These are the personal views of Peter Morici, a professor at the University of Maryland’s Robert H. Smith School of Business and former chief economist at the U.S. International Trade Commission:
Scott Brown’s Massachusetts victory serves notice that Americans don’t want big government policies championed by liberal Democrats.
It is not a mandate for Republican tax cuts and deregulation. Rather, from health care to the economy, Democrats should stop accusing critics of deceiving the public and ask what voters would embrace.
To cover the uninsured, Americans would support reforms that made Medicaid and similar programs less expensive and lowered health insurance premiums for the middle class.
Real reform would reduce drug and administrative costs to those in other advanced countries, like Germany or Holland, and end waste imposed by malpractice suits those countries don’t endure.
Reform should not impose higher taxes but rather lower costs–the president should apply that yardstick, not budget neutrality.
Regarding unemployment, the $789 billion stimulus package will not deliver the 4 million jobs promised. Fanciful dreams of creating million jobs in green industries are just that–fanciful dreams.
American investments in alternative energy technologies may be essential to global economic leadership in the future, but in the here and now, green industries can provide less than one-tenth of the jobs needed to pull unemployment down to acceptable levels.
President Barack Obama must tackle the trade deficit. For many years to come, Americans will use oil and buy manufactured products like cars and computers. Unless Americans export more, or import fewer, of those products, consumer demand will not create enough jobs for Americans.
Alternative energy is important but Americans will use fossil fuels for a long time. The U.S. has abundant, untapped offshore oil and on-shore natural gas. Developing those would generate taxes to reduce the budget deficit and create jobs in drilling, refining and supporting industries.
Invest in green technologies, but the medium-term choice is between importing oil and borrowing from China to pay for it, or becoming more self reliant.
China undervalues its currency to subsidize its products on U.S. store shelves, and keeps out U.S. exports. It’s time to challenge Chinese protectionism. Either China revalues the yuan enough to rebalance trade, or the U.S. should tax the conversion of dollars into yuan to offset Chinese subsidies.
Banks are not lending to homebuyers and businesses. Wall Street is again recklessly trading derivatives and questionable securities, and paying huge bonuses. This is accomplished with $1.5 trillion in near-zero interest loans from the Federal Reserve–a sum twice the Troubled Asset Relief Program.
Separate real banks, which take deposits and make loans, from the gambling houses at Goldman Sachs and other financial firms.
Regulate the banks and their pay.
Let the casinos pay traders as they like but don’t let those have Federal Reserve credit or create money market accounts. Require the casinos to back derivatives with funds adequate to pay potential losses, and don’t let banks own securities.
If President Obama embraced this agenda, the drug and insurance executives, tort lawyers, and bankers would make Washington lobbyists the richest people on the planet.
But it’s high time President Obama championed the interests of the ordinary folks he was elected to serve.
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