New Deal Numerology: A Second Act in Politics

Oct 19, 2012Tim Price

This week's numbers: 58%; 3%; 1; 4; 27%

58%... is a mixed number. That’s how many CNN viewers thought Romney would do a better job of handling the economy after the second debate. They heard him say “I know what it takes” so many times, they just assume he’ll tell them the secret one day.

3%... is a qualified number. According to Reuters, that’s how much higher Obama scored on appearing presidential after the second debate, which should bump him up to 103 percent, since he is literally the president.

This week's numbers: 58%; 3%; 1; 4; 27%

58%... is a mixed number. That’s how many CNN viewers thought Romney would do a better job of handling the economy after the second debate. They heard him say “I know what it takes” so many times, they just assume he’ll tell them the secret one day.

3%... is a qualified number. According to Reuters, that’s how much higher Obama scored on appearing presidential after the second debate, which should bump him up to 103 percent, since he is literally the president.

1... is a premature number. That’s how many jobs were created during the debate, as Romney promised one to his first questioner if he’s elected. Just 11,999,999 to go and he can cross unemployment off his first-term agenda.

4... is a verbose number. That’s how many more minutes Obama got to speak than Romney did, which critics cite as evidence of moderator bias. But he also spoke longer during the first debate, which suggests that it really helps to have something to say.

27%... is an unbound number. That’s how many senior staff positions were held by women by the end of Mitt Romney’s term as governor -- a 3 percent drop from when he took office. Was he collecting all those women in binders so he could trade them for a good rookie card?

Tim Price is Deputy Editor of Next New Deal. Follow him on Twitter @txprice.

Share This

Despite a Strong Debate, Obama Remains Vulnerable on the Economy

Oct 18, 2012Jeff Madrick

The president found his voice in the second debate, but he still needs to make a clearer case for the progress he's made.

There has been entirely too much celebrating about President Obama’s debate performance on Tuesday. He did very well, without a doubt. He won hands down. He didn’t get into the ring cold, and he showed that he knew his stuff—and that Romney really didn’t.

The president found his voice in the second debate, but he still needs to make a clearer case for the progress he's made.

There has been entirely too much celebrating about President Obama’s debate performance on Tuesday. He did very well, without a doubt. He won hands down. He didn’t get into the ring cold, and he showed that he knew his stuff—and that Romney really didn’t.

But the economy remains the ace in the hole for Romney and Ryan. We haven’t nearly recovered in terms of jobs, and that’s a tough fact to slide by. The unemployment rate rose rapidly in Bush’s last term to around 8 percent, then peaked in 2009 at 10 percent and slowly came down to its current level. So we are only back to the start of the Obama term. No one ever won the presidency with a 7.8 percent unemployment rate. And we know, as Romney keeps reminding us, that median family income is awful and that poverty is up.

Everyone knows this, and yet Obama did not have a good enough explanation of how much progress has been made. He sounded defensive. So Obama needs a strong, non-defensive explanation of his achievements, and one way to put it is what would have happened had Romney won the presidency in 2008. You’d have a 10 percent unemployment rate with Romney as president. Poverty would be way up. He’d be blaming Social Security and Medicare for all his problems, and he’s find economists to claim he was right. They might already be cutting these programs forever “in order to save them.” It’s triage -- throw the elderly out of the boat and let everyone else eat the rations. People would be poorer. They would get less health care. Those in poverty would have fewer benefits. Is that the kind of America you want?

Odds are that Romney, if he put the Romney-Ryan plan into effect, would create a bigger deficit, too. That’s actually what we need, but a deficit based on tax cuts will create few jobs. (EPI ran some numbers based on Mark Zandi's multipliers.) And if Romney did close the many tax holes he promises to, recession is almost guaranteed even as your taxes rise.

This concept is tough to communicate in a credible way. It just sounds like economists bickering. But there is a record out there: George W. Bush’s. His central economic policy was tax cuts for the rich, and he produced the slowest job growth of any president since the Depression. Romney will do that again. Promise.

Obama has to be clear: He stopped a depression. He is getting the housing market to come back after the worst devastation since the early 1930s. Employment stopped falling. But he shows hesitation in critical areas. Will he protect Social Security and Medicare? If so, then say so. The other guys will cut it, even gut it. But is he vacillating too much here. The talk about Dodd-Frank doesn’t win him many points because most of America thinks the banks got away with murder. He needs a better way of talking about that. As for Obamacare, he is talking about its good points, but he needs to be bolder still. List them all, and list them fast.

And when he says Romney is lying, which is a deliberate motif of the Republican game plan, don’t say he lied with a smile. Say, "It makes me very sad and disheartened when the governor misleads the American people. It is unfair to you voters. And when challenged, my opponent will come back and tell you again, that’s not what his program is, or he never said that. Be proud of your claims, Governor Romney; don’t back off them to win over some in the middle of the pack. Tell them where you really stand."

Finally, it is critical to be constructive about the uses of government. Tell America the only way the country will succeed and the economy will remain prosperous is if we bring everyone with us. Every American must be able to contribute to the economy with a good education and good health. Every region must have good, dependable transportation. Every part of America must breathe clean air. Government can do that.

Unfortunately, there is no third debate about domestic matters since the next one is on international events. But I bet we get back to the economy in the third debate. I hope so. Democrats have to realize that every time Romney says "just look at the record," they are behind the eight ball. Obama needs a very clear, persuasive statement about how bad the economy was in 2009 and how much he did. He stopped the bleeding. The patient was in the hospital. Who put him there? The Republicans, with the same plan Romney is offering today. The patient is resuscitated. Jobs are coming back. The housing market has turned the corner. Everyone is still getting Social Security and Medicare. And now 30 million more will have health insurance. 

Oops, I've already said all this. Sorry, readers. But why do I have to keep repeating it?

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed.

Share This

Roosevelt Reacts: At the Presidential Debate, Mitt Misleads and Obama Omits

Oct 4, 2012

After the first presidential debate last night, which focused entirely on domestic policy, Fellows and staff from the Four Freedoms Center, Campus Network, and Pipeline weigh in with what was said, what was left out, and what was just an outright fib.

After the first presidential debate last night, which focused entirely on domestic policy, Fellows and staff from the Four Freedoms Center, Campus Network, and Pipeline weigh in with what was said, what was left out, and what was just an outright fib.

Thomas Ferguson, Senior Fellow, Roosevelt Institute; Professor of Political Science, University of Massachusetts, Boston; Contributing Editor, AlterNet:

My first reaction is simple: These guys have some nerve talking so cavalierly about teachers. Virtually from their first words, both the president and Governor Romney got lost in a fog of details. They begged questions, frequently argued from different premises, tossed off too many details without context, and rarely held a focus long enough for many in the audience to discern what they were talking about. The effort was a case study in how not to illuminate very much.

So what? I’d guess that Romney’s endless talk about “jobs” may persuade a few of his listeners that somehow his arithmetic actually does add up, but that number probably will not be large. I suspect, too, that the president’s highlighting how Romney’s voucher plans might change Medicare even for Americans now in their fifties probably was widely understood, too, and will work in the opposite direction. Possibly Romney, by not looking wooden, might pick up some tiny increment of public support. But my guess is that this debate changed few minds for all the talk of a Romney “victory.” My own takeaway is that both candidates’ harping on the genius of the American people and the virtues of the market system made it easy to lose sight of virtually all the important points at issue. I’d say the candidates battled to close to a draw, while America lost.

Dorian Warren, Fellow, Roosevelt Institute; Associate Professor of Political Science & School of International & Public Affairs, Columbia University:

Debates are rarely game-changers in presidential elections, and last night's debate was no different. The quick assessments of Romney's more aggressive performance compared to President Obama's weak and sleepy responses are correct, as far as they go. But we should remember that incumbents always do poorly in the first debate. As political scientist Sam Popkin argues, sitting presidents don't have time for debate prep, and they aren't used to being challenged the way Romney challenged Obama last night. Clearly, the Obama team's strategy was for the president to play it safe and not come across as an angry black man. We also know that Obama has never been a good debater -- recall the 2007 Democratic Primary debates where both Hilary Clinton and John Edwards put in consistently better performances. Obviously, we know who won the nomination despite his weak performance relative to his adversaries. What will happen now through the next debate will be fact-checking the claims made by both candidates followed by obsessive poll watching to see if and how the numbers move. In the end, of the small number of voters uncommitted, last night's debate wasn't decisive nor did it sway potential voters one way or the other. 

Joelle Gamble, Deputy National Field Director, Roosevelt Institute | Campus Network:

What was noticeably absent in last night’s debate was the mention of the role of everyday Americans in the economy, health care, and governance. Candidates talked about making strong investments in the future, but they did not elaborate on the role future Americans play in making their promises a reality. The bottom line for both campaigns was essentially this: “Vote for me and everything will be (or continue to be) better. Nothing bad will happen to people who are comfortable with their lives. Those who are unhappy with things will only see immediate benefits because of my policies.”

But this is a quintessential flaw in our current electoral political system. Citizens are simply voters and nothing more. We show up to the polls and mark our calendars for the next major election. For this reasons, political candidates have resigned themselves to only telling us what we want to hear before an election instead of what we need to hear to be invested in their policies afterwards. For either candidate to execute their plan well, a fully engaged citizenry is needed throughout their entire four years in office. Their success is dependent upon our continued participation on November 7th.

This participation requires a shared responsibility for the efficacy of our economic recovery. Some people will have to waste less gas or change their habits if we want to be more energy-efficient in the future. Others will have to adjust to a new system of health care if we want to be healthy as a country in the future and lower costs. The fact of the matter is, in order to keep moving in a positive direction, things will change for everyday Americans. The presidential candidates need to make it clear that we will have to be participants in that change if we want to be a better nation.

Jeanne Tilley, Roosevelt Institute | Pipeline, Greater Boston:
 
Millennials, if you went to bed after the debate feeling disheartened, that’s okay. You weren't alone. That debate was not for us. I love that Dodd-Frank got so much play, but President Obama and Governor Romney each missed the mark on talking to younger generations -- particularly on education.
 
President Obama mentioned twice that he wants funding to hire “100,000 math and science teachers,” and Governor Romney gave schools here in Massachusetts a mostly deserved tip of the hat for being among the best in the country. But while these statements came during a discussion of the role of the federal government, they failed to drill down on the role of education and thus the role of educated citizens in the American social framework.
 
I was disappointed that the candidates avoided discussing two key aspects of education policy last night. First of all, I wish that the DREAM Act had been raised. It’s plausible that this will come up as part of the foreign policy debate in the coming weeks, and I try to maintain hope that eventually we can have a comprehensive immigration reform debate. But the DREAM Act is not really about foreign policy and national security. It is about creating opportunity for young, undocumented Americans to enter the hallowed demographics of “small business owners” and “middle-income families” that everyone courts so strongly during election season. American demographics are changing, and in order to remain competitive on the global stage, we need to embrace the talented, committed young people who are already here and give them every opportunity to succeed.
 
Teachers’ unions were also roundly ignored -- perhaps not surprising given recent controversies, but still unfortunate. (In fact, unions as a whole were not mentioned once, and even the ever-popular auto industry got but one brief line.) Millennials are teaching in droves, typically through structured service programs, before graduate school or entering the broader job market. This teaching bent is mainly temporary, however; most programs last only two to three years. 
 
I think President Obama’s idea to hire 100,000 STEM teachers is a great one. But once schools have recruited and trained all these teachers, the trick is to keep them in the classroom working their magic with American school children and to make sure they feel supported by their parents, schools, and government outside the classroom. The unions may well have a powerful and positive role to play in striking this balance. The time to talk it over and find out is now. American education statistics no longer top the world. For candidates who talk about global competitiveness and making sure small businesses have someone to hire, leaving education out of this debate is a huge oversight.
 

Rahul Rheki, Roosevelt Institute | Campus Network Senior Fellow for Health Care; Senior, Rice University: 

To me, the philosophical difference between the president and Governor Romney -- the visions they put forth for the role of government in America -- could not have been more stark. The barbs traded over healthcare were particularly emblematic of this dichotomy. Whereas Romney lambasted the ACA's "unelected board" for rationing care -- the IPAB is only advisory, mind you -- while distancing himself from his own signature health reform achievements in Massachusetts and proposed Medicare voucherization, President Obama embraced the provisions of the ACA that provided universal coverage, ended pre-existing conditions clauses, and ensured a thriving American social safety net for the coming decades. The competing choice, in my mind, was evident: the challenger's "every man for himself" versus the incumbent's "we're all in this together."

Tim Price, Deputy Editor, Next New Deal:
 

Given how much time the candidates spent talking past each other last night, it’s odd that some of their biggest flubs came in areas where they actually agreed, or at least claimed to. For Romney, it was health care reform – his most significant achievement as governor, and the one he’s barely been able to mention during this campaign for fear of conservative revolt. Though he was able to dodge most of the president’s criticisms throughout the debate by adopting new policy positions on the fly, his hair-splitting about whether Romneycare should be a model for national legislation was the least convincing part of his performance. Pressed to explain why he’d repeal the Affordable Care Act given that it’s essentially a scaled-up version of the plan he adopted in Massachusetts, Romney seemed to argue that Romneycare might be an appropriate model for every state, but not all of them at the same time. If states are the laboratories of democracy, he apparently wants Massachusetts to keep a tight hold on its patents.

As for President Obama, when he wasn’t wandering through a fog of obscure policy details, he was conceding far too much ground to conservatives. One of the most eyebrow-raising moments of the night was when Obama began the discussion of entitlements by declaring that he and Romney share a similar position on Social Security. Do they really? If so, progressives have a lot more to worry about than we thought, since Romney’s running mate is the author of a plan that would privatize it. Then there was the question about the need to cut deficits, where instead of rejecting the premise and making the case that we need a bigger deficit to create jobs, Obama defended his budget plans as Bowles-Simpson with a cherry on top. Instead of articulating a bold progressive vision for the economy and a strong defense of the social safety net, he often sounded like a moderate running in a Republican primary.

Rajiv Narayan, Roosevelt Institute | Pipeline, California:

We bring as much of our own perception to the debates as the presidential candidates add with their responses and rebuttals. Having recently landed my first job out of college, I understand the importance of building a labor force with diverse skills and an economy rich with opportunities. But what I understand to be even more important is the community of support that got me from my diploma to my first paycheck. That means teachers. Tonight I saw one candidate who praised teachers, but was unwilling to keep intact those programs supporting classrooms for political reasons. Likewise, I was disappointed by the political “strategery” at work on health care reform. When we reach a point where Governor Romney is threatening to dismantle the (unspecified, seemingly unpopular) parts of a health program cloned from his health program, in order to reinstate from the states, where "democracy's experiments take place," the most successful version of that program, I'm afraid we've become audience to Dadaist political theater.

Hannah Locke, Roosevelt Institute | Campus Network Senior Fellow for Energy and Environment; Senior, Goucher College:

C-SPAN, Fox News, Twitter, Facebook---tax policy, Big Bird, educational vouchers, zingers. The Internet was alive with puns, expressions of disgust, tired and overused commentary, and the usual spin. Is this what the battle for the soul of our country looks like? Boiled down to cherry-picked numbers, to stuttering sentences of little substance, to talking over the moderator? What does our Millennial generation garner from such a discussion? We laugh and point and tweet and snark, but I’ve started to wonder whether that level of  “political engagement” is worth bragging about.

Meanwhile in Venezuela, the people are taking to the streets, risking their own lives to demand a fair and transparent democracy. The challenger, Henrique Capriles, heads a coalition of opposition groups who contest not only the continuation of Chavez’s isolating economic practices, but the proliferation of violence and fear in Venezuela. What started as state-sanctioned Robin Hood behavior quickly bred into a festering, sprawling disease of chaotic violence where anyone—poor, rich, liberal, conservative—runs the risk of getting in trouble with the street gangs or the military.

So next time we bemoan our elections, let’s take a step back and put things into perspective. We aren’t on a black list for going to an opposition leader’s website. We aren’t risking a bullet in the head every time we step out to a rally, stump speech or fundraiser. We aren’t risking our families’ future on the hope that our country can be something better than one of the most violent nations on this planet.

We go to the polls, and we vote. Sometimes, we should take a moment to recognize how much we’ve got, just as much as we recognize what we don’t have yet.

Kyle Shepherd, Roosevelt Institute | Pipeline:

My favorite passage of the night came from the candidates' back and forth on federal regulation of the economy. "You couldn't have people opening up banks in their garage and making loans," Romney said. "Every free economy has good regulation. At the same time, regulation can become excessive."

I love imagining people loaning money out of their garage. For all the talk of the American people's ingenuity, it seems like someone on the right must think this is a good idea. But this statement also points to the key differences between the two candidates on regulation, albeit in broad strokes. And as a progressive, this is a big deal to me, because Romney wants to eliminate important financial protections that don't have enough teeth to begin with.

Dodd-Frank, like much government oversight of the economy, can be easy to criticize. Detractors say it’s unwieldy, opaque, and brings unintended consequences. It's also not immediately apparent how it has solved the problem of banks being "too big to fail." Romney played on this by saying he wants to repeal and replace it with more intelligent regulation that will create jobs. This was a somewhat new proposal from him, as he has previously stated he just wants to repeal it, but it's also important to note he remains characteristically vague on the subject, making deeper analysis of his policies difficult. It's safe to say, however, that it would probably involve decreases in regulation on derivatives and relaxing the restrictions that have been imposed on the large, systematically important firms. This would debatably result in more jobs, but would certainly result in more banking profits.

Obama didn't do much to advance any new policy initiatives. He instead defended Dodd-Frank, mentioning the "reckless behavior" of Wall Street and touting the capital requirements and bank "living wills" imposed by the legislation he supported. There are some good things in Dodd-Frank, and it's much needed legislation that will hopefully strengthen over time as regulators adapt and enforce its stipulations.

The discussion of the role of government in regulating financial institutions is a vital one. These are important issues that get to the heart of inequality, corporate welfare, and consumer protection in our country. We need people to be able to borrow money with confidence they are not being taken advantage of, and the banks need to understand their risk is real and can't be passed over to someone else along the financial daisy chain. The debate on this issue needs to more fully acknowledge the risks inherent in the economy, who should assume responsibility for those risks, and what policies can make that happen.

Unfortunately, the debate as framed last night presented only two options. Either Dodd-Frank, a bill mercilessly attacked by lobbyists, only supported by key financial interests in order to prevent a stronger bill from passing, and only partially enforced -- or weaker regulations and restrictions as offered up by Romney.

Lydia Austin, Roosevelt Institute | Campus Network Senior Fellow for Economic Development; Senior, University of Michigan:

It seems that the hype surrounding this debate -- the numerous news articles and coverage dedicated to it -- was greater than the actual event. Both candidates held their own, both threw out a lot of facts related to tax policy and Medicare, and both were on the defensive for some amount of time. Romney had the most at stake coming into tonight: he desperately needed to rebrand himself as someone who understands the middle class and is responsive to Americans' frustrations. I think he effectively did that. Not an outstanding performance by either candidate, but in terms of who shifted the public discourse, it was definitely Romney (though now the Internet is blowing up with Big Bird photos).

Ken Lefebvre, Roosevelt Institute | Campus Network member; Senior, University of Massachusetts:

Last night we witnessed two opposing narratives clash, unmitigated in their stances, and mostly unmoderated in their discourse. We saw a president tired from four years of entrenchment in the daily minutiae of national politics, and we saw an ever-eager opponent going into this fight with the gloves off. It could be said that Mitt Romney won this debate through his writers and an ability to look presidential. At the same time, Obama did what he had to to maintain his steady ground and consistent policies. Little was accomplished in this debate, and both candidates made the same talking points together that they had for months before. No new details were offered. You really could take segments of their commercials and edit them as if they were the debate. Emotional responses may tip the polls toward Romney for the time, but voters learned little from either candidate in this display.

Jean-Ann Kubler, Roosevelt Institute | Campus Network member; Senior, Skidmore College:

After sifting through the talking points and empty rhetoric of last night’s debate (we get it, 5 trillion is a big number), the American public is left with very little substance on which to compare the incumbent Obama and challenger Romney. The two candidates made bold attempts, particularly during the economic segment of the debate, to appear as if they were presenting facts and specifics about tax plans, the deficit, and creating jobs. But in the end, what did viewers learn other than that Romney and Obama have starkly different opinions on how theoretical math works? Can Obama decrease the deficit by spending more and taxing more? Romney said no, but demonstrated no evidence other than his lack of faith. Can Romney spend $2 trillion extra on defense without raising taxes on the middle class to pay for it? Obama said no, and the math seems to back him up, but he was unable to present his argument in a manner that would be digestible by a common viewer. What the common viewer could easily discern, however, was that two presidential candidates with four Ivy League degrees between them, who both claim that the key to their governing style is bipartisan leadership, were unable to put aside polarizing, partisan rhetoric long enough to provide the American people enough information to make an educated decision about the future of our country.

Michelle Tham, Roosevelt Institute | Campus Network member; Sophomore, American University:

The presidential debate had a lot more number-crunching than I expected. However, this didn't mean that all the numbers were correct. One ironic rhetorical point Romney has been using throughout his campaign (and continued at the debate) was "disregard the fact-checker and studies." Yet Romney's tax plan is defended by the Heritage Foundation. Furthermore, Romney mentioned clean coal. Since 2009, clean coal has already been identified as more of a misleading political frame than actual clean energy. Currently, there's no economical way to capture and eliminate carbon emissions from coal itself -- dirty or clean. On the same note, as Romney praises the idea of clean coal, he also misunderstands the collapse of the solar company Solyndra. There is no Solyndra scandal. Solyndra was simply a startup solar-power equipment manufacturer that was funded under the Bush administration. Solyndra fell because of the lack of demand and overseas competition. It has nothing to do with Obama's initiative for higher clean energy funds. Finally, the idea of investing in Solyndra itself adheres to Romney's idea of economic growth. 

Mawish Raza, Roosevelt | Institute Campus Network member:

The start of the presidential debates last night had stirred up much more excitement than the debate itself was able to offer. Governor Romney presented an aggressive side that clamored over President Obama’s passiveness, but aside from the candidates' demeanor, the debates didn’t touch on many key issues, including women’s rights or immigration reform. Even during the dialogue on education and health care, neither candidate even mentioned the right for a woman to make her own decisions with her body or education being a right for all individuals. 

Governor Romney repeated his commitment to education several times, along with his plan to allow parents to choose where to send their children. That’s great, but what about kids coming from broken families and being raised in poverty? What about human trafficking victims who are sold to the streets until disposed of? What about the failing education systems in inner cities? Because commitment to the education system doesn’t provide kids in these communities with instantaneous financial support, education often isn’t an answer for them. In these environments, the only plausible option for them may be to turn to drugs or crime. And when we focus on the family, where the emphasis on education will be placed on the parent’s engagement with their child, we are neglecting entire populations of youth around the country. This creates a cyclic culture of poverty for young people.

Share This

The Recession Ends. Then What?

Sep 24, 2012

It may be hard to imagine, but (we all hope, anyway) some day the recession and meager recovery period will come to an end. At that point, will the debates we're having now about the economy become completely irrelevant? What will we have to fight about?

It may be hard to imagine, but (we all hope, anyway) some day the recession and meager recovery period will come to an end. At that point, will the debates we're having now about the economy become completely irrelevant? What will we have to fight about? Roosevelt Institute Fellow Mike Konczal and EPI's Josh Bivens took this question on in the latest Fireside Chats episode on Bloggingheads:

As Mike points out, "Right now the debates seem very focused on things very specific to this recession," such as what the Federal Reserve could do to make things better or whether we should reduce mortgage burdens to boost consumption. Those are "very technical and very important debates to be having," he points out, "but they’re very narrow to the moment we’re in right now." Once we one day leave these issues behind, what will liberals decide to promote? And will we all be able to get on board?

The first issue Josh sees rearing its head is what we consider the "natural" rate of unemployment to be. Right now it's pretty obvious that unemployment is too high. At what point does it fall so much that some people, including the Fed, start to say it shouldn't go any lower? This question will have larger implications as well. As Mike says, "You see policy experts running around trying to figure out how to boost the wages of the lower quintile, but we know what has done it in the past 30 years, and it’s when unemployment is below 5 percent for a sustainable period of time." In fact, he says, a low unemployment rate "is the ultimate jobs program, it is the ultimate policy solution," and boosts wages for everyone -- not just those at the bottom.

What else will we squabble over when the economy once again booms? Bivens predicts social insurance programs -- Social Security, Medicaid, and Medicare -- will have to be on the agenda. And related to that will be just how high we can go with tax rates on the rich. "Obviously you can have a fairness argument and a just deserts argument, but the economic case is pretty clear that [tax] rates [on the wealthier] could go much higher," Mike says. "But we’re seeing resistence to just getting to near 40 percent at this point." Brace yourself, political battles are coming.

Watch the full episode below, in which Mike and Josh discuss how little we all take home and whether inequality and the social safety net have anything to do with it:

Share This

The Recession Ends. Then What?

Sep 24, 2012

It may be hard to imagine, but (we all hope, anyway) some day the recession and meager recovery period will come to an end. At that point, will the debates we're having now about the economy become completely irrelevant? What will we have to fight about? Roosevelt Institute Fellow Mike Konczal and EPI's Josh Bivens took this question on in the latest Fireside Chats episode on Bloggingheads:

It may be hard to imagine, but (we all hope, anyway) some day the recession and meager recovery period will come to an end. At that point, will the debates we're having now about the economy become completely irrelevant? What will we have to fight about? Roosevelt Institute Fellow Mike Konczal and EPI's Josh Bivens took this question on in the latest Fireside Chats episode on Bloggingheads:

As Mike points out, "Right now the debates seem very focused on things very specific to this recession," such as what the Federal Reserve could do to make things better or whether we should reduce mortgage burdens to boost consumption. Those are "very technical and very important debates to be having," he points out, "but they’re very narrow to the moment we’re in right now." Once we one day leave these issues behind, what will liberals decide to promote? And will we all be able to get on board?

The first issue Josh sees rearing its head is what we consider the "natural" rate of unemployment to be. Right now it's pretty obvious that unemployment is too high. At what point does it fall so much that some people, including the Fed, start to say it shouldn't go any lower? This question will have larger implications as well. As Mike says, "You see policy experts running around trying to figure out how to boost the wages of the lower quintile, but we know what has done it in the past 30 years, and it’s when unemployment is below 5 percent for a sustainable period of time." In fact, he says, a low unemployment rate "is the ultimate jobs program, it is the ultimate policy solution," and boosts wages for everyone -- not just those at the bottom.

What else will we squabble over when the economy once again booms? Bivens predicts social insurance programs -- Social Security, Medicaid, and Medicare -- will have to be on the agenda. And related to that will be just how high we can go with tax rates on the rich. "Obviously you can have a fairness argument and a just deserts argument, but the economic case is pretty clear that [tax] rates [on the wealthier] could go much higher," Mike says. "But we’re seeing resistence to just getting to near 40 percent at this point." Brace yourself, political battles are coming.

Watch the full episode below, in which Mike and Josh discuss how little we all take home and whether inequality and the social safety net have anything to do with it:

 

Crossroads image via Shutterstock.com.

Share This

Mitt Romney's 47% Remarks: Wrong on the Facts, Not Just the Rhetoric

Sep 18, 2012Jeff Madrick

Americans who rely on government programs aren't "takers." They're people who have been left behind by our economy.

Americans who rely on government programs aren't "takers." They're people who have been left behind by our economy.

Mitt Romney’s “off-the-cuff” remarks that nearly half of Americans are “dependent” on government and believe they are “victims” who are “entitled to health care, to food, to housing, to-you-name-it,”  were widely publicized. This is in fact old saw for a certain kind of anti-government conservative. I have given talks deep in conservative territory where courteous memebers of the audience would come up to me afterwards and say they agree we should pay taxes for infrastructure but not for giveaways “to those people.”

But coming from a presidential candidate of one of the major parties, such remarks are stunning. Moreover, Romney later claimed he stood by them. He insulted half the American people; at least the people who spoke to me were talking about perhaps only one quarter of them! Romney also used the once-ubiquitous claim by conservatives that only half of Americans pay income tax. 

There was widespread criticism of Romney's rhetoric, but the stronger case against his condescending and elitist remarks is to present the facts, of which he seems happily unaware. Fortunately, the Tax Policy Center and the Center on Budget and Policy Priorities have pointed out that the large majority of Americans pay federal taxes when payroll taxes for Social Security and Medicare are included. The only Americans who don’t pay taxes are some of the elderly, the poor, and the young.
       
But it is the dependency issue that requires real information. Income for the lower half of American earners has been growing very slowly since the late 1970s -- more or less when Ronald Reagan took office. Compared to economies overseas, the wage performance has been just plain bad. 
        
Why? The declines of unions, the refusal to raise the minimum wage with inflation, and the increased pressure by Wall Street to minimize expenses in the short run -- typically labor expenses -- have all contributed. So have rapidly lost manufacturing jobs and globalization in general. Finally, on average economic growth was slow in the 1980s until the mid-1990s. Only in the late 1990s did growth push the unemployment rate down adequately to boost incomes for the lower half. In the 2000s, we had adequate growth but little job or wage growth. Without social programs like the Earned Income Tax Credit, the lower half would have hardly seen incomes grow at all.
      
Was dependency a cause of low incomes? This is easily refuted nonsense. Had social programs hurt rather than helped Americans, poverty rates would have been low in the 1950s. As Michael Harrington alerted America, the poverty rate was probably 30 percent in the 1950s. Finally, the U.S. government computed a poverty line -- a low one, mind you. It found the poverty rate at about 22 percent. 
      
Why? Couldn’t have been dependency. The War on Poverty had not yet begun. By the 1970s, however, the poverty rate was down to 11 percent. As Social Security expanded, elderly poverty rates fell from 50 percent to about 10 percent. And so on. These are the purposes of government, Mitt.
      
On our Rediscovering Government website you can find a set of charts and an important summary paper by Lane Kenworthy on this issue.
 

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed.

Share This

Central Banks Are Saving Democracy From Itself

Sep 17, 2012Jeff Madrick

We may want more democratic control over the Federal Reserve, but its independence is allowing it to push back against austerity.

We may want more democratic control over the Federal Reserve, but its independence is allowing it to push back against austerity.

The Federal Reserve's recent announcement of aggressive new policies is more than a little welcome. It involved a new round of quantitative easing focused on mortgage-backed securities, but more importantly, a statement that the Fed would keep rates low for a long time, even if the unemployment rate begins to fall markedly. In other words, the Fed will be more tolerant of rising inflation. A couple of points are clear and have been widely discussed:
 
First, more inflation is what this economy needs. It will reduce “real” interest rates down the road. It will also reduce the level of debt, which will now be paid off in somewhat inflated dollars. Lenders will pay the price; borrowers will benefit.
 
Second, the Fed is at last accepting its dual mandate, which is not only to keep inflation in check but also to keep unemployment in check as well. Inflation got almost all the focus since Paul Volcker’s reign in the early 1980s.
 
Third, inflation targeting as almost the sole purpose of any government policy is now either not applicable to current circumstances or never really was the answer to our prayers. The main claimant on the uses of either hard or soft inflation targeting was none other than Ben Bernanke himself. He was the champion of the Great Moderation, which held that less GDP volatility and low inflation were admirable ends in themselves -- proof of a nearly perfectly managed economy.  
 
Never mind that growth in the late 1990s was supported by high-tech speculation in the stock market, or that growth in the early 2000s was supported by a housing bubble and crazy, risky practices on Wall Street. And forget that job growth was the worst of the postwar period under George W. Bush, even before the 2008 recession, and wages had been performing poorly for 30 years. It was all really great, said Bernanke, and only a few mainstream economists disagreed.
 
But there is another point that needs emphasis and is being passed over. This one is about democracy. Bernanke is acting aggressively because the American Congress and president are locked in an austerity embrace. Fiscal stimulus is now turning into de-stimulus. Even the president’s budget calls for fiscal restraint. The deficit bugaboo is strangling the world.   
 
Those who want to make the Fed more subject to democratic control – and to a degree, I am sympathetic -- should heed a lesson here. Democracy -- that is, a democratically elected Congress and president -- is choosing a damaging course of austerity. In Europe, it is far worse. 
 
Needed policies are coming from America’s central bank, which was deliberately created as an independent entity. Note that it is Romney who is saying he wants Bernanke out of there and crying wolf about inflation. Bernanke, not subject to the whims of democracy, has had the courage to change his own thinking. He knows the consequences of tight policy now.
 
So what do we do? We should be a little modest about the universal benefits of democracy. For example, I think democracy may yet work to end the severest levels of austerity in Europe. People are mad. Governments are changing for the better. Demoracy in America is the only answer to an ever-richer and more powerful oligarchic class in the U.S., which wants to lower taxes, limit regulations, and cut government into ever smaller pieces.
 
But we must also deal with the disturbing fact that one of the least democratic of our institutions, the Fed, is the only one saving the day now. The same is true in Europe, where the European Central Bank is now acting intelligently, in contrast to the fiscal hawks dominated by the German policymakers and apparently supported by a majority of the German people. This issue is not simple.
 

Roosevelt Institute Senior Fellow Jeff Madrick is the Director of the Roosevelt Institute’s Rediscovering Government initiative and author of Age of Greed.

Share This

How to Make Work Pay Again

Sep 13, 2012Richard Kirsch

The latest Census data prove that we need to start rebuilding the American middle class, and a new report shows how it can be done.

The latest Census data prove that we need to start rebuilding the American middle class, and a new report shows how it can be done.

Yesterday the U.S. Census Bureau reported that family income in the U.S. dropped to its lowest level in 16 years. The key thing in this news is that the drop is not just over the last three years, during the Great Recession. The squeeze on the middle class isn’t new, it wasn’t caused by the recession, and it won’t be fixed as we come out of the recession. If we’re going to rebuild the middle class, we need an agenda aimed at making work pay in the 21st century.   

That’s why I worked with more than 20 groups who understand the daily struggles of working families on a new report we’re releasing today, 10 Ways to Rebuild the Middle Class for Hard Working Americans: Making Work Pay in the 21st Century. The report is a road map for addressing the truth that we don’t just have a jobs problem; we have a good jobs problem.

Before we get to what we do about it, we need to confront the fact that even though the proportion of Americans with a college education doubled in the past three decades, the share of working people with a decent job dropped. Six out of ten (58 percent) jobs now emerging from the recession are low-wage. On top of that, the jobs projected to have the most openings between now and 2020 are mostly low-wage and require no more than a high school education. So there is no reason to think things will get better unless we act.

One set of solutions proposed in 10 Ways to Rebuild the Middle Class is to tackle the lack of support and protections for low-wage workers. A first step is to restore the minimum wage, which buys 30 percent less now than it did 40 years ago. The minimum wage for tipped workers is $2.13 an hour, the same as it was in 1991. One in five workers would get a pay raise if the minimum wage were increased. That includes workers who get paid just above today’s minimum wage, who would also benefit as the legal floor got raised.

Remarkably, four out of ten private sector jobs – including the great majority of low-wage jobs – do not give employees any paid time off if they are sick or need to care for an ill family member. In response, Connecticut and several cities have passed paid sick days ordinances. The federal government and states and localities should update basic labor standards to include this essential benefit to working families.

The report recommends tough enforcement, with meaningful penalties, of laws that unscrupulous employers now routinely flout. Many employers of low-wage workers routinely steal wages by not paying the minimum wage, not paying for overtime, or simply not paying workers at all. Other employers misclassify workers as “independent contractors” in order to get out of paying payroll taxes or benefits and hire “permatemps.” Worker safety and health is another area where measly penalties, weak enforcement, and widespread retaliation against workers who dare to speak up allow employers to keep low-wage workers in hazardous work conditions every day. 

It will take systemic solutions to address the broader problem of stagnant wages. A crucial step is to uphold the freedom of workers to organize a union by modernizing the National Labor Relations Act and stopping employers from harassing organizing efforts with virtual impunity. Nothing in our nation’s history has done more to bring workers decent pay, benefits, and dignity at work than organized labor. The factory workers of the mid-20th Century didn’t have a college education; they organized unions. The low-wage workers of the 21st Century – the housekeepers and janitors and home health aids and retail clerks – will only be able to get decent wages and become part of the middle class when they are able to effectively organize to bargain collectively.

Other proposals in the 10 Ways to Rebuild the Middle Class report would create new social insurance protections for the 21st Century, just as Medicare, Social Security, and Medicaid were key to fighting poverty and building the middle class in the last century. The nation took one major step in 2010 with the passage of the Affordable Care Act, which in 2014 will enable working families to get affordable health coverage even if they don’t get it on the job.

The report proposes two other steps to provide families more security in their work and in their retirement. Though today’s norm is for all the adults in a family to be in the workforce, only one in ten workers (12 percent) has paid family leave through work to care for a new child or a sick family member. A solution is to establish a national family and medical leave insurance program, similar to Social Security and successful programs in California and New Jersey, for workers to draw on when they are out on family leave.

To address the fact that pensions have been replaced by thread-bare 401Ks over the past 30 years, the report recommends establishing new pooled and professionally managed retirement plans for those who rely solely on Social Security and 401Ks, which would pay a defined amount – a pension – each month.

In addition to these and other steps, 10 Ways to Rebuild the Middle Class recognizes that a foundation of improving work is full employment. That is why we need to stop laying off public workers and outsourcing jobs overseas.  It's also why we should create millions of jobs now by investing in infrastructure and a green economy.

Rebuilding the middle class is about more than assuring that every working American can support his or her family with dignity and security. It’s about powering the economy forward in the 21st Century. The middle class is the engine of our economy, an engine that can only be rebuilt by making today’s jobs good and tomorrow’s jobs better.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

 

Construction worker image via Shutterstock.com.

Share This

The Michigan Clean Energy Roadshow: Success Stories Pave the Road for a Clean Energy Future

Sep 12, 2012Cory Connolly

Michigan, once the industrial capital of the United States, has the opportunity to create jobs and economic opportunity while paving the way forward for a clean energy future. 

Michigan, once the industrial capital of the United States, has the opportunity to create jobs and economic opportunity while paving the way forward for a clean energy future. 

In 2008, the state of Michigan made a commitment to clean energy, to the environment, to economic opportunity, and – most of all – to people. Public Act 295, passed in 2008, set the framework for the development of Michigan’s clean energy economy by establishing a renewable portfolio standard (RPS). A renewable portfolio standard (also called a renewable electric standard or clean energy standard) mandates that electric providers generate a certain percentage of electricity from renewable resources by a set date. For Michigan’s RPS, the percentage was 10 percent and the date was 2015. A renewable portfolio standard is the most popular strategy for promoting the development of clean energy sources like wind, solar, and hydro in the United States today. There are 28 other state-level renewable portfolio standards in the U.S. with varying goals and timelines.

At the federal level, in 2011, President Obama called for a “clean energy standard” of 80 percent by 2035 and a similar act called the “Clean Energy Standard Act” was proposed this past spring in the Senate. This past week at the Democratic National Convention, the Democratic Party endorsed such a standard as well. Global investment reached $263 billion in 2011, and is expected to continue to grow. A national RPS or clean energy standard has the potential to make the United States a leader in the global clean energy market, and Michigan has the potential to lead this charge. 

In Michigan, the adoption of an RPS has caused a significant uptake in clean energy installations and investment in the industry. Since 2008, Michigan has installed over 1,200 megawatts of new generating capacity – that’s enough power to run 240,000 homes. While the numbers are exciting, in Michigan the clean energy economy is about more than just numbers and figures – it’s about the people and the opportunities behind clean energy. Two weeks ago, I traveled Michigan as a part of MiGrid, a Michigan-based company, and we started telling the story of the state’s clean energy opportunities through the Michigan Clean Energy Roadshow. The MiGrid team visited over 25 clean energy sites and interviewed over 25 business owners, experts, and Michigan residents. Highlighting the successes of Michigan’s RPS and other clean energy efforts in the state, MiGrid is educating, engaging, and empowering people and helping to build clean energy jobs and economic opportunities.

Without a doubt, Michigan’s 2008 RPS is one of the most modest in the country; however, it was designed with that intention. In 2008, a more aggressive RPS wasn’t politically feasible, so policymakers chose an incremental approach that could serve as a proof of concept for Michigan. Currently, Michigan only receives 3.6 percent of its energy from renewable sources, but is on pace to increase that to 8.4 percent by 2013 and to 10 percent – the RPS goal – by 2015. This incremental approach has proven not only that clean energy can succeed in Michigan, but that Michigan is ready for an even more ambitious approach to clean energy moving forward – as is the rest of the country.

In fact, clean energy has been a bright spot in the Michigan economy. Home to an industry cluster of advanced battery manufacturers, Michigan is reclaiming its place in the automobile industry. In 2010, according to Clean Edge, Michigan had the most clean energy patents of any state. And, according to Environmental Entrepreneurs, Michigan, with 1,319 anticipated jobs created, ranked fourth among states in new clean energy jobs this quarter.  In total, according to a recent Bureau of Labor and Statics report, Michigan is home to over 80,000 “green collar” jobs.

While these industry-wide statistics speak loudly, possibly the most convincing evidence of Michigan’s clean energy economy are the numerous wind and solar installations popping up across the state. Whether it’s the recent solar installation at IKEA in Canton, wind turbine blades coming through the port in Muskegon, or the introduction of solar at Ypsilanti’s Corner Brewery, there are stories of clean energy all over the state. Innovative manufacturers and companies are also redefining Michigan’s economic landscape. The Detroit-based PowerPanel is a prime example; the new company is manufacturing an innovative combined solar hot water and solar photovoltaic panel that simultaneously generates electricity and hot water.  Energetx Composites, a company highlighted in this year’s State of the Union, was started by the owners of S2 Yachts – a manufacturer of Tiara Yachts and Pursuit Boats – and now manufactues wind turbine blades. These are just a handful of the types of success stories that were captured during the Michigan Clean Energy Roadshow and that continue to provide a foundation for a more radical energy transition in Michigan. 

Building from these successes, the Michigan Energy, Michigan Jobs campaign (also known as 25 by 25) is supporting a more ambitious path forward for Michigan. Included as a ballot initiative this November, the campaign is supporting an increased RPS or RES of 25 percent by 2025. Included in November’s election as a ballot initiative, the 25 percent by 2025 is anticipated to attract 10 billion dollars in investment to Michigan and create 74,000 jobs. Such an increase would nearly double the clean energy jobs in Michigan and may show what job-creating potential a clean energy standard could have nationally. Additionally, for Michigan, the initiative would reduce the $1.7 billion that Michigan spends importing coal from out of state each year. As Michigan’s installed clean energy capacity nearly triples in the next three years, the clean energy economy will continue to move forward with or without the passage of the ballot initiative. However, the passage of 25 by 25 this November would catapult Michigan to the forefront of the clean energy economy in the United States and, in turn, help the United States compete globally.

From seeing these businesses, job creation, and installations and hearing their stories throughout the state, it is clear that a transition to clean energy is inevitable in Michigan. Still, citizens and policymakers in many cases remain unaware of the economic opportunity and stories behind clean energy. As Skip Pruss points out in a recent op-ed in the Detroit Free Press, Michigan has the opportunity lead in this sector, but it must seize it.

The clean energy economy should be about people, and therefore it should start with people. Through increased awareness of and familiarity with clean energy systems, Michigan residents and Americans more generally will be able to fully engage in the clean energy economy. A recent report documents the “contagious” nature of solar installations: “there is a positive, statistically significant, causal effect of previous nearby installations on a household’s decision to adopt solar panels…A one percent increase in the zip code installed base leads to approximately a one percent increase in the zip code adoption rate.” As the report points out, the results of increased exposure to clean energy systems add up. Taking this idea to a broader level, broadcasting and uncovering the successful strategies and the benefits of clean energy in Michigan can serve to stimulate growth in this sector in other states and at the national level.

Clean energy, in Michigan and across the globe, has the potential to transform how economies work and where and how energy is generated. This November, when Michigan votes on the 25 by 25 ballot initiative, it won’t be determining whether clean energy has a place in Michigan; what will be on the line is the degree and the trajectory of Michigan’s clean energy transformation. Michigan was once one of America’s industrial capitals with the automotive industry. Can it pave the way forward again?

MiGrid will be releasing videos, interviews, and pictures from the Michigan Clean Energy Roadshow in the coming weeks. For more information about the MiGrid and the Roadshow please go to to mi-grid.com

Cory Connolly is a Roosevelt Institute | Pipeline Fellow focusing on the development of the clean energy economy and a member of MiGrid.

Share This

Konczal and Grunwald: Could the Stimulus Have Been Better Without Being Bigger?

Sep 10, 2012

We've all heard the standard arguments about the stimulus: progressives think it should have been bigger, while conservatives think it was a pork-filled monstrosity.

We've all heard the standard arguments about the stimulus: progressives think it should have been bigger, while conservatives think it was a pork-filled monstrosity. But in the latest episode of the Roosevelt Institute's Bloggingheads series, Fireside Chats, Mike Konczal talks to Michael Grunwald, author of The New New Deal, about four stronger criticisms of the bill from the left.

Konczal notes that it probably wouldn't have been possible to pass a larger stimulus through Congress, but his first question is "Why didn't we have a WPA? President Roosevelt went out in one month and hired like four million people," so if we're facing a similar jobs crisis now, "why don't we just go and hire five million people to do whatever?"

Next, the Michaels discuss President Obama's rhetorical pivot toward deficit reduction and "the idea that you couldn't pass the first stimulus, you couldn't do more to expand the economy, without also bringing down the long-term debt," which led Obama to "straitjacket himself on this issue of worrying about the bond market."

Third, Konczal argues that "President Obama very much looked at how to attack the problem of unemployment as a budgetary phenomenon as opposed to using every lever at his disposal," including the Federal Reserve and the nationalized GSEs. Rather, he chose to "kick the can on housing, hoping unemployment would come down in two years."

Finally, Konczal says "the New Deal brought in kind of a new contract with government" that involved the creation of a safety net and a much stronger role for the federal government in the economy. He and Grunwald explore whether Obama's policies have the potential to create another paradigm shift that is "fundamentally a new kind of social reality, a political reality."

For more, including details on what was actually in the stimulus and how it reflected President Obama's broader agenda, check out the full video below:

Share This

Pages