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Senator Levin on War and the US Economy

February 15, 2010

Earlier today the Economics Club of Grand Rapids hosted a luncheon presentation by Michigan Senator Carl Levin. The event promotional material cited Senator Levin as one of the country’s 10 best Senators, according to a recent Time Magazine.

The focus of Senator Levin’s talk today was on the US economy, but he first he started with a few remarks on the US war in Afghanistan.

Senator Levin, “our men and women in the military are hoping to prevent the Taliban from taking and keeping control of Afghanistan.” This was an interesting statement, since even President Obama in his December address to the nation claimed that the US was in Afghanistan to fight terrorism and al Qaeda.

Levin said that he was delighted that Afghans were participating in the military campaign and that for Afghanistan to succeed the Afghan army has to take control the country. This is similar to what Levin has said over the past year, making claims that the Afghans themselves must take control of their country. However, the Senator never addresses how sending more US troops will achieve such a goal.

In addition, Levin made the claim that the Afghan military is the only respected organization in the country, which was somewhat of a slight against non-governmental groups like the Afghan Women’s Mission and RAWA. Levin also said that according to sources (one he never identifies), that the Taliban only have 8% support amongst Afghans.

The Bailout was the Right Thing To Do

Levin spent most of his luncheon talk speaking to the issue of the state of the US economy. He began by addressing why the economy failed. According to the Senator there were three main factors – 1) a certain level of greed, 2) misjudgment and, 3) deregulation. “American families paid the price for the excesses of Wall Street.”

He gives the example of Goldman Sachs and how they used the system to make massive profits. He also said that AIG is nothing more than a thinly disguised casino. However, despite his criticism of such companies the Senator said, “We bailed out the financial system and it was the right thing to do.” So, how can you be critical of some companies, yet defend a massive taxpayer bailout to the very same entities which engaged in massive fraud at the expense of the American public?

Senator Levin then went on to say that in 2009, the government adopted the TARP program as a major part of the stimulus plan, or as Levin said, “We took your money to try to get the economy out of a ditch. The judgment of most economists was that we would be worse off if TARP was not adopted.” However, numerous writers, including Dean Baker, have demonstrated that TARP was just another mechanism to turn the taxpayers money over to Wall Street.

Levin felt that Michigan definitely benefited from the federal stimulus plan, because it saved jobs, but also because it will help Michigan industries, like the auto industry, have a chance to be competitive. This was an interesting admission that the so-called free market system in the US cannot survive without massive government intervention. In fact, Levin stated that, “Michigan companies are not competing against other companies, they are competing against other governments.” Levin added to this statement by saying that there needs to be more US business and government collaboration if the US is to remain competitive globally.

Michigan’s senior Senator told the crowd that next week the Senate will be addressing a jobs package. Levin said that it will need to be a bi-partisan effort if it hopes to pass.

In closing, Senator Levin said the US government needs to restore confidence in our markets, which ultimately means Wall Street. However, in addition to restoring confidence in the market the government needs to reduce the deficit and figure out a way to better police financial institutions in the future, even though the Senator offered no ideas on just how the federal government plans to “police” Wall Street.

Questions, not many Answers

There was a brief question and answer period, with questions on a variety of topics. The first question asked about a current lawsuit by media companies requesting full government disclosure on who got what money in the bailout. Levin said he was in favor of disclosure, but he stressed that the real solution is for the government and businesses to work together even more for the future of the economy.

Another questioner asked why politicians can’t get along in DC. Levin’s response was, “We need more people like Vern Ehlers in DC. What is lacking in Washington is civility.” Levin claimed that some of the blame should be put on the media, since he thinks that government officials have to act more outrageous in order to get coverage. He also said there needs to be serious changes in campaign finance. Senator Levin expressed his frustration with the recent Supreme Court decision to allow corporations to give more money during elections.

While we would agree that campaign finance is necessary for positive change, it is important to point out that Senator Levin has received over $27 million dollars to run for office since 1989, and that some of the sectors who have contributed the most in that period are law firms, Pro-Israel groups, real estate companies and the auto industry. Can the Senator honestly says that this money has not influenced his voting decisions?

The last question was from a man claiming to be a small business owner who expressed frustration over the government proposals that are being shoved down his throat – Health Care insurance for everyone, Cap & Trade, and a small business tax package. Levin responded by saying that none of these proposals are likely to go through. However, the Senator did say that he supported some kind of health insurance for all Americans and that there must be something done to reduce carbon emissions. Unfortunately, Senator Levin offered up no real plan on how either of these issues could be addressed.

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