Barack Obama has outlined his plan to create 2.5m jobs in his first two years in office with an ambitious spending programme on roads, schools and and renewable energy.
In his weekly internet address the United States president-elect warned that the US was “facing an economic crisis of historic proportions”.
But he suggested he was keen to launch a major two-year spending programme, to “jumpstart job-creation in America and lay the foundation for a strong and growing economy”. He pledged the programme would create 2.5 million jobs by January 2011.
That goal has led to speculation that Obama will try to launch a spending package larger than the $175bn (£118bn) plan he outlined in his election campaign.
Very interesting. I wonder what sort of effect new Treasury Secretary Timothy Geithner will have in calming the markets which were a) responsible for this mess and b) are continuing to go wild. The second question of course is whether the initial signs of greater calm are actually what’s really desirable here:
Geithner was also closely involved in the design and execution of the Bush administration’s $700bn banking bailout, which has proven less than popular with Congress and could become an issue during his confirmation hearing.
Apparently it was a toss-up between Geithner and former Treasury Secretary Larry Summers, Summers now rumoured to be the behind-the-scenes brains of the new Treasury team. But Naomi Klein is alarmed by the prospect of the latter (and by implication the former?):
Larry Summers, who held the post under Clinton, is the man “the Street would like most”. Let’s be clear why. “The Street” would cheer a Summers appointment for the same reason the rest of us should fear it: because traders will assume that this champion of deregulation will offer a transition from Henry Paulson so smooth that we will barely know it happened.
One thing we know for certain is that the market will react violently to anyone likely to impose serious regulation, invest in people, and cut off the free money. In short, the markets can be relied on to vote in precisely the opposite way that Americans have just voted. (A recent poll found 60% strongly favour “stricter regulations on financial institutions”, while just 21% support aid to financial companies.)
There is no way to reconcile the public’s vote for change with the market’s foot-stomping for more of the same. Any moves to change course will be met with market shocks.
Reading between the lines, unless another factor is added to this mix, I’m not sure then what change Obama will truly then be able to enact, other than the most superficial. Good news that he’s promising a move towards energy independence (as per the Phoenix Initiative report), good too that he’s promising massive investment in long-neglected infrastructure. Bill Clinton was right when he labelled the American economy as post-industrial, identifying a huge, untapped market in alternative energy and energy conservation technologies (which if invested in would achieve multiple Phoenix Initiative objectives). But I don’t see any of these policies, and particularly not the Geithner appointment, tackling the structural, regulatory, managerial and behavioural problems in the markets which caused this mess in the first place. Neoliberalism is broken – putting it back together again will only get us back in the same mess, and probably sooner rather than later.