13.7.14

SEEN AND UNSEEN.

A few weeks ago, MSNBC provocateur Chris Matthews figured that a spittle-flecked tirade at Elizabeth Warren about the continued non-recovery recovery in which there was scant public spending on infrastructure would be just the way to rile up his audience.


I was not able to find a transcript, unfortunately. That's fine, because the most important fiscal policy initiative of the Roosevelt Administration never came up.  To Mr Matthews and to Senator Warren, spending money on "infrastructure" (never mind whether useful or not) was essential, and to the senator, it was (as usual) those obstructionist Republicans not authorizing the money.  At Breitbart, the performance is mock-worthy all around;  to a Daily Kos diarist, Mr Matthews has forgotten what Tip O'Neill taught him.
In the interview, Matthews acknowledged that the Democratic message is the message that speaks to all these issues and that the Democratic Party is the party with the platform from which these goals are accomplished. However, he displayed his characteristic righteous indignation against the president, Elizabeth Warren and the Democratic Party. It seemed as if he did not understand the legislative process he was a part of under Speaker of the House Tip O’Neill for many years.

"I don’t understand the union movement," Matthews said. "Why aren’t they bitching and moaning and complaining every day? We want big construction projects. And the president of the United States is not doing it. I don’t hear him talking about it. He talks about one thing one day, something the next day. But I tell you, I don’t hear you [Senator Elizabeth Warren], getting it done. The Democrats control the U.S. Senate. The Democrats control the White House. When are you going to do what you just said you would like to do?"
Egberto Willies concurs.  But nowhere in this Washington-Democrats-Know-Best posturing is there any recognition that spending money on infrastructure does not by itself jump-start the economy.  The Golden Era contemporary Democrats long for (after the Democrats of a half-century ago destroyed it) neglects the role of World War II in killing off many potential workers, destroying the industrial capability of countries that would otherwise be trading partners, and fostering a vision of post-victory domestic tranquility.  (The Democrats of a quarter-century ago were willing to blame the emergence of the Rust Belt on those emerging trading partners being able to build new, less costly, manufacturing capacity, sometimes with Marshall Plan money, while the Arsenal of Democracy was making do with worn-out pre-war factories.  There's a solid analysis of what really happened here.)

Robert Kuttner recognizes the role of the War in re-setting the social contract.
World War II, even more than the New Deal, profoundly altered the economy in ways that generated a more equal society, with more opportunity and security, than the one we have today. These structural changes reinforced one another and affirmed government as friend of the common person.
That's prologue to a different set of policy prescriptions, which, yes, involve some of the same tax-and-spend ideas that Mr Matthews and Senator Warren agree upon, but which recognizes the disruptive effects of fighting a war.
Suppose we had an infrastructure program of $500 billion a year for ten years, or $5 trillion. That’s just over 3 percent of GDP. It would cover the deferred maintenance bill for basic infrastructure for such uses as water and sewer systems, roads, bridges, rail, public buildings, and the like, as well as state-of-the-art public Internet systems. The investment could be financed two-thirds with bonds and one-third with surtaxes on the wealthy. As during and after World War II, the higher growth rate would retire the debt.

A social-investment strategy also addresses the downward pressure of globalization without resorting to protectionism. The wartime economy required us to set national goals, limit private finance, and use national investment and production for America’s purposes.
That has long been the fantasy of technocrats -- getting people to agree on what the national goals are. And that conceit, when it breaks down, is what calls forth a Margaret Thatcher to note that the notion of "society" as something coherent is incoherent.  But to Joseph Stiglitz, the restoration of the social solidarity he thought was present during the War is desirable.

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