Robert Reich Strikes Again

God, I cannot explain how much I love Robert Reich, commentator for Marketplace and former Clinton cabinet member. His commentary this week about how the downward spiral of the economy is caused not just by the lack of jobs and high energy costs, but by stale and stagnant wages is brilliant. So, yet again, I'll post it here and bask in it's glory.

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Robert Reich: The economy is failing, but it's now clear the Fed won't revive it. It figures if it cuts interest rates, global investors will move their money out of dollars, causing the dollar to drop further, meaning more inflation as the price of everything we buy from the rest of the world, including much of our oil, rises even faster.

Yet American consumers cannot stimulate the economy on their own because they don't have any money left. And exports can't make up the difference. So how to get back on track?

Blue Dog Democrats, Calvin Coolidge Republicans and Ross Perot Independents all must understand the critical importance of a fiscal stimulus right now. And it has to be on the right scale. Distributing those little stimulus checks last month was like dispensing aspirin for pneumonia: momentary relief for a whole system desperately sick.

The fastest and strongest stimulus would be a one-year exemption of the first $15,000 of income from payroll taxes, starting as soon as the bill is signed. Congress still has time to pass this before the session ends.

This should be followed soon after the next President is sworn in by major infrastructure spending based on a newly-formed capital budget. Expand public transportation, fix hundred-year-old sewer and water systems, rebuild levees, invest in green technologies. All this will get the economy moving and bring it into the 21st century.

But to keep the economy moving, the middle class will need to get back some of the buying power it's lost over the years as almost all of the benefits of growth have gone to the very wealthy. The surest way is through a middle-class tax cut financed by a tax increase on those at the top.

In other words, now that the Fed's hands are tied, we need a bold fiscal policy, a stimulus large enough to get the economy moving again and a progressive tax system large enough to keep it moving. The question is how low the economy will have to sink before there's political will to do this.

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A-to-tha-men.

I Think I'm in Love

Today, Sen. Barack Obama reaffirmed why I love him so very very much. He basically laid out a totally revamped way of doing taxes that aims at closing the class gap and the loopholes for corporations. I know dat's right.

Sen. Barack Obama on Tuesday proposed overhauling the tax code to lower taxes for the poor and middle class, increase them for the rich and make it so most Americans can file their taxes in five minutes.

The tax relief plan he envisions for the middle class alone would mean $80 billion or more in tax cuts, he said.

Obama, an Illinois Democrat who is a front-runner for his party's 2008 presidential nomination, said during a speech at the Tax Policy Center that the present tax code reflects the wrong priorities because it rewards wealth instead of work.

Hellz to the yes. The tax system does reward wealth instead of work...damn skippy.

Obama proposes funding the tax cuts by closing corporate loopholes, cracking down on international tax havens and increasing the dividend-and-capital-gains tax for the wealthy, he said.

He called his proposal a "fair" alternative to the present tax code and said it was necessary because hard times on Main Street translate to hard times on Wall Street.

"When the changes in our economy are leaving too many people behind, the competitiveness of our country risks falling behind," he said. "When that dream of opportunity is denied to too many Americans, then ultimately that pain has a way of trickling up."

The use of the term "trickling up" brought a slight tear to my eye.

I can't wait until this guy is president.