In a symposium on the economy in the current issue of The New Republic, there is a contribution by Ray Teixeira, Senior Fellow at the Center for American Progress Action Fund, titled “How to Exploit America’s Contradictory Attitudes Towards Keynes.”
This is the gist.
Obama’s advisors are arguing that Keynesianism – the notion that the government should spend money at times of economic crisis – simply can’t be sold to the American people.
Obama should ignore these advisors. While public opinion polls consistently show that Americans are skeptical of Keynesian ideas, they can still be won over on the merits of many specific Keynesian policies. It’s by exploiting this seeming contradiction that Obama can win over the public and take concrete steps to boost the economy.
From an economic perspective, there is very little chance the economy will right itself without significant intervention – intervention that is large scale and fast acting. The Obama administration won’t get much credit from proposing modest policies, even if they gain the assent of the House, because those policies aren’t apt to make any actual difference. The White House would be better off offering bold ideas to solve the jobs crisis – ideas like extending unemployment insurance; extending and possibly increasing the payroll tax holiday; providing a tax credit for hiring new workers; new infrastructure spending, especially on fixing schools; and direct aid to state and local governments – even if they risk offending John Boehner.
Indeed, in the event that the economy remains stalled, Obama’s best and perhaps only chance to gain re-election is to make a strong argument that Republicans, by failing to act on his proposals, are responsible for the state of the economy.
Obama’s political advisors are no doubt arguing that the American public will be hostile to any program that involves further government spending – that a strong jobs proposal would be tainted by its association with Keynesian ideas. Such policies, so the theory goes, will just annoy the public, which will further tank Obama’s already fading chances of retaining the presidency.
This analysis is deeply mistaken. It is true that voters would never identify themselves as Keynesians. But voters don’t need to be Keynesians or otherwise sympathetic to the general idea of more government spending to support Keynesian policies.
It’s always been that way in American politics. This simultaneous support for conservative ideas about government and liberal policy programs is a long-standing feature of American public opinion. American voters are symbolically conservative but operationally liberal.
Instead of arguing with the Republicans over whether spending can create jobs – an argument where he doesn’t have public sympathies on his side – he should change the conversation to specific measures that will put money in people’s pockets and put them back to work.
Eric Koch’s book, The Weimar Triangle, is available at Indigo-Chapters and in your local bookstore. 
The Republicans and Tea Party-ists are gaining ground by speaking very simply to ordinary people. Can Obama do the same? Here’s the level of rhetoric anyone can understand whether or not they’ve ever heard of Keynes:
“Too many Americans – you and your friends included – can’t find jobs. But there’s lots of work to be done. That’s my job. To put America back to work. So, we will build new roads and bridges. We will repair old ones. We will construct new schools for our children. We will build factories that produce the machinery to harness energy from the sun, water and wind. Those are just some of the ways we’ll get Americans back to work. If we don’t, the economy will grind to a halt because jobless Americans can’t buy anything. And without customers, businesses will continue to fail. We can’t wait to get the ball rolling. We have to act now. For your sake and for the sake of our nation.”
Tune in tonight. That’s exactly what he’s going to say.
David Schatzky: Perfect! Forward it to the White House.
Elisabeth
David’s proposal does not, it seems to me, disarm Tea Party sympathizers’ counter-argument that “there goes Big Government again”. But it is sad, is it not, that the overriding concern is that of re-election rather than correcting the economy?
I go along with Schatzky, but if thus BIG GOVERNMENT gets Obama defeated, what will happen then ? Will the Tea Party all cause us to go broke ?
Obama has already said all the things David suggests. The New York Times says he is going to cut payroll taxes and not much more. There will be rhetoric about big oil, millionaires and billionaires and maybe some green talk. The reality is his union supporters want work building a pipeline to Alberta, while his Hollywood supporters want windmills. Hollywood will lose. They will still vote for him since they have no other choice; the construction workers are swing voters.