One BIG Reason Pres. Obama's Approach may be TOO LITTLE TOO LATE for the MI Economy

Michigan Indefinitely Delays Over 200 Road & Bridge Projects

Lansing Associated Press writer KATHY BARKS HOFFMAN today posted a report, which NPR picked up, that underlines the reasons we may still be on the path to a second great depression.

And unless President Obama and Congress develop a quick and aggressive response to this economic reality in Michigan and many other states, he will be following the path of Herbert Hoover rather than F.D. Roosevelt.

According to Hoffman's report:

Michigan transportation officials have voted to delay more than 200 road and bridge projects previously planned for the next five years because the state is running low on money.

And, according to Hoffman, "Michigan could go from spending roughly $1.4 billion on roads this year with the help of federal stimulus money to less than $600 million three out of the next four years."

And this is just the tip of the iceberg of the additional economic decline and job loss in store for many states like Michigan in the coming years, unless something is done immediately to prevent states from heading down this path toward delaying and canceling major infrastructure projects, which must be the base of any economic recovery.

Unless President Obama and Congress support a major new economic stimulus package directed at helping the States to avoid massive additional job loss across Michigan and many other states as the result of cancellation of infrastructure projects like these in Michigan, the success Obama had in slowing job losses in 2009 (although we're still losing jobs each month) will quickly reverse, and we'll be sliding backwards again. And this time the Democrats won't simply be able to blame the Republicans, since when this downward spiral begins, it will be as much a result of insufficient and weak Democratic policy response, as due to Republican obstructionism.

The fact that even last night in his State of the Union speech President Obama continued to appeal to a hope that the Republican party would come around to support a "common sense" bipartisan strategy to help the country rise out of its crisis, would seem to indicate that he and his advisors have barely begun to reckon with the banality of evil that has been driving the Republican strategy for more than eight years now.

And if Obama and his advisors think they can confront and reverse this nihilistic and destructive Republican political force by appeals to common sense, they have apparently not even begun to think seriously about the lessons the struggles of the civil rights movement and the work of Dr. Martin Luther King have to teach us.

President Obama said in his speech that he was not naive. Unfortunately, based on the lack of a clear strategy and focus for supporting a strong economic/jobs recovery in his speech, I'm not convinced he is right about himself or his administration.

Based on the speech last night, the Obama administration continues to pursue an extremely naive political strategy, which sacrifices the power of popular progressive mobilization that could carry it forward, to a weak political strategy that keeps him hostage to the Republicans.

The continuing insistence on appealing to a Republican Party that has shown it is primarily invested in the destruction of the Obama Presidency at all costs, and that it has little concern for common sense or the good of the country, is bizarre and tragic from a President who should know better. After all, if the Republican Party had any concern for the country's welfare and the welfare of people, it would never have landed us in this economic mess in the first place!

The great slide into the first great Depression of the 1930s occurred largely because under President Hoover the Federal Government failed to help states avoid exactly the kinds of severe cut-backs states are now facing, and instead tried to focus on traditional business incentives to stimulate the economy.

Unless President Obama's administration and Congress wake up to the hard lessons of the previous great depression, and quickly, we will find ourselves repeating the mistakes of the past, and of President Hoover, who like Obama was a good man with good intentions who wanted to help his country, and even had a great resume of past experience for doing so.

But when it comes to the hard reality of capitalist economic cycles, good intentions that are not backed up with necessary and informed policy action, are utterly meaningless. And if we end up in another great depression, history will not remember Obama's good intentions. It will record and remember his failure to listen to the lessons of history, and to act on the advice of historically-informed economists like Paul Krugman, who should be put in charge of running Obama's economic team (though I suspect he may not want such a thankless job)....

See Krugman's recent blog post on the stupidity of the approach suggested by Obama's speech last night, which according to Krugman (and I agree) completely failed to change the narrative that has put the Republicans in charge of the rhetorical battle over both policy and politics in 2010.

I love Krugman because he pulls no punches, while his critiques also go to the core of what is wrong with the entire framework of both the Republican and Democratic approaches to policy in this crisis.

And unless politicians in charge of policy strategy begin to listen to Krugman and other economists like him, the consequences of all the premature 2009 talk of having avoided another great depression, which merely continues the delusional detachment from reality of the Bush era, will soon be coming home to roost.

The illusion-creating stock market "recovery" will be forced to meet the reality of continuing job loss, as our whole economy turns around for its "second dip." And this time, since we're starting at 10% unemployment (which hides a much larger unemployment rate that is structural and not even being counted--in cities like Detroit, for example, the real unemployment rate is around 30%, even higher than national rate in depths of the 1930s depression), we'll be entering depression era territory pretty quickly--thanks to the feckless policies of both political parties.

*****
Update: From the Detroit News--

Metro Detroit projects placed on hold include reconstruction of I-96 from Middle Belt to Telegraph and Newburgh to Middle Belt; reconstruction of Fort from Sibley to Goddard; widening of Telegraph from Vreeland to West Road; and resurfacing of major portions of I-94 in Macomb County. It would also mean not replacing 27 bridges.

Detroit's Katrina: Where is the National Response to Assist Detroit's Residents in Rebuilding Their City?

From "Community-Based Preparedness" (Oct. 14, 2009)

On October 7, an estimated 30-50,000 Detroit residents descended on Cobo Hall in downtown Detroit--not to escape the ravages of a hurricane, but with the simple hope of being able to escape the increasing ravages of homelessness and hunger that are threatening many of Detroit's residents.

This human surge was a response to news that 3500 federal grants were available to assist city residents needing temporary housing assistance to avoid homelessness. This is how badly the residents of Detroit are hurting. But they've been hurting for a long time--so long, in fact, that the nation seems to yawn whenever they hear another story like this one, which hit the headlines only days after TIME magazine's lead cover story on "The Tragedy of Detroit."

Detroit has been drawing a lot of media attention over the last year, and has now even "earned" for itself the "honor" of a Detroit office for TIME magazine with a front page cover titled "The Tragedy of Detroit" that launched its one-year "Assignment Detroit" project. This project will feature Detroit-area stories over the next year.

But while the "tragedy" of Detroit has been receiving news coverage, along with a lot of freelance photographic coverage of its decaying urban architecture, the slow-moving tsunami that has devastated Detroit's human population over the last decade has received no national or federal response similar to the kind New Orleans received after the Katrina disaster.

While Katrina devastated New Orleans in a single week in August 2005, Detroit has been in crisis for decades, the victim of repeated waves of slow-moving economic "hurricanes" that have left Detroit's physical and human infrastructure severely damaged. And of course this damage has only been magnified over the last year by the triple hurricane of the national economic recession, the crisis of the auto industry, and a series of local governmental scandals that have virtually paralyzed Detroit government for more than a year.

Detroit's citizens have been needing an effective and responsive government, and we can now hope that the long series of elections of Mayor and City Council in 2009 will yield the kind of government in 2010 that will work with, rather than against, the community and its energy and capacity to bring about change in Detroit. While more efficiency in government spending is clearly necessary, this efficiency cannot be achieved by cutting the basic services needed by Detroit's residents, such as public transportation, which are already at bare-bones levels.

Meanwhile, the nation seems to react to every story of about the Detroit "tragedy" with a collective yawn.

Hurricane Katrina struck New Orleans suddenly, and its devastating impact--largely the result of human neglect and failed response--was highlighted every night on the national news for weeks at a time. President Bush's miserably failed leadership in response to this crisis helped to raise New Orleans to the center of national consciousness, and it became a symbol of the racialized impacts of bad policy, neglect, and the poor planning that made the nation take the Katrina disaster in New Orleans to its heart, and respond in kind. For a moment, at least, the nation even seemed to admit that in spite of its desire to be colorblind, racial inequities and racism were still major determining factors in American life.

Detroit is a twin sister to New Orleans, not only in its French heritage, but in its suffering as a result of the racialized impacts of bad policy, neglect, and poor planning over many decades. Yet Detroit is the twin sister whose major needs have been all but ignored by the nation--even though the needs of its citizens, and of the city as a whole, are just as great, and perhaps even greater now, than those of New Orleans.

The twinned collapse of the national economy and the local auto economy have left Detroit with a depression-level 30% unemployment rate, and a rate of housing abandonment that probably surpasses that of any other city in the nation. Without having suffered the destruction of the wall of water that devastated the lower ninth ward in NOLA, significant parts of Detroit closely resemble NOLA's most devastated ward.

But where is the national surge of response to help Detroit's residents, its nonprofit organizations, and its local government to recover from this disaster?

We need a national recovery program that will fund the many nonprofit organizations and residents in Detroit to put the city back to work rebuilding itself. As someone who has gotten to know many of the amazing people and organizations in Detroit who have been doing great work under the most trying circumstances for many years with very limited resources, I've seen the great things that are possible for Detroit--if only the nation will move beyond simply telling the story of Detroit's tragedy, and will instead move to funding Detroit's recovery.

Detroiters are ready to rebuild their beloved city. They have the passion, the energy, the commitment, and the vision for rebuilding. All they need is some help with the financial resources, which have been drained from the city for several decades.

The nation and much of the rest of the state of Michigan has stood idly by for decades and watched the city decline. Some, but not all, of Detroit's problems have been self-inflicted. The state of Michigan is now in almost as desperate an economic condition as Detroit, so has not been able to extend much help to Detroit in the current crisis. And so Detroit's recovery requires and demands a national response.

Its time for the nation to stop yawning, and to start doing what is necessary to lift up the city that was once the arsenal of its democracy. Its citizens can make the city great again, with a bit of help from their fellow citizens across the nation, and from our shared federal government.

So let this be an appeal for shared labor and collective national investment in the future of Detroit and its residents. For the fate of Detroit over the next several years will signal, in many ways, the fate of our entire nation.