Julian Zelizer: Stakes are huge for Obama and nation
[Julian E. Zelizer is a professor of history and public affairs at Princeton University's Woodrow Wilson School. He is completing a book on the history of national security politics since World War II, to be published by Basic Books. Zelizer writes widely on current events.]
... For several decades, starting in the 1930s with the New Deal, liberals argued the federal government should be the first responder in times of economic crisis. They made a series of arguments to support their claim.
Only the federal government could marshal the kinds of funds that were necessary to strengthen the nation's economic infrastructure (ranging from bringing electricity to rural America to building our highway program).
Only the federal government could limit the severity of the financial risk that Americans confronted when our economy went bad. And, most importantly, only the federal government could spend the amount of money that was needed to sustain economic growth when Americans had empty pocketbooks.
Starting with Ronald Reagan's historic supply-side tax cut in 1981 and lasting through President George W. Bush's second tax cut in 2003, conservatives countered those liberal arguments.
While conservatives accepted the need for big government in practice (despite their rhetoric) when it came to economic recovery, Republicans argued that tax cuts and deregulation were the answer.
The right said that the best thing that government could do to is to lower the tax burden of business as well as upper middle class and wealthy Americans so that they would invest their money and take risks that were needed to grow the economy.
Conservatives said that government spending did not strengthen the infrastructure of the economy but only produced "boondoggle" projects.
Every program, they said, was another "Big Dig," referring to the overpriced and disastrous tunnel-building project in Massachusetts.
Conservative economists argued that the "stagflation" in the 1970s -- the combination of stagnation and inflation -- undermined the promise of liberal economists following the advice of economist John Maynard Keynes, who advocated government spending to energize the economy.
"Government is not the solution to our problem," Reagan said, "government is the problem."
Now Obama and the Democratic Congress have dramatically changed the conversation. The economic freefall that the United States faces has discredited Republican ideas about tax cuts and deregulation. But now the burden is on Democrats to provide a compelling alternative. iReport.com: Share your thoughts on the stimulus plan
Stepping into power during a moment of grave crisis and uncertainty, Congress approved an economic recovery bill and the White House will start work on a huge financial bailout program that would have been impossible to even conceive of after the 2004 presidential election, when the conservative activist Richard Viguerie said, "Now comes the revolution."
Even a few months ago, commentators were talking about the reality of a "center-right" America that would severely limit President Obama's options. Yet what we are seeing constitutes a kind of government intervention in the economy that America has not experienced for decades.
If these programs succeed, Democrats will have revitalized a core argument of modern American liberalism: that the federal government, primarily through spending and regulation, has to be the first responder when we face an economic crisis.
But failure would constitute a huge blow to that liberal argument. If six months or a year from now the economy remains in its current state, or conditions become even worse, conservatives will have the example they have desperately been seeking. iReport.com: 'I want to see the meat and potatoes of the stimulus plan'
The stimulus package and financial bailout will become the symbol to show why government intervention does not work in times of economic crisis. This, according to liberal economists, is the danger posed by the compromises that were made by the administration -- both in asking for less than most economists think is necessary and then settling for an even lower figure in the negotiations.
The effects of new policies on politics can be enormous. When Americans enjoyed economic growth in the 1950s and 1960s, liberals were able to point to the New Deal and subsequent federal programs as powerful evidence that government intervention can benefit the nation....
Read entire article at CNN
... For several decades, starting in the 1930s with the New Deal, liberals argued the federal government should be the first responder in times of economic crisis. They made a series of arguments to support their claim.
Only the federal government could marshal the kinds of funds that were necessary to strengthen the nation's economic infrastructure (ranging from bringing electricity to rural America to building our highway program).
Only the federal government could limit the severity of the financial risk that Americans confronted when our economy went bad. And, most importantly, only the federal government could spend the amount of money that was needed to sustain economic growth when Americans had empty pocketbooks.
Starting with Ronald Reagan's historic supply-side tax cut in 1981 and lasting through President George W. Bush's second tax cut in 2003, conservatives countered those liberal arguments.
While conservatives accepted the need for big government in practice (despite their rhetoric) when it came to economic recovery, Republicans argued that tax cuts and deregulation were the answer.
The right said that the best thing that government could do to is to lower the tax burden of business as well as upper middle class and wealthy Americans so that they would invest their money and take risks that were needed to grow the economy.
Conservatives said that government spending did not strengthen the infrastructure of the economy but only produced "boondoggle" projects.
Every program, they said, was another "Big Dig," referring to the overpriced and disastrous tunnel-building project in Massachusetts.
Conservative economists argued that the "stagflation" in the 1970s -- the combination of stagnation and inflation -- undermined the promise of liberal economists following the advice of economist John Maynard Keynes, who advocated government spending to energize the economy.
"Government is not the solution to our problem," Reagan said, "government is the problem."
Now Obama and the Democratic Congress have dramatically changed the conversation. The economic freefall that the United States faces has discredited Republican ideas about tax cuts and deregulation. But now the burden is on Democrats to provide a compelling alternative. iReport.com: Share your thoughts on the stimulus plan
Stepping into power during a moment of grave crisis and uncertainty, Congress approved an economic recovery bill and the White House will start work on a huge financial bailout program that would have been impossible to even conceive of after the 2004 presidential election, when the conservative activist Richard Viguerie said, "Now comes the revolution."
Even a few months ago, commentators were talking about the reality of a "center-right" America that would severely limit President Obama's options. Yet what we are seeing constitutes a kind of government intervention in the economy that America has not experienced for decades.
If these programs succeed, Democrats will have revitalized a core argument of modern American liberalism: that the federal government, primarily through spending and regulation, has to be the first responder when we face an economic crisis.
But failure would constitute a huge blow to that liberal argument. If six months or a year from now the economy remains in its current state, or conditions become even worse, conservatives will have the example they have desperately been seeking. iReport.com: 'I want to see the meat and potatoes of the stimulus plan'
The stimulus package and financial bailout will become the symbol to show why government intervention does not work in times of economic crisis. This, according to liberal economists, is the danger posed by the compromises that were made by the administration -- both in asking for less than most economists think is necessary and then settling for an even lower figure in the negotiations.
The effects of new policies on politics can be enormous. When Americans enjoyed economic growth in the 1950s and 1960s, liberals were able to point to the New Deal and subsequent federal programs as powerful evidence that government intervention can benefit the nation....