Prosperity, Not Austerity

[Valin]

In These Times:

Obama needs to resist deficit-oriented, anti-worker austerity policies.

David Moberg

11/23/12

 

After playing a key role in President Obama’s re-election, the labor movement must pivot immediately to a new task: moving the president away from a potentially disastrous policy of “austerity economics” and toward a second-term adoption of more worker-friendly “prosperity economics.” In the weeks after the election, Obama will negotiate with the hard-right House Republicans about the looming threat of automatic across-the-board cuts.

 

Labor leaders see Obama’s strategy on these negotiations as a key test of his second-term priorities. They fear that if he accepts cuts to important programs such as Social Security, Medicare and Medicaid, his presidency will turn into a political and economic catastrophe for working people. “Even people who voted for Mitt Romney” don’t want cuts to those key social insurance programs, says AFL-CIO President Richard Trumka. Instead, labor wants Obama to adopt a plan for “prosperity economics” along the lines proposed by Yale political scientists Jacob Hacker and Nate Loewentheil earlier this year. Beyond debunking austerity as a deeply flawed strategy, Hacker and Loewentheil argue for a government investment in such areas as research, infrastructure, education, improved economic and environmental security for working families, constraints on corporate political power, and more widespread unionization. Together these measures will provide stronger, more equitably shared economic growth that ultimately resolves budget deficits.

 

If Obama adopts a deficit-obsessed austerity approach to the long-range budget, there will be little money available for creating jobs—what workers most need from the next Congress. And if Obama breaks his promise to protect social insurance programs and accepts a “grand bargain” with Republicans that prolongs the past “lost decade” for workers, the political and economic repercussions could be far-reaching. “Our members would simply walk away from the Democratic Party, and Paul Ryan would be president in 2016,” one labor official says.

 

(Snip)

 

 

 

Bet you didn't know it is 1932?