ShareThisBoth the U.S. House of Representatives and Senate moved expeditiously to approve President Barack Obama's economic recovery legislation. Before taking office, he stated he wanted the package by Presidents' Day February 16. Congress has delivered on time.
President Obama visited Capitol Hill to make his case. This is not unprecedented; Presidents Abraham Lincoln and Gerald Ford did the same. However, such a step is unusual in modern times. This did not move Republican legislators, save the three Senators who voted with the White House, but Obama's primary goal probably was communication of a conciliatory image to the public at large.
This week the President conducted a populist pilgrimage to rally the people behind the package. Four quick trips have addressed action in Washington but at a more subtle level also reflect important state, regional and international aspects of economic problems.
On Thursday he visited Peoria, home of Caterpillar Tractor Co. Yellow colored construction equipment made by this great company is visible around the globe. In intense competition with Japan's Komatsu, Cat has shown a U.S. firm can win. The recession, however, is hurting, which the President acknowledged very explicitly.
Peoria is also politically symbolic. "Will it play in Peoria?" was asked by Nixon White House staffers before major decisions. In other words, will the average American support this move? Evidence of humor in the grim Nixon regime is always welcome. Nixon's active appreciation for vote collecting is reflected in Obama's courtship of Middle America.
The Obama rescue plan features assistance to state governments. Illinois, where Peoria is located, has very severe budget problems, compounded through mismanagement by the just impeached former governor. However, such problems of states span the nation, and are largest in California, which has a mammoth $42 billion deficit.
The Washington Center on Budget and Policy Priorities has done an important comprehensive report on state budget problems. Highlighted factors include the long-term Washington trend of imposing expensive mandates with no offsetting grant or other income.
Examples include the U.S. Internet Tax Freedom Act of 1998, which reduced state sales taxes, Bush administration tax cuts designed without consideration of impacts on states, and the No Child Left Behind Act of 2002, which greatly expanded testing and record-keeping responsibilities of states, with no compensating income.
Faced with such problems, Democratic Gov. Jim Doyle of Wisconsin and Republican Gov. Tim Pawlenty of Minnesota recently held a dramatic joint news conference to announce a breakthrough partnership to control costs through joint purchase and management of food, fuel, transportation and other costs.
The U.S. has few examples of effective regional cooperation. One is the Tennessee Valley Authority, a New Deal hydroelectric power innovation. More such regional cooperation may help the economy.
Finally, at the global level, while protectionist pressures are growing in the U.S. and other nations, the UN economic institutions constructed at the 1944 Bretton Woods Conference continue to undergird relatively free and stable trade. The great British economist John Maynard Keynes was a principal leader in this Anglo-American initiative during World War II. British Prime Minister Gordon Brown and associates are playing a leading role in the current effort to modernize these international institutions.
In short, beyond distributing enormous amounts of money, Washington confronts complex state, regional and international policy puzzles. Peoria people, defined in national terms, will ultimately decide if President Obama has made the right moves.
(Arthur I. Cyr is Clausen Distinguished Professor at Carthage College in Wisconsin. Contact him at acyr(at)carthage.edu.)
(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)
commnet
