next year in terms of economic policy.

  9. Laurie: Interesting that you don’t know anyone in a real bind right now. I thought nearly everyone did at this point, so your friends and neighbors are doing pretty well. Good for them! But we all agree that new opportunities are limited and that’s what I usually focus on. I do want to get people more engaged because I don’t see how we’ll get out of this any other way. Keep those links coming, there is a lot of good discussion out there!

  10. I know your hopeful that things are changing but there is still Congress to get past and they have always said “No”. I don’t think they can go along with any of this without upsetting their base pretty badly. So we’re probably still stuck until we can do something about them.

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