Bloomberg does the economy
Posted: Wednesday, January 23, 2008 4:31 PM by Mark Murray
From NBC's Chuck Todd
Potential indie presidential candidate Michael Bloomberg heads to DC later today to give a speech on the economy. His office released prepared text of his remarks. As you'll read, Bloomberg doesn't mince words when it comes to Washington and Congress' attempts to stimulate the economy.
"From where I sit, having spent 35 years in the private sector, the debate in Washington is missing the point.
“Tax rebates, more generous unemployment benefits, home heating oil credits- these measures could modestly benefit Americans, and there is some value in that. Cutting taxes and increasing spending to stimulate demand is the standard Keynesian response. But there’s just one problem -- it’s not going to make much of a difference, because we’ve already been running huge deficits.
“John F. Kennedy told us, ‘The time to repair the roof is when the sun is shining.’ That’s what many of us in this room did. We used the good times to save for the future and pay down debt. And when the storm clouds started gathering last year, we tightened our belts. In New York, we put $2.5 billion into a trust fund, beginning in 2006. Last year, we began cutting agency spending by 2.5 percent and we instituted a hiring freeze. But in Washington, they did exactly the opposite.
“They spent most of this decade running up bills with reckless abandon and when the economy started heading for the ditch, the special interest give-always got even bigger. They ate the seed corn without worrying about the next year’s harvest. Well, the next year is here, and the seed corn is gone. All we’ve got is a barn full of I.O.U.s."
Clearly, Bloomberg is making the competency case when it comes to the economy. What's interesting is that this pitch from Bloomberg actually sounds similar to the rhetoric Romney's using on the trail lately. Washington is broken, we need new people to fix it.
As for a solution on the economy, Bloomberg takes a page from FDR. But he also counsels against giving folks a tax rebate. Instead, he thinks the cities ought to do the following:
"In some cases that will mean financial counseling. In others, it will mean ensuring that lenders make good on their promises to modify loans and make them affordable. And in some cases, it may also mean offering families trapped in bad mortgages a subsidized loan before their interest rates shoot up. This approach would provide immediate relief that would help stabilize both the national economy and strengthen local neighborhoods.
“Second, I believe - and I know a lot of mayors agree - that the best way to pump money into the economy in the short-term and get something out of it in the long-term is to finance immediate infrastructure projects that cities and states can’t afford. I’m sure all of us have a list a mile long - bridges and roads and mass transit systems that need repair. Why not put people to work on these projects right now? Remember, the public works of the New Deal didn’t just create jobs. They built a foundation that allowed America to experience unprecedented growth in the 1940s, 50s, and 60s."
Another jobs proposal is on the manufacturing front: "Demand is growing in every industry for materials that make products better, lighter, faster, cheaper and greener. That’s especially true of green energy, biotechnology, life sciences, computer technology. These industries are going to create millions of jobs. But whether those jobs are American or foreign will depend largely on the economic climate we create."
Finally, Bloomberg pushes one thing from the right, the elimination of the so-called "marriage penalty."
“Expanding the earned-income tax credit and eliminating its marriage penalty would be a more effective way of getting money into people’s hands than a rebate - and, unlike extending unemployment insurance, it would incentivize work. To help Americans stretch their dollar further, we should also use the downturn to begin getting serious about finding ways to control health-care costs, and reforming policies that add hundreds of dollars to every family’s grocery bill. But the single-most important thing we can do to raise real income in the years ahead is to invest more - and more wisely - in education and job training."
All in all, Bloomberg's prescription for the economy appears to ideologically come more from the left than the right, but the tone of Bloomberg's speech is definitely one that is attempting to find the middle ground -- to come at this problem from an independent point of view. Clearly, this speech is designed to get Bloomberg's economic ideas into the national debate.
