First, we're proposing a series of steps to help small businesses grow and hire new staff. Over the past fifteen years, small businesses have created roughly 65 percent of all new jobs in America. These are companies formed around kitchen tables in family meetings, formed when an entrepreneur takes a chance on a dream, formed when a worker decides its time she became her own boss. These are also companies that drive innovation, producing thirteen times more patents per employee than large companies. And, it's worth remembering, every once in a while a small business becomes a big business - and changes the world.
That's why it is so important that we help small business struggling to open, or stay open, during these difficult times. Building on the tax cuts in the Recovery Act, we're proposing a complete elimination of capital gains taxes on small business investment along with an extension of write-offs to encourage small businesses to expand in the coming year. And I believe it's worthwhile to create a tax incentive to encourage small businesses to add and keep employees and I'm going to work with Congress to pass one.
These steps will help, but we also have to address the continuing struggle of small businesses to get the loans they need to start up and grow. To that end, we're proposing to waive fees and increase the guarantees for SBA-backed loans. And I am asking my Treasury Secretary to continue mobilizing the remaining TARP funds to facilitate lending to small businesses.
Second, we're proposing a boost in investment in the nation's infrastructure beyond what was included in the Recovery Act, to continue modernizing our transportation and communications networks. These are needed public works that engage private sector companies, spurring hiring across the country. Already, more than 10,000 of these projects have been funded through the Recovery Act. And by design, Recovery Act work on roads, bridges, water systems, Superfund sites, broadband networks, and clean energy projects will all be ramping up in the months ahead. It was planned this way for two reasons: so the impact would be felt over a two year period; and, more importantly, because we wanted to do this right. The potential for abuse in a program of this magnitude, while operating at such a fast pace, was enormous. So I asked Vice President Biden and others to make sure - to the extent humanly possible - that the investments were sound, the projects worthy, and the execution efficient. What this means is that we're going to see even more work - and workers - on Recovery projects in the next six months than we saw in the last six months.
Even so, there are many more worthy projects than there were dollars to fund them. I recognize that by their nature these projects often take time, and will therefore create jobs over time. But the need for jobs will also last beyond next year and the benefits of these investments will last years beyond that. So adding to this initiative to rebuild America's infrastructure is the right thing to do.
Third, I'm calling on Congress to consider a new program to provide incentives for consumers who retrofit their homes to become more energy efficient, which we know creates jobs, saves money for families, and reduces the pollution that threatens our environment. And I'm proposing that we expand select Recovery Act initiatives to promote energy efficiency and clean energy jobs which have proven particularly popular and effective. It's a positive sign that many of these programs drew so many applicants for funding that a lot of strong proposals - proposals that will leverage private capital and create jobs quickly - did not make the cut. With additional resources, in areas like advanced manufacturing of wind turbines and solar panels, for instance, we can help turn good ideas into good private-sector jobs.
Finally, as we are moving forward in these areas, we should also extend the relief in the Recovery Act, including emergency assistance to seniors, unemployment insurance benefits, COBRA, and relief to states and localities to prevent layoffs. This will help folks weathering these storms while boosting consumer spending and promoting jobs...
Next there are the programs he proposes in order to reduce the budget deficit:
Given the challenge of accelerating the pace of hiring in the private sector, these targeted initiatives are right and they are needed. But with a fiscal crisis to match our economic crisis, we also must be prudent about how we fund it. So to help support these efforts, we're going to wind down the Troubled Asset Relief Program, or TARP - the fund created to stabilize the financial system so banks would lend again.
There has rarely been a less loved or more necessary emergency program than TARP, which - as galling as the assistance to banks may have been - indisputably helped prevent a collapse of the entire financial system. Launched hastily under the last administration, the TARP program was flawed, and we have worked hard to correct those flaws and manage it properly. And today, TARP has served its original purpose and at a much lower cost than we expected.
In fact, because of our stewardship of this program, and the transparency and accountability we put in place, TARP is expected to cost the taxpayer at least $200 billion less than what was anticipated just this summer. And the assistance to banks, once thought to cost the taxpayers untold billions, is on track to actually reap billions in profit for the taxpaying public. This gives us a chance to pay down the deficit faster than we thought possible and to shift funds that would have gone to help the banks on Wall Street to help create jobs on Main Street.
Finally, Obama pivots away from discussing how to get out of our present crisis and focuses on what we can to prevent its recurrence in the future:
... as we strive to meet the crisis of the moment, we are laying a new foundation for the future.
Because an educated workforce is essential in a 21st century global economy, we've launched a competitive Race to the Top fund through the Recovery Act to reform our schools and raise achievement, especially in math and science. And we've made college more affordable, proposed an historic set of reforms and investments in community college, and set a goal of once again leading the world in producing college graduates by 2020.
Because even the best trained workers in the world can't compete if our businesses are saddled with rapidly increasing health care costs, we're fighting to do what we have discussed in this country for generations: finally reforming our nation's broken health insurance system and relieving this unsustainable burden.
Because our economic future depends on a financial system that encourages sound investments, honest dealings, and long-term growth, we've proposed the most ambitious financial reforms since the Great Depression. We'll set and enforce clear rules of the road, close loopholes in oversight, charge a new agency with protecting consumers, and address the dangerous, systemic risks that brought us to the brink of disaster. These reforms are moving through Congress, we're working to keep those reforms strong, and I look forward to signing them into law.
And because our economic future depends on our leadership in the industries of the future, we are investing in basic and applied research, and working to create the incentives to build a new clean energy economy. For we know the nation that leads in clean energy will be the nation that leads the world. I want America to be that nation. I want America's prosperity to be powered by what we invent and pioneer - not just what we borrow and consume. And I know that we can and will be that nation, if we are willing to do what it takes to get there.
There are those who claim we have to choose between paying down our deficits on the one hand, and investing in job creation and economic growth on the other. But this is a false choice.
Ensuring that economic growth and job creation are strong and sustained is critical to ensuring that we are increasing revenues and decreasing spending on things like unemployment so that our deficits will start coming down. At the same time, instilling confidence in our commitment to being fiscally prudent gives the private sector the confidence to make long-term investments in our people and on our shores.
When historians look back on the last eighty years of American history, they will see that:
- The economic assumptions of laissez-faire conservatives (who had dominated our ideological paradigm since 1920) were discredit by the onset of the Great Depression in 1929.
- The election of Franklin Roosevelt in 1932 brought about a new period in our nation's political history, one in which the Democratic Party was dominant due to its advocacy of a government that played an active role in bringing about economic justice for working-class Americans.
- The next forty-eight years of American political history were dominated by the political coalition Roosevelt established during and immediately after the 1932 election, one in which great social changes were brought about that increased socioeconomic opportunity and upward mobility, brought about an unprecedented period of prosperity such as had never been seen before (both in quality and duration), and significantly expanded the middle class. It will also be remembered for having far-reaching impacts on non-economic matters, such as by causing America to become one of the world's foremost superpowers, obtaining justice for long oppressed groups of Americans (including African-Americans, women, and a host of religious and racial minorities), and encouraging the challenging of established institutions and assumptions in such a way as to stimulate both a cultural revolution (embraced by the inheritors of the Roosevelt legacy in the late-1960s and early-1970s) and a reactionary backlash against said cultural revolution.
- The reactionary backlash against the cultural revolutions of the 1960s and 1970s brought about the beginning of the end of the Roosevelt era with the election of Richard Nixon in 1968. However, Nixon's embrace of liberal economic policies (relatively speaking) prevented his presidency from marking a real close to the Roosevelt period. It sowed the seeds of its ultimate downfall, but the Roosevelt paradigm still pervaded through this period.
- The election of Ronald Reagan in 1980 brought the period ushered in by Franklin Roosevelt to a final end. This was achieved by playing on the fears of those who rebelled against the impact of the cultural revolution of the 1960s/1970s, in large part by causing millions of Americans to identify the Democratic Party with cultural values they abhorred, and then conflating in their minds the liberal economic policies of that party (which had been previously widely recognized as beneficial) with their shunning of the counterculture. By forging a dominant political coalition through this means, Reagan caused the Republican Party to dominate American politics for the next twenty-eight years, using his power to reverse much of the legislative achievements from the Roosevelt era (1932-1980). This led to a backpedaling of social justice on issues such as women's rights and the fight for racial equality, and more significantly, caused an increase in the socioeconomic inequities that had dominated American life until Roosevelt's ascent to power.
- The advent of the Great Recession in September 2008 - which was caused by and brought to a head the growing disparity between rich and poor, the accelerating dwindling of the middle class, and the increasing loss of socioeconomic opportunity and a decent standard of living for millions of Americans - caused Americans to reject the notions of the Reagan era and demand a new period in our country's ideological/political history, much as one had been ushered in by the election of Franklin Roosevelt in 1932 and Ronald Reagan in 1980. Hence Barack Obama was elected President of the United States.
After Obama's inauguration, the question was whether he would squander the unique and precious opportunity which history had bestowed upon him, or whether he would act in accordance with the words of his Chief of Staff, Rahm Emanuel, and "never let a serious crisis go to waste" since "it's an opportunity to do things you think you could not do before."
I have to admit that, for a very long time, I was concerned that Obama was doing the former, something I made clear in several blog posts (http://riskinghemlock.blogspot.com/2009/11/letter-to-barack-obama_677.html, http://riskinghemlock.blogspot.com/2009/09/obamas-centrism.html). Yet here is a speech that contains the policy substance we need - programs that will actively use the government's power to stimulate job growth, that will attempt to restore fiscal responsibility to our national treasury after three decades of wild Republican profligacy, that will take steps to prevent the future recurrence of this type of crisis, and that boldly attempts to redefine how Americans view the proper role of their government in its economic life.
It is the kind of speech that I hoped Obama would make when I first predicted that he would be elected president (on October 6, 2005, I wrote "I, Matthew Rozsa, as of October 6, 2005, hereby predict that Barack Obama will be the 44th President of the United States"). It is the kind of speech that I believed he would someday make when, one year later, I wrote another article expressing my preference for him as the Democratic presidential candidate. It is the kind of speech that encouarged me to volunteer for his campaign in New Jersey for the Democratic primaries and in Pennsylvania during the general election. In sum, by supporting policies that synthesize the economic activism of Franklin Roosevelt with the fiscal hawkishness of Bill Clinton, Obama has crafted a program that can not only get us out of this recession, but usher in a new ideological period in American history. For the first time since January 20th, I have reason to believe that - despite the doubts of his liberal critics and the verbal assaults of his conservative adversaries - Barack Obama may very well measure up to his moment in history.
Periods in American Political History (parentheses contain the presidents who served during each of these ideopolitical periods, with the ones who caused the initial transformative effect - Washington, Jefferson, Jackson, Lincoln, Roosevelt, Harding, Roosevelt, Reagan, and Obama - mentioned first and emboldened):
- The Federalist Age (George Washington; Washington, J. Adams): 1789-1800
- The Jeffersonian Age (Thomas Jefferson; Jefferson, Madison, Monroe, J. Q. Adams): 1800-1828
- The Jacksonian Age (Andrew Jackson; Jackson, Van Buren, W. Harrison, Tyler, Polk, Taylor, Fillmore, Pierce, Buchanan): 1828-1860
- The Civil War (Abraham Lincoln): 1860-1865
- The Gilded Age (Established through the weakening of executive power under Andrew Johnson; A. Johnson, Grant, Hayes, Garfield, Arthur, Cleveland, B. Harrison, McKinley): 1865-1901
- The Age of Roosevelt (Theodore Roosevelt; T. Roosevelt, Taft, Wilson): 1901-1920
- The Second Gilded Age (Warren Harding; Harding, Coolidge, Hoover): 1920-1932
- The Second Age of Roosevelt (Franklin Roosevelt; F. Roosevelt, Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter): 1932-1980
- The Age of Reagan (Ronald Reagan; Reagan, Bush, Clinton, Bush): 1980-2008
- The Age of Obama (Barack Obama...): 2008-???