Barack Obama

The United States is headed for an economic version of a Wall Street “triple witching hour.”  In finance, a triple witching house comes along four times a year, when options contracts on stocks, options contracts on stock indexes, and futures contracts of those indexes all expire at the same time on the same day.  Washington’s own version will unfold at midnight, December 31, 2012.  That is the moment when, at once, all of George W. Bush’s tax cuts expire, President Obama’s payroll tax relief ends, and the grace period before $1.2 trillion in across-the-board cuts runs out.  If the President, Congress and the two parties cannot finally agree on what to do about spending and revenues, their doing nothing will actually solve most of the U.S. deficit problem.  But all of that austerity coming at once would also shut down the U.S. economy.   

We actually face something close to a quadruple witching hour, because sometime in late-December or early-January, within days or weeks of everything else, the U.S. debt limit will run out again.  The irony is that if the lame duck Congress and possibly a lame duck President cannot resolve these matters, the United States could face a technical sovereign debt default even as its political gridlock carves out a sustainable path for its government debt.  Given how tortuously difficult it has been to resolve any one of these issues thus far, on even a temporary basis, the health of the American economy demands some new political thinking.

The range of scenarios for the post-election period is mind-boggling.  For example, conservatives might be tempted to trade a multi-year extension of payroll tax relief for permanent status for all of the Bush tax cuts.  A newly-reelected President Obama might consider agreeing if, say, the Republicans also would agree to find some new revenues from other sources and fold in a multi-year extension for the debt limit.  (Good luck with that.)  And if Romney wins the White House, congressional Democrats could call his bluff, let him enter office with a sinking economy, and then force him to negotiate with a Senate Democratic caucus able to block whatever a GOP House passes.  Or, in what would pass for a rosy scenario here, everyone may be so exhausted from the years of political trench warfare that all sides agree to extend everything for several more months, so the new Congress and whoever is President can try to work it all out. 

Whatever the election results, the debate over taxes and the budget will dominate our politics and government through at least the first half of 2013.   In fact, that happens nearly every four years.  Since Ronald Reagan’s first term, most Presidents have figured out that they can use their initial budget and tax initiatives to carry most of their agenda – and that their sway with Congress will likely only erode with time.  To be sure, this initial focus on budget and taxes made more sense when Washington still knew how to forge bipartisan compromises.  The question today is, can any president get the current crop of Republicans to sign on to any plan that includes new taxes?  And without that concession, could any president persuade congressional Democrats to reform Medicare and Social Security?

If taxes and entitlement remain off-the-table, there can be no grand bargain and no resolution.  For the short-term, the United States instead will face auto-pilot austerity.  More important, the patience of global investors with our stumbling political process could run out, which would mean rising long-term interest rates.  If that happens, the U.S. expansion will end before it can generate any benefits at all for most Americans.

The next president needs a game changer, one that might entice each side to make painful concessions, say, in exchange for control over the impact of those concessions.  As president, Bill Clinton could intuit the terms of such mutual concessions.   We will have to settle for a new process – or for putting an old one to new use.  

For many years, certain aspects of taxation have been seen as too complex and esoteric for even the professional tax mavens at the Senate Finance and House Ways and Means committees.   The taxation of mutual and stock life insurance companies is an example.  So when Ronald Reagan raised corporate taxes, the tax writing committees parceled out several billions of dollars in new revenues to the life insurers and told them to figure out how to raise it in ways that would be least disruptive economically.   Those were simpler times politically, to be sure, but the same model could be adapted to our current problem.

Let’s assume that the lame duck gives the President and Congress a few more months to work out everything.  Next January, the President and the leaders of both parties in both houses agree – tacitly, of course -- on how to broadly allocate another $4 trillion in budget savings over 10 years, under new rules.  Say, for example, that $1 trillion would come from new revenues, $2 trillion from entitlement reforms, $200 billion from discretionary defense spending, $300 billion from additional discretionary non-defense programs, and the rest from interest savings.  By agreeing to $1 trillion in new revenues, Republicans get the right to design whatever reforms they deem best to achieve the target.  Similarly, by agreeing to $2 trillion in entitlement savings, Democrats gain the right to fashion whatever Medicare and Social Security changes they deem best.  Similarly, Republicans could allocate the additional defense cuts, and Democrats would parcel out the additional, discretionary non-defense cuts.  And the looming threats from the expiration of everything, combined with the knowledge that each party would control the terms of the changes it fears most, might just be enough to get both sides to agree to the underlying allocation of pain. 

Millennials (born 1982-2003) were crucial to Barack Obama’s 2008 election.  Other than the state of the economy, the most pivotal factor in determining the outcome of the 2012 general election is likely to be whether or not America’s youngest voters repeat their 2008 electoral performance in 2012.  

In November 2008, Millennials comprised about 17% of the electorate and voted overwhelmingly for Barack Obama over John McCain (66% to 32%). With older generations dividing their votes almost evenly between the two candidates, Millennials accounted for about 80% of Obama’s national popular vote margin over McCain, turning what would have been a narrow  win into a decisive seven-point victory.

So far, the data suggests Millennials are poised to support Barack Obama at the same level this year that they did four years ago. In a recent Pew survey, Millennials preferred Obama over Mitt Romney, the likely Republican nominee, by a 62% to 36% margin.   But this year, Millennials make up 24% of those eligible to vote. Coupled with its partisan unity in comparison with older voters, the sheer size of the Millennial Generation, America’s largest ever, could make its impact even more decisive in 2012 than in 2008.

Whether Millennials have that kind of impact depends on what the two parties do to attract their votes.  For Republicans, the best approach is to connect with Millennials before they are solidly in the Democratic camp for the next three or four decades. A few Millennial Republicans such as John McCain’s daughter, Meghan,  and Kristen Soltis, a GOP pollster,  have argued that their party should moderate its stance on social issues and immigration in order to have greater appeal to their highly tolerant and diverse generation. So far, however, the GOP presidential field has attracted relatively little Millennial support; through Super Tuesday the Republican frontrunners (Mitt Romney, Rick Santorum, and Ron Paul) combined had received less than half the Millennial votes that Barack Obama did in 2008.   Perhaps the lack of Millennial interest in the GOP candidates explains why Republicans in at least half of the states are more focused on limiting Millennial voting turnout than in actively courting the generation’s support 

For Democrats, the concern is not so much the partisanship of Millennials, but their engagement. One way to reinforce Millennials’ Democratic leanings is to remind them of their stake in the election by emphasizing the Millennial-friendly policies the Obama administration has pursued. Help with the cost of attending college, funding more national service opportunities, and permitting young people to remain on their parent’s health insurance until age 26 are all initiatives the Obama team could raise with Millennials.  Already that campaign is gearing up online and offline organizational efforts to bring Millennials to the polls in November that exceed the technological sophistication of its very successful efforts in 2008. 

If Millennials vote in numbers proportionate to their presence among eligible voters, their continued support of the president should allow him to overcome any attrition he suffers among older voters. But if large numbers of Millennials do not vote, the president’s reelection chances will be sharply reduced. Whichever alternative occurs will very likely determine whether Barack Obama or his eventual Republican opponent is inaugurated as president on January 20, 2013. 

Attorney General Holder gave a widely-anticipated speech yesterday attempting to shed some light on the Administration's policy regarding the targeted killing of American citizens engaged in terrorism abroad. Politico has a good summary of what was said and I recommend reading Adam Serwer's take over at Mother Jones.  The bulk of the speech was boilerplate that we've heard before, but the important portion was when Holder laid out the standard used by the Administration when making decisions about targets:

"Let me be clear: an operation using lethal force in a foreign country, targeted against a U.S. citizen who is a senior operational leader of al Qaeda or associated forces, and who is actively engaged in planning to kill Americans, would be lawful at least in the following circumstances: First, the U.S. government has determined, after a thorough and careful review, that the individual poses an imminent threat of violent attack against the United States; second, capture is not feasible; and third, the operation would be conducted in a manner consistent with applicable law of war principles."

While this is the clearest statement that's been given by the Administration on the subject, it begs more questions than it answers. He characterizes Al Qaeda as posing an ongoing and imminent threat to the US. Given that reality, it's not clear what relevant distinction exists between "operational" and non-operational leadership. Holder's internal logic wouldn't seem to preclude the targeting of people who provide significant material, recruiting, or logistics support if the entire organization is viewed as posing an imminent threat to Americans.

He goes on to acknowledge the necessity of "robust oversight," explaining the detailed procedures in place to deal with intelligence gathering, wire-tapping, and prosecuting suspects through military tribunals. When he gets back to the situation at hand, however, the only oversight that appears to apply to targeted killings is for the White House to "regularly inform...the appropriate members of Congress." Mere Congressional notification hardly seems like a robust form of oversight. In fact, it's really the bare legal minimum. It certainly sounds as though the White House is operating under the amended National Security Act which doesn't require them to notify all of Congress, or even everyone on the relevent Intelligence committees. They can choose to brief only the so-called "Gang of 8," and the Congressional Research Service points out that "Congress does not have the authority under statute to veto outright a covert action." There may be compelling reasons for the Administration to limit oversight so severely, but the Attorney General didn't make those arguments.

Holder did, however, attempt to take his most vocal legal critics head-on when he asserted--correctly--that "Due process and judicial process are not one and the same." The Supreme Court has consistently allowed for alternative, extra-judicial processes in instances where a judge and traditional trial are unnecessary. Kevin Drum points out, however, that historically this approach has been "meant to keep full-blown trials from being required even for fairly minor offenses, something that could grind the criminal justice system to a halt. It's not meant to demean the due process required for something as serious as targeting someone for killing." The legal precedent is clearly on the side of the Administration here, but in order to know whether or not they are, in fact, demeaning the standard--we would need a lot more knowledge about how the internal process of target selection and approval is carried out. These are details that the White House appears intent on keeping to itself.

It isn't just American terrorist supporters who have a deeply vested interest in this policy, however. There's more than a few foreign countries that I'm sure are weary of American Hellfire missiles targeting people within their borders. Holder recognized these concerns, assuring the audience that the White House's legal interpretation "does not mean that we can use military force whenever or wherever we want." After this throat-clearing, however, he goes on to remind everyone that "neither Congress nor our federal courts has limited the geographic scope of our ability to use force... the use of force in foreign territory would be consistent with these international legal principles if conducted, for example, with the consent of the nation involved - or after a determination that the nation is unable or unwilling to deal effectively with a threat to the United States." We know that the Osama bin Laden raid, for example, was conducted without the consent or knowledge of the Pakistani government, so presumably there is some kind of process and criteria in place to make a determination about whether or not a country is "unable or unwilling" to act. Like the process for determining individual targets, though, the actual standards and calculus being used remains too opaque to judge.

All told, I commend the Administration's attempt to increase, if only marginally, the transparency around this policy. Americans, legal scholars, and foreign countries are right to view these actions with skepticism. The Authorization for Use of Military Force, passed by Congress in the wake of the September 11 attacks, grants the President broad powers to use "necessary and appropriate force" in protecting the nation from terrorism. As the Attorney General himself pointed out, though, proper oversight and review are essential to ensure that the White House exercises this power in a way that's consistent with our constitution, values, and international legal commitments. The ACLU, in a response to Holder's speech, argued that "judicial oversight is critically important given the breathtaking authority the government has claimed." Some accommodation for national security is clearly appropriate, but whether more formal judicial oversight is needed can't be fairly determined without understanding the rigor of the Administration's internal due process. With that in mind. civil rights groups are doing a real service by continuing to push for the needed level of disclosure. 

President Obama made inequality a major theme of his State of the Union address last night, an unsurprising choice as he prepares to face Mitt Romney. Everyone now knows that just last year Mr. Romney paid a smaller share of his $21 million income in taxes than the average American paid on a $50,000 salary. But if inequality was the President’s theme, his main subject was jobs. For Obama, faster job growth depends on more government. We need Washington, for example, to retrain workers, reduce college costs, and provide special supports for manufacturers. For Romney, the answer for job creation is, what else, less government: Washington needs only to cut regulation and reduce taxes, especially for the wealthy people and corporations who, in the Romney worldview, create the jobs.

But not so fast — there are other options as well. A new report from the NDN think tank suggests that certain kinds of new technologies can spur job creation more effectively than most government programs or tax cuts. The new study, conducted by Kevin Hassett of the American Enterprise Institute and myself, found that the rapid spread of new 3G wireless devices from 2007 to 2011 led directly to the creation of nearly 1.6 million new jobs. And those job gains occurred even as the overall economy was shedding 5.3 million other jobs.

Our analysis tracked shifts by consumers and businesses from 2G wireless phones to 3G smart phones and tablets, quarter by quarter and state by state, from July 2007 to December 2011. We then analyzed the links between the shift to the more powerful 3G devices and changes in employment, quarter to quarter and state by state. We did the math and found that every 10 percentage point increase in the use of those devices generated more than 231,000 new jobs within a year.

It makes clear and compelling economic sense. As a growing share of Internet use shifts to wireless devices, the people and businesses that use them become more efficient and productive. Those gains, in turn, create new value which ultimately leads to more job creation. The spread of 3G wireless devices also created a platform for new services — for example, in mobile e-commerce, mobile social networking, and location-based services. The growth of those new services also led to more job creation.

And the best news for jobs is that another technological shift is occurring right now, from 3G to 4G wireless devices. 4G wireless networks and the Internet infrastructure that supports them have the potential to drive significant new efficiencies and innovations across the economy. Jobs already are being created in 4G-dependent areas such as cloud-based services and mobile health applications. According to industry analysts, 4G wireless networks in the near future could be used to create a Smart Electricity Grid and a national public safety system.

This analysis, then, can provide a new direction for job creation efforts: Adopt spectrum and other policies that will promote the broad and rapid deployment of 4G

Still, there are also kernels of economic truth in the Romney and Obama positions. Romney is not wrong, for example, when he says that lower taxes are usually better for the economy than higher taxes. But there’s no evidence that lower taxes on wealthy people or corporations would produce many jobs. And in a period of trillion-dollar budget deficits, calls for tax cuts seem at best irrelevant, and at worst politically cynical and misleading.

The President is on firmer ground. Greater access to higher education and retraining should increase productivity and growth, at least over the long haul. Since the direct benefits from those efforts would presumably go to people from modest or middle-income households, Obama’s approach also could help address inequality. And since the President seems prepared to raise the revenues to finance his proposals, they could be more than political window dressing.

For all of these good points, these approaches are not the answer to slow job creation. For that, President Obama and Mr. Romney have to directly address the forces that actually create and destroy private-sector jobs. One such force is technology, and our new analysis shows that the 3G and 4G wireless technologies can create many more jobs than they may destroy, and do so quickly. Another approach could focus on reducing the additional costs that businesses bear directly when they create new jobs. That could mean cuts on the employer side of the payroll tax or new measures to slow increases in the health care costs that businesses bear for their employees. At a minimum, any of these approaches would produce more economic benefits for more people than all of the tax cuts promoted by Obama’s opponents.

I released the following statement today:

"Today’s report that the U.S. economy created  200,000 new jobs, net of layoffs, certainly counts as strong gains for this recovery.  Of course, what constitutes strong job growth today would have seemed, at best,  moderate in the 1990s and 1980s, when the United States routinely created more than 300,000 new jobs per month.   Still, for the first time since the 2007-2009 recession, decent levels of job creation seem sustainable.  Business investment is growing nicely, creating jobs directly.  The trade deficit keeps falling, slowing the drain of U.S. jobs overseas.  And while consumer spending is still fragile, household debt continues to fall, setting the stage for a stronger recovery.  

If Washington would take steps to help stabilize housing prices, as Ben Bernanke called for this week, and if the Eurozone manages to avoid a financial meltdown, Obama could find himself presiding over a decent recovery by November."

You can find Rob's statement on Thursday about the promising ADP report showing similar numbers here.

A word of caution to President Obama's critics:   American families and businesses may be finally recovering from the economic beatings they suffered in the 2008 financial crisis and the extended unwinding of the 2002-2007 housing bubble.  The giant payroll company ADP, whose surveys have a good record of anticipating the official jobs reports, said today that private sector employment grew by an estimated 325,000 in December.  This follows several months of encouraging news on jobs from the Bureau of Labor Statistics.   Business investment and corporate profits also have shown renewed strength.   

Yet, GDP growth has been modest, mainly because consumer spending is still fragile.   Americans want proof that job creation is back and the value of their homes has stabilized.  The first factor may now be in place.   If housing prices stop falling - and Europe avoids a financial meltdown -- the American economy in 2012 is likely to be the strongest since 2007.

In Kansas last week, President Obama laid out the economic brief for his reelection. Its substance plainly recalls the program Bill Clinton offered in 1992. Both plans are built around new public commitments to education, R&D and infrastructure, some fiscal restraint to finance the public investments and unleash more private investment, plus some modest redistribution of the tax burden from working families to the wealthy. This formula still strikes the right notes politically, at least for those who aren’t diehard, pre-New Deal conservatives. But economically, this mainstream approach will face much greater hurdles today.

Most of the President’s conservative critics have focused on his call for more revenues from affluent Americans, starting with a surtax on millionaires. In fact, congressional Republicans not only have rejected the surtax; they’ve also suggested that they might hold payroll tax relief hostage until Obama agrees to make the Bush upper-end tax cuts permanent. It’s a bluff, and not a very good one: The GOP will stop the surtax on the rich, but they cannot be seen at the same time as raising taxes on everyone else. Whether or not Bush’s largesse for upper-income Americans survives will turn on who is inaugurated in January 2013.

This tax debate may pack a good political punch for Obama; but in the end, it doesn’t have much economic significance. Yes, a higher marginal rate, in itself, would have negative effects. But in the real world, a higher rate never operates by itself. The additional revenues may help bring down interest rates by reducing deficits and so spur business investment, as they did under Clinton. Or the same revenues could help finance public investments that make businesses more efficient and productive. And the truth is, the adverse effects of a higher tax rate on the wealthy, by itself, fall somewhere between quite weak and very weak. What else can an economist infer from strong growth in the 1950s when the top rate exceeded 90 percent, quickening growth in the 1990s after Clinton hiked the top rate, and more tepid growth after Bush cut the top rate?

The harder and more important issue is whether the combination of more public investment and smaller deficits, which worked so well for Clinton, will make much difference today. Like Clinton in 1992, Obama last week called for more federal dollars in the three specific areas that can boost productivity and growth in every industry, and which businesses tend to shortchange. This covers worker education and training, basic research and development, and transportation infrastructure. The theory, confirmed by the boom of the latter 1990s, is that these factors help make businesses more efficient and their workers more productive. Together, those gains translate into higher incomes and stronger business investment, especially if businesses don’t have to compete with Washington for capital to invest. And all of that should produce stronger growth, more jobs, and a much-sought-for virtuous circle.

The catch lies in jobs and wages. If the public investments allow businesses to become more efficient and productive, but those investments do not lead to higher incomes and more jobs, the only result will be higher profit margins. The whole virtuous circle will slow down or even stall out, much like what happened once the 2009 stimulus ran its course. In the 1990s, the strategy worked like a charm, because U.S. companies still responded to higher growth and productivity with strong job creation and wage increases. But those connections have weakened badly since then.

Consider the following. The Bush expansion from 2002 to 2007 saw GDP grow by an average of 2.7 percent a year, 30 percent slower than the 3.5 percent annual gains for a comparable period in the 1990s, say 1993 to 1998. But while the number of private sector jobs grew by more than 18 percent from 1993 to 1998, this rate fell to less than 6 percent from 2002 to 2007, a two-thirds decline from the earlier period . Even worse, the connection between productivity and wage gains broke down even more. In the 1990s, productivity grew 2.5 percent per-year, and average wages increased nearly in lock-step, by 2.2 percent a year. In grim contrast, productivity grew 3 percent a year from 2002 to 2007 while the average wage didn’t go up at all.

Clinton’s program could take strong job creation and wage gains virtually for granted. President Obama’s program will have to address these issues head on, and in ways that might attract some bipartisan support. Obama will also have to contend with additional hurdles, including the persistent economic drag from the financial crisis and, perhaps, from another round triggered by Europe’s faltering sovereign debt.

Here are three ways to begin.

First, while the President’s temporary payroll tax cut for workers provides some welcome stimulus, reducing the tax burden that falls directly on job creation on a permanent basis — the employer side of the payroll tax — would be more powerful economically.  We could cut employer payroll taxes in half, for example, and replace the revenues with a new carbon fee on greenhouse gases. In the bargain, the United States also would become the world’s leading nation in fighting climate change.

To address stagnating wages as well as slow job growth, the President should recast his training agenda as a new right. Most jobs today — and virtually all positions very soon — require some real skills with computers and other information technologies. All working Americans should have the opportunity to upgrade their IT skills, year after year. They could have that, and at modest cost to taxpayers, if Washington will give community colleges new grants to keep their computer labs open and staffed at night and on weekends, so any American can walk in and receive additional IT training for free.

Finally, U.S. multinationals have lobbied furiously, without success, for a temporary tax cut on profits they bring back from abroad. Give them what they want, if they will give the economy what it needs. We could let U.S. multinationals bring back, say, 50 percent of their foreign profits at a lower tax rate if, and only if, they expand their U.S. work forces by 5 percent. A 6 percent increase in a company’s U.S. workers would entitle them to bring back 60 percent of those profits at a lower tax rate, and on up to a 10 percent job increase and 100 percent of foreign profits.

That’s what it will take, just to begin, for an economically-powerful program of public investment and fiscal restraint to work its magic this time.

Everyone knows that unemployment is high today and unlikely to fall by much soon. Yet, a longer view of the official jobs data would startle most people, including virtually everyone in the media. Nearly three years into Barack Obama’s presidency, his record on private job creation has actually been much stronger than George W. Bush’s at the same point in his first term. Whatever the public perception, the real record provides strong evidence for both the relative success of Obama’s economic program and how hard it now is for American businesses to create large numbers of new jobs — as they did once so effortlessly, and without political prodding.

Let’s go to the numbers reported by the Bureau of Labor Statistics (BLS). In the first 33 months of George W. Bush’s presidency, from February 2001 to October 2003, the number of Americans with private jobs fell by 3,054,000 or 2.74 percent. Perhaps Americans were too distracted by Osama bin Laden to pay attention, or everyone was lulled by the dependably strong job creation of the 1980s and 1990s.  Whatever the reason back then, Americans are certainly paying attention to jobs now. Yet, few seem to have noticed that Barack Obama’s jobs record has unquestionably been much better. In the first 33 months of his presidency, from February 2009 to October 2011, private sector employment fell by 723,000 jobs or 0.66 percent. That means that over the first 33 months of the two presidents’ terms, jobs were lost at more than four times the rate under Bush as under Obama. 

To be fair, new presidents shouldn’t be held responsible for job losses or job gains in the first five or six months of their administrations.  Bush’s signature tax cuts, for example, weren’t enacted until June 2001; and while Congress passed Obama’s signature stimulus program earlier in his term, it didn’t take effect for several more months. But the story is the same when we start counting up jobs without the first five months of each president’s term. The BLS reports that from July 2001 to October 2003 under Bush’s program, U.S. businesses shed 2,167,000 jobs, or about 2 percent of the workforce. Over the comparable period under Obama’s policies, from July 2009 to October 2011, American businesses added 1,890,000 jobs, expanding the workforce by 1.75 percent. In fact, private employment in Bush’s first term didn’t begin to turn around in a sustained way until March 2004, 38 months into his term. By contrast, private employment under Obama started to score gains by April and May of 2010, 14 to 15 months into his term.

The same dynamics have played out with manufacturing workers. While they have taken a beating under both presidents, they suffered much harder blows under Bush than Obama. Setting aside, once again, the first five months of each president’s term, the data show that under Bush, 2,141,000 Americans employed in producing goods lost their jobs by October 2003, a 9 percent decline. Under Obama, job losses in goods production totaled 183,000 over the comparable period, a 1.0 percent decline.

Public perceptions, especially of Obama’s record, may be skewed by the collapse of the jobs market in the months before he took office. In the final, dismal year of Bush’s second term, from February 2008 through January 2009, American businesses laid off an astonishing 5,220,000 workers, 4.5 percent of the entire private-sector workforce. Obama and the Fed managed to staunch the hemorrhaging. But the huge job losses in the year before he took office have become a political hurdle which Obama must overcome before he can take credit for putting Americans back to work.

Apart from the obvious disconnect between conventional wisdom and what actually has happened with jobs, the data also speak to certain features of the labor market and the policies we use to affect it. For example, both presidents began their terms with large fiscal stimulus programs, backed up by more stimulus from the Federal Reserve. So, the record now shows clearly that when the economy is depressed, spending stimulus has a more powerful effect on jobs than personal tax cuts.

Beyond that, why couldn’t either president restore the much stronger job creation rates of the 1990s and 1980s? Obama’s economic team can point to the long-term effects of the 2008 housing collapse and financial crisis, especially the impact of four years of falling home values on middle-class consumption. But another factor also has been at work here, one which contributed mightily to the slow job creation under both presidents, and will similarly affect the next president.

The tectonic change from strong job creation of the 1980s and 1990s to the current times is, in a word, globalization. From 1990 to 2008, the share of worldwide GDP traded across national borders jumped from 18 percent to more than 30 percent, the highest level ever recorded. Intense, new competition from all of that additional trade has made it harder for American businesses to raise their prices, as competition usually does. That’s why inflation has remained tame for more than decade, here and nearly everywhere else in the world. The problem that American employers have faced — and still do — is that certain costs have risen sharply over the same years, especially health care and energy costs. Businesses that cannot pass along higher costs in higher prices have to cut back elsewhere, and they started with jobs and wages.

One irony here is that the Obama health care reform should relieve some of the pressure on jobs, by slowing medical cost increases. The administration’s energy program, still stalled in Congress, also might slow fuel cost increases, at least over time. So, if he does win reelection in the face of high unemployment, there is a reasonable prospect of stronger job creation in his second term than in his first one — or in either of George W. Bush’s terms.

NDN was fortunate enough to be invited to talk at the University of Richmond Spanish in the Community program about our 21st Century Border Initiative Program.

The interdisciplinary program is designed to allow students to engage in "Lectures presented by influential business, media, political, and government leaders—many of whom are active in the local Spanish-speaking community—bring the emphasis to comprehension and production through immersion in context."

NDN was pleased to present and foster a dialogue and debate about the southwest border region and immigration reform. The presentation was intended to educated the students about the very real progress made in creating a safer and more economically dynamic region and what that means for future movement on comprehensive immigration reform:

Regarding border safety, the presentation highlighted the fact that overall violence along the Southwest Border has been in decline for some time and that overall the region is quite safe:

The FBI report on Preliminary Annual Uniform Crime shows that nationally, including border states, all four categories of violent crime declined overall compared to 2008:robbery, 8.1 percent; murder, 7.2 percent; aggravated assault, 4.2 percent; and forcible rape, 3.1 percent. Violent crime declined 4.0 percent in metropolitan counties. The same report shows that in Texas, violent crime rates declined,by 3.5 percent to 123,668 incidents per 100,000 residents in 2009.  From 2009 to 2010 in the 4 Texas border states, El Paso, Laredo, Brownsville and McAllen all saw drops in violent crime. By contrast Dayton, Ohio part of Speaker of the House John Boehner’s is far more violent.

Regarding our important economic relationship with Mexico, the presentation highlighted the tight economic bond between the our countries:

Mexico and the United States trade more than $1 billion worth of goods each day ($393 billion in 2010). Mexico spent $163 billion on U.S. goods in 2010, including $14 billion on agricultural products. NAFTA-related trade with Mexico has added 1.7 million jobs to the U.S. economy. Twenty-six U.S. states had exports to Mexico in excess of $1 billion in 2010.

NDN President Simon Rosenberg weighing in on NJ Gov. Chris Christie's criticism of President Obama on 9.29.2011