Watch CBSN Live

Column: President-elect Must Aggressively, Swiftly Address U.S. Economy

This story was written by Arthur Blaustein, Daily Californian

Most Americans have had one eye on the nation's financial crises and the other on the presidential election. They have been asking themselves, "Is McCain or Obama, the Democrat or the Republican, better for the economic health of the country as well as for my own financial well-being?" That was the defining question of this election.

What is clear is that the vast majority of Americans who voted yesterday wanted to change our economic policies. A mere 11 percent told the pollsters that the country was headed in the right direction, and the Gallup Poll found that one in five people said their finances had already been hurt "a great deal."

Before outlining what the president-elect should do to confront our economic crises, I think it is absolutely critical to understand and review the genesis of the failed policies that got us into this economic and financial mess so that we do not make the same mistakes. It is imperative that we learn from recent history.

The Clinton-Gore administration presided over the longest peacetime economic expansion in our history. The national debt was reduced dramatically, the industrial sector boomed, wages grew and more Americans found jobs. How has the Bush-Cheney team fared? In the past seven and a half years, we have experienced the weakest post-recession job creation cycle since the Great Depression, record deficits, record household debt, a record bankruptcy rate and a substantial increase in poverty.

What is downright frightening is that President George W. Bush and Sen. John McCain seem to still believe that an unregulated free market will solve America's economic problems. Sen. Barack Obama, on the other hand, maintains that government has the responsibility to keep our economy on the right track and he believes in oversight and accountability to protect American taxpayers. Obama says he will work toward reducing the debt and deficit. He pledges to help the middle class and the working poor by maintaining benefit levels and eligibility for the Earned Income Tax Credit. He will hold the line on our tax progressivism and fairness, by rolling back the Bush tax giveaways to taxpayers earning over $250,000 annually. Obama wants to target health care, education, affordable housing, alternative energy and the environment with critical investments. McCain has been opposed to curtailing the tax breaks to the wealthy.

Bush has been mired in the failed economic policies of his Republican predecessors. In 1980, George H. W. Bush -- running against Ronald Reagan in the primaries -- called supply-side policies "voodoo economics." But he embraced these "trickle-down" policies in order to become vice president and then president. Reagan and both Bush's royalist economic policies turned out to be failures. The consequences were staggering debt, industrial decline, shrinking wages, four painful recessions, increased poverty and structural unemployment. The reckless Reagan-Bush-Bush spending and borrowing has brought us to the brink of social chaos and economic catastrophe.

With respect to the $700 billion bailout plan, McCain's position is worth examining as a case study. He has cast himself as a reformer, championing the cause of Main Street, who will take on Wall Street and the bankers. Yet in the 1980s, when deregulation mania drove the Reagan revolution, McCain was all for it. While Bush administration appointees at the federal regulatory agencies turned a blind eye to the greedy machinations of Wall Street and those bankers working the sub-prime market, McCain was against regulation, oversight and accountability. Now that the policies he supported for all those years has gone belly-up, he's experienced an instant transformation.

McCain and his surrogates have been pounding away at the Democrats, labelig them as the "tax-and-spend" party. Yet recent research has shown that over 70 percent of our national debt was created by just three Republican presidents.

McCain and Gov. Sarah Palin have embraced the economic policies that both undermine the middle class and subvert the security of American family life. American families need policies geared toward a healthy economy, secure jobs, decent health care, affordable housing, quality public education, renewable energy and a sustainable environment. We need a president who understands and believes in coherent, comprehensive and equitable policies that promote sustainable and healthy economic growth. We need a leader who in his first hundred days in office will also deal effectively with the housing crisis and legislative oversight of financial institutions.

The first thing that the president-elect should do is restore the confidence of the American people by demonstrating that he is willing to provide leadership, that he is willing to take immediate and bold policy initiatives to put the economy back on the right track. Toward this end, he should call a meeting later this week with Senate Majority Leader Harry Reid and Speaker of the House Nancy Pelosi. At this meeting he should propose that they call Congress back into a special session to consider emergency legislation that would include: investment in alternative energy development and new green collar jobs; an extension of unemployment benefits; an expansion of the food stamp program; an increase in the Community Economic Development discretionary budget to $250 million a year so that community economic development corporations (CDCs) can create more business and employment opportunities in economically distressed neighborhoods and communities; and most important, a major economic stimulus package that would provide $250 billion in direct assistance to states and local governments for infrastructure development. This kind of direct federal spending for community and economic development would be far more productive than rebate checks. It will create jobs and crucial investments where it counts and is needed.

It is entirely possible that Democratic congressional leadership is convinced that it would take more time to put together a coherent and comprehensive package -- or that the lame-duck Bush administration would block it. If that is the case, the president-elect should tell the American people that this legislation would be his first order of business immediately following the inauguration in January. That is the kind of leadership we need.

View CBS News In
CBS News App Open
Chrome Safari Continue