Weekly Audit: Welfare, Work and the Bailout Bonanza

by Zach Carter, Media Consortium MediaWire Blogger

The U.S. economy lost nearly 600,000 jobs in January, bringing total losses in the past three months over 1.5 million—more than the entire population of Philadelphia. If there ever was a good time to mend the tattered U.S. social safety net, it's now. While unemployment benefits and food stamps remain relatively uncontroversial, basic welfare continues to be neglected by the general media and vilified by the right. And as of this moment, a responsible welfare program is needed more than at any point since the 1930s.

Seth Wessler has a great blog on RaceWire about retooling welfare so that it actually provides relief to people in need. The welfare reform Congress passed in 1996 tied benefits to employment, thereby excluding those who most need help, especially in an economy like this. The law's popularity was fueled by false stereotypes about the disadvantaged.

"The punitive rules established after twenty years of racially coded frenzy to 'end welfare as we know it' have left Americans with no safety net during this deepening economic crisis," Wessler writes, arguing that it is high time for this hateful chapter of American history to be over.

Pointless haggling over the economic stimulus legislation also needs to stop now. In a post for The Nation, John Nichols details the damage Senate Republicans have inflicted on the economic recovery package, and by extension, the economy itself. If the current Senate bill becomes law, Nichols notes, states will get less money to keep public employees on the payrolls, education programs will receive less funding, efforts to create jobs will be less effective and public health initiatives will be stymied. Even conservative French President Nicolas Sarkozy thinks that the changes the Senate has made to the bill are a bad idea.

And what do we get for sacrificing all of these public investments? Tax cuts. As Robert Oak notes in the Economic Populist: "We need income, people!" The government can try to create incentives for people to buy cars and houses and stocks, but without a job, a lower price tag means nothing. If tax cuts are to make any impact, they have to be accompanied by major job creation. And job creation programs mean government spending.

Has everybody forgotten that Democrats just won back-to-back elections? Trickle-down economic policies were rejected by voters across the nation last November. Republicans lost seats in Idaho and Virginia, of all places! When a party suffers such complete losses, it means that voters don't put much stock in its ideological toolkit—and they probably don't want the winning party to do so either.

"There's been a sort of embarrassment at the prospect of aggressively using the Democratic mandate, and there shouldn't be," Ezra Klein writes for The American Prospect.

Of course, the U.S. government plans to do more than provide more tax cuts for rich people. It's also going to bail out the shareholders and executives of huge multinational corporations that wounded the economy in the first place, creating a new welfare program for the wealthy. We will need some kind of financial sector to support economic recovery, and freshly sworn-in Treasury Secretary Timothy Geithner could take one of two reasonable routes to economic salvation: The Treasury could nationalize the major "too-big-to-fail" banks outright, or simply let them die and have the Federal Reserve fill the credit-shaped hole in the economy. Unfortunately, the Obama team appears ready to pump money into the banks and shield shareholders from losses that stem from some of the worst management decisions in business history.

If Geithner and Co. orchestrate another bank bailout, however, we lose an opportunity to rebuild the U.S. economy that actually addresses the needs of individuals in an environmentally sustainable way. As David Korten argues in Yes! Magazine, the Wall Street-driven economy has created huge sums of money, but done almost nothing to meet any serious social challenge. To build a better economy, we need to transcend Wall Street. "Trying to solve the crisis with the same tools that caused it is the definition of insanity," Korten writes.

Beyond Wall Street, the Obama administration has inherited a decimated manufacturing sector. It's currently propped up by a deeply flawed loan the Treasury Department extended to General Motors and Chrysler in December. Below is a segment from a four-part series on the auto bailout from The Real News. In it, Host Paul Jay notes that unions are being asked to take pay cuts as part of the effort to retool the Detroit car makers, even as decades of dreadful management decisions and poor environmental policy are being shut out of the public discussion.

It's important to note that autoworkers' union could be helping cement the false perception that workers are responsible for Detroit's problems by agreeing to accept pay cuts as part of the bailout plan. Acquiescing to the demands of incompetent executives and opportunistic lawmakers also sets a terrible precedent for other stand-offs between CEOs and their employees. The millionaire managers who created the mess should be held accountable for the clean-up, not the factory workers who had the audacity to ask for health insurance.

Something is terribly amiss when the most neglected members of society can't ask for help paying the bills, while even those protected by union contracts can't expect to have their health care costs covered. The U.S. economy will be losing at least half a million jobs for the foreseeable future. We cannot abide by a system that punishes those who are already being hit hardest by the economic downturn.

 

This post features links to the best independent, progressive reporting about the economy. Visit StimulusPlan.NewsLadder.net and Economy.NewsLadder.net for complete lists of articles on the economy, or follow us on Twitter.

This is a project of The Media Consortium, a network of 50 leading independent media outlets, and was created by NewsLadder.

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Comments

probably true

But of all topics that has a snowballs chance in hell right now in Congress, it's probably this.

They sure as hell do need to up all of the funds for all of the social safety nets and I think they should fix social services generally.

For example, unless someone has children, they cannot get shelter at all.

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