Exit stage right, enter stage left. Maybe, just maybe, President Barack Obama reads the New University or at the very least my articles. Just as I was about to write another disappointing review of Obama’s hesitance to act boldly, he turns progressive on me.
Obama’s new proposed budget is a decisive turn away from the conservative model of Reaganomics: Government is bad — give money to the rich and watch it trickle down. Every president since Ronald Reagan has toed that line, more or less. While former president Bill Clinton was a Democrat, he remained a centrist at heart. Clinton never clearly broke away from the Reagan-stigmatizing tradition of “government is the problem,” even though he ran the government better than any of the Reaganites.
The new budget proposal has a different view of government. Instead of the government being inherently bad, the government should foster growth. And foster it does, with $3.6 trillion requested for the 2010 fiscal year. In addition, money for alternative energy research, health care and education are being laid out in big sums. Health care in particular is getting a $634 billion down payment in preparation for when Obama reforms the health care system. Progressive ideas are finally being funded. Wait, the Democrats took back Congress in 2006 and the White House in 2008; I can finally say “liberal” ideas are being funded.
This is not to say that the Republicans will roll over and accept this. And I hope they don’t accept the new budget. The Republican Party has already made itself into a regional party for the South; why not let it also become the fringe party? Oh sure, we do have a red Republican “Governator” in California, but we all know he wears blue underwear.
Fox News is once again setting the stage with calls of socialism from Glenn Beck and now Bill O’Reilly, the so-called “Independent” commentator, said that the country is going to go bankrupt. He often cites our own state as an example of progressive ideas not working because it costs too much money. Well, I’m not sure if Billy realizes that the federal government has much more money than the state government of California, and the federal government has the power to print money. While I’m not advocating wild printing sessions that would lead to hyperinflation, and while the federal debt and deficit are noteworthy concerns, I don’t think the United States is going to have to be auctioned off any time soon.
There is, however, one issue where Obama does need to turn more to the left and not just because it’s the cool thing to do, but because it’s the right thing to do — that is, nationalizing insolvent banks. President Obama’s current plan (if there really is one) is to keep bailing out banks. This is eerily similar to the Japanese crisis of the 1990s. They tried fiscal stimuli, along with cash infusions and low interest rates. Does this sound familiar? None of those remedies worked. The banks remained troubled because of their bad assets. It was not until 2003, when the nationalization of the banks took place, that the credit crisis in Japan started to turn around.
Obama knows that temporary nationalization of the insolvent banks is a must if the problem is to be fixed. And by banks, I don’t mean the little ones; they are already being nationalized. The big banks that have major problems need temporary nationalization and revitalization. Sure, it won’t be politically easy to sell, no pun intended. Nationalization of the big, bad banks would require wiping out their stockholders. Wall Street and the Dow Jones seem to scream at just the mention of nationalization. But Obama has to realize that if the problem isn’t fixed and we get our own Japanese-style “Lost Decade,” then it’ll be pretty hard for the Democrats and Obama to push their progressive agenda, much less stay in power.
Today people still argue over how effective President Franklin D. Roosevelt was in ending the Great Depression. While FDR did some great things with the New Deal, he never fully fixed the depression until the great spending of World War II. Thus, he still has right-wing critics to this day.
If Obama wants his legacy to become unequivocal, he needs to fix the problem. Without fixing it, the legitimacy of any of his programs will be called into question, undoubtedly by the right. Obama’s new domestic proposals bring the U.S. back to the center-left of politics, like that of the Lyndon Johnson administration, and we thank him for that. But when it comes to banking, President Obama, how do you lean?
Jaye Estrada is a third-year biological sciences major. He can be reached at estradaj@uci.edu.
