Sep 142010
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Everybody you talk to has an opinion about the American Recovery and Reinvestment Act (ARRA) of 2009, better known as the Stimulus. Enacted in February of 2009, the program was intended to shore up short term consumer spending, provide aid to states and invest in projects to create jobs. With a total price tag originally estimated to be $787 billion, the Stimulus was originally supported by 51% of Americans, but a year and a half later, only 29% believed that it had actually helped the economy.

A Rasmussen Reports poll taken in July showed that not only did so few Americans believe the Stimulus had helped, but that 43% believed that it hurt the economy. That same poll revealed that 69% of those surveyed believed tax cuts were a better way to create jobs than more government spending. Without doubt, these attitudes are reason for concern, but they fall far short of telling the whole story.

Things actually get much more confusing when the results of a Gallup poll taken in June are also considered. The survey asked people if they would be in favor of Congress passing legislation to “Approve additional government spending to create jobs and stimulate the economy,” and 60% of those polled answered in the affirmative with only 38% in opposition.

So, 60% of Americans support more stimulus spending, but 43% believe that what was spent through July had actually hurt the economy, and 69% believe tax cuts would create more jobs. What can explain this incongruence?

The answer is likely found in the American proclivity to swallow political talking points without any verification of facts. A revealing example of this dynamic concerns the Obama tax cuts offered through the Stimulus. A CBS News/New York Times poll conducted in February of this year showed that 24% of respondents believed that Obama had increased taxes, while only 13% believed they had been reduced. Amongst Tea Partiers, only 2% believed taxes had decreased under Obama, and a whopping 44% believed they had increased. The opinions evinced in these polls have nothing to do with the reality that the Stimulus included 25 different tax cuts that benefitted 95% of all Americans.

Sadly, voter opinion seems to track much more closely to political rhetoric than anything substantive or factual. Republicans have consistently spread the message that Obama will raise people’s taxes, therefore people believe that he has. They’ve also espoused the position that tax cuts best stimulate the economy, and although the vast majority of economists believe tax cuts to be the worst form of economic stimulus, a majority of Americans adhere to the conservative falsehood.

This dynamic seems also to be at the root of public opinion regarding the Stimulus. Arguably the Obama administration’s most successful program to date, it has been credited by the Congressional Budget Office (CBO) with adding as much as 4.5% to the GDP and increasing the number of people employed by between 1.4 and 3.3 million. According to Mark Zandi, former economic advisor to John McCain, unemployment would be 11.5% instead of 9.5% without the Stimulus. But still 43% of Americans believe the Stimulus has hurt the economy.

The stimulus has paid out 77% of the $288 billion in tax relief, but only 64% of the $224 billion in entitlement funds, with direct investment funds trailing still further. Thus far, barely 54% of the $275 billion slated for contracts and grants has been paid, mostly because of the long lead times resulting from a shortage of “shovel-ready” projects. But as the projects ramp up, the real promise for future jobs, new industries, lower healthcare costs, more efficient government and improved energy independence will all begin to materialize.

More than $23 billion in contracts, grants and loans has come to California, funding over 18,000 awards. One major project right here in Contra Costa County is the fourth bore on the Caldecott Tunnel. Nearly $200 million was allocated to Caltrans for the project that would not have proceeded without the ARRA. In addition, direct local funding within Contra Costa County has funded 46 contracts and 252 grants totaling nearly $300 million. Investments include $43 million for transportation, $22 million for public safety, $14 million for energy, $126 million for education and more funding to assist with health and human services, housing, labor, technology and water/environment. Together, these projects have created nearly 500 new jobs, saved many times that amount and promise to create more as projects move forward.

Unfortunately, the Stimulus success stories are not what most people are fed through the media. Unless an individual happens to be working on a Stimulus funded project, their opinion is likely shaped by the spurious claims levied by its political opponents. People like House Minority Leader, John Boehner and half-term Alaska Governor, Sarah Palin have made it a practice to disparage the Stimulus without any facts to back their claims.  Republican Senators John McCain (R-AZ) and Tom Coburn (R-OK) even went so far as to create a list of “wasteful” Stimulus projects that was more a waste of time to create or read than anything else.

The Stimulus could have been more effective. There’s little doubt that money could have been better directed to achieve maximum job creation, but to say that the entire program “has gotten us nowhere,” as John Boehner stated recently, is nothing short of a bald-faced lie. The Republican obstructionists have succeeded in using deception and distortion to convince American citizens that stimulus spending is ineffective and that tax cuts are a preferred option. Both economic theory and American history say otherwise.

The Stimulus has raised the number of full-time-equivalent (FTE) jobs by as many as 4.8 million. It is also creating new export industries, moving our nation forward with alternative energy and laying the foundation for lower healthcare costs and more efficient government. The most significant issue with the Stimulus is that it was too small, and the national conversation should now be focused on a second wave. But instead we toil with Republican subterfuge and self-serving delay.

Wake up America! Those who criticize the Stimulus, raise concerns about the deficit and at the same time fight for tax cuts for the super-rich, don’t give a care about your wellbeing. Open your eyes and see them for what they are — Republicans.

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Sep 092010

Article first published as Obama Comes Out Swinging in Cleveland on Technorati.

Yesterday in Cleveland, President Obama came out of his corner swinging. Pundits have been counting the President out of late, but if he was beaten and bruised when he entered the ring today, he shook it off like Rocky Balboa.

Speaking at the Cuyahoga Community College West Campus in Parma, Ohio, he had barely finished his opening remarks when he lit into the GOP. Immediately on offense, Obama tore into the opposition by blasting their 8-year reign with a political philosophy that clearly was and still is — government for the elite few.

According to Obama, he ran for president in order to correct what the Republican philosophy has wrought. The President started with a four punch combination: first were their tax cuts — “especially for millionaires and billionaires,” which he immediately followed with their deregulation — “for special interests.” Then a body blow on their trade deals — “even if they didn’t benefit our workers,” and another punch to the gut on cutting back investment — “in our people and in our future – in education and clean energy, in research and technology.” He followed the combo with an overhand smash, that demanded acknowledgement from anyone listening, “The idea was that if we just had blind faith in the market, if we let corporations play by their own rules, if we left everyone else to fend for themselves that America would grow and America would prosper.” And thus the tempo of the fight was set, and the contrast in philosophy defined.

What did America get with all those “sound” Republican policies? As the President termed it, the people got “the illusion of prosperity.” Obama briefly commiserated with the Buckeye audience who has been hurt so badly through job loss, stating that job growth during the Bush years was slower than in any economic expansion since WW2 — and he added — “slower than it’s been over the last year.” The President finished the picture by recalling how income for the middle class stagnated while costs climbed, especially for tuition and healthcare. He also linked this dynamic of lower wages and higher costs to the reactive increase in personal debt that paid for the “illusion.” And with the Republicans on the ropes, the President added that their failure to pay for two wars and two tax cuts for the wealthy had turned a record budget surplus into a record deficit.

Thus began the final 8-week countdown to Election 2010. President Obama was in fighting trim, or campaign form as the case may be. He started by drawing the contrast between left and right and then punctuated his entire speech with references to the America he believes in, “An America that took pride in the goods that we made, not just the things we consumed. An America where a rising tide really did lift all boats, from the company CEO to the guy on the assembly line.” That America demands patriotism, but the President left no doubt that the America that had lost 4 million jobs in the 6 months prior to his taking office no longer upheld those values, and he didn’t pull any punches in assigning responsibility.

Not only did the President attack Republican policies for creating the recession, an assertion that conservatives may be tired of hearing but one that is undeniable nonetheless, but he also drove the point home that they have deliberately delayed the recovery. He cited the success of the Stimulus in that it has created “roughly 3 million” jobs, but also spoke of how the Republicans had fought its passing and chose instead to ride the “fear and anger all the way to Election Day.” And once again, Obama called upon the name of John Boehner, the new face of the Republican Party, and the plan that he recently shared for America — “the same philosophy that we had already tried during the decade that they were in power — the same philosophy that led to this mess in the first place: Cut more taxes for millionaires and cut more rules for corporations.”

President Obama made crystal clear that the distinction between Democrats and Republicans is really about the strengthening or demise of the middle class, and he hammered the case over and again throughout his speech: the Republicans fight for insurance companies to be able to refuse coverage for preexisting conditions, for corporations to be able to move jobs overseas, for banks to be able to raise interest rates at will, and for tax cuts for the richest 2% of Americans. They fight for higher corporate profits and the lower wages that help create them, and they believe in the market over democracy.

In the President’s eyes, Democrats essentially take the opposing position on each of these issues and believe instead in “a vibrant free market, but one that works for everybody.” They contend that government should support the middle class so that, in Obama words, “if they work hard and meet their responsibilities, they can afford to raise their children, and send them to college, see a doctor when they get sick, retire with dignity and respect.” Obama called upon the words of the first Republican President, Abraham Lincoln, to summarize the Democrat’s position, “I also believe that government should do for the people what they cannot do better for themselves.” Democrats don’t want “big government” — they want effective government.

This is exactly the message the Democrats need to carry to America for the next two months. The lines are now clearly drawn. The Republicans say they’re for small business but fight against legislation that sends them aid in the form of tax cuts and improved access to financing. They say that the main issue for America is jobs, yet they fight spending to create them in order to protect loopholes that send them overseas. They contend that they support the middle class, yet in the President’s words, they “hold middle-class tax cuts hostage” in order to protect cuts for the top 2%. They feign concern for the deficit while refusing to cut defense and simultaneously adding the $700 billion cost for their “wealth-fare” tax cuts.

The President did take time to plug his 6-year infrastructure investment plan and to introduce a proposal to extend tax credits to businesses for 100% of their 2011 capital investments. Also on the table is an expansion of the research and development tax credit from 14% to 17%. All of these proposals would typically be acceptable to Republicans, but as the President suggested in reference to their opposition to the small business tax cuts supported by the Chamber of Commerce, “the only reason they’re holding this up is politics, pure and simple.” Should Americans really place their trust in a party that would deliberately sacrifice the wellbeing of the country for their own personal gain?

The choice couldn’t be more clear, once the thick overburden of misinformation is pulled back and the facts revealed. But the Democrats now find themselves in an uphill climb to set the record straight. They will be well served to follow the President’s lead and draw upon the distinct differences between party philosophies. They can do no better than to frame the conversation as did President Obama — what we now need is to return to “the time-honored values that built this country: hard work and self-reliance; responsibility for ourselves, but also responsibility for one another. It’s about moving from an attitude that said ‘What’s in it for me?’ to one that asks, What’s best for America? What’s best for all our workers? What’s best for all of our businesses? What’s best for all of our children?”

The text of the speech is available at the New York Times. You can also watch the entire speech at

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Sep 082010
Looking south above Interstate 80, the Eastsho...
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Article first published as Obama Takes a $50 Billion Infrastructure Punch at the GOP on Technorati.

Speaking at a Labor Day rally in Wisconsin yesterday, President Obama announced a new $50 billion infrastructure spending plan. Of the new initiative, the President told the crowd of union workers that, “This will not only create jobs immediately, but will make our economy run better over the long haul.” He also warned that, “If we are going to get anything done, Republican cooperation, which has been all but non-existent recently, will be necessary.” Can it be that the President actually believes he can get Republican support? The pragmatic answer would have to be, not unless he’s lost his mind. So, assuming that President Obama is still in control of his mental faculties, why present this new initiative?

The obvious answer is “politics.” The President’s speech was not confined to the new infrastructure spending plan. He also used the opportunity to fire a salvo at the Republicans in Congress and set the stage for the Democratic argument for the final two months of campaign 2010. Not only did the President contrast the need for Republican support against their consistent record of obstructionism, but he also made the case that should the Republicans be returned to power, they will attempt to revive the very same agenda that created the crisis in the first place.

“They’re betting that between now and November, you’ll come down with amnesia,” said the President. “They think you’re going to forget what their agenda did to this country,” he continued. He’s right, of course, but then the odds appear to be firmly in the Republican’s favor, and their bet anything but a long shot. The people have already forgotten — haven’t they? Why else would they support the Republicans?

It’s good that President Obama is finally taking some initiative to help frame the debate, but he’s come to the party so late that most people have already made up their minds. Where was the President while the Republicans thoroughly polluted the well with their fact-free propaganda? The best that can be hoped for at this juncture is that a newly invigorated debate that contrasts Democratic substance with nauseating Republican hypocrisy will motivate Democrats to get out and vote. But with little else left in their bag of tactics, this is likely a good choice, although as stark as the contrast may be, one must question whether or not anyone’s still listening.

Democrats have been too silent for too long, allowing Republicans to spin some whoppers into commonly accepted truisms. Distorted perceptions are so keenly ingrained at this point that the Obama administration doesn’t even want to associate their infrastructure initiative with the word “stimulus” — this in spite of the fact that, according to all objective measures, the Stimulus has been extremely effective. It’s created as many as 3.3 million jobs and added as much as 4.5% to the GDP, yet President Obama continues to avoid singing its praise, thereby opening his flank to further GOP sniping. But regardless, the non-stimulus infrastructure initiative should provide an excellent opportunity for Democrats to bring core party differences to the forefront.

No sooner had the President announced the infrastructure plan when congressional Republicans started their predictable rhetoric. Senate Minority Leader, Mitch McConnell was quick to color the proposed bill as having “more than $50 billion in new tax hikes.” Of course, he was referring to the fact that the infrastructure spending that would rebuild or restore 150,000 miles of roads, add 4,000 miles of railway, target improvements to the U.S. air traffic control system and create an “Infrastructure Bank” to coordinate funding and planning of projects would all be fully funded, without impact on the deficit, by ending various tax breaks for oil and gas companies. Like the Democrat’s plan to fund aid for teachers and firefighters by ending tax loopholes that encouraged corporations to ship jobs overseas, McConnell and his cronies are against anything that might reduce corporate profits.

Never wanting to be left out, the man who wants to be Speaker of the House, John Boehner, was also quick in his criticism of the plan. “As the American people, facing near double-digit unemployment, mark Labor Day by asking, where are the jobs, the White House has chosen to double-down on more of the same failed ‘stimulus’ spending,” said Boehner in a prepared statement. Long a champion of the wealthy, Boehner failed to mention how his ongoing commitment to self-interest has consistently driven his obstruction of anything and everything that could help jobs. Yet, the man who called the healthcare legislation “Armageddon,” who feigns concern over the deficit yet supports tax cuts for the rich, who supports small business but fights against small business aid, who ignores every statistic on the Stimulus and paints public employees as “special interests,” wants everyone to believe that he has a plan to, “create jobs by eliminating the job-killing uncertainty that is hampering our small businesses.”

The fact of the matter is that Congressman Boehner is the creator-in-chief of the “job-killing uncertainty” he so often calls to mind. He and his Senate counterpart, Mitch McConnell are stuffed so deep into the pockets of Big-Business that they’ve lost sight of their moral compasses. Together, they are the wingmen of a Republican party whose plan to create jobs consists of a “Roadmap for America’s Future” that promises to cut into Social Security and Medicare in order to fund more tax cuts for the rich. Just how a tax cut that would provide 117% of its relief to the top 1%, while increasing taxes on the bottom 95%, will help create jobs has yet to be explained. But this is just SOP for the GOP — the fiction and friction party.

Obama started a new conversation yesterday. He took off the kid gloves and put on the boxing gloves. He fired a few combinations, mixed it up with some body blows, and showed the Republicans for whom they truly are. The Republicans responded with some blind flailing and cover up. Round 1 goes to Obama, but the fight has just begun. Fortunately for Democrats, if called on the facts, the Republican’s defense is wafer thin. If the President continues to press, he will easily reveal their complete lack of substance. Let’s hope that President Obama fights to the finish. America needs a champion for all Americans.

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