I'd like everybody who possibly can, to listen to 'Obama's Challenge': A Transformative Opportunity, a 38-minute interview, podcast, from NPR's Fresh Air which broadcast on Thursday November 6.
And read the excerpt that's included here as well.
Robert Kuttner, author of Obama's Challenge spells out a convincing argument for both the depth of the problem and the need of a Roosevelt-like, New-Deal-like solution. I hate to summarize something as important as this, but:
- The government has to spend billions to prop up housing prices. Too many of us link our wealth to our home value. The economy can't survive a severe hit to the home owners. Roosevelt, facing something like this, established the Home Owners Loan Corporation (HOLC to buy up bad mortgages, keep people in their homes, and support home prices. If not — listen to Kuttner's very convincing explanations in the podcast, not me — there will be hell to pay with the economic repercussions.
- The government has to spend billions to create lots of new jobs. People out of work will — or might — cascade into a huge problem. That's the worry. And, to prevent it, he has some brilliant answers about where to put government money to add new jobs to keep the economy afloat. His suggestions, which strike me as brilliant, don't fit into my bullet points.
"Yeah, right!" I was saying to myself, as I listened in my car. "Pipe dream. How do we pay for that?" I was muttering about deficit spending and the current administration and all, when, as I listened, I discovered that I've been wrong for a while on a very important concept. I just assumed, perhaps by instinct alone, that we can't afford a New Deal solution.
And that's where this interview caught me. Consider this, which Kuttner explained to Terry Gross. Our national debt has risen lately to 40% of GNP. To support the housing prices and create the jobs Kuttner recommends, he says, it would probably have to rise to 50% of GNP, maybe even more. But — and this opened my eyes wide — the debt rose as high as 120% of GNP during the New Deal. And, furthermore, that led to the most prosperous two decades in U.S. history, beginning with my birth in 1948 (not that I was the cause, but I enjoy the coincidence).
I don't like being wrong. But it's exciting to be wrong on this one because for the first time in months I see a way that the president-elect can dig us out of the mess. Hooray.