The dust has far from settled on the Washington stalemate over setting a new debt limit. As Thomas Sowell pointed out so logically, were an increase in the debt ceiling only “routine,” held up by pesky congressional tea partyers as the spenders have charged, then what would be the purpose of having a ceiling at all? But while an indecorous debate encapsulated the larger ideological divide, America moves on, remorselessly, to threatening politico-economic issues cascading in from Europe and Asia as well as closer to home.
Ironically, the world crisis has proved one thing: a continuing, overwhelming faith in America’s importance, whether economically or culturally. Proof is “the flight to quality” by investors worldwide into the American republic’s indebtedness, as can be seen by the all-time record low interest rates offered in U.S. Treasury bond auctions. British Prime Minister David Cameron’s turn to American police in the face of chaotic urban rioting (overcoming the usual our “British/Greek” to your “American/Roman” prejudices) is another indicator. But disquieting news from Libya, facing an indecisive civil war, and the tragic events in Afghanistan, where withdrawal leaves a highly vulnerable Pakistan, indicate just how wanting is the Obama administration’s policy of “leading from behind.”
U.S. economic amelioration and patching up its world role will require extraordinary statesmanship. As many observers, Harry S. Truman for one, have judged, the Constitution and history have made the presidency a strong executive, and it sometimes matters less what the president decides than that he act. Truman’s pithy “The buck stops here” remains a call for presidential courage on President Obama.
Here’s the kind of action that might result were that summons answered:
• Send Michelle and the kids off to Martha’s Vineyard while making a seminal Oval Office Labor Day speech on economic affairs. The spin might be: While holding to fundamental beliefs for a new era of economic justice, pragmatism demands that that agenda be put on hold to meet the deepening emergency by a program of cooperation with business to produce jobs immediately.
• Ask Congress to skip its vacation and reconvene in special session, if need be three days a week, to consider economic-political measures necessitating legislative action, or simply to serve as a forum to vent the public’s criticism.
• Call for a summit with our allies in Europe and Japan on the world economy — including the simultaneous attendance of all central bankers — to discuss coordinating economic strategy and tactics.
• Begin weekly meetings in closed session with a group of recognized private-sector leaders to brainstorm recovery strategy and tactics.
• Call for an immediate minimum two-year extension of the George W. Bush-era tax cuts, ask Congress immediately to cut capital gains taxes to zero, and begin the examination of longer-term tax alternatives, including a flat tax.
• Propose a tax reform commission modeled after the Defense Base Closure and Realignment Commission to suggest immediate incremental incentives for small businesses — the fountainheads of jobs.
• Lift all administrative restrictions on the discovery and production of fossil fuels, especially in the Gulf and off the coasts of Alaska and Virginia, creating perhaps a quarter-million jobs immediately.
• Use the extensive administrative powers written into Obamacare to suspend any implementation for at least five years and suggest a review of the law by a body of medical, insurance and regulatory technocrats to be presented to Congress before November 2012.
• Ask Congress for a one-time tax remission for multinationals to encourage the repatriation of an estimated $2.5 trillion in profits held overseas, on the condition that 25 percent of the money be invested immediately in an infrastructure fund (highways, bridges, airports, rail reconstruction, etc.), a private-sector Reconstruction Finance Corp. administered by those companies in collaboration with local governments.
And then sit back and watch the American economy take off.View Entire Story
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