Obama Might Build Something of Value on the Ruins Left by Bush
The Bush-Cheney era has been such a disaster for America that Barack Obama may have an opportunity to effect worthwhile changes that would otherwise be politically impossible. Health care springs to mind. With the devastating layoffs of the past two years, millions of Americans have lost the medical insurance that went with their jobs. Added to the 47 million already without health insurance, this stampede of the uninsured can be expected to provide a strong demand for government intervention. Until recently, the majority of Americans were opposed to the idea of “socialized medicine.” I am confident that few of them knew what that meant, but they had been brainwashed by decades of propaganda against anything “socialist.” Now that their own lives are in jeopardy, they might be more amenable to a rational health care system.
Also, with the economy in shambles and credit frozen, the environment might be more favorable to other forms of government intervention. American taxpayers have seen the rocks on which the siren song of low taxes and deregulation has landed the ship of state; perhaps now they will accept the hard truths of governance. Sooner or later the piper must be paid. You can fund public initiatives – such as a ruinous war – by raising taxes or by budgeting for a deficit. If you budget for a deficit, somebody sometime will have to foot the bill. President Bush chose the latter course and the result is a trillion-dollar deficit.
We will have to pay that debt some day, but it won’t be any time soon. First the economic collapse must be addressed, and that will mean another trillion dollars of red ink – or something close to it. However, in such a drastic crisis, there is the opportunity for structural change that could produce long-term benefits.
I think the Obama Administration should consider public-private partnerships of the kind employed in many other countries. The Bush Administration already has partly socialized the financial system. Perhaps, that trend should be continued. The American government might do well to look at Canada’s banking system, for example.
Another area in which “Socialism” should be contemplated is auto manufacturing. After dithering interminably, President Bush has finally given car companies a $17.4 billion rescue loan, defying rebel Republicans who wanted to see the domestic industry collapse and the Auto Workers union broken. He recognized that letting the Big Three auto makers collapse was not an option amid a recession, housing slump and financial credit crunch, but he is demanding tough concessions from the automakers and their employees. If the carmakers fail to prove viability – a positive cash flow and ability to make good on the loans – by March 31, they will be required to repay the government loans. That’s something they would find all but impossible to do.
Of course, all Bush has done is postpone the solution of the auto manufacturing crisis to Obama’s presidency. If I were the President-elect, I would be studying countries like Sweden, where the government is involved in running essential industries. I would consider at least some government ownership of the auto industry. With a stake in the operation, the government could pursue such objectives as pollution reduction and improved fuel efficiency.
This would not be such a big departure for America. From railroads in the 19th century to huge investments in aerospace and computer technology in the 20th century, the US government has a history of investing in major industries as well as crisis intervention.
I expect that there would be a clamor of dissent from doctrinaire free-enterprise economists. They argue that entrepreneurs, not the government, create wealth and that the free market must be allowed to rise and fall without interference. All I have to say to those poor souls is, look around you at the disastrous consequences of your philosophy. Isn’t it time to cry enough?