The current struggle for America’s soul is between a Coolidge/Hoover coalition that wishes to use current budget deficits to eliminate as much of the Great Society and the New Deal as it can and a reactionary liberal faction represented by much of the Democratic party that fights primarily to prevent this from happening.  The Nostalgic are right to do so, but that will not restore economic health.

The Old stretches from antique FDR haters to present day anti-government know-nothings using, as I strongly believe, deficits purposely trumped up by “supply-side” tax cuts (not to say also two expensive, prolonged wars) to justify returning us to pre-Depression America with no ladders of opportunity, safety nets for the elderly and the young, and regulations to protect food, workers, consumers, and the environment.

The Nostalgic are those in the Democratic party now bargaining with the Old as to how much of this to permit.  A number of Democratic leaders are complicite in the tax cuts for the wealthy and the Iraq war (see The Courage of Our Convictions), so they are prevented from assessing blame.  Most people think of “liberal” as innovative.  But I was involved in a national nomination campaign more than a quarter century ago where the party opted to protect its traditional policies rather than prepare for a dramatically changing world of globalization, information, energy security, and military reform.  It is possible to be “liberal”, in the sense of the left, and still be reactionary when the choice is to protect the past or to innovate for the future.

The only way to make any serious dent in the federal deficit by spending cuts is to abandon the New Deal safety net (which primarily benefits the middle class) and the Great Society ladders of opportunity (Head Start and so forth).  This is the project of the Old.  The other option, tax increases, is not feasible in an economic downturn and when the right has made paying for the government people want seem socialistic.

The most viable option is to make the economy grow again, but not at the old levels and not merely by manipulation of money, which is what passed for growth for the past two or three decades.  I mean real growth based on an explosion of innovation in the technology sectors (including medicine), in energy creativity (fusion), in services (requiring US workers, not Indians and Pakistanis to provide them), in transportation (fast trains), in new food production techniques (vertical farms), in construction (synthetic materials), in water (desalination), in carbon replacement, in about every sector of the global economy where American innovation still can lead.

While Wall Street waits for these innovations to prove profitable before investing, and the Old and the Nostalgic struggle to clean up the mistakes of the past, the real role for government in the 21st century is to stimulate a cascade of innovation, which is the only way to put our economy back on its feet, to make it grow, and to provide the revenues to maintain a truly civilized society.

14 Responses to “Confrontation Between the Old and the Nostalgic”

  1. Blue Floridian Says:

    Senator, A rousing introduction but it does not go far enough. We still have a significant part of the party that is protecting the established way of life for the wealthy. What about a call on the present administration to change NOW the policies that allow out sourcing of jobs overseas. State that an unemployment rate of 9% or 15% actual is a national emergency and declare the same and rally to get those jobs back here even if it means stepping on the toes of the Bill Gates and Jeffrey Immelts of the world . In referring to Coolidge/Hoover coalition, Obama might be following Cal at this point. His silence is deafening.

  2. Neil McCarthy Says:

    Assuming your advice were taken, how long would it take before those new industries were generating the type of returns needed to, in effect, recreate the real economic growth that can sustain a middle class, and what position would you take in the interim on the continuing battles(e.g., in Wisconsin as we speak) between the “old” New Dealers and the reactionary Coolidge-Hoover Republicans?

  3. David Chapman Says:

    Senator Hart,

    I am a fan of your work and philosophy. You write that Wall Street is waiting for markets and technology to prove itself before they invest. Wall Street no longer provides its financial ingenuity to a broad swath of the American Economy. They make a majority of their money today trading derivatives and placing bets on global monetary policy. Straight line investing in American enterprise is not exciting and profitable enough. i’ve been in meetings in which technology companies looking for investment are told they will not get the investment unless they agree to outsource a majority of the engineering to India as part of the investment.

    Andy Grove Founder and chairman of Intel will tell anyone who will listen that we will never have a healthy economy unless we SCALE the companies and technology we create here in America. Wall Street and the investment community in general hasn’t served the general american economy for a decade or longer.

    We are no longer a functioning Democracy, you cannot have the imbalance we have in our income structure and survive as a complex Republic. Recent Supreme court rulings giving corporations an open season on the rest of us has insured this great imbalance is forever the norm unless we have a major revolt of the middle class and wanna-be middle class and I don’t see that happening here. We have a divided electorate that can no longer govern itself and deal with the scope and scale of the problems we have. Most angry Americans are mad at the wrong people and policies. It is unbridled GREED that will destroy the America we grew up in.

    Keep up the good work I only wish we had more like you actually running the government.

  4. John Yu Says:

    Dear Senator Hart,

    Oh what could have been…You remain a voice of reason and insight in an ever increasing world, and nation, of reactionaries lacking true vision for America. While you still can add to, and encourage, the impetus for all Americans to do what is right for our country. Thank you for your dedication and service to our country.

    Sincerely,

    John Yu
    Los Angeles, CA

  5. John in SD Says:

    You cannot technologically innovate yourself out of a challenge that FDR understood – the corrosive impact of vast inequalities of wealth. The fundamental problem is one that kindergarteners are supposed to learn – sharing.

    “My Teaching, simple though it is, will show you the necessity for sharing, for the creation of a pool of resources from which all men may take, the substitution for greed of co-operation and trust, the manifestation of the inner divinity of men. This manifestation, My friends, must proceed, for without it, the future for man would be black indeed. A crisis of decision awaits mankind. My Love creates a polarity of viewpoints; that is the Sword which I wield.”
    -Messages from Maitreya the Christ

  6. David Greene Says:

    “The other option, tax increases, is not feasible in an economic downturn and when the right has made paying for the government people want seem socialistic.”

    Tax rates for the wealthiest have not been this low since before and during the beginning of the Depression. Roosevelt brought those rates up, including to 90% for the highest bracket.

    You are contributing to the problem yourself by saying tax increases are not feasible. They are more than feasible, they have been proven by history.

    Waiting for an explosion, in innovation or anything else, is not a good idea.

    It is not clear what to do but history has shown us what has worked and what has not. Unfortunately we are as a nation doing those things that history has shown do not work, especially for workers.

  7. G.Finegan Says:

    Kudos for an excellent essay; I too see what is an attack on the New Deal;It is unfortunate to say the least that the very people that have been helped by the New Deal want to undo it.

  8. Gary Hart: Confrontation Between the Old and the Nostalgic Says:

    […] To comment, please visit Senator Hart’s blog at: http://www.mattersofprinciple.com/?p=627 […]

  9. Robert R. Says:

    I respectfully take issue with the premise of your argument. I believe that there is still a constructive role to be played by govt, but I do not think that belief should automatically tar me as a leftist or a reactionary. Indeed, I don’t think it is at all reactionary to want to preserve policies that have worked for Americans. Repeal of the “antiquated” Glass-Stegall Act, for instance, has proved to have been an unmitigated diaster. Moreover, no private-sector “innovations” have arisen to replace Social Security, Medicare or college loans or to make collective bargaining unnecessary. On the contrary, most of the “innovations” that corporate America has spawned make govt involvement more critical than ever. True innovation of the type you call for will not, I believe, occur without some sort of political involvement.

  10. Dean Farris Says:

    The democratic party is not democratic enough to hold a majority. The public voted for change in 2008. The system is so hidebound nothing changes. Democratic voters must change the party before positive change is possible.

  11. Gary Hart Says:

    Several responses: to John in SD, I am not suggesting “technologically innovating out of the FDR responsibility.” I am arguing that we cannot meet that responsibility without a growing economy and my party has yet to put forward a comprehensive plan to make the economy grow that takes advantage of the information age. Likewise, to Robert R., I am arguing here for a very activist role for government in investing in and stimulating the next great round of economic growth using inventiveness unique to Americans. And to David Greene I simply say, if you wish to have the Democratic party confirm itself as the tax party, we can do that…and lose. If our government stimulates invention and innovation, we’ll collect a great deal of taxes.

  12. Liam McGuffie Says:

    Dear Senator: My group and I see nothing but opportunity and prosperity ahead, a new Renaissance fueled by technology and characterized by one word: connectivity. If it is as we believe, that in this revolution, the most important thing any citizen can contribute would be their ideas, we intend to give them an easy, friendly way to do so. Every citizen. Our approach must be inclusive or it will fail.

    And, by the way, as we are sending their ideas to the appropriate entities (thousands per hour), we will be transporting them on a system that would charge their EVs en route to another city along the Front Range at 200-plus mph. Imagine, at a perfectly connected node of activity and traffic, 30-40 EVs spilling out every hour from an HST, each user on their way prepared because they could work on the train.

    Unless the generation of electricity is rethought here, it won’t work for the future we envision. We intend to use renewable sources onsite (our new paradigm places all generation of electricity at or nearby the geographical location of it’s use, like a few feet away)…and design modularly to anticipate future innovation and invention.

    Stay tuned. ALLdownhiLL will have a website soon. If you need a local contact, see Michael R. Gray, 4550 Sleepy Hollow Cr in Colorado Springs, 80917 or call him (719) 362-7895 or 574-3483.

    Ideas will get that lazy and/or scared money off the shelf. This is a classic moment, one in which government can actually lead by gentle example. It is human nature to be self-serving, sure, but it is also our nature to gravitate towards efficiency. It is universal. We just need to be shown.

    Cheers, Liam

  13. Gary Hart Says:

    To Neil McCarthy: Government loans to qualified start ups, and their huge number of suppliers and spin offs, would begin to stimulate hirings, plant and equipment purchases almost immediately. Those companies and their workers would be paying taxes vrey quickly. Their successes would in turn stimulate a huge amount of private investments. The payoff to the government and the national economy would be swift. It should have begun, as some of us advocated strenuously, 25 or more years ago.

  14. Joseph Markey Says:

    Having spent March 1 visiting our congressional offices (Colorado) and talking to health legislative aides, who are both knowledgeable and appeared to be frank in their responses I came away convinced that medicine can be part of saving money and providing better medical care if the Affordable Care Act is allowed to experiment with more equitable provider reimbursement and implement effectiveness measurement. It is possible to measure outcomes, as CARF, the rehabilitation commission has shown. Combining this with evidence based medicine and emphasizing talking to patients and thinking rather than just paying for drugs and procedures can allow scrapping the Sustainable Growth Rate mess. The ACA does provide a way forward and we should not be brow-beaten into accepting the way things were.

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