The Two Stories of This Terrible Economy, Yet Obama and the Dems Won’t Tell Theirs

gop gloom and doomThe public doesn’t understand specific policies but it does understand stories that link them together. The stories give the policies context and meaning, and thereby show where policymakers are taking a nation (and, by implication, where the opposition would take it).

Republicans lack specific policies but they have a story. Obama and the Democrats have lots of specific policies but don’t have a story. That spells even more trouble for Democrats.

The Commerce Department reported Friday that the economy grew only 1.6 percent in the second quarter, which is a fancy way of saying what everyone on Main Street already knows. The economy has stalled. Unemployment is still in the stratosphere and shows no sign of improving. The housing market is worsening.

Why? What to do? The Republican story is simple. It’s the fault of government. They say Obama’s policies have bankrupted the nation and made businesses too uncertain to create jobs. The answer is less government. Cut taxes and spending, privatize, and deregulate.

It’s not a new story but it’s capturing the public’s mind because the Democrats offer no story to counter it with.

Obama and the Democrats respond by defending their specific policies. The stimulus worked, they say, as did the bailout of Wall Street, because the economy is better today than it would be without them. If anything, we need more stimulus. And healthcare reform will protect tens of millions.

A large and growing segment of the public believes none of this. The public doesn’t think in terms of specific policies. All it knows is the economy has stalled and there’s only one story that explains why and points the way forward – and that’s the Republican’s.

recovering economyWhat should the Democratic story be? How can they connect the dots?

Here’s a clue. In times of economic stress, Americans lose faith in the nation’s large institutions. They blame either government or its counterpart in the private sector – big business and Wall Street.

Twenty years ago, 42 percent of Americans said they trusted government to do what was right just about always or most of the time. Now, only 25 percent do. Twenty years ago 26 percent they had a great deal or quite a lot of confidence in big business; now, only 16 percent do. And almost no one trusts Wall Street. The drop in trust toward all major institutions has been most precipitous since the start of 2008.

The underlying political debate in America is which of these is most responsible for the mess we’re in, and which can be most trusted to get us out of it – big business and Wall Street, or government.

It wouldn’t be hard for Democrats to make the case that big business and Wall Street blew it. The Street’s wild speculation took the economy off the cliff, caused the stock market to crash (and millions of 401(k)s along with it), and created a housing bubble whose burst has hurt millions more.

Big business has used the Great Recession as an opportunity to slash payrolls and cut wages and is now sitting on a $1.8 trillion mountain of cash it refuses to use to create new jobs. Instead, it’s using the cash to build more factories abroad, buy back its own shares of stock, invest in more labor-replacing technologies at home, and do mergers that will lead to even fewer jobs.

Meanwhile, a parade of “public-be-damned” actions have threatened small investors (Goldman Sachs’s double dealing), individuals trying to buy health insurance (WellPoint’s double-digit premium increases), worker safety (the Massey mine disaster), the environment (BP), and even our food (Jack DeCoster’s commercial egg operations).

And a gusher of corporate and Wall Street money has flooded Washington, exemplified by Big Pharma and the health-insurance lobby fighting heatlhcare reform, and Wall Street’s minions fighting off stricter financial reform.

If Obama and the Democrats would connect these dots they’d have a story that would make Americans’ hair stand on end. We’re in this mess because of big business and Wall Street. Government is needed to get us out of it.

It’s not that big business and Wall Street are evil. It’s that they’re out to make as much money as possible – which is what they’re set up to do. That’s why we need an activist government to stimulate the economy, create jobs, and protect the public from their excesses.

robert_reich.jpgSo why haven’t Obama and the Dems succeeded yet? Big business and Wall Street have used their money and political clout to stop government from doing as much as needs to be done.

The story is clear, and it has the virtue of being the truth. Why won’t Obama and the Democrats tell it? Is it because big business and Wall Street have the money and political clout even to prevent the story from being told?

Robert Reich

This article first appeared on Robert Reich’s Blog. Republished with permission

Comments

  1. Elaine says

    The truth be told not renewing all the Bush Tax Cuts is going to hurt the small businesses more then anyone else. Obama’s goal is to make us part of the Global One World Order and do away with our Constitution, Bill of Rights, our Democracy and this is not what America is about. We stand alone. The reason he is so well liked in Europe is because he is going to sign us up for this and they make us the country with the most so we are the ones to have to send these poor nations more money then any other country. Is this what you people want?

  2. marie says

    I like how R Reich makes a clear separation between government and the wealthy rich with their corporations. Indeed it is very important for the Democrat success in the mid-term elections to see clearly the separate functions of those two groups.
    Business is business, a heart-less robot to expand and make more money. And Government is their to keep control over its dead-greed, and also to discipline the super-rich into their limits.
    The only way out is to choose a more powerful Government that really presents the well-being from all its citizens, and to break the financial chain between corporations and our representatives. Since Republicans don’t want to brake that chain, we have to vote for those Democrats that are strong enough to withstand the temptation of those political bribes.
    So it is said that Obama is weak. Then we have to try our best to give him more strength, instead of letting some anti-democracy-president take his place.

    By the way, looking at it from this view-point, it is total irresponsible to grant business human rights, since business has no heart and will use any possibility only to serve itself, trampling over anything precious, like human lives and wellbeing and that of nature’s beauty and health.

  3. Fred Farkle says

    Which is more colossal – Robert Reich’s ignorance, or his arrogance? Reich knows far less than “the public” he so sneeringly refers to in this article. Has Robert Reich ever run a business? Met a payroll? Jumped through all the government hoops just to get a project built? Filed all the tax forms the government requires? NO, he has not! He’s an ignorant arrogant academic whose head is filled with grand failed theories, and whose hands are as soft and useless as a baby’s.

    I’ve got news for you, Mr Reich: Cutting taxes and spending, privatizing, and deregulating IS a policy. It’s the proven, correct policy. It’s the ONLY policy course that will turn our economy around. And it’s the only policy that accords with the U.S. constitution.

    You have drawn a fat government paycheck your whole life and you are completely clueless about what it takes to create wealth by building a successful business. And how destructive our government is with its insane vast thicket of rules, laws and regulations.

    In this age of technology, government should be focused like a laser on slashing red tape, paring down regulations to the essential minimums needed to ensure honesty and integrity, and then enforcing those regulations efficiently and consistently.

    Instead, the paperwork jungle grows ever more vast and impenetrable, and the parasitic bureaucracy sucks in ever more resources into its fat, lazy, ravenous maw.

    Mr. Reich, the business of America is business. Go read up on Calvin Coolidge.

    • R Zwarich says

      These comments from Fred Farkle serve as an excellent example that supports Mr. Reich’s thesis. Anyone who is fully awake and aware knows full well that “cutting taxes and spending, privatizing, and deregulating” are exactly the policies that have concentrated most of the nation’s wealth in the hands of an elite few. This wealthy elite, The Rich, have captured control of the nation’s government, and have used it to augment their power to function as greedy parasites that are sucking dry the Common Good of the nation’s citizens.

      This rapacious elite, The Rich, have brought our nation to its knees, but even in the midst of the suffering of so many, they are still raking in money in obscene amounts.

      As we can see in the audacious absurdity of Farkle’s comments, the unrestrained gall of this elite, (of those who did this to us), knows no bounds. Their “story”, (as Mr. Reich calls their rank, and always clever, propaganda), is successfully fooling tens of millions of very good people, precisely as it has been fashioned and intended to do.

      This rank propaganda is cleverly channeling people’s righteous anger against the only social agency, (government), that has the power to restrain the naked greed of the The Rich. The unrestrained greed of The Rich is the proper and righteous target of the people’s anger. This elite, which has captured control of the government, and used the power of government against the people, is now bamboozling people into railing against government itself, the only social agency that can possibly protect the Common Good of the nation’s citizens.

      The poor should complain about bad government, but The Rich do not want to be governed at ALL. Their overarching goal is to weaken government, until they can “drown it in the bathtub”, at which point their greed will know no restraint or regulation.

      Look how well their strategy has worked for them to this point. In only 30 years of their ascendancy, (since Reagan began deregulating), they have managed to garner most of the nation’s wealth. But as we can see, they are far from satisfied with their spectacular success. Not satisfied to have most of the wealth, they will not rest until they have it ALL.

      This is naked Class War, writ very large. People like the clever, (or else very stupid), Mr. Farkle should try to realize that as their success continues, at some point the common citizens are going to rise up and give them their just due.

      True Democracy is the only solution to our problem. We are going to suffer under the greed of The Rich until we take back democratic control of our government into the hands of the people. Bad government serves the elite. A truly democratic government protects the people from being ravaged by the greed of a few. A truly democratic government is the ONLY social agency that has the power to protect us.

      Zwarich

      • Fred Farkle says

        I love how you leftists look at everything through the prism of “class war”.

        But here’s the problem: our government is not protecting us, it is oppressing us. Our government is not setting clear workable rules so that the rich have to play fair, it setting dense impenetrable thickets of rules that help the rich cheat and take advantage of the system.

        And our government is not standing back after setting clear rules and letting us all get on with life by playing fair, it is stupidly and ham-handedly wading into the middle and damming up the stream. Do you think these 2000-page “bills” on healthcare and banking are examples of clarity and efficiency, and models of honest fairness? No, they are not. They are Christmas trees for the governments favored interests.

        “Reagan began deregulating”. What horsepuckey. Do you have even the slightest idea of the endless regulations imposed on every area of business and private life by our governments these days? Do you have the tiniest clue about the insane size and scope and spending of governments at every level, and just how pitifully atrocious they are at flushing our hard-earned dollars down the toilet? And they are making it worse every day.

        Do you honestly believe that we have *less* laws and regulations on the books than we did in 1979? If so, your ignorance is showing. Government is the biggest special-interest group in the country now.

        Here’s the bottom line pal – We don’t want to be oppressed by “the rich”, *or* by the vast leviathan of government. Yet what we have now is double oppression, both economic and political. I have no desire to choose one over the other.

        Your idea that a just government can corral the cheaters is great – I’m all for it. But our government is deeply corrupt – and the bigger it gets, the deeper the corruption.

        Your pill is poison, sir.

        And Marle – I agree that the goal of business is to create wealth – or “”make money” as you say. We should never expect more, and should set rules accordingly. But our government already has all the vast power it needs to make fair and honest rules for business. The Democrats and Republicans in power are the same; they are both corrupt and are working against the people. The “financial chains between corporations and our representatives” cross party lines, and they protect each other – against us.

        We DO NOT NEED a more powerful government – we need an HONEST government, under the control of the Constitution and the people. A small honest government, that sets clear concise, enforceable rules to ensure honesty and integrity from all, and then steps back out of the way, and lets all the energies of a free people create wealth, health, beauty, and permanence.

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