NDN Blog

See the end of the video where they discuss facial angles. They also discuss homeland security, intelligence, and immigration. 

America’s Gross Domestic Product — GDP — is a very powerful statistic. Markets and politicians zealously track the quarterly numbers looking for a bottom line on how investors and the rest of us feel about our conditions and prospects. Compiled by some 2,000 economists and statisticians at the Bureau of Economic Analysis (BEA), GDP pulls together everything they can measure concerning how much America’s households and various industries earn, consume and invest, and for what purposes. Over the last two weeks, however, two new developments should have reminded us that we know less about GDP than we usually believe.

Early this week, the BEA itself tacitly acknowledged that the GDP measure lags behind the actual economy. The Bureau released a set of changes in how it calculates GDP, designed to take better account of the economic value of ideas and intangible assets. Today, few among us would question the notion that new ideas can have great economic value. But some 15 years ago, long before smart phones, tablets and protein-based medications, the BEA started to study how to revise the GDP measure to take better economic account of innovations. This week, the Bureau announced that when a company undertakes research and development or creates a new book, music, or movie, those costs will be counted as investments that add to GDP, rather than ordinary business expenses, which do not.

In an instant, the official accounting of the economy’s total current product increased some $400 billion. Business profits also have been larger than we thought, because ordinary business expenses reduce reported profits, while investments do not. Most important, the revisions told us that American businesses and government, together, now invest just 2.1 percent of GDP in R&D — less investment than in the 1990s here, especially by businesses, and less than much of Europe.

While this week’s BEA changes bring us closer to an accurate picture of GDP, last week we learned how naïve we can be about blatant misuses and distortions of GDP. This story began four years ago, when two well-respected economists, Carmen Reinhardt and Kenneth Rogoff, published an economic history of financial crises. R&R’s timing (2009) was impeccable, and their book was a bestseller for an academic treatise. More important, it gave its authors wide public credibility when they issued a paper the following year, “Growth in a Time of Debt,” that claimed to have found a deep and strong connection between high levels of government debt and a country’s economic growth. The data, they reported, showed that when a country’s government debt reaches and exceeds the equivalent of 90 percent of GDP, its growth slumps very sharply.

With the big run-up in government debt spurred by the financial crisis and subsequent deep recession, conservatives who had waited a long time for a plausible economic reason to slash government found it in the new R&R analysis. And based on its authors’ newly-elevated reputations, conventional wisdom-mongers from think tanks to editorial boards echoed the new line on austerity. Even the most liberal administration since LBJ couldn’t resist the new meme. Despite a palpably weak economy, the President and congressional Democrats grudgingly accepted large budget cuts, and then pumped the economy’s brakes some more by insisting on higher taxes. And we were not the only ones so economically addled. As government debt in Germany, France, Britain and most other advanced countries rose sharply, conservatives there argued that less government was a necessity for average Europeans as well.

Just last week, we learned that the R&R 2010 analysis was so riddled with technical mistakes that its “findings” about what moves GDP are meaningless. When three young economists from the University of Massachusetts found they couldn’t replicate the results – the standard test for scientific findings — they took R&R’s model apart, piece by piece, to figure out why. It turns out that R&R – or more likely, their graduate assistants – left out several years of data for some countries, miscoded other data, and then applied the wrong statistical technique to aggregate their flawed data. And as bad luck would have it, all of their disparate mistakes biased their results in the same direction, amplifying the errors. In the end, instead of advanced countries experiencing recessionary slumps averaging – 0.1 percent growth once their government debt exceeded 90 percent of their GDP, the correct result was average growth of 2.2 percent carrying that debt burden.

Utterly wrong as R&R’s analysis was, the austerity advocates proceeded to badly misuse it. The authors had merely reported a correlation between high debt and negative growth – or, as we now know, between high debt and moderate growth – without saying what that correlation might mean. Hard line conservatives and their think tank supporters, here and abroad, quickly insisted it could only mean that high debt drives down growth. That can happen, but only rarely — when high inflationary expectations drive up interest rates, which at once slows growth and increases government interest payments. In the much more common case, Keynes still rules: Slow or negative growth leads to higher debt, not the other way around. In those more typical instances, cutting government only depresses growth more, further expanding government debt. Occasionally, the correlation of negative growth and high government debt reflects some independent third cause. The tsunami and nuclear meltdown that struck Japan in 2012, for example, simultaneously drove down growth and drove up government debt. And sometimes, there is no correlation: Britain carried government debt burdens of 100 percent to 250 percent of GDP from the early-to-mid-19th century, while it was giving birth to the Industrial Revolution.

The R&R analysis did not distinguish between these various scenarios. Yet, the conservative interpretation became the received public wisdom. The IMF, the World Bank and most politically-unaffiliated economists insisted that slashing government on top of weak business and household spending would only make matters worse. No matter. The inevitable result was not the stronger growth as promised, but persistently high unemployment and slow growth here, and double-dip recessions for much for Europe and Japan. In the end, R&R deserve less criticism for their mistakes than for their failure to correct the damaging distortions of their deeply flawed work.

This post was originally published in Dr. Shapiro's blog.

If you wanted to start an energy project - from a traditional energy source like oil or a clean energy source like solar or wind - the first thing you need to do is attract investors. If you don't have access to capital, your project is unlikely to get off the ground.

One of the ways energy projects are financed is through a mechanism known as a Master Limited Partnership or MLP. An MLP is a business structure where investors provide capital to a managing partner that handles the MLP's daily operation. (You can read a lot more about the operating model of MLPs here.)

Here's where it gets interesting. For years, the MLP structure has only been available to oil and gas endeavors.

Today, a bipartisan group of Senators and Representatives introduced new legislation to level the playing field for all sources of energy. The Master Limited Partnerships Parity Act will allow all energy sources - including clean energy sources - to have a shot at the MLP model. This will level the playing field and give all domestic energy sources a fair shot to compete in the marketplace.

This simple tweak (the entire bill is 600 words long) to the tax code could unleash a significant new revenue stream to start up clean energy companies.  With sponsors ranging from Democratic Senator Chris Coons to Republican Ted Poe, this commonsense legislation could actually move forward in this bitterly divided Congress.

Open Position – 21st Century Border Initiative Policy Associate (Temporary)

In April of 2010 the governments of Mexico and the United States issued a Declaration of the 21st Century Border. This declaration stated an understanding that: “a joint and collaborative administration of their common border is critical to transforming management of the border to enhance security and efficiency.’’

With immigration reform before Congress, the border, security and our bi-lateral relationship with Mexico is central to the debate before the country. The 21st Century Border Initiative of NDN/NPI has been designed to support, promote and develop this important vision for how our two countries manage our common border region. We have done this by facilitating events, papers, essays and creating a network of like minded individuals both inside and outside the beltway.

About the Position:

The 21st Century Border Initiative Associate supports and reports directly to both the Policy Director and the President. The Associate manages the 21st Century Border Initiative blog, updating it daily with news salient to the southwest border region and the ongoing immigration debate. The Associate also supports NDN senior staff in creating program priorities and talking points, and provides updates on legislative developments as they occur. The Associate is also responsible for helping to plan large events and assisting with outreach efforts targeting southwest border networks, members of Congress, and administration officials. Outreach assistance includes developing, managing, and maintaining media and contact lists. The Associate will have the opportunity to write original content and conduct original research to be posted on the 21st Century Border Initiative website and on the NDN homepage.

Qualifications:

Ideal candidates will have an undergraduate degree as well as a background in politics and a working knowledge of the current immigration reform debate. Candidates must possess strong research and writing skills, and be able to work independently and communicate with high level staff both at NDN and elsewhere. Knowledge of social media (including twitter and Wordpress) are required. Spanish proficiency is a plus.

To apply, please send your resume and a cover letter to cbowman@ndn.org.

The deadline to apply for this posting will be Monday, April 29.

Your border bulletin is up. Please click here for the full stories.

New York Times Editorial – Immigration and Fear: Much of the country was still waking up to the mayhem and confusion outside Boston on Friday morning when Senator Charles Grassley decided to link the hunt for terrorist bombers to immigration reform. “How can individuals evade authorities and plan such attacks on our soil?” asked Mr. Grassley, the Iowa Republican, at the beginning of a hearing on the Senate’s immigration bill. “How can we beef up security checks on people who wish to enter the U.S.?”

CBS News: Sen. Leahy: Don’t “exploit” Boston to “derail” immigration: Convening the Senate Judiciary Committee for its second hearing on immigration reform, committee chairman Patrick Leahy, D-VT., on Monday urged his Senate colleagues to stop using the Boston Marathon bombings as an excuse to slow down immigration reform.

Talking Points Memo: Former Republican Cabinet Secretary Dismantles ‘Dangerous’ Right-Wing Immigration: A former cabinet secretary under President George W. Bush took apart a main talking point that conservatives have used to oppose immigration reform. Speaking at the Hispanic Leadership Network conference, former Commerce Secretary Carlos Gutierrez addressed the notion, oft-repeated on the right, that immigrants “take jobs away from Americans.”

The just released Border Security, Economic Opportunity, and Immigration Modernization Act of 2013 is 844 pages long piece of legislation crafted by a bi-partisan group of 8 Senators, four Senate DemocratsChuck Schumer (NY), Dick Durbin (IL), Bob Menendez (NJ), and Michael Bennet (CO and four Senate Republicans John McCain (AZ), Lindsay Graham (SC), Marco Rubio (FL), and Jeff Flake (AZ). There is a lot of immigration policy to navigate in this legislation, below please find four big takeaways from the bill.

1. Pathway to Citizenship is Earned: The Senate bill provides a legalization program that could put most of the 11 million undocumented immigrants on the road to eventual citizenship.  This is a several step legalization program that first allows people to apply for “Registered Provisional Immigrant” (RPI) status and then, after 10 years, for lawful permanent resident status, and then after 3 more years U.S. citizenship.

Below are some of the specifics to orient your understanding of this process.

• Registration Requirements: Immigrants who entered the United States before December 31, 2011 and have been physically present in the U.S. since that time will be eligible to apply for Registered Provisional Immigrant (RPI) status provided they pass a background check, have not been convicted of a serious crime, pay any assessed tax liability, and pay appropriate fees and a $500 fine. Initial registration will be valid for six years. It provides for work and travel authorization, and includes spouses and children in the United States on the same application. 

• Renewal: RPIs applying for renewal will be subject to a new background check, payment of processing fees, payment of taxes, and a $500 fine. RPIs must provide evidence of having been 1) regularly employed while meeting a requirement that he/she is not likely to become a public charge or 2) having resources to demonstrate 100% of the poverty level.

• Adjustment of Status to Permanent Residency:  At the end of ten years, RPIs may apply for adjustment of status, provided that they demonstrate: 1) they are admissible, 2) pay an additional $1000 fine per adult plus application fees; 3) prove they are learning English; 4) pay their taxes; 5) pass a background check and 6) demonstrate compliance with the employment requirement. Specifically, they must show: 1) theyhave regularly worked in the U.S. such that they are not likely to become a public charge or 2) they have resources to meet 125% of the Federal Poverty Level. Under the revamped legal immigration system, individuals present in the U.S. for 10 years in lawful status can adjust status to lawful permanent residence including RPIs and other legal immigrants. RPIs may apply for naturalization after an additional three year wait, making the total path to citizenship about 13 years. The bill includes a “back of the line” requirement: RPIs may not adjust status until the family and employment backlogs are cleared.

2. Border Plan is Comprehensive: Stage one requires the DHS Secretary to develop a Comprehensive Border Security Strategy and Southern Border Fencing Strategy within six months before the registration period for Registered Provisional Immigrant status (RPI) begins.  These strategies must be designed to achieve persistent surveillance of the border and a 90% effectiveness rate for apprehensions and returns in high risk border sectors. The bill appropriates $3 billion for this plan which will include technology, personnel and other  resources.  It also provides funding for 3,500 additional Customs agents (OFO Officers) nationwide.

The “triggers” require the Secretary of Homeland Security to submit, within 6 months of enactment, two plans. The first is a strategy to achieve a 90% effective rate goal in high risk sectors of the Southern border. The second is a fencing plan designed to reinforce current fencing and barriers. The initial legalization program does not begin until these plans are submitted.  The legalization program also will not begin until implementing regulations are issued – within 12 months after enactment of the bill.

If, after five years, the 90% effectiveness rate in high risk sectors has not been achieved, an additional pool of resources will be authorized for appropriation and a commission of experts and elected officials from border states will be formed. The border commission will issue recommendations to DHS regarding additional measures that should be adopted to help reach the 90% effectiveness rate goal. 

Two other enforcement “triggers” that have to be met before RPIs can apply for permanent residence involve  implementation of the E-Verify program and entry-exit controls at air and sea ports. Both of these triggers are achievable and should not delay the path to permanent residence.

• Reallocation of Customs Agents From Northern to Southern BorderThe second thing that this section of the legislation does is allow the Secretary of the Department of Homeland Security to reassign or station U.S. Customs and Border protection officers and agents from the northern border to the southern border. They are authorized to be appropriated as such from the Comprehensive Immigration Reform Trust Fund established by this piece of legislation.

• DHS Oversight: To protect the integrity of the system, additional resources and training will be devoted to implementing a DHS-wide use of force policy and associated training in appropriate use of force and the impact of federal operations on border communities.  A Border Oversight Taskforce is established to take testimony and conduct hearings in order to review and recommend changes to existing border policies.  The current duties of the USCIS Ombudsman’s office will be expanded to encompass all DHS immigration functions. DHS will be required to issue regulations on racial profiling that are based on a study analyzing individualized data on DHS officers enforcement activity.

3. Expedited Path for DREAMERs and Farmworkers: DREAMERs can earn permanent legal status within five years, and are then immediately eligible to apply for U.S. citizenship.  DREAMERs who have been previously deported may still be eligible to apply for legal status if they meet certain requirements, even if they don’t have a qualifying U.S. relationship. Farmworkers are eligible for an expedited five year path to permanent legal status and then eventual citizenship under current law.  In order to qualify, among other things, they must continue working in the agricultural sector for an additional 3-5 years post-enactment. 

Other essential workers may apply for a new “W” worker visa which will allow them to enter and work in the U.S. for participating employers, change jobs to other W employers, and eventually self-petition for lawful permanent status under the new merit based program.

Both the W visa program and the new agricultural worker program are subject to important standards for wages and working conditions, negotiated by labor to protect both immigrant and native-born workers. Finally, there are new protections against employers using immigration status to intimidate workers and to prevent international recruiters from misleading or otherwise mistreating those they bring to the U.S.

4. Changes To High Skill Visa Programs Are Significant:   This legislation does away with caps for the highest skilled employment based green cards.   The legislation also changes the H-1B high skilled visa program by expanding the current cap from 65,000 to 110,000 with an option to ultimately increase the cap to 180,000 visas annually based on a High Skilled Jobs Demand Index.

The legislation also allows for work authorization for spouses and children.  Increases requirements for recruiting and offering jobs to U.S. workers at higher wages prior to hiring foreign workers. Increases fines and wage requirements for companies that are heavy-users of H-1B visas. After 3 years, companies whose workforce is more than fifty percent H-1Bs are barred.
 

Many NDNers in DC and New York knew my dad, Peter.  He was not just a constant presence at our events over the years, but a major contributor to NDN in his own right.  In the days since his passing two weeks ago, I've heard the same thing again and again -

"Simon, I remember talking to your Dad at an NDN event in xxxx.  He was so interesting and thoughtful.  Was a joy to talk to him."  Or something along those lines.

My mother passed in 1998, so my father's departure - unexpected, a bit sudden - ends a very important chapter in my own life and career.  I was motivated to the political life by my parents.   It was their sense of justice, of the need to do more to make the world a better place, that I think at the end of the day led me to where I have been these past 25 years. It is safe to say without their powerful sensibilities, I would not have ever choosen this path, and started NDN many years ago.

I miss my Dad.  I talked to him almost every day.   He often called me with the latest political outrage (as he saw it).  And I would try to calmly, not always successfully, why something was just, and so.  I called him to report in on my remarkable wife, Caitlin, and my terrific kids Jed, Will and Kate.  He was a constant presence in their lives too, and everyone at home misses him more than he would ever have believed.  Willie said the other day that Grandpa Pete was "his best friend." 

So the NDN family lost a big one this month my friends.  The man who inspired me, who paid for our very first dinner back in 1996, who often provided a "bridge" loan during cash flow crunches.  Other than me it is possible Peter Rosenberg did more to make NDN work these almost 17 years (in our various legal forms), and he will be missed. 

For more on Peter, take a look at this wonderful obituary which is running now on the Antiques And The Arts Weekly web site.  While I remain terribly sad, I am comforted at every moment by knowing that Peter lived a full and rich life, and that he touched so many people, warmly, powerfully, along the way.

Today, NDN's Simon Rosenberg and Kristian Ramos released the following statements on the Senat4e "Gang of Eight" Border/Immigration Bill:

Simon Rosenberg, President of NDN:

“The Senate Gang of Eight border and immigration bill is a serious, thoughtful effort to make our border safer, our immigration system better while also expanding legal trade and travel through our nation’s ports of entry. 

The Eight Senators should be congratulated for their ambition, and courage.  In a time when rancorous politics have dampened legislative ambition in Washington, this bill reminds us that our leaders can come together, across party lines, to offer big, comprehensive solutions to tough modern-day challenges. 

The seriousness of the Senate Bill gives us here at NDN a great deal of optimism that a good and smart border/immigration bill can be passed by Congress this year.”

Kristian Ramos, Policy Director, 21st Century Border Initiative:

“While there is much to recommend in the Senate bill, two parts in particular should be highlighted:

First, at the heart of the bill is a broad legalization process for ten million plus people living and working in the United States today. If the bill passes this summer, we could see the legalization process begin as early as next spring, with millions passing through the process by the summer of 2015.  It cannot be overstated the impact the this initial legalization process will have on the lives of these undocumented immigrants and their families; and on resolving a debate that has brought harm to the broad Hispanic community as a whole.  That this process is so comprehensive is a major bi-partisan achievement, and one which makes America a better place for all of us. 

Second, while there is a significant emphasis on border security in the bill, the bill also makes smart investments in modernizing our ports of entry.  By funding 3,500 more customs agents in the Department of Homeland Security’s Customs and Border Protection department, the bill not only makes our border safer but will facilitate more trade, travel and tourism which will bring significant benefit to our economy and entire country.

The Senate Gang of Eight border/immigration bill is a great starting place for this important debate.”

If you have any questions about NDN's recent research or publications on the southwest border and immigration, please contact Chris Bowman at either 202-842-7217 or cbowman@ndn.org.

Today, Ezra Klein revisited the issue of the undemocratic Senate in his blog, highlighting its impact on the recently failed gun legislation. In doing so he joins Alec Macgillis from The New Republic, who recently highlighted the same imbalance and forecast the result on the gun legislation, and the New York Times' Adam Liptak who also wrote on the undemocratic nature of the Senate.

Klein explains that "Of the senators from the 25 largest states, the Manchin-Toomey legislation received 33 aye votes and 17 nay votes — a more than 2:1 margin, putting it well beyond the 3/5ths threshold required to break a filibuster. But of the senators from the 25 smallest states, it received only 21 aye votes and 29 nay votes." He concludes, powerfully, that the Senate ultimately "took a bill supported by most Americans and killed it because it was intensely opposed by a minority who disproportionately live in small, rural states." 

NDN has researched and investigated this topic thoroughly, this "small state bias," starting back in early 2012. At the core of our research is the idea that with demographic and population shifts, the Senate's representational schema has increasingly amplified what was already disproportionate representation for individuals in small states at the time of the founding. Though Wyoming has a population approximately 1/66th of California, both are of course awarded same amount of Senators. If you combine Wyoming, Alaska, North Dakota and Vermont, they suddenly have four times the amount of Senators as California, despite, with their aggregated populations, only having 1/16th as many people as the "Golden State". 

50% of the population of the United States is represented by 18 Senators, leaving the other 50% with 82. These halves, though proportionately equitable, are hardly the same. States with higher populations tend to be more diverse, a trend likely to continue with demographic and population shifts. 

The undemocratic imbalance in the Upper Chamber has real legislative consequences - the failure to reach cloture on the vote yesterday cogently demonstrates that. And for those who highlight that the Founders intended the Senate to be the generally slower, more conservative (not ideologically, but in instituting or passing legislation), and deliberately more representative of smaller states - consider that at the time of the Convention, the biggest discrepancy in state populations was between Delaware and Virginia. That difference in population only represents a fifth of the current difference between California and Wyoming. Further, there was no institutional hurdle akin to the Filibuster. The new threshold of sixty votes exacerbates the disconnect between the people and its representation in the Senate.

Popular support for background checks, depending on which poll you look at, hovers between eighty and ninety percent. Jon Kohn and Eric Kingsburg crunched the numbers and found that when you factor in the population of states from which the Senators voting "yea" yesterday, nearly two-thirds of the US population is accounted for. Not only is that a substantial majority, but it exceeds the threshold for the Filibuster. And that is still fifteen to twenty-five points shy of the polling numbers. 

The undemocratic Senate is then a major abbettor in the Upper Chamber's failure to pass background checks through a filibuster. If this were amended, it seems the legislation would likely advance. As the President promises that the debate on background checks and reform is not over, we'll have to see if the tide of popular support will eventually win out in the debate to stem gun violence.  

An overwhelming majority of Americans believe that significant investments in clean energy and energy efficiency are critical for our nation’s future. In addition to the clear environmental and public health impacts, taking charge of the emerging clean energy sector could play a tremendous role in spurring economic growth and job creation.

In addition to these benefits, some major corporations have now realized that cleaning up their energy usage is also good for their bottom line.

Walmart began a major sustainability initiative in 2005 that established a wide range of energy initiatives including reducing energy usage at their stores by 30% and doubling the fuel economy for their fleet within ten years. Ultimately, Walmart intends to power their stores using 100% renewable sources. That’s a big challenge for the largest private consumer of electricity in the United States.  

This week, the world’s largest retailer rolled out some concrete steps on their path to 100% renewable electricity. Walmart announced that by the end of 2020, the company would generate or purchase 7 billion kilowatt hours of renewable energy, a 600% increase of their 2010 investment.  Although specifics of the plan were not released, Walmart indicated that they intend to install solar arrays on at least one thousand buildings.

In a statement, President Mike Duke said:

"More than ever, we know that our goal to be supplied 100 per cent by renewable energy is the right goal and that marrying up renewables with energy efficiency is especially powerful. The math adds up pretty quickly - when we use less energy that's less energy we have to buy, and that means less waste and more savings. These new commitments will make us a stronger business, and they're great for our communities and the environment."

Transitioning to renewable energy isn’t just good public policy. It’s also a real bottom line issue for corporations willing and able to seize the opportunity. These investments in energy efficiency and renewable energy production could save Walmart a BILLION dollars per year once the targets are met. 

This investment will not only be great for Walmart, but will also provide a boost to the nascent clean energy sector overall. An investment of this size could help drive prices down and attract more clean energy manufacturing to the United States. It also sends an important signal to other large companies that investing in energy efficiency and renewable energy has a host of financial benefits.

Although Walmart certainly faces its share of scrutiny, they deserve praise for this level of commitment to clean energy.