Today in the Senate, Senator Schumer is holding an important hearing: "Comprehensive Immigration Reform in 2009, Can We Do it and How?" Here at NDN, we believe the answer to whether Congress can pass reform this year is "yes." Below are seven reasons why:
1) In tough economic times, we need to remove the "trap door" under the minimum wage.
One of the first acts of the new Democratic Congress back in 2007 was to raise the minimum wage, to help alleviate the downward pressure on wages we had seen throughout the decade even prior to the current Great Recession. The problem with this strategy is that the minimum wage and other worker protections required by American law do not extend to those workers here illegally. With economic times worsening here and in the home countries of the migrants, unscrupulous employers have much more leverage over, and incentive to keep, undocumented workers. With five percent of the current workforce -- amazingly, with one out of every 20 workers now undocumented, this situation creates an unacceptable race to the bottom, downward pressure on wages, at a time when we need to be doing more for those struggling to get by, not less.
Legalizing the five percent of the work force that is undocumented would create a higher wage and benefit floor than exists today for all workers, further helping, as was intended by the increase in the minimum wage two years ago, to alleviate the downward pressure on wages for those struggling the most in this tough economy.
Additionally, it needs to be understood that these undocumenteds are already here and working. If you are undocumented, you are not eligible for welfare. If you are not working, you go home. Thus, in order to remove this "trap door," we need to either kick five percent of existing American workforce out of the country -- a moral and economic impossibility -- or legalize them. There is no third way on this one. They stay and become citizens or we chase them away.
Finally, what you hear from some of the opponents of immigration reform is that by passing reform, all of these immigrants will come and take the jobs away of everyday Americans. But again, the undocumented immigrants are already here, working, having kids, supporting local businesses. Legalization does not create a flood of new immigrants -- in fact, as discussed earlier, it puts the immigrant worker on a more even playing field with legal American workers. It does the very inverse of what is being suggested -- it creates fairer competition for American workers -- not unfair competition. The status quo is what should be most unacceptable to those who claim they are advocating for the American worker.
2) In a time of tight budgets, passing immigration reform will bring more money into the federal treasury.
Putting the undocumented population on the road to citizenship will also increase tax revenue in a time of economic crisis, as the newly legal immigrants will pay fees and fines, and become fully integrated into the U.S. tax-paying system. When immigration reform legislation passed the Senate in 2006, the Congressional Budge Office estimate that accompanied the bill projected Treasury revenues would see a net increase of $44 billion over 10 years.
3) Reforming our immigration system will increasingly be seen as a critical part of any comprehensive strategy to calm the increasingly violent border region.
Tackling the growing influence of the drug cartels in Mexico is going to be hard, cost a great deal of money, and take a long time. One quick and early step toward calming the region will be to take decisive action on clearing up one piece of the problem -- the vast illegal trade in undocumented migrants. Legalization will also help give these millions of families a greater stake in the United States, which will make it less likely that they contribute to the spread of the cartels influence.
4) Fixing the immigration system will help reinforce that it is a "new day" for U.S.-Latin American relations.
To his credit, President Obama has made it clear that he wants to see a significant improvement in our relations with our Latin neighbors and very clearly communicated that message during his recent trips to Mexico and the Summit of the Americas. Just as offering a new policy toward Cuba is part of establishing that it is truly a "new day" in hemispheric relations, ending the shameful treatment of Latin migrants here in the United States will go a long way in signaling that America is taking its relations with its southern neighbors much more seriously than in the past.
5) Passing immigration reform this year clears the way for a clean census next year.
Even though the government is constitutionally required to count everyone living in the United States every 10 years, the national GOP has made it clear that it will block efforts for the Census Bureau to count undocumented immigrants. Conducting a clean and thorough census is hard in any environment. If we add a protracted legal and political battle on top -- think Norm Coleman, a politicized U.S. Attorney process, Bush v Gore -- the chance of a failed or flawed census rises dramatically. This of course would not be good for the nation.
Passing immigration reform this year would go a long way to ensuring we have a clean and effective census count next year.
6) The Administration and Congress will grow weary of what we call "immigration proxy wars," and will want the issue taken off the table.
With rising violence in Mexico, and the everyday drumbeat of clashes and conflicts over immigration in communities across America, the broken immigration system is not going to fade from public consciousness any time soon. The very vocal minority on the right -- those who put this issue on the table in the first place -- will continue to try to attach amendments to other bills ensuring that various government benefits are not conferred upon undocumenteds. We have already seen battles pop up this year on virtually every major bill Congress has taken up, including SCHIP and the stimulus. By the fall, I think leaders of both parties will grow weary of these proxy battles popping up on every issue and will want to resolve the issue once and for all. Passing immigration reform will become essential to making progress on other much needed societal goals like moving toward universal health insurance.
7) Finally, in the age of Obama, we must be vigilant to stamp out racism wherever it appears.
Passing immigration reform this year would help take the air out of the balloon of what is the most virulent form of racism in American society today -- the attacks on Hispanics and undocumented immigrants. It will be increasingly difficult for the President and his allies to somehow argue that watching Glenn Beck act out burning alive of a person on the air over immigration, "left leaning" Ed Schultz give air time to avowed racist Tom Tancredo on MSNBC or Republican ads comparing Mexican immigrants to Islamic terrorists is somehow different from the racially insensitive speech that got Rush Limbaugh kicked off Monday Night Football, or Don Imus kicked off the radio.
So for those of us who want to see this vexing national problem addressed this year, this important hearing is a critical step forward. But we still have a long way to, and a lot of work ahead of us if we are to get this done this year.
(Also check out our recently released report, Making the Case for Passing Comprehensive Immigration Reform This Year, which succinctly lays out our case for why Congress can -- and should -- pass comprehensive immigration reform this year).
Bipartisanship. Other than "stimulus" or "bailout," perhaps no word has been written or spoken more often by politicians and pundits alike in Washington since the inauguration of Barack Obama. Commentators have generally characterized President Obama's attempts to engage Republicans as almost completely unsuccessful, while Republicans have derided his efforts as charming but ineffective, especially in light of the more partisan approach of his party’s Congressional leadership. Liberals such as Thomas Frank dismissed bipartisanship as a "silly Beltway obsession," calling it "the most cynical stance possible."
For his part, the President told columnist E.J. Dionne that the almost complete rejection of the American Recovery and Reinvestment Act by congressional Republicans reflected a combination of genuine "core differences between Democrats and Republicans" and an opportunistic attempt to "enforce conformity" and "reinvigorate their base." Obama then outlined the limits of his good will in a phrase sure to be repeated as the debate continues: "You know, I'm an eternal optimist. That doesn't mean I'm a sap."
While some of this is just typical Washington politics, there is more to the argument over bipartisanship than mere gamesmanship. American politics has moved to a new era, one in which basic public attitudes toward government and the norms by which political activity is conducted and judged have been altered sharply and profoundly. Spurred as always by the emergence of a large and dynamic new generation, this makeover or realignment has changed almost everything about American politics, including the very meaning and practice of "bipartisanship."
The most striking evidence of just how much things have changed was the extraordinary exchange between the President, congressional leaders from both houses and parties, and leaders from the private sector, both business and labor, at the White House Summit on "Fiscal Sustainability." The entire event was deliberately choreographed by President Obama to be demonstrably bipartisan and televised for the public to see. The dialogue between the President and Members of Congress suggested some principles of an approach to governing that can best be described as "positive partisanship." It is the way in which bipartisanship will be exercised in the new civic era that began with the election and inauguration of Barack Obama. The President himself summarized how this new approach should work, responding to U.S. Rep. Joe Barton (R-TX), the ranking Republican on the House Energy and Commerce Committee, who asked him to take the lead in telling Speaker Nancy Pelosi and her fellow Democrats to be inclusive in their approach to developing legislation: "I do agree that the majority has an obligation to try and be as inclusive as they can, but the minority has to be constructive in return. The minority has to come up with their own ideas and not just want to blow things up." Exactly.
In the 40-year long "idealist" era that just ended, bipartisanship reflected the circumstances of a nation dominated by the unflinchingly ideological and profoundly fractured Baby Boomer Generation. Within the electorate, and especially among Boomers, there were approximately an equal number of Republicans and Democrats and, at times, more independents than either. Voters were almost always sharply divided along the demographic lines of gender and ethnicity. In 14 of the 20 Congresses during the era, different parties controlled the presidency and at least one house of Congress, something favored by the American public in attitude surveys throughout the period. As a result, major alterations in public policy were rare and institutional gridlock was the rule rather than the exception.
Historically, in previous idealist eras, "bipartisanship" meant seeking the lowest common denominator to bridge the differences between ideological extremes. During most of the idealist era between the election of Andrew Jackson in 1828 and Abraham Lincoln in 1860, attempts to find a literal mathematical midpoint between the slave states and free states were the rule. The Missouri Compromise of 1820 divided the territory acquired in the Louisiana Purchase into free states north of latitude 36° 30' and slave states south of that line. Later, new states entered the Union in pairs, one slave and one free state at a time. A Whig politician, Henry Clay, gained the nickname "the Great Compromiser" for his efforts to achieve those middle ground solutions.
In the idealist era that has just ended, political leaders, especially Democrats, were often forced to return to the bipartisan model of that earlier era. Bill Clinton, certainly the more successful of the two Democrats elected to the presidency between 1968 and 2004, often pursued an approach of "triangulation" between the ideological liberals of his own party and the conservatives of the opposition Republicans. "Centrist" Democratic groups (the very term obviously implying middle ground positioning) sought a "Third Way" between the ideological and partisan ends of the political spectrum. Party liberals often excoriated Clinton and the "centrist" Democrats for their ideological impurity. But the efforts to seek midpoint bipartisan policies made sense in a politically divided idealist era, especially one in which the opposition party held the presidency most of the time and divided government was the norm.
But in 2008, America moved to a new political era and everything changed, including the meaning of bipartisanship, as the greatest economic crisis since the Great Depression pushed the country into another civic era. In this environment, the American public, which had preferred divided government during the previous idealist era, now endorses unified government. A CNN survey conducted immediately after the 2008 general election indicated that a clear majority (59%) favored the idea of the Democrats controlling both elective branches of the federal government. Only 38 percent said that one-party rule was a bad idea. The public used a clearly civic era rationale to explain its changed attitude, telling Wall Street Journal pollsters that when the same party controls both the presidency and Congress, "it will end gridlock in Washington and things will get done." A recent CBS/New York Times survey confirmed the desire for decisive action across the institutional lines of a newly unified government. A clear majority (56%) wants President Obama to pursue the policies he promised in the campaign rather than working in a bipartisan way with Republicans (39%). By contrast, an even larger majority (79%) wants congressional Republicans to work in a bipartisan way with the President rather than sticking to Republican policies.
Faced with the need to deal with the deep national crisis that triggered the birth of the civic era, the majority of Americans no longer have the time or tolerance for the partisan and ideological rancor that fractured the political process and produced gridlock in the previous idealist era. If nothing else, the public expects calm, courteous, and polite discussion that focuses more on possible solutions and less on defining differences and distinctions. That tone was exemplified by the President as he conducted the Q&A with the Summit participants -- listening carefully to what they had to say, agreeing or disagreeing with some comments but always in a civil, and in some cases self-deprecating, way that made it impossible for the participants to engage in their usual hot-button rhetoric.
Beyond demanding a new tone in political discourse, the public is also expressing its desire for decisive action with the majority party, currently the Democrats, having primary responsibility for governing. At the Summit, the President underlined some of the philosophical differences between the parties when discussing the question of individual tax rates or levels of overall revenue. But he made clear by his control of the session what he had told some Republicans earlier: "We won." He acknowledged both that the electorate had asked Democrats to take the lead in developing and implementing policies to deal with the major issues facing the nation and that he wanted the Republicans to play a role in finding the answers so long as they participated in a "constructive" fashion.
This offer to engage puts the GOP in a quandary. It can choose to retain its ideological purity and hope to avoid blame if Democratic decisions turn out to be ineffective or harmful, but in doing so it is denying itself any role policymaking during Obama’s presidency. Furthermore, such posturing is already creating an image in the public’s mind of Republicans being too political and obstructionist.
Alternatively, the GOP can resurrect the "Ev and Charlie Show" from the days of Lyndon Johnson when those two Republican congressional leaders participated in the policymaking process as a junior partner. If the Republicans choose this approach, they may leave themselves open to charges, similar to those leveled by Newt Gingrich at Republican congressional leaders when he first arrived in Congress, that they are a pale "me too" reflection of the Democrats, without any guiding principles of their own. But the approach does produce results. In the 1960s, Everett Dirksen and Charles Halleck collaborated with LBJ to provide the crucial votes on the Civil Rights Act of 1964 and the Voting Rights Act of 1965. The decisive support of Republican Senators Susan Collins, Olympia Snowe, and Arlen Specter for the recently enacted economic recovery act may be an unofficial and limited reflection of this approach early in the new civic era.
Overall, however, the GOP seems inclined to avoid collaborating with Democrats in order to stay true to its idealist era ideology. While that may well promote party unity and discipline, from the perspective of enhancing the Republican brand, it seems to be a major error.
In a recent Daily Kos survey, clear majorities had favorable opinions of the President (67%) and the Democratic Party (53%). Favorable attitudes toward congressional Democrats (44%), Speaker Nancy Pelosi (39%), and Senate Majority Leader Harry Reid (34%) were not nearly as high. But, the favorable ratings received by the Democrats were substantially above those given to the Republican Party (27%), congressional Republicans (17%), John Boehner (13%), and Mitch McConnell (19%). Moreover, since the first of the year, favorable ratings of the Democratic leaders and the Democratic Party have remained stable or even increased, while those of the Republicans have declined.
In 2008, the American people chose the Democratic Party to take the lead in confronting and resolving the grave problems facing the nation. They are expecting a decisive, civic-oriented response from President Obama. The Republican Party is left with the options of either joining the struggle or being left behind. Ultimately, both parties behavior will be shaped and judged by a new definition of what it means to exercise positive partisanship in a new era.
NDN had major appearances in a great group of publications this week. First off, Simon was featured in Roll Call in a story about Al From stepping down from the DLC. Here's an excerpt from the piece:
Another group trading on its centrist ties is the NDN, a group previously known as the New Democrat Network that was started and is still run by former DLC field director Simon Rosenberg.
His organization, now a think tank focusing on demography, technology and the media, was once a political action committee engaged in trying to elect moderate Democratic candidates.
NDN has since retooled, Rosenberg said, although not entirely.
"There is no question our origins come out of the New Democrat movement and NDN has been long affiliated with the New Democrats," Rosenberg said.
"But we’ve also charted our own course. We've really tried to make sure that we've tried to understand the changes in America and build ideas and strategies and arguments around what is a very dynamic and fast-changing time."
For NDN, a "fast-changing time" in 2003 meant engaging with the net roots, the activist wing of the Democratic Party that raises money and interacts primarily on the Internet — and became a thorn in the side of more established players such as From.
Rosenberg said a fissure within his party cropped up in recent years over how moderates should align themselves on the issues with Republicans, whose centrist ranks in recent elections have been gutted. Rosenberg said that once Republicans "became unreasonable, the whole construct of the third way started to weaken.
"There were elements of the New Democrat movement that became leaders in the opposition to [President George W.] Bush and there were others who were slow to recognize how much damage they were doing to the country," he continued. "That became a huge dividing line in the family."
Finding common ground with people "whose ideas are wrong and bad for the country," Rosenberg said, "is not a virtuous act."
Rosenberg wrote the forward to Jerome Armstrong and Daily Kos founder Markos Moulitsas’ best-selling 2006 book "Crashing the Gate: Netroots, Grassroots, and the Rise of People-Powered Politics."
As evidence of the rift that still exists between From and others perceived as the party's establishment — a divide originating with moderate Democrats' support for the Iraq War — Moulitsas dismissed the idea of compromise.
"The notion that splitting the difference makes an issue moderate is patently absurd," he said.
Simon was also quoted in an excellent Alternet article about the prospects for immigration reform in the midst of an economic crisis:
But those with whom I spoke are optimistic that a slightly different coalition will hold together. Simon Rosenberg, director of the New Democrat Network, a centrist group that's been in the thick of the immigration debate, told me, "if people want to resolve these issues, they can." He believes a modest guest-worker program is key to winning broad support, including the support of a number of Republicans.
"Getting 5 percent of the workforce out of the shadows, giving them the opportunity to unionize, getting them minimum wage protections -- this is such an important goal for progressives that they need to be willing to accept some compromise," he said.
The original 2007 bill included a guest-worker program that would have allowed as many as 400,000 migrant workers, but an amendment halved that number, capping the number at 200,000 per year for two years. The guest-worker program was a key part of the bargain hammered out between McCain and Sen. Ted Kennedy, D-Mass., in 2006.
Rosenberg fears that a bill without a guest-worker program may not earn the support of key members of the GOP, including McCain, who rightly feels a sense of ownership over the legislation. "It's going to be hard without McCain, because no Republicans want to be seen running to his left on immigration," Rosenberg said.
There's no doubt that the system is in serious need of reform, as NDN's Simon Rosenberg summed up a month ago:
"Our broken immigration system is a national disgrace, yet another terrible vexing governing challenge left over from the disastrous Bush era. Legitimate workers have a hard time getting legal visas. Employers knowingly hire and exploit undocumented workers. Our immigrant justice system is a moral outrage. And of course, the scapegoating of the undocumented migrant has become the staple for right-wing politicians and media, giving them something to rail against as the rest of their agenda has collapsed all around them. It is long past time to fix this broken system and replace it with a 21st century immigration system consistent with traditional American values and the needs of our modern ideas-based economy."
Few would disagree with that assessment, the real contention is over the solutions. Nativists advocate a hardline against immigrants, but their loud and aggressive efforts have proven to be an electoral bust. On the other hand, Democrats have benefitted from an increasingly engaged, and increasingly Democratic Latino electorate. They're growing (PDF), they voted Democratic, and they expect action on this key issue. You see, for Latinos, immigration reform isn't an ideological issue, it's a family one. And you don't mess with family.
Next, Mother Jones had a write-up of our event last week with Joe Rospars, the Obama campaign's New Media Director and founder of Blue State Digital. From the piece:
On Tuesday, Rospars took part in a question-and-answer session about the impact of technology on politics hosted by the left-leaning think tank NDN. Rospars dinged the Republicans' much-criticized request for a proposal (PDF) to redesign its website, laughing that his company, Blue State Digital, certainly won't be competing for the business. (Lefty BSD probably wouldn't respond to the RFP anyway, of course, but Rospars brought it up out of the blue—he was obviously referring to the widespread mockery it had already received.) He criticized the GOP's email list, boasting that the Obama campaign's 13-million-strong list was developed in an "organic" way. "We didn't purchase lists and just add people to our email list," he said. "The point of having a big email list isn't just to say you have a big email list. The RNC says they have a however big email list, but the point is to actually have relationships with people so they open the message, they listen to what you're saying, and they're willing to do something," he said.
Finally, Michael had a piece in Grist about creating a sustainable system for infrastructure funding - it's very important stuff, so be sure to check it out!
David Brooks today hammers the Republican Party for its wholly inadequate response to the Great Recession and to President Barack Obama's plans for economic recovery:
The Democratic response to the economic crisis has its problems, but let’s face it, the current Republican response is totally misguided. The House minority leader, John Boehner, has called for a federal spending freeze for the rest of the year. In other words, after a decade of profligacy, the Republicans have decided to demand a rigid fiscal straitjacket at the one moment in the past 70 years when it is completely inappropriate.
The G.O.P. leaders have adopted a posture that allows the Democrats to make all the proposals while all the Republicans can say is “no.” They’ve apparently decided that it’s easier to repeat the familiar talking points than actually think through a response to the extraordinary crisis at hand.
If the Republicans wanted to do the country some good, they’d embrace an entirely different approach.
If Republicans were to treat this like a genuine emergency, with initiative-grabbing approaches, they may not get their plans enacted, but voters would at least give them another look. Do I expect them to shift course in this manner? Not really.
Instead of offering reasonable policy choices, Republicans argue that we shouldn't do anything other than try to change a couple banking rules to restore lending. This, and many of Brooks' proposals, shows a deep misunderstanding about the causes of the Great Recession. There were fundamental problems in the American economy long before the financial meltdown, including the stagnation of wages and incomes for everyday Americans, despite strong productivity and GDP growth. This wage-productivity gap had never been seen before in American economics, and, unless policymakers move to create a 21st century economy, recovery will not come the way we'd like. This necessitates, unlike Brooks argues, bold action to restructure much of what was not working.
As an example of the backwards response that Republicans are exhibiting on the economy, enjoy U.S. Rep. Jack Kingston of Georgia on Morning Joe:
Sam linked to it this morning, but this new essay by Martin Wolf, the first in a new series about the future of capitalism in the FT, is worth revisiting (and reading):
In the west, the pro-market ideology of the past three decades was a reaction to the perceived failure of the mixed-economy, Keynesian model of the 1950s, 1960s and 1970s. The move to the market was associated with the election of Reagan as US president in 1980 and the ascent to the British prime ministership of Margaret Thatcher the year before. Little less important was the role of Paul Volcker, then chairman of the Federal Reserve, in crushing inflation.
Yet bigger events shaped this epoch: the shift of China from the plan to the market under Deng Xiaoping, the collapse of Soviet communism between 1989 and 1991 and the end of India's inward-looking economic policies after 1991. The death of central planning, the end of the cold war and, above all, the entry of billions of new participants into the rapidly globalising world economy were the high points of this era.
Today, with a huge global financial crisis and a synchronised slump in economic activity, the world is changing again. The financial system is the brain of the market economy. If it needs so expensive a rescue, what is left of Reagan's dismissal of governments? If the financial system has failed, what remains of confidence in markets?
It is impossible at such a turning point to know where we are going. In the chaotic 1970s, few guessed that the next epoch would see the taming of inflation, the unleashing of capitalism and the death of communism. What will happen now depends on choices unmade and shocks unknown. Yet the combination of a financial collapse with a huge recession, if not something worse, will surely change the world. The legitimacy of the market will weaken. The credibility of the US will be damaged. The authority of China will rise. Globalisation itself may founder. This is a time of upheaval.
In today's Wall Street Journal, Michael J. Boskin, former Chair of the Council of Economic Advisors for President George H.W. Bush and a Senior Fellow at the aptly named Hoover Institution, lays out a list of conservative talking points against the President’s budget. Dr. Robert Shapiro laid out a pretty compelling analysis of the problems with this type of thinking, but the real issue with the column is that, preceding the talking points, Boskin says this:
Obama's Radicalism Is Killing the Dow
A financial crisis is the worst time to change the foundations of American capitalism.
It's hard not to see the continued sell-off on Wall Street and the growing fear on Main Street as a product, at least in part, of the realization that our new president's policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis.
The column proceeds with the list of conservative complaints about the budget, and provides no substantive reason why President Obama’s allegedly flawed budget blueprint is specifically making the Dow tank.
I have another reason in mind why the Dow might be tanking. Let's try it on for size:
The economy is in the tank.
That's right, the actual state of the economy, including the massive financial and housing crises, is the actual force driving down the stock prices of the large companies that comprise the Dow Jones Industrial Average. It's not that Obama is some sort of radical. (Take a look at David Brooks today, who comes around on the notion that Obama and his people are pragmatists, even if he’s not fully on board with their brand of pragmatism.) Rather, it's that the American economy is in its worst shape since the Great Depression.
The causation (more on causation from Mankiw today) Boskin implies (and he's by no means the only one, the media – especially business media – is obsessed with attributing the ups and downs of the Dow to various policies or how confidently the President is speaking, or how much the budget weighs or quickly it can be deep fried), is largely misplaced, and ultimately dangerous. There are times when markets react to government policy, and that's been happening somewhat lately too, but, right now, the Dow is in the tank because that's where the economy is, and its not getting fixed by today's closing bell.
The leaders of the Republican Party, reeling from their painful string of defeats, seem stuck in two of the classic stages of grief, denial and anger. This week, Rush Limbaugh replaced Bobby Jindal as the leading and most colorful example. Limbaugh may seem like too easy a target, since talk radio always tends toward hyperbole. Nonetheless, the essence of the message from the presumptively addled Mr. Limbaugh is that Americans would be better off if the President’s economy program failed. Even if their homes slip into foreclosure and their kids have to drop out of college, American families would at least escape the degradations of “socialism” or, as another popular conservative pundit put it, “left fascism” (that’s from the hard-right blogger and historian, Ron Radosh).
The rhetorical excesses of talk radio and the Web would hardly be noteworthy, if the same strain of non-thinking didn’t also dominate the Republican Party’s current economic positions. Let’s set the stage: of the three natural sources of demand in a market economy, consumers have stopped spending, businesses have stopped investing, and exports have fallen off the proverbial cliff. That leaves government stimulus as the only possible source of new demand to at least slow the accelerating downward momentum of the economy and most of the people in it. Perhaps the best explanation, then, for why every Republican in the House and all but three GOP senators voted “no!” on the President’s stimulus is, well, denial and anger.
To be sure, economic ideology almost certainly plays a role here, too, on top of their denial (about the consequences) and anger (about no longer calling the shots). This came through vividly at a conference I attended earlier this week for the National Chamber Foundation. My panel was asked to talk about whether the Administration’s plans foreshadowed a permanent change in the relationship between the public and private sectors. Set aside the fact that the leaders of the central private institutions in this drama, big finance, have begged Washington to amend that relationship long enough to preserve their jobs and the assets of their bond holders.
At the panel, a well-turned-out executive from a major private equity company (and former Bush Treasury official) laid out what once could have been the reasonable conservative position -- stimulus weighted to tax cuts, a banking rescue that avoids taking over anybody (or dictating anybody’s compensation), and tax-based measures to reduce foreclosures. As a matter of economics, he got his targets right, even if his approaches are weaker than those favored by the Administration. But at least his response suggested that he wants the economy to recover, regardless of who gets the credit.
Not so from the other member of the panel, Brian Westbury, who on top of being an economist with a Midwestern financial advisory is also the economics editor of the American Spectator and a frequent writer for the Wall Street Journal. He provided an economic-cum-ideological gloss for the denial and anger expressed by the flamboyantly-frustrated Mr. Limbaugh. Westbury’s prescription was no stimulus, no banking rescue and no program for foreclosures. The only constructive government action he could imagine was to jettison current “mark-to-market” rules. Those rules say that the balance sheets of banks and public companies have to reflect the actual market value of their assets and liabilities. So, for example, when a mortgage-backed security goes bust, you have to write down its value while preserving the liability of the money borrowed to purchase it and still owed.
In this view, none of what seems so important to the rest of us -- collapsing demand, investment and trade, huge job losses, rising bankruptcies -- matters for government policy. The only thing Washington should do here is to change how the financial losses from these events are reported. This isn’t economics; it’s a prescription that follows from a hard-edged ideological view that government can do nothing of value for an economy, regardless of conditions.
Unhappily, this cramped understanding isn’t limited to the pages of the American Spectator and the Wall Street Journal op-ed page. Bobby Jindal put the Republican Party on record for much the same view in his awkward response to the President’s address to Congress. He even cited the colossal inadequacies of the Bush Administration’s response to Katrina as proof that the private sector is always the best answer to any problem or catastrophe -- even if it’s under water at the time.
I honestly can’t believe that they’re really so dull-witted. A better explanation for Jindal and Limbaugh, along with commentators like Westbury and Radosh, is that they’re still grappling with the grief of losing the support of the American people -- and the power that came with it. They’re stuck in denial and anger. And that’s a very bad position from which to consider the best policies for a nation and world economy in crisis.
Across the upper five percent of America, there's some sense that this Great Recession, as NDN's Dr. Robert Shapiro labeled it in December, just isn't really that bad. Sure, stocks are taking a hit and the financial sector is hurting, but we've been there before. In the New York Times, David Leonhardt lays out how bad this Great Recession really is, and who it has hurt the most, to this point.
What does the worst recession in a generation look like?
It is both deep and broad. Every state in the country, with the exception of a band stretching from the Dakotas down to Texas, is now shedding jobs at a rapid pace. And even that band has recently begun to suffer, because of the sharp fall in both oil and crop prices.
Unlike the last two recessions — earlier this decade and in the early 1990s — this one is causing much more job loss among the less educated than among college graduates. Those earlier recessions introduced the country to the concept of mass white-collar layoffs. The brunt of the layoffs in this recession is falling on construction workers, hotel workers, retail workers and others without a four-year degree.
The Great Recession of 2008 (and beyond) is hurting men more than women. It is hurting homeowners and investors more than renters or retirees who rely on Social Security checks. It is hurting Latinos more than any other ethnic group.
Leonhardt tells us that could all soon change:
You often hear that recessions exact the biggest price on the most vulnerable workers. And that’s true about this recession, at least for the moment. But it isn't the whole story. Just look at Wall Street, where a generation-long bubble seems to lose a bit more air every day.
In the long run, this Great Recession may end up afflicting the comfortable more than the afflicted.
He points out that the collapse of the financial sector will hurt the wealthy and ultimately lead to a smaller Wall Street. (The same dynamic will ultimately help young families, allowing them to buy into the financial and housing markets at the bottom.) Government policy will reduce inequality. And, most importantly for expanding the economic pie, the nation's unemployed will turn to education, if they can. Community colleges are already feeling budget crunches across the country, especially in the areas where they’re most needed.
There seems to be, amongst conservatives in Congress and the Rick Santellis of the world, a sense that the Great Recession just isn't that bad. They shout "Moral Hazard" as we try and stabilize the housing market, and they cry about deficits that didn't matter to them when the last Administration launch an optional war and ideological tax cuts. But Leonhardt tells us that they're about to start feeling it.
And, even if they aren't big fans of some of the President's plans, let's hope they can work with him to do the one thing we know will grow the economy for everyone in the long term – build a 21st century education system to create the workforce for the next great expansion.
I’d imagine that everyone has seen Rick Santelli’s absolutely absurd tirade on CNBC yesterday, but in case you haven't:
Santelli's tirade is remarkable for his anger about (amongst many other things) the idea that the Obama mortgage plan throws the concept moral hazard to the wind. According to Santelli's line of argument, people are now going to make irresponsible decisions about their housing and general economic behavior because of this government policy. And he’s getting cheered by a bunch of stock traders behind him.
The irony (as if there's only one) is that much of his cheering section had long ago thrown caution to the wind, as they took tremendous risks, many of which were premised on the notion that, if things got really bad, government salvation was a foregone conclusion. Big banks knew they were too big to fail; the financial world felt invulnerable. And I didn't hear them complaining about moral hazard when now more than a trillion dollars has been thrown at these banks, which makes the Obama housing plan, which will affect 8-10 million Americans and cost $75 billion, look cheap.
In the current economic climate, moral hazard has become a convenient piece of poorly understood economic theology that critics of any given government plan use to oppose it. The economy is in such shape that being overly concerned with this theology is folly. Policymakers need to focus on pragmatic solutions that fix these incredibly serious problems with the economy, including the housing market, in large part because figuring out the incentives that will nudge Americans’ behavior in the proper direction in incredibly complex markets is not going to happen by tonight’s closing bell.
February seems to be a banner month for turning out our nation's greatest leaders.
To celebrate today -- Presidents' Day -- C-SPAN has released a survey compiled by 65 historians and presidential experts who ranked our America's 42 presidents thus far. The list is bookended by two Georges -- one a Washington, the other a Bush. The former placed second. The latter -- George W. -- didn't fare so well. He came in at #36, behind Herbert Hoover. Dead last? James Buchanan.
And which President took top honors?
You guessed it. Abraham Lincoln. I am guessing this made our current President, Barack Obama, happy as 44 is a major league fan of 16 and took the oath of office using Lincoln's Bible. Both are from Illinois, and Lincoln was, at 6'4", our country's tallest President. He definitely could have held his own during Obama's informal pick-up games with his Cabinet.
President's Day is today, Februarry 16. Obama did Lincoln's birthday up in style last week (Abe would have turned 200 on February 12).
Interestingly, Presidents' Day -- as designated by Congress -- only celebrates Washington's birthday, which is next Monday, February 22.
A little of the interesting history below, courtesy of Wikipedia.
Titled Washington's Birthday, the federal holiday was originally implemented by the Congress of the United States of America in 1880 for government offices in the District of Columbia (20 Stat. 277) and expanded in 1885 to include all federal offices (23 Stat. 516). As the first federal holiday to honor an American citizen, the holiday was celebrated on Washington's actual birthday, February 22. On January 1, 1971 the federal holiday was shifted to the third Monday in February by the Uniform Monday Holiday Act. A draft of the Uniform Holidays Bill of 1968 would have renamed the holiday to Presidents' Day to honor both Washington and Lincoln, but this proposal failed in committee and the bill as voted on and signed into law on June 28, 1968 kept the name Washington's Birthday.
By the mid-1980s, with a push from advertisers, the term "Presidents' Day" began its public appearance. The theme has expanded the focus of the holiday to honor another President born in February, Abraham Lincoln, and often other Presidents of the United States. Although Lincoln's birthday, February 12, was never a federal holiday, approximately a dozen state governments have officially renamed their Washington's Birthday observances as "Presidents Day", "Washington and Lincoln Day", or other such designations. However, "Presidents Day" is not always an all-inclusive term. In Massachusetts, while the state officially celebrates "Washington's Birthday," state law also prescribes that the governor issue an annual Presidents Day proclamation honoring the presidents that have come from Massachusetts: John Adams, John Quincy Adams, Calvin Coolidge, and John F. Kennedy. (Coolidge, the only one born outside of Massachusetts, spent his entire political career before the vice presidency there. George H. W. Bush, on the other hand, was born in Massachusetts, but has spent most of his life elsewhere.) Alabama uniquely observes the day as "Washington and Jefferson Day", even though Jefferson's birthday was in April. In New Jersey, Connecticut and Illinois, while Washington's Birthday is a federal holiday, Abraham Lincoln's birthday is still a state holiday, falling on February 12 regardless of the day of the week. In California, Lincoln's Birthday is also a legal state holiday, however, observance is frequently moved to the Monday or Friday occurring closest to February 12. When Lincoln's Birthday is observed on the Friday preceding Washington's Birthday, the resultant four-day weekend is commonly called "Presidents' Day Weekend", particularly by retailers in their sale advertisements.
In Washington's home state of Virginia the holiday is legally known as "George Washington Day."