We had the opportunity to sit down with Robert Kuttner, co-editor of The American Prospect and a senior fellow at Demos, at the 'Building Workforce Partnerships' conference. His latest book is A Presidency in Peril: The Inside Story of Obama's Promise, Wall Street's Power, and the Struggle to Control our Economic Future.
Labor’s Edge: What role do you see unions playing in our nation’s economic recovery?
Robert Kuttner: Let’s look at the 1930s — a period of higher joblessness but also a great time for union growth. It really all depends on how well-informed the workforce is. Some folks who aren’t well-educated look at public employee unions and say, “These folks have it too good.” Other more informed people look at union workers and say, “I want what they have.” It’s up to labor and political leadership to use this recession as an opportunity to educate, mobile and organize workers.
Labor’s Edge: In 2009, you wrote about the White House’s Task Force on Middle Class Working Families. What has the task force accomplished so far, and what still needs to be done?
Robert Kuttner: The task force is a good first step — it has created a new venue where the issues that matter to working families can be raised and addressed. But unfortunately, the task force is understaffed, and the proposed executive order to give contractors extra points for treating their workers well is hung up at Office of Management and Budget. We need the President to prioritize the task force himself (currently it’s being headed up by the Vice President’s program) and make it a top priority, in order to target those large, high profile companies who are low road employers.
Labor’s Edge: In terms of stabilizing the economy and reinvigorating job growth, what has Obama done right, and what still needs to be done?
Robert Kuttner: The stimulus package was a good thing — it helped create a lot of jobs. But it’s not enough; the money will run out soon and the package must be repeated. Right now, I’ll give financial reform a B+ — the bill is getting better as public understands the stakes. For his first few years in office, Obama should have been completely focused on the economy, financial reform and mortgage relief. The health care bill consumed too much time and attention and didn’t go far enough; and it could have waited until Obama’s second term. And the ongoing emphasis on deficit reduction is the wrong approach – it’s only making it harder to get other bills passed, because everyone is scared of increasing the deficit (which is actually a good thing in times of high unemployment).
Labor’s Edge: What exactly would the federal financial reform bill do? Is it enough rein in Wall Street greed?
Robert Kuttner: The Consumer Financial Protection Agency is a very important component of the financial reform package – but it needs to be a free-standing agency. In the Senate version of the bill, the CFPA lies within the Federal Reserve, but in the House version, it’s a committee of regulators, which is what we need. The “Audit the Fed” amendment is good. The derivatives reform component is also pretty good, but it could be better – there are just too many loopholes. The bottom line is that the financial reform bill doesn’t do enough to change the current business model of banks acting like hedge funds, creating exotic assets too confusing for people to understand, and profiting richly at the expense of working people.
Labor’s Edge: What do you think needs to happen to break California out of its perpetual budget woes?
Robert Kuttner: California’s budget is going to be a mess until we get rid of Proposition 13 and the supermajority requirements on budgets and taxes. As long as we have those hurdles in place, our hands will always be tied, even if we had a great Governor. But these rules have fostered a political climate that makes it easy for the Governor to impose his cuts and pit us against each other, playing welfare programs against worker pensions, and so on.
Labor’s Edge: Do you think the anti-Wall Street sentiment will carry over and affect the November election in California, in the event that we end up with two corporate CEOs (Whitman and Fiorina) at the top of the ticket?
Robert Kuttner: Well, you would think so, but I believe we need to make this an issue for it to resonate. Buying your way into public office should be politically radioactive.
Labor’s Edge: What does the BP oil spill mean for the future of the green economy?
Robert Kuttner: If there’s one thing that this oil catastrophe has demonstrated, it’s that we absolutely cannot trust the oil companies to regulate themselves and control our energy policy. We need real regulation to save them from their own greed. But there’s more to it. We can’t rely on oil in the long-term; we must shift to a cleaner, greener economy, which would benefit the workforce, environment and trade. If ever there was an impetus for the Obama Administration to make this move, the oil spill is it.