Nudging Obama

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Tread Carefully Obama: The Party is Over and You Killed It !!!

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Tread Carefully Democrats

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Sun Dec 27, 2009 at 10:10:53 AM PST

As the Congress limps toward the finish line on health-care reform, it would be wise of Democrats to consider the last three significant pieces of legislation signed into law by a Democratic president and their effects. The current Senate version of HCR is significantly flawed and unless the bill is improved Democrats will face enormous electoral challenges in the near future.

“I would never knowingly do anything to cost an American a job.”

Those were the confident words of President Bill Clinton to a skeptical AFL-CIO audience while urging passage of the North American Free Trade Association (NAFTA) in 1993. The cogent idea behind the agreement was that trade liberalization would result in new high paying jobs, paving the way for a 21st century economy for American families.

History however has rendered its own verdict on the legacy of NAFTA. The result has been the net loss of over one million American jobs and a decade of downward pressure on wages for middle class families. For those who still think NAFTA was a square deal, perhaps a visit to Detroit, a city whose real unemployment figures are nearing 50%, will dissuade you of those illusions.

“This legislation will stimulate investment, promote competition, provide open access for all citizens to the Information Superhighway.”

Once again, overly optimistic words from the mouth of President Bill Clinton following his signing into law the Telecommunications Act of 1996. The avowed objective of the act was to promote competition, increase diversity, lower consumer prices, while delivering 1.5 million new jobs for the American economy.

Unfortunately, the result was greater media consolidation, less diversity, and increased prices for consumers, in addition to the loss of half a million jobs. The expansion of media conglomerate News Corp, along with the recent acquisition of NBC Universal by Comcast, highlights the failure to promote market competition.

“Today, Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century “This historic legislation will better enable American companies to compete in the new economy.”

Finally, those were the buoyant words uttered in 1999 by then Treasury Secretary Larry Summers upon repeal of the Glass-Steagall Act. The stated goal of the legislation was to encourage the growth of US banks, presumably to better position them to compete on a global scale. And bigger they grew.

Following a $300 million lobbying effort, the deregulation of the financial sector was complete. Only two members of the US Senate, Byron Dorgan of North Dakota and Richard Shelby of Alabama, opposed the repeal of Glass-Steagall. The destruction of the regulatory firewall that stood between commercial and investment banks since 1933 resulted in too big to fail. Bigger is not always better.

All three bills; NAFTA, The Telecommunications Act of 1996, and the Gramm-Leach-Bliley Act, which repealed most of Glass-Steagall, were lauded at the time by a Democratic president, convinced that the only way to beat the Republicans at their own game was to mimic their corporate affinities. Some things never change.

So, where we stand today with health-care reform? Once again, a Democratic president is poised to sign into law a bill that will deliver few of its promises to the American people while simultaneously sullying the reputation of his own ideology in the pursuit of the path of least resistance for 2012.

To those who would argue that Democrats and progressives alike should begrudgingly fall into line and support the Senate health-care bill as it currently stands, I would urge caution. Aim before you shoot.

The examples above have shown that action simply for the sake of action is a course not worth navigating.

The blowback from such an obviously flawed bill will bring enormous electoral challenges to the Democratic Party in 2010 unless substantial changes are made once the House and Senate versions of the bill are merged. So where do we go from here?

To begin, the individual mandate along with any punitive measures must be removed from any final bill and a strong public option inserted. In addition, the restrictions on women’s reproductive rights, the ban on the re-importation of generic drugs, and the offsetting of most of the bills stated benefits until 2014 while taxation kicks in immediately must all be reconciled prior to the signing of this bill.

If the stated purpose of this bill is to lose 50 House seats next year, failure to include those considerations into the final bill would be a terrific start. And that is but a sample of the changes that must be made.

Thus far, the president has remained aloof on the issue of health-care reform, content to allow the Congress to shape HCR legislation in the round. Last week however, the president signaled his desire to help “wrap up health-care reform” as the two bills are merged next year. He better.

If the final bill resembles anything like the current Senate version, this president and his allies in Congress will have hell to pay with the voters in 2010 and beyond. And they should.


Written by bearmarketnews

December 30, 2009 at 3:13 am

Posted in Uncategorized

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