Repudiating the Bush Era

Just when you thought the spigot was off -- NOT.

Joe the Plumber is back. As readers may recall, JTP made his prime time debut last night during the final presidential debate between U.S. Sens. John McCain and Barack Obama. There was no doubt who the winner of that debate was -- yep. It was one Joe Wurzelbacher, who McCain invoked as an everyday guy just trying to get ahead -- a guy who would be crushed by an Obama Administration and its inevitable overflow of taxes.

My able deputy, Dan Boscov-Ellen, kept us updated -- and enthralled -- throughout the day. Seems Joe is no ordinary plumber. Heck, he doesn't even have a plumbing license. Worried about his taxes? Heck, he doesn't pay 'em. Oh, and what about being related to Charles Keating (of the Keating Five scandal that ensnared McCain)? Won't say who he'll vote for? He's a Republican.

Joe was an overnight -- if slightly sinking -- sensation. As my good friend Toby Harnden, U.S editor for the Telegraph reported:

"By the middle of Friday morning, Mr Wurzelbacher was in the top 10 searches on Google and had already been given an honoured place in the stump speech of Governor Sarah Palin of Alaska, Mr McCain's running mate. But the country's most sought-after media "get" was nowhere to be found. His mobile phone was turned off and he was said to be en route to New York for what a local news editor described darkly as a 'paid interview.'"

Apparently, some alarm bells had gone off inside the McCain campaign about the wisdom of using Joe as a human prop -- was he a PR pressure tank? But that hasn't stopped the campaign from turning the faucets full-on.

That's right. The McCain campaign has launched a new ad starring -- Joe the Plumber, which attacks Obama on -- taxes! While Obama is spending record amounts on TV ads, this new buy may drain McCain's relatively small budget, but you can watch "Joe the Plumber" here:

Obama's most important lead after last night's debate may have come among Hispanic voters, who favored him by a 50-36 percent margin according to the national Politico/InsiderAdvantage survey of undecided debate-watchers. The candidates were evenly matched among white voters, with McCain holding a 49-46 percent advantage - equal to the three point margin of error. African Americans picked Obama as the winner by 88-10 percent. You can trace Hispanics' support of the presidential candidates through Gallup's weekly poll - the poll shows Obama with a consistent comfortable margin of at least 20-25 points ahead of McCain. The latest Gallup poll shows Obama ahead by a 60-31 percent advantage.

As I mentioned in my previous post on this topic, Joe the Plumber is a registered Republican and McCain supporter, who in fact would qualify for a tax cut under Obama's plan, does not pay his taxes anyway, and is not even a certified plumber. 

But that is the least of what's wrong with the Joe the Plumber narrative. Let's listen to Joe in his own words:

But to -- just because you work a little harder to have a little bit more money taken from you, I mean, that's scary. You know as opposed to other people. I worked hard for it. Why should I be taxed more than other people?

The basic assumption here is that hard work = more pay, and that therefore if people aren't making enough money, they simply aren't working hard enough - Joe works hard "as opposed to other people." This is the absolute granddaddy of all conservative fallacies; for years, Americans' productivity has continued to rise, while their real wages have stagnated or fallen - nearly all of the benefits of our GDP growth have gone to the rich. Many Americans are working just as hard and are still struggling just to get by, which is why I have less sympathy for Joe. 

And what of this idea that with hard work, a person can climb the ladder to wealth? As Paul Krugman points out in "The Death of Horatio Alger," upward mobility in America is largely a thing of the past:

It is true, however, that America was once a place of substantial intergenerational mobility: Sons often did much better than their fathers. A classic 1978 survey found that among adult men whose fathers were in the bottom 25 percent of the population as ranked by social and economic status, 23 percent had made it into the top 25 percent. In other words, during the first thirty years or so after World War II, the American dream of upward mobility was a real experience for many people.

Now for the shocker: The Business Week piece cites a new survey of today's adult men, which finds that this number has dropped to only 10 percent. That is, over the past generation upward mobility has fallen drastically. Very few children of the lower class are making their way to even moderate affluence. This goes along with other studies indicating that rags-to-riches stories have become vanishingly rare, and that the correlation between fathers' and sons' incomes has risen in recent decades. In modern America, it seems, you're quite likely to stay in the social and economic class into which you were born.

As Governor Palin might put it, "Say it ain't so, Joe!"

UPDATE: Joe the Plumber "does not believe in Social Security." Maybe that's why he doesn't pay his taxes.

As Melissa just pointed out, the star of last night's debate was Joe the Plumber (who does not hold a plumbing license, makes less than $250,000 a year and has not paid his taxes anyway, rendering the whole argument utterly moot). US Sen. John McCain brought Joe up in order to paint US Sen. Barack Obama's tax plan as class warfare - he accused Obama of wanting to take Joe the Plumber's wealth and spread it around (although in liberally-biased "reality," it turns out that Joe would actually receive a tax cut under Obama's plan), and repeatedly asked why Obama would want to raise taxes on anyone in these difficult times. McCain even asserted that there could be no possible justification for Obama's tax plan.

Really, Senator McCain? How's this for a start; Obama's tax plan does nothing more than to partially (and not even completely) reverse Bush's tax policy. Under the Bush tax cuts, which Senator McCain supports and wants to extend, the bottom 20% of earners got 1% of the tax cuts, while the top 1% got a whopping 33%. The top 5% got almost 50% of the tax cuts.

This isn't just a problem of fairness, as Joe Biden argued in the vice-presidential debate (although this question of fairness in our tax structure certainly merits a more sustained philosophical discussion). It also happens to be bad economics; because lower and middle-income people have a higher marginal propensity to consume, more of the money that goes to them in tax cuts goes back into our economy, resulting in a larger multiplier effect and a greater increase in aggregate demand. This, of course, is simple common sense; give tax breaks to the people that actually NEED them, not the top 1% who are already making an average of $13+ millon a year.

The growing inequality in our country is making our economy increasingly unstable and our current form of government untenable and unsustainable. But don't just take my word for it: ask the most recent winner of the Nobel Prize for Economics, Paul Krugman. In a fantastic piece from 2003 in the New York Times Magazine entitled "The Tax-Cut Con", Mr. Krugman laid out a prescient analysis of where the Bush economic policies would lead us. It turned out that he was right, yet Senator McCain continues to espouse the same flawed and discredited economic arguments. It is high time that progressives pushed back, hard. At the end of this must-read article, Krugman says this:

The astonishing political success of the antitax crusade has, more or less deliberately, set the United States up for a fiscal crisis. How we respond to that crisis will determine what kind of country we become.

If Grover Norquist is right -- and he has been right about a lot -- the coming crisis will allow conservatives to move the nation a long way back toward the kind of limited government we had before Franklin Roosevelt. Lack of revenue, he says, will make it possible for conservative politicians -- in the name of fiscal necessity -- to dismantle immensely popular government programs that would otherwise have been untouchable.

In Norquist's vision, America a couple of decades from now will be a place in which elderly people make up a disproportionate share of the poor, as they did before Social Security. It will also be a country in which even middle-class elderly Americans are, in many cases, unable to afford expensive medical procedures or prescription drugs and in which poor Americans generally go without even basic health care. And it may well be a place in which only those who can afford expensive private schools can give their children a decent education.

But as Governor Riley of Alabama reminds us, that's a choice, not a necessity. The tax-cut crusade has created a situation in which something must give. But what gives -- whether we decide that the New Deal and the Great Society must go or that taxes aren't such a bad thing after all -- is up to us. The American people must decide what kind of a country we want to be.

Alaska Gov. Sarah Palin ventured out onto the ice last night to drop the ceremonial puck at the season opener for the Philadephia Flyers.

As Washington Capitals owner Ted Leonsis told Politico's Ken Vogel a few days before the game, rowdy sports fans and politics just don't mix:

“I don’t think it is a good idea to mix politics and sports. Half the fans will disagree with what you say or do,” said Ted Leonsis, owner of the Washington Capitals, a conference rival of the Flyers. Leonsis, who in the primary gave maximum contributions to both Palin’s running mate and his Democratic rival Barack Obama, said if he invited a candidate in a looming election to appear at a Caps-related event, “I would be sure to give both sides equal time.”

Introduced as Amercia's most famous Hockey Mom, Palin stepped onto the ice with her teenaged daughter Willow and her younger daughter Piper, who wore a Flyers jersey and is probably one of the cutest kids in America. If Palin thought the kids might quiet down rambunctious fans, she was wrong.

While there was applause, the boos were much louder. But as Politico's Ben Smith reported, Philly fans willl boo just about anyone, maybe even thrown snowballs at Santa Claus.

Palin may lack a lot of things, but guts isn't one of them. Despite being dissed, she kept smiling and waving (you can't help noticing that the music did get louder and louder to the point where no one could hear anything).

An interesting aside: the Flyers home base is the Wachovia Center. Maybe the fans were just cranky about the nation's continuing financial woes, evidenced by Wachovia's pending sale to Wells Fargo? Nah.

Anyway, you can watch the puck drop here:

In terms of the bigger picture, I imagine Palin was in Philly as part of the McCain-Palin strategy to win Pennsylvania, especially the conservative suburbs around the Democratic city. U.S. Sen. Barack Obama campaigned yesterday in Philly as well and both sides will no doubt be headed back to the state many times before November 4.

The aforementioned Ken Vogel has a new story out today, McCain makes risky play for Pa., that has a spot-on rundown at just what's at stake in for each side in the Keystone State.

Vogel writes that Palin will be in Scranton on Tuesday. Obama's running mate, U.S. Sen. Joe Biden, who lived in Scranton until he was 10, is there today with U.S. Sen. Hillary Clinton and her husband, Bill Clinton. Hillary Clinton walloped Obama in northeast Pennsylvania during the primary by winning heavily among white, working class voters.

While Pennsylvania's 21 electoral votes haven't gone to a Republican in two decades, McCain-Palin are taking a big gamble they hope will pay off.

With just 25 days left until Election Day, the airwaves and Web video are getting increasingly cluttered -- and increasingly ugly.

U.S. Sen. John McCain's campaign has two new guilt-by-association ads out, both questioning U.S. Sen. Barack Obama's motives and judgement.

One, a new Web ad, seeks to tie Obama to ACORN, a community organizing group under investigation for voter fraud. The McCain camp held a conference call today with reporters today to call for a federal investigation of Obama's alleged ties to the group. The ad does away with any such niceties and makes its own assertions:

The New York Times, which calls the second McCain spot "...a paint-peeling advertisement that highlights Mr. Obama’s relationship to Bill Ayers, one of the Weather Underground founders," reports: "The campaign says the commercial will air nationally. So far this morning, using the television monitoring service ShadowTV, we have found that it has only been shown by news programs — once on MSNBC and once on WINK-TV in Florida – and has not run yet as a paid commercial."

Watch the paint-peeler here:

I'm no economist, but I can read. The front page of my morning paper has huge, screaming headlines about global stocks sinking, the Dow closing below the 10,000 level for the first time in four years, Germany drafting a plan to shield its banking sector and no planned raises for local teachers because of a now-expected budget shortball, among others. The front page looks downright apocalyptic.

Most of this news seems far away -- it's on Wall Street, in Berlin, in Tokyo. But it's not. It's affecting those teachers in Maryland. It's affecting the presidential race in states like Michicgan (U.S. Sen. john McCain pulled his campaign out last week) and Ohio, where a new poll shows folks' economic anxiety on the rise along with the poll numbers of U.S. Sen. Barack Obama.  

What can we do?

For the last several weeks, NDN has argued that Congress and the President must make a serious effort to slow down the continuing deterioration of the housing market that ultimately has driven the problems in financial institutions. The bottom line? Keep people in their homes. 

So long as housing values continue to fall and foreclosures continue to climb, housing-based securities and derivatives will continue to default, further weakening financial institutions and the businesses and households that depend on them for credit.

In an insightful new Associated Press report (well worth reading) on just what caused the financial collapse, whom it's affecting and what might be done to fix it, AP's Tom Raum talked to NDN Globalization Initiative Chair Dr. Robert Shapiro:

Rob Shapiro, who was an economic adviser to President Clinton, said the crisis in Europe will turn out to be at least as severe as it is in the United States. "Between Europe and the United States, we'll take everybody else with us. And this is reflected in the markets," he said.

Shapiro, who heads the global initiative program at NDN, a Washington think tank, said one step that might help restore confidence would be for the government to set up a program to make direct loans to people facing foreclosures. Another might be for the government to turn all the problem mortgages held by Fannie Mae and Freddie Mac into 30-year fixed rate ones.

As Jake pointed out last night, the presidential campaigns are engaged in plenty of political maneuvering on the eve of the candidates' second debate, but Obama made clear in a speech yesterday in North Carolina that he knows very well the importance of addressing the ongoing mortgage crisis.

So again, NDN urges Congress and the President to take steps to stablilize the deteriorating housing market. Only then will we be able to address the economic struggles of everyday people here at home and turmoil in the markets abroad.

The Washington Post reported Saturday that it's going to get ugly. 

Gov. Sarah Palin didn't waste any time that day. According to ABC News:

At a private fundraiser in Englewood, Colo., this morning, and later at a rally in Carson, Calif., this afternoon, Palin for the first time raised Obama’s connection to Ayers, one of the founding members of the Weather Underground, a '60s radical group that took credit for bombing attacks around the country, including explosions set off at the Pentagon and U.S. Capitol.

"Our opponent, though, is someone who sees America, it seems, as being so imperfect, imperfect enough that he's palling around with terrorists who would target their own country," Palin told supporters at a $1,000-a-plate fundraiser in Englewood. "Americans need to know this."

Palin cited a front-page article in today’s New York Times that explored the ties between Obama and Ayers. Obama had served on a charity board with Ayers in Chicago during the mid-90s, and Ayers was present at an organizing meeting in 1995 to kick off Obama's first election campaign for the Illinois State Senate.

More incoming fire today. U.S. Sen. Barack Obama's team is pushing back against U.S. Sen. John McCain's "guilt by association" campaign.

According to a 6:30 a.m. ET report by Politico's Mike Allen:

Pushing back against what it calls McCain's “guilt-by-association” tactics, the Obama campaign overnight began e-mailing millions of supporters a link to a website, KeatingEconomics.com, which will have a 13-minute documentary on the scandal beginning at noon Eastern time on Monday. The e-mails urge recipients to pass the link on to friends.

The Obama campaign, including its surrogates appearing on radio and television, will argue that the deregulatory fervor that caused massive, cascading savings-and-loan collapses in the late ‘80s was pursued by McCain throughout his career, and helped cause the current credit crisis.

The 13-minute Web video documentary is now live:

Update at 3:41 p.m. ET: Politico's Ben Smith reports that Obama's Keating campaign may be paying off:  

Obama apparently had today's Charles Keating attack in the can, ready to deploy against an attempt to revive Bill Ayers, and it seems to be working.

A glance at Google Trends finds "keating economics" the second-most-popular search term right now. Numbers 8, 11, 12, and 21 are terms like "keating five" and "charles keating."

Bill Ayers shows up at 36, just after "mccain keating."

The first term is Neal Kashkari, newly tapped to head the bailout. Voter registration terms also rank high.

Two major articles in today's Washington Post and New York Times focus in-depth on how the nation's worsening economy is presenting new opportunities -- and new challenges -- for the campaigns of U.S. Sens. Barack Obama and John McCain.

It looks like things were going McCain's way after the GOP convention -- Alaska Gov. Sarah Palin had electrified the base, Obama was losing ground and the Arizona senator took a slim lead.

Then the nation's finanical markets crashed, Palin-mania has subsided as many Americans didn't like what they've seen post-St. Paul and Democrats traditionally do better with pocketbook issues.

Now McCain has pulled out of Michigan and Obama is competitive in traditionally red states like Florida where foreclosures are epidemic; nationally, the economic news just keeps getting worse.

Amidst all of this, yesterday, I picked up a book, "Deer Hunting with Jesus" by Joe Bageant. It is in turn fascinating, frightening and depressing. The book addresses a question that has always bothered me: why do people who are so clearly hurt by the GOP's economic policies keep voting for them again and again and again? Another article in today's Washington Post highlights the economic struggles of a suburban Michigan enclave and focues on why, while some people there may vote for Obama, others struggling to make ends meet are still planning to vote for McCain, despite the fact that his economic proposals do nothing to help them or their children.

Until progressives find a way to reach the voters written about in "Deer Hunting with Jesus" and the Washington Post article, we will continue to lose their votes because they will continue to vote, not on economic issues, but social "hot button issues" such as abortion, guns and sex education. And, sadly, as many of them admitted, they simply will not vote for an African-American candidate. All in all, it is not their failure, but our failure, to explain to them how we will not allow globalization to leave them behind; how we will invest in their education; how we will ready them as we accelerate toward a 21st century economy.

In 2007, NDN conducted a series of polls on the how Americans view the economy. They are well worth reading here and here. I know I will be looking at them for answers.

Lastly, in what can be at best called a sophmoric effort to change the subject, the McCain campaign said yesterday that:

We are looking for a very aggressive last 30 days," said Greg Strimple, one of McCain's top advisers. "We are looking forward to turning a page on this financial crisis and getting back to discussing Mr. Obama's aggressively liberal record and how he will be too risky for Americans." "We're going to get a little tougher," a senior Republican operative said, indicating that a fresh batch of television ads is coming. "We've got to question this guy's associations. Very soon. There's no question that we have to change the subject here," said the operative, who was not authorized to discuss strategy and spoke on the condition of anonymity. [Washington Post, 10/04/08]

In response, the Obama campaign has launched a new ad on the economy, highlighting what has happened over the last eight years during the Bush-Cheney reign.

Watch it here:

For the last several years NDN has been making an argument that a "new politics" of the 21st century is emerging.  Driven by vast changes in demography, media and technology, and the a whole new set of very 21st century challenges (and one could add the utter collapse of modern conservatism) a new politics was emerging in America that would be very different from the century just past.  

Reflecting on the morning papers 3 stories stuck out as interesting examples of how the world is changing around us.  1st up is how the Army is starting to see nation building and the shoring up of "fragile states" as a primary area of responsibility.  2nd is a fascinating piece by Eve Fairbanks on the sensibility of the next generation of Congressional Republicans.  Finally, a wide ranging and important piece by our friend David Rothkopf, who argues: 

The current economic debacle is far more likely to be seen by historians as a true global watershed: the end of one period and the beginning of another. The financial chaos has brought down the curtain on a wide range of basic and enduring tenets also closely linked with the Reagan era, those associated with neoliberal economics, the system that the Nobel Prize-winning economist Joseph Stiglitz has called "that grab-bag of ideas based on the fundamentalist notion that markets are self-correcting, allocate resources efficiently and serve the public interest well." Already this crisis has seen not just our enemies but even some of our closest allies wondering whether we are at the beginning of the end of both American-style capitalism and of American supremacy.  

Change is indeed coming to Washington.  And this next Presidency will without doubt be among the most important in American history.