This noted progressive economist saw the crash coming. He sees a solution, too — if we’re willing to confront concentrated wealth.

By Sam Pizzigati

A review of Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency by Robert Kuttner (Chelsea Green Publishing, 2008). 213 pp.

The United States has reached, with the Wall Street meltdown, what the Economic Policy Institute’s Larry Mishel last week called “a transformational moment.” The ideological foundations of the Reagan Era have now all crumbled. But no national leader has yet built up a consensus for an alternate base.

In a sense, we’ve come back to the future, back to 1932, the last time a deeply unequal United States confronted a deeply frightening economic crisis while the White House and Congress flailed about aimlessly.

The Democratic Party’s Presidential candidate, back in 1932, mouthed backward-looking platitudes about balancing the budget and cutting federal spending. He won election anyway. That candidate, Franklin D. Roosevelt, would then go on to transform America.

Like Lincoln before him, FDR pulled off an achievement that seemed politically impossible to his contemporaries. Lincoln freed the slaves. FDR made government, for the first time ever, a helpful partner in the everyday economic life of ordinary Americans.

A President Barack Obama, economist and author Robert Kuttner believes, could be equally transformational. A President Obama, Kuttner noted in a Washington appearance last week, would have little choice.

“Obama is going to have to be FDR,” as the progressive analyst puts it, “or he is doomed to failure like Herbert Hoover.”

Kuttner has written a remarkable new book that explains just why. He completed the writing for this just-published Obama’s Challenge in August, before the last three weeks of Wall Street unraveling. But that early deadline didn’t matter. Kuttner saw the crisis coming — and he sees the solution, too.

“Only one general policy approach,” Obama’s Challenge contends, “can dig the economy out of its current hole and put it back on a path toward broadly shared prosperity: Restore taxes on corporations and the wealthiest Americans, reduce spending on foreign wars, incur temporary larger deficits, and use the proceeds for very substantial social investments.”

How substantial? Kuttner outlines a $700 billion a year program of new domestic outlays — for building a post-petroleum economy, for restoring America’s public infrastructure, for making every human services job caring for young children and old adults a well-paying professional job.

Candidate Barack Obama has proposed nothing remotely near as sweeping. Neither, back in 1932, did candidate Franklin Roosevelt. The two share something else in common: incredibly turbulent economic times.

“If a President Obama does embrace a more radical economic recovery program,” writes Kuttner, “the reason will be that economic conditions leave him few other good choices.”

But even if Obama were to embrace an ambitious recovery agenda, could he gain support for it? Obama’s Challenge walks us through the society-shaking transformations that other Presidents have wrought, not just Lincoln and FDR, but LBJ as well, “the president who delivered the century-delayed promise of full civil rights.”

In each case, popular movements pushed a sitting President in a far more progressive direction. In each case, history demonstrated that “an eloquent and principled President has immense power to define the moment and transform the nation.”

And that would be Obama’s challenge, “to reverse the thirty-year trend not just of Republican rule but of voter quiescence and Democratic complicity,” to raise expectations “and then rise to meet them.”

This slim, inspiring, and sometimes even thrilling new book will have you believing that we can indeed end our nation’s “broader pattern of increasing insecurity and inequality.” Quite a feat in our still cynical times. Read it. And hope Barack Obama reads it, too.

Sam Pizzigati, an associate fellow at the Washington, D.C.-based Institute for Policy Studies, edits Too Much, the online weekly on excess and inequality.