In his weekly address, President Obama talks about his focus on the economy in 2010 and covers his commitment to deficit reduction. Notably, he covers some of the politics that conservatives have been playing with deficit reduction.
Take a look:
The President's remarks on politically motivated changes on issues are a narrative that seems to be working pretty well:
Finally, I've called for a bi-partisan Fiscal Commission - a panel of Democrats and Republicans who would sit down and hammer out concrete deficit-reduction proposals by a certain deadline. Because we've heard plenty of talk and a lot of yelling on TV about deficits, and it's now time to come together and make the painful choices we need to eliminate those deficits.
This past week, 53 Democrats and Republicans voted for this commission in the Senate. But it failed when seven Republicans who had co-sponsored this idea in the first place suddenly decided to vote against it.
Now, it's one thing to have an honest difference of opinion about something. I will always respect those who take a principled stand for what they believe, even if I disagree with them.
But what I won't accept is changing positions because it's good politics. What I won't accept is opposition for opposition's sake. We cannot have a serious discussion and take meaningful action to create jobs and control our deficits if politicians just do what's necessary to win the next election instead of what's best for the next generation.
On that note, if you haven't seen it, take a look at the President's "question time" from yesterday at the House Republican Issues Conference. I'll leave you to judge who got the best of that situation:
A year ago, millions of voters across America flocked to the elections polls to elect Barack Obama as our nation’s president. I remember that night vividly, as it was a culmination of the longest American presidential campaign cycle in history. A campaign cycle in which a candidate, who was virtually unknown just 5 years before the election, inspired Americans to renew their Hope. He inspired Americans to renew their Hope in government, to renew their Hope in politics, to renew their Hope in each other and to renew their Hope in America.
I remember sitting in the war room for the Nevada State Democratic Party in Las Vegas analyzing exit polls and tabulating results from states across the country. The numbers coming in were indicating that this election would be won by our nominee, but having been fooled in the previous two election cycles, I waited frantically until I knew this victory was certain. As the results continued to move Obama closer to the victory margin, I ran from the war room to join my fellow Americans in celebration. I laughed, I shouted, and I even cried that night as I was so moved by what had just happened. As an American who has been fighting for civil rights and human rights for so long, and who was on the verge of losing all Hope in our country, that night changed so much for me.
That Americans were in need of Hope was no mystery. America was taken to the brink of ruin under failed leadership and governance by the previous presidential administration. The situation left Americans with not much else, but Hope. To summarize briefly, millions of Americans were without jobs or losing their job, millions of Americans lacked health insurance, our educational systems were underfunded, our infrastructure was literally collapsing, our financial systems collapsed, our auto industry collapsed, our energy sources are outdated and insufficient, and thousands of Americans were sacrificing their lives in the two wars overseas. There was not much left in America but Hope.
When the President was elected, the NY Times published a piece detailing the historic win of President Obama and noting:
The election of Mr. Obama amounted to a national catharsis — a repudiation of a historically unpopular Republican president and his economic and foreign policies, and an embrace of Mr. Obama’s call for a change in the direction and the tone of the country.
Despite this reality, Republicans leaders have been desperately attempting every method possible to prevent President Obama from moving America in a different direction. Engaged in what I call “Operation Obstruction,” they have stalled the President’s agenda to lift this country out of the ruins that he inherited. However, they have not prevented President Obama from enacting several significant pieces of legislation in his first year in office as reported in the Wall Street Journal yesterday.
Last week, Mr. Obama signed defense-policy legislation that included an unrelated measure widening federal hate-crimes laws to cover sexual orientation and gender identification -- 12 years after it was first introduced. The same legislation also tightened the rules of admissible evidence for military commissions, an issue that consumed Congress in debate in 2007 but received almost no attention this go-round.
Other new measures signed into law since the administration took office, all of which kicked up controversy in past congresses, make it easier for women to sue for equal pay, set aside land in the West from development, give the government the power to regulate tobacco and raise tobacco taxes to expand health insurance for children. Congress and the White House, in the new defense-policy bill, also killed weapons programs that have survived earlier attempts at termination, among them, the F-22 fighter jet, the VH-71 presidential helicopter and the Army's Future Combat System.
So what has all this obstruction accomplished for the Republicans? Not much. America is still largely where it was on election night a year ago.
If we look at the graph above, it shows that despite all the efforts of Republicans to persuade Americans to abandon their call for change, Americans remain committed to steering away from the failed policies of the previous administration. In short, America is still holding on to Hope.
The last few months have not been particularly good ones for Democrats. That's the bad news. The good news is there a clear roadmap for how they can use the coming months to get back on track, and it revolves around staying relentlessly focused on the economy and the struggle of every day people.
1) The Lack of Income Growth for Average Families is the Greatest Domestic Challenge Facing America Today. Depending on how you cut the data, American families have not seen their incomes rise in at least eight, and perhaps, ten years. Even in the Bush recovery, which was by many measures, robust, median incomes declined, poverty levels increased, debt loads exploded. The typical American family ended the Bush era making $1,000 less than at the beginning.
Basic economics tells us when productivity increases wages and incomes rise. When GDP expands, jobs are created at a certain rate. Neither of these events took place in the Bush era, leading us here at NDN to argue that there is a large structural change being brought about by globalization that is making it harder for the American economy to create jobs and raise the standard of living of every day people.
That median incomes dropped during a robust economic recovery made the Bush recovery different from any other recovery in American history, and has made the current Great Recession different from other recessions. The American consumer was already in a very weakened state before the current recession, which is why the recession has been more virulent than many predicted, and why the coming "recovery" might be so anemic. The economy seems to be going through profound, structural change, making old economic models anachronistic. We are literally in a "new economy" now, one that is not well understood, and one that is confusing even the President's top advisers.
Simply put, getting people's incomes up is the most important domestic challenge facing those in power today. It is not surprising that other issues like health care, energy policy and climate change are being seen through a prism of "will this make my life, my economic struggle better today?" because so many families have been down so long, and things have gotten an awful lot worse this year. Regardless of what they hope to be graded on by the public, the basket of issues that will do more to determine the success of the President and his Party is both the belief that things are getting better, and the reality that they are for most people.
2) The Public Believes the Economy Is By Far and Away the Most Important Issue Facing the Nation Today. In poll after poll this year, the public has made it clear that the economy is their most important issue, with really nothing coming in a strong number two. The new Pew poll out this week maintains the basic ratio we have seen for months: mid 50s say the economy is number one; 20 percent of the American people say health care is their number one concern; and literally "zero" pick energy (see the chart to the right).
While one could mount an argument that one should not govern by polls, one can also ignore them at their own peril. The country wants their leaders focusing on what is their number one concern - their ability to make a living and provide for their families in a time of economic transformation - which also happens to be, in this case, the most important domestic issue facing the country.
My own belief is that one of the reasons the President and the Democrats have seen their poll numbers drop is that they have spent too much time talking about issues of lesser concern to people while the economy has gotten worse. There is a strong argument to be made that the President and the Democrats have taken their eye of the economic ball, and are paying a price for it. This doesn't mean the President shouldn't be talking about health care, climate change, education, immigration reform, but they must be addressed in ways that reflects both their perceived and actual importance; and as much as possible discussed in the context of long term and short term benefit for every day people and not abstract concepts like "recovery," "growth," "prosperity," which in this decade are things that have happened to other people.
We have long believed that the lack of a sufficient governmental response to the increasing struggle of every day people has been the central driver of the volatility in the American electorate in recent years (see here and here). Given the poll and economic data of recent months it is possible that the conditions which have created this volatility remains, and simply cannot be ignored for too long.
3) The Way Forward - Make The Struggle of Every Day People The Central Focus Of the National Debate. The great domestic challenge facing President Obama is to ensure that, in this new age of globalization and the "rise of the rest," the country sees not "growth" or "recovery" but prosperity that is broadly shared. Until incomes and wages are rising again, fostering broad-based prosperity has to be the central organizing principle of center-left politics. It is a job we should be anxious to take on given our philosophical heritage, and one that we simply must admit is a little harder and more complex than many have led us to believe.
Luckily, the President has been given three significant events in September to begin to make this rhetorical and governing turn - Labor Day next week, and the G20 and UN General Assembly meetings in late September. He can use this events to re-knit together his argument, weaving in health reform and energy/climate change (and we believe immigration reform too) along the way. For there is no broad-based prosperity in 21st century America without health care costs coming down (which has to happen to allow us to cover more people), and a successful transition to a low-carbon economy. Even though the Congressional committee and legislative process requires these to be separate conversations, in fact they are one conversation, one strategy for 21st century American success, one path forward for this mighty and great nation.
Vice President Biden's speech about the economy today is a very good start in this needed repositioning. But much more must be done. In a recent essay I wrote:
There have been calls from some quarters for a 2nd stimulus plan, an acknowledgment that what the first stimulus has not done enough to stop the current economic deterioration. This may be necessary, but I think what will need to be done is much more comprehensive than just a new stimulus plan. Future action could include a much more aggressive action against foreclosures, a more honest assessment of the health of our financial sector, an immediate capping of credit card rates and a rollback of actions taken by credit card issuers in the last few months, a speeding up of the 2010 stimulus spending, a completion of the Doha trade round and a much more aggressive G20 effort to produce a more successful global approach to the global recession, the quick passage of the President's community college proposal, enacting comprehensive immigration reform which will bring new revenues into the federal and state governments while removing some of the downward pressure on wages at the low end of the workforce, and recasting both the President's climate and health care initiatives as efforts which will help stop our downward slide and create future growth.
These are some thoughts on how to re-engage the economic conversation but many other people also have great ideas on what to do now that the specter of a true global depression has been averted, and we have the luxury of talking about what to do next. Which is why NDN is launching a new series of discussions on the global and American economies. We begin next week with Dr Jagdish Bhagwati and Dr. Rob Shapiro. Keep checking back on our site for the next events in this important new series based in Washington, DC but also webcast for anyone to watch no matter where they are.
The bottom line - the recent decline in the President's poll numbers are reversible. The key is for he and his Party to make the struggle of every day people their number one rhetorical and governing concern. A "new economy" is emerging in America, and it is not has been kind to most Americans. Getting incomes and wages up in this new economy of the 21st century is in fact the most important dmoestic challenge facing the country, and one the American people are demanding a new national strategy for. This fall is the time for the President to make it clear to the American people that he understands their concerns, has a strategy to ensure their success in this new economy, and will make their success the central organizing principle of his Administration until prosperity is once again broadly shared.
In yesterday's New York Times, conservative columnist Ross Douthat accuses President Obama of "pushing a blue-state agenda during a recession that’s exposed some of the blue-state model’s weaknesses, and some of the red-state model’s strengths."
Asking readers to consider California, which he places against the stellar conservative governance of Texas, Douthat notes:
California, always liberalism's favorite laboratory, was passing global-warming legislation, pouring billions into stem-cell research, and seemed to be negotiating its way toward universal health care.
(his link points to a Time article about Arnold Schwarzenegger's work in this area, who, last I checked, has an R and a 28 percent in state approval rating next to his name)
While California is undoubtedly a national leader in trends of all stripes, understanding the legacy of California governance as being "liberalism's favorite laboratory," couldn't be more wrong. The reasons for California's epic struggles lie, not in the "always liberalism" that Douthat sees, but instead in the Ronald Reagan conservative tax revolt coming home to roost.
In contrast to, say, California's efforts on energy policy, which research shows have created prosperity in the state over the last generation, the tax revolt defining Proposition 13 destroyed a top notch public schools system and, more recently, rendered the state bankrupt. The 1978 ballot initiative, which capped property taxes and mandated a 2/3 rule for the state legislature to pass a budget, has created a structural shortfall in the state budget and a political inability for legislators to craft a solution -- but Douthat doesn't see fit to mention it.
Conservatives love to argue that California has incredibly high tax rates, and, in the case of some specific taxes, that's true. But that's only because Proposition 13 so drastically lowered property taxes as to necessitate raising taxes to compensate for lost revenue. As Ezra Klein, in discussing Robert Samuelson's op-ed on California (which, like Douthat's piece, conspicuously fails to mention Prop 13), notes this morning:
Total state and local taxes take up 11.73 percent of the average Californian's income. The national average is 11.23 percent. And it's been like that for many years:
Far from being "always" liberal, California's electoral votes were supposed to be safe for Reagan's Republicans, giving them a generational lock on the White House. Here again, California was ahead of the nation, this time in discovering that conservatives couldn't govern and is now as deep blue as the Pacific Ocean.
Now that the nation has learned its lesson from eight years of red-state governance under Douthat's vaunted Texas leadership, America followed California, this time for the better, in overwhelmingly rejecting failed conservative governance. Blue-staters (a lot of folks these days) have only had six months on the job after eight years of botched "red-state" governance. It will be a lot longer than that if conservatives like Douthat can't even figure out where they went wrong; Proposition 13 was certainly one of the first places.
Update: Ezra Klein just blogged on Douthat's column as well. He does a nice job taking down the argument that Texas is a good model for anything and the broader red-blue frame that Douthat tries to use.
NDN has been writing and talking about the state of the conservative movement and the deterioration of the Republican Party for many years. Even as Republican National Committee (RNC) Chairman Michael Steele lunched yesterday with the party faithful, the GOP is adrift, with a new Gallup poll showing significant decline among Republican Party affiliation across nearly every major demographic subgroup.
As Republicans continue to debate the GOP's future path, NDN offers up some of its past and recent work on the state of the modern conservative movement and the end of the conservative ascendancy.
Everybody's Wrong But Us, Morley Winograd and Mike Hais, 4/9/09The polarization between Democrats and Republicans in the Pew and every other survey has much less to do with President Obama's personal and political style...than it does with the inability of his own Republican Party to adapt to this new era.
The Utter Bankruptcy of Today’s Republican Party, Simon Rosenberg, 1/29/09 if the Republicans continue to act in ways so clearly designed to serve the interests of the few over the interests of the many at a time of such great national challenge then their road back may be even longer than I could have imagined.
The GOP and Magic Negroes, Simon Rosenberg, 12/30/08 The song “Barack the Magic Negro,” promoted by RNC chair candidate Chip Saltsman, is indicative of the troubles the Republican party finds itself in today.
The Long Road Back, Simon Rosenberg, 11/18/08 Barring major mistakes by the Democrats in the coming few years, Republicans are likely looking at a very long road back to power.
It's Official: Millennials Realigned Politics in 2008, Morley Winograd and Mike Hais, 11/17/08 The 2008 election not only marked the election of America's first African-American president, it also saw the strong and clear political emergence of a new, large and dynamic generation and the realignment of American politics for the next 40 years.
On Obama, Race, and the End of the Southern Strategy, Simon Rosenberg, 1/4/08 By looking to younger voters, minority voters, and Western voters, the Democratic Party can move beyond the southern strategy that, for so long, has been the only way Democrats knew how to win.
Repudiating the Bush Era, Simon Rosenberg, 2/18/07 Politics over the past several years has been driven by a widespread rejection of the disastrous Bush era.
"The 50-year Strategy: A New Progressive Era," Mother Jones, Simon Rosenberg, 11/1/07 With a fresh argument and a strong, diverse coalition, the stage has been set for a lasting progressive majority.
A Day of Reckoning for the Conservative Movement, Simon Rosenberg, 11/7/06 The 2006 elections marked the end of conservative ascendancy. These essays look at how this shift can be explained by historical trends, hard electoral data, and recent decisions made by leaders of both parties (more here and here).
NDN fellow Morley Winograd says the younger McCain's growing following underscores an "underlying conflict" in the party - between opposing forces and generations.
By Simon Rosenberg and Robert Shapiro, September 23, 2008 - This narrative setting essay argues that leaders must do more to staunch the foreclosure crisis, which was at the heart of the financial meltdown.
A decade of reckless deregulation, mismanaged regulation and equally reckless private mismanagement has now brought the American and global economies to a crisis point. Investment banks, hedge funds and other financial institutions have borrowed hundreds of billions of dollars to sink into securities widely recognized to entail extraordinary risk, passing that risk along to millions of Americans whose retirement plans, pension funds and money market accounts found their way into funds set up by such mismanaged financial titans as Lehman Brothers, Bear Stearns, Merrill Lynch and AIG. Through it all, the White House, Treasury and Federal Reserve have practiced their own reckless regulatory mismanagement, allowing the gradual accretion of the biggest financial house of cards in history. Now it has caught up with them and the rest of us, and those who let it happen are asking taxpayers to spend hundreds of billions of dollars to clean up this mess.
This crisis is far from over, and its effects are still spreading. We need a broad plan that will actually work to restore financial and economic stability. But those who have had little or no hand in it – America’s taxpayers and most Members of Congress – should not be steamrolled into giving a blank check to those in the Administration who failed to head off this crisis. First, the check they want us to write is unlike any ever written before during financial crises. When Washington last took over the failing assets of private institutions, during the savings and loan bailout, taxpayers first took over the institutions themselves and then sold the assets, while the regulation of the remaining S&Ls was tightened and reformed to preclude another round of the same problems down the road. This time, Congress is being told that it must use taxpayers’ money to buy up the degraded assets of hundreds of financial institutions while they continue operating as private entities and without any guarantee of regulatory changes that will prevent it from happening the next time. That’s a bad bargain and terrible policy.
Second, it’s doubtful that the plan will even work in its own terms. If the Paulson Treasury plans to buy the deteriorating securities at their current, low market values, it may help the institutions holding them to avoid further deterioration, but it won’t reduce the losses they’ve already taken. Consequently, this bailout cannot actually lead us out of the crisis – unless the Treasury plans to pay these institutions above-market prices for the tanking securities they now hold, which would produce the largest direct transfer of money from taxpayers to shareholders and executives ever seen.
Third, the plan does not address the forces which continue to drive this crisis. At the base of the pyramid scheme that has infected our financial markets – underneath the credit default swaps and collateralized debt obligations created with borrowed money to “guarantee” mortgage-backed securities created with more borrowed money, in a housing market swollen by a historic bubble — lies the only real assets in the picture, the mortgaged homes of tens of millions of Americans. On that critical score, the Administration plan offers nothing. The only way to stop the cascading financial crisis consuming not only investment banks, investment funds, mortgage lenders and insurance companies, but also pieces of most Americans’ retirement security, is to stabilize the housing market from which all of the rest arises. The Treasury and the Administration propose to use taxpayers to bail out the institutions which speculated in the securities based on that market. Given the system’s current precarious position, a bail out of some kind cannot be avoided. But our government owes at least as much attention to homeowners facing foreclosure. If the Treasury and Fed had been willing to spend $85 billion on loans to strapped homeowners, as they did to AIG last week, the crisis might never have crested into the conditions that now require a system-wide bailout.
These mortgages are at the root of the crisis. It’s their mounting defaults driving down the overall housing market which has brought venerable banks like Lehman Brothers and Bear Stearns. Before Congress leaves this week or next, it should enact legislation that either provides a mechanism for direct loans to people to avoid foreclosure or allows them to renegotiate their mortgages. This single step will keep untold numbers of people in their homes, help stabilize the housing market, help contain the crisis at one of its critical origins, and thereby help shore up the financial system. Paired with a program to provide more liquidity to financial institutions and an orderly way to write down their failing holdings, this step could finally take us past this crisis.
Even so, only a small share of the costs of this historic mismanagement are apparent today. This financial shock, on top of the housing and energy shocks that preceded it, have almost certainly pushed our economy into recession. That will further reduce the value of the assets held by tens of millions of American through their pension funds, retirement accounts, money market and mutual fund investments. The squeeze will be hardest on the rising numbers of Americans who will also lose their jobs. The need to help these people and millions of others keep their homes is urgent, then, for a host of economic and social reasons.
When Congress returns in December or next year, it will find itself with far fewer resources to finance badly-needed new initiatives in health care, climate change and tax policy. One urgent order of business, however, will be entirely within its capacity: adopt and apply strict and appropriate transparency, capital and other regulatory standards to all financial institutions. And the politicians who hailed the hands-off attitude that enabled this crisis to fester and break out, and who now blame greed instead of their own negligence, must be held accountable.
With an ever decreasing hold on congressional power and a lack of an agenda to promote that has plagued them for the past decade, Republicans leaders are resorting to an old familiar playbook, and attempting to rally their base by showing them images of terrorist and Hispanics. This tactic failed miserably for them in 2006 and 2008, but "if at first you don't succeed..."
The Roll Call reports this morning that members of the Congressional Hispanic Caucus have asked U.S. Representative Boehner for an apology and to remove the video from his website. According to the story, his spokesman called this complaint "silly." What is silly, is that after years of failed leadership, Republicans are only interested in returning to the tactics that led this country into the situations we now face.
U.S. Rep Boehner, and the GOP should be ashamed of themselves. They lost US Senator Specter this week because they continue to alienate differing thoughts and peoples, and they have been losing election after election because of this same strategy. The American public is tired of your divisive politics, and this latest incident will only further complicate your desires to return to power.
Yesterday, as we marked the passage of President Obama's first 100 days in office, I recorded some of my thoughts on how the new administration is doing so far:
While one could mount an argument that one should not govern by polls, one can also ignore them at their own peril. The country wants their leaders focusing on what is their number one concern - their ability to make a living and provide for their families in a time of economic transformation - which also happens to be, in this case, the most important domestic issue facing the country. 
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