This post originally appeared on the New Deal 2.0 Blog as part of the Roosevelt Institute's "New Agenda for America."
Today, we have the highest level of income inequality in our nation's recorded history. We must address the structural flaws in our economy that created, and continue to widen, this divide. History teaches that extreme inequality leads to political instability. We cannot assume that we are immune.
In President Obama's words, the middle class is experiencing "the American Dream in reverse." Rising long-term joblessness and the possibility of 13 million foreclosures (more than one in every four American mortgages) create the potential for the former middle class to move from frustration to anger -- an anger sparked by reduced circumstances and the belief that they have been treated unfairly.
With each job loss or foreclosure, another family -- now on a down-ward spiral -- potentially loses its faith in our basic economic system and our basic system of governance. America's ongoing vitality requires that people trust that these systems work, and that our democracy is self-correcting. With rising income inequality, this trust is now at risk.
America has never been a nation of haves and have nots. If the gulf widens, it's hard to imagine that our future will be marked either by a healthy economy or a healthy democracy.
The only other time in our nation's recorded history that income inequality approached current levels was 1928, just before the Great Crash. The New Deal eliminated the excesses of an unsustainable system. It was not easy then, and it will not be easy now. But, it is essential.
Comments
what are the policy proposals?
For example, the obvious one is to do a WPA focused on infrastructure that is in desperate need. Most of the Stimulus went to just repaving and widing roads, not the bridges, dams, waterworks and so on that are in dire need.
How about a National Infrastructure Bank
I questions whether the private sector will be able to generate enough jobs just to keep up with inflation for years to come. And forget about it (ever) if we don't change our global engagements.
A national infrastructure banks would serve two purposes 1) using capital markets to maximize gov't capital dollars and 2) a potentially more efficient allocation of resources.
RebelCapitalist.com - Financial Information for the Rest of Us.
RebelCapitalist.com - Financial Information for the Rest of Us.
kind of similar to a post I wrote a while ago
With the idea of creation of a federal venture capital fund. But the stipulations would have to be U.S. citizen/perm hires only, no outsourcing and to start new U.S. businesses.
I think for infrastructure they need a WPA. As far as I know (and a detailed post on the structure of the WPA, what worked, what didn't would be damn interesting) ....
but as far as I know the WPA did direct hires, managed the projects. None of this no-bid contracts to companies who are busy offshore outsourcing jobs, using illegal labor and also who had huge overhead in costs and run way over on projects.
We could use some details on this. I've dug around some into the SBA (which to me is a maze of confusion and "no" on even trying to figure out that system) as well as easier methods to bid on Fed/State contracts for small business.
But I don't see any reason government itself cannot manage and also hire directly people to work on infrastructure.
Maybe an infrastructure Czar (sic, not)....I'm not sure but they just managed to kill the F-22, which is a great example on how through contracts and other political insanity one can spend billions of U.S. taxpayer money and basically get nothing done and nothing in return.
The New Agenda for America
About two years I drafted a 10-plank program to save America. At the time I was unaware of FDR's program of the same name. But we both have the same goal: preserving the American Middle Class:
http://www.youtube.com/watch?v=bdEtFEzyShM