The American People are Ready for Leadership in the Wake of Obama's Victory

Nov 7, 2012David B. Woolner

The election results could encourage the bipartisan cooperation we need to solve our country's greatest challenges.

The election results could encourage the bipartisan cooperation we need to solve our country's greatest challenges.

Today we re-consecrate our country to long-cherished ideals in a suddenly changed civilization. In every land there are always at work forces that drive men apart and forces that draw men together. In our personal ambitions we are individualists. But in our seeking for economic and political progress as a nation, we all go up, or else we all go down, as one people.—Franklin D. Roosevelt, 1937

Tonight, more than 200 years after a former colony won the right to determine its own destiny, the task of perfecting our union moves forward. It moves forward because of you. It moves forward because you reaffirmed the spirit that has triumphed over war and depression, the spirit that has lifted this country from the depths of despair to the great heights of hope, the belief that while each of us will pursue our own individual dreams, we are an American family and we rise or fall together as one nation and as one people.—Barack Obama, 2012

With the 2012 election now over and President Obama returning to the White House, many Americans are asking themselves, will the next four years be any different? Or will we see more of the same gridlock, bickering, and obstructionism that so dominated the Washington political landscape of the past few years? Much will depend, of course, on the temper of the Congress, where the Republicans still hold a majority in the House of Representatives and where, despite their minority status in the Senate, Republicans can still use the filibuster to block or delay the president’s—and the country’s—agenda.

It was roughly two years ago that Senate Minority Leader Mitch McConnell famously remarked that “the single most important thing” the Republican Party wanted to achieve “is for President Obama to be a one-term president.” But now that the Republicans have failed in this effort one would hope that the party leadership would be more willing to work with—rather than against—the president and his Democratic colleagues.

Certainly the American public would welcome such a move, and thanks to the recent behavior of Governor Chris Christie of New Jersey and Governor Andrew Cuomo of New York, we now have a precedent upon which such a bi-partisan spirit might be built. For most Americans, Republican Governor Christie’s willingness to “extend the hand of friendship” to the President and “to say ‘thank you sir,’ for providing good leadership in a crisis and for helping the people of New Jersey” was a long overdue antidote to the harsh negativity of today’s “political discourse.”

Moreover, the same might be said for Governor Cuomo, who, despite his status as New York’s governor and leading Democrat, took the highly unusual step of endorsing Republican State Senator Stephen Saland’s bid for re-election thanks to the latter’s decision to support the governor’s legislation legalizing same-sex marriage last year. Senator Saland’s decision to vote in favor of the bill, in what he said was a personal vote of conscience, was not popular among his party’s right wing. So the governor, in a move he said was motivated in part by his desire to counter “extremists on both sides of the aisle,” came out strongly in favor of Saland, much to the chagrin of the senator’s Democratic opponent. (The winner in that race has yet to be called at this time.)

Like Governor’s Christie’s willingness to work with President Obama to meet the crisis caused by Hurricane Sandy, Governor Cuomo’s willingness to work with Republican legislators in Albany has been enormously popular among the New York electorate, where he has consistently enjoyed an approval rating of roughly 70 percent. Given all of this, and given the extremely low regard most Americans hold for Congress, one would hope that these examples of bi-partisan cooperation might prove infectious and that our representatives in Congress might summon the courage to work together to meet the enormous challenges we face today.

Nearly 80 years ago, at a time when our nation faced an even graver economic crisis, Franklin Roosevelt reminded those who were concerned “with the problems of government and economics” to never forget that “devotion to the public good, unselfish service, never-ending consideration of human needs are in themselves conquering forces.”

We expect this sort of devotion in the face of natural disasters like Hurricane Sandy, but is it too much to expect the same “consideration of human needs” in the face of the economic disaster we are grappling with today? If government can and must play a major role in rebuilding areas ravaged by nature’s fury why shouldn’t the same government do more to help those American citizens ravaged by the scourge of unemployment?

Last night in his acceptance speech, President Obama echoed Roosevelt’s first inaugural when he noted that the American people “voted for action, not politics as usual.” While the Speaker of the Republican-controlled House, John Boehner, remarked that the election represented “a mandate for both parties to find common ground and take steps together to help our economy grow and create jobs.”

After years of partisan gridlock, the American people are hungry for that elusive but all-important quality they expect from their elected officials and which was on rare display for a brief moment as a president and a governor from different parties came together in a moment of compassion for those suffering hardship through no fault of their own. That quality is called leadership. Let us hope that the moment has finally arrived when those we have placed in positions of power, both in the White House and in Congress, will now have the courage to exercise it.

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute. He is currently writing a book entitled Cordell Hull, Anthony Eden and the Search for Anglo-American Cooperation, 1933-1938.

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In the Last Debate, the President Shone Under the World's Biggest Spotlight

Oct 24, 2012Bo Cutter

The last debate wasn't just about foreign policy. It was about the diverse and difficult responsibilities of being president of the United States.

"Bullfight critics ranked in rows crowd the enormous plaza full, but he's the only one who knows, and he's the man who fights the bull."

The last debate wasn't just about foreign policy. It was about the diverse and difficult responsibilities of being president of the United States.

"Bullfight critics ranked in rows crowd the enormous plaza full, but he's the only one who knows, and he's the man who fights the bull."

For me, that sums up the debate. The president won. He was the commander-in-chief and he played a strong hand well. This isn't a foreign policy blog, but if you step back from the absurdities of the charge/counter-charge of a campaign, he and Hillary Clinton and Defense Secretaries Gates and Panetta have carried out foreign policy well in an incredibly difficult and confusing time.

Governor Romney did not do badly, but he is like a pilot: there are old pilots and there are bold pilots, but there are no old bold pilots. He doesn't have any particularly new ideas, and the ones he hints at having are either profoundly wrong, profoundly dangerous, or both.

"Hint" is a good verb. He hints at deep disapproval. He'd be stronger, firmer, altogether better. Events would be less disorderly, and the world would dance to his commands. But he actually wouldn't do anything differently. Stay in Iraq or Afghanistan? Divorce Pakistan? Invade Iran? Put troops in Syria? Really show China what's what? On all of these issues you get the impression that he actually doesn't have a different policy; he is depending on his strong jaw and magnetic personality to command events. Should he actually win, his policy would be exactly the same, except he might actually get himself bullied into a hasty bombing campaign against Iran. Does anyone think "Bibi" wouldn't be over in a heartbeat to collect his receivable?

The major preoccupation of that alternate universe White House would be attempting to demonstrate constantly that there was some sort of difference from the Obama policies. Heck, maybe the world really will sit up and do right with a President Romney. But trapped as he is between the neo-cons who have learned nothing and President Obama's mostly successful policies, he was reduced to throat-clearing and ankle-biting. And if his whole approach depends on the argument that he'd do the same things but somehow better, you have to remember that this is man who managed to insult the United Kingdom over the management of the Olympics. (Yes, they used to be enemies, and we all remember the unpleasantness of 1812.)

This was all sort of fun. But I did have a somewhat deeper thought -- a profound appreciation for America and for how tough being president is. A really long time ago, I was in a small group of appointees with President-elect Carter a month or so before the inauguration. (I know the fashion now is to be contemptuous of President Carter, but I'm not. I revered the man, loved working for him, and still revere him.) Anyway, I was mostly in such awe that I was even there -- how did someone from Loudoun County High School get here? -- that I couldn't talk. But I could think, sort of. What I thought about was the two faces of the president's job. On the one hand, he had to grapple with the actual issues, facts, and arguments as they affected the most important nation in the world, and then he had to turn around and persuade a nation of 225 million people (at that time).

I felt the same way 37 years later watching President Obama and this debate. You grapple with the most difficult possible issues of foreign policy, some completely unpredictable -- at least, I haven't seen the Romney crowd claim yet that they knew all about the Arab Spring. All of them are confusing, information is never particularly good, and most of the time getting the right thing done in one event runs right into the players and calculations involved in some other event. All you can do is approach each calmly, try to keep a larger framework intact, and live every time with the thought that you didn't do it perfectly.

Then you have to turn around and debate your opponent, in front of millions, on the details of these policies. Your opponent doesn't have to deal with all of them at the same time, as you do, and he makes it clear that he would have done everything perfectly. There is a lot you can't say. Every syllable you utter is going to be parsed by every head of government in the world. And any big misstep can both screw up something big and cost you the presidency.

I could tell that President Obama was both frustrated and, at times, angry about being in this position. But you know what? It's part of the deal. It's what we do in America, and our presidents better be good enough to handle it. I thought President Obama more than met that test. I also thought again as I looked around the bar where I watched this debate en route, a bar that was packed full with maybe half of the audience foreign-born, how proud I am to be a citizen of the country that holds these debates and doesn't think they are anything special. 

Roosevelt Institute Senior Fellow Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team. He has also served in senior roles in the White Houses of two Democratic Presidents.

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A President Should Run the Country Like a Household, Not a Business

Oct 22, 2012Minjon Tholen

Romney and his conservative colleagues have made it clear that they care more about bottom lines than investing in people's lives.

Romney and his conservative colleagues have made it clear that they care more about bottom lines than investing in people's lives.

In last week’s presidential debate, Governor Romney said he will make a great president because he is a businessman and has run companies. He might know how to make a profit and possibly balance a budget like he promises. But running a country is not just about balancing the budget – which, by the way, he likely wouldn’t be able to do any better than President Obama – and it is definitely not about making a profit.

President Obama is not trying to run America like a company. He has a background in community organizing and is trying to run the country like a community, like a family, a household. A nation is not just a material system of capital, investment, and revenue. It directly affects the human lives of each and every American. Households are invested in every family member, as their shared living space, culture, history, and lineage binds them together for life. In companies, on the other hand, employers and employees are generally tied together by monetary relationships.

A few years ago, I met a member of the Pan-African Parliament at the United Nations Commission on the Status of Women. We had a conversation about how to encourage women to participate in politics. She said she talks to women living in the villages in her country, and they typically respond that politics is not for them, as they “only” know how to run a household. The member of Parliament then told them that if they can run a household, they can run a country. Think about it: you have to work together and negotiate with your spouse or partner to make decisions and get things done (bi-partisanship), understand and respond to the needs of the various family members (constituencies), and do so strategically with limited resources (budgeting, redistribution, long-term investments).

This is President Obama's strength. Sure, he hasn’t been a perfect president – if such a thing exists. But I trust him as a leader. I believe he truly cares about all constituencies, especially those who have traditionally been disenfranchised. He understands the strategic, long-term social and economic benefits of investing in quality education, efficient universal healthcare, healthy lifestyles, fair distribution of resources, and respect and equal rights for every individual. He understands that a country is only as strong as its weakest link and that leveling the playing field for everyone facilitates equal opportunity and empowerment for individuals as well as for the entire country. He understands that creativity, innovation, and progress are promoted by leveraging our rich diversity. His commitments and policies regarding healthcare, gender equality, poverty, education, and immigration, for instance, give us the feeling that he is everyone’s president.

Governor Romney, on the other hand, recently made it very clear that it is not his job to be concerned about 47 percent of Americans. He implied that almost half of the country does not take responsibility for itself and that he won’t be able to convince it otherwise. But most people want nothing more than to be economically independent, and the fact that some are not is more a reflection of social inequalities than of their characters. As most parents know, to raise your children to be self-sufficient and productive members of society, they need to develop skills and gain knowledge. They need to be invested in; they need opportunities for personal and professional development.

David Brooks argues, "People are motivated when they feel competent. They are motivated when they have more opportunities. Ambition is fired by possibility, not by deprivation." Deprivation of opportunity -- an unleveled playing field -- does not create self-sufficiency and actually fosters dependency on others, including on the government. For all the conservative rhetoric about economic self-sufficiency and individual freedom, President Obama seems to get this logic better than his opponent, with a long-term plan to empower all Americans and with strategic budget decisions that will set us on the road to economic recovery, deficit reduction, and a more equitable society. Republicans say they so greatly value “the family as the cornerstone of society,” yet they disregard the factors that promote economically independent, educated, healthy, and thriving individuals and families.

By not raising taxes, cutting capital gains, and reducing the corporate income tax, Governor Romney is catering to big business and the wealthy and their interest in making a profit. Like companies, Republicans are focused on their own bottom line and the bottom lines of those they consider stakeholders in the conservative political ideology, rather than on the empowerment of all the American people. I’m sure Governor Romney is a wonderful husband and father. It just doesn’t seem like he would be a true family man when it comes to 100 percent of the American family.

Minjon Tholen is a Roosevelt Institute | Pipeline Fellow and the Training & Development Specialist at Cook Ross Inc.

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A Post-Debate Interview with Glenn Hubbard on Housing Policy

Oct 22, 2012Mike Konczal

There were no serious housing questions at any of the presidental debates. Given how important the housing market is for both voters and the economy, this is surprising and disappointing. As Zachary Goldfarb noted, "here are a few words that surprisingly have not shown up through much of this debate: housing, mortgage, refinance, underwater." 

There were no serious housing questions at any of the presidental debates. Given how important the housing market is for both voters and the economy, this is surprising and disappointing. As Zachary Goldfarb noted, "here are a few words that surprisingly have not shown up through much of this debate: housing, mortgage, refinance, underwater." 

I attended last Tuesday's presidential debate at Hofstra University as press for Al-Jazeera English, providing TV commentary on economic issues. It was my first debate, so I took some time to wander around. While exploring after the debate was over, I found the Spin Alley area, which is the area where politicians and campaign people stand by to give quick media responses. Handlers held large signs advertising the people in question. I saw a "Hubbard, Glenn" sign in the air, and the Columbia economist and Romney economic advisor standing by to give spin on the debate.

I decided to get some housing questions on the table. When some people, notably Josh Barro, argue Romney has a secret economic plan, and in particular a secret housing plan, they cite Hubbard, who has been very vocal on boosting demand through interventions in the housing market. I've noted that his plans might not be that different from what Obama is currently doing.

Below is a transcript of what I got a chance to ask him:

Mike Konczal: In 2008 you co-wrote a plan with Chris Mayer on the housing market that called for mass refinancing and principal reduction through the GSE. In 2011 you released another plan with Mayer that just featured the mass refinancing. Why was there the change?

Glenn Hubbard: It wasn't principal reduction; it was setting up a Home Owners' Loan Corporation model.

There was a debt-to-equity swap in your proposal.

Right. What we focused on in 2011 was trying to give direction to the Obama administration, which was bungling the mass refinancing so badly. That's why we focused on that. I still think it would be a good idea to have a Home Owners' Loan Corporation. But the point of that piece was that the Obama administration had bungled every housing plan, so we were trying to provide some guidance.

Earlier this year, HARP, the Home Affordable Refinancing Program, was relaunched as HARP 2.0.

It's still a failure.

After the relaunch, we are seeing a large increase in refinancing on very underwater homes, particularly those with loan-to-value over 125 percent.

It's still a failure. If you compare it to the number that Chris Mayer and I had argued, it's trivial.

Compared to the number of possible refinancing?

Yes. The reason is the GSEs have stood in the way, and the Obama Treasury has not managed the GSEs in such a way as to facilitate its own policies. It's really quite sad.

But that's an FHFA problem, is it not?

I'm sorry, but you can't duck the FHFA.

So you think President Obama should have done a recess appointment [to replace Ed DeMarco] at the FHFA?

I don't manage the Obama appointments, but I do know that the FHFA has mismanaged the president's own plan.

What would a President Romney put forward in the housing market?

What Governor Romney wisely is focused on is the long term in housing. We need to wind down the portfolios of the GSEs and reassess the government's role in such a way to get more private capital back into housing.

In 2008 you argued that cramdown, or some sort of bankruptcy reform, was a bad idea because it could impact long-term growth. In retrospect, do you still think that?

Yes. I still believe that. I absolutely think that was the correct call.

Thank you for your time.

==========

Mike here, with a few notes. According to the latest data from FHFA, there have been 118,470 refinances of mortgages with an LTV over 125 percent between February, when HARP 2.0 allows for these seriously underwater refinancings, and now. Here's a graph from Dan Green's Mortgage report:

Matt Zeitlin has more on the initial successes of HARP 2.0 at the Daily Beast. Rather than the legal issues at FHFA, it seems that the next big blockages in turning record low mortgage rates into increased consumer demand through refinancing are applications overwhelming banks, the financial sector collecting oligopolistic rents from not passing along low rates to consumers via their pricing power, and lack of competition on HARP refinances.

Hubbard is correct that Ed DeMarco is blocking principal reduction at FHFA, preventing the adminstration from pursuing their own plans. I was surprised to see Hubbard pushing for a a Home Owners' Loan Corporation (HOLC) structure now, and I wonder if he'd fight for what Senator Merkley is currently proposing. An HOLC model could bypass some of these new blockage problems we are seeing on record low interest rates, benefiting homeowners.

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A Big Banker’s Belated Apology

Jul 30, 2012Jeff Madrick

This op-ed originally appeared at NYTimes.com.

This op-ed originally appeared at NYTimes.com.

Last week, in a CNBC interviewSanford I. Weill, the former chairman of Citigroup, said that America should separate investment banking from commercial banking. This separation, of course, was the prime purpose of the Glass-Steagall Act of 1933, a piece of legislation that Mr. Weill and other bankers had successfully watered down, with Alan Greenspan’s support, before Mr. Weill helped engineer its official demise in 1999. Now, Mr. Weill, the creator of what was once the largest financial conglomerate in the world, suggests that Citigroup and others should be broken up. Banks can no longer “be too big to fail,” he told CNBC.

But what was most eye-catching was Mr. Weill’s claim that the conglomerate model “was right for that time.” Nothing could be further from the truth.

Mr. Weill’s original business concept — the justification of financial conglomeration — was to provide one-stop shopping to any and all customers. This could now include clients for investment banking, stock research, brokerage and insurance. Then, with the 1998 merger of his Travelers Group with Citicorp, it could include savers, business borrowers and credit card users, too. But few, even among his own executives, ever believed the strategy would work.

Rather, conglomeration bred conflicts of interest in Mr. Weill’s firms, and others — the very conflicts that the original Glass-Steagall Act was designed to prevent. This inevitably led to investment in and promotion of risky, poorly run and, in some cases, deceitful companies that brought us the high-technology and telecommunications bubble of the late 1990s.

Indeed, Mr. Weill’s Citigroup was a primary underwriter of and one of the two largest lenders to the oil and futures trading firm Enron, whose accounting charade resulted in what was in 2001 the biggest bankruptcy of its time. Citigroup was a major underwriter for the telecommunications giants Global Crossing and WorldCom, which would later go bankrupt as a result of flagrant accounting deceptions. There were many other, if less visible, debacles.

Read the full article here.

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Investing In and Invigorating Head Start

Jul 11, 2012Amy Baral

Head Start is a good start to revitalizing national education but there is still room for improvement. 

Head Start is a 8 billion dollar federal grant program that provides preschool and other early childhood learning opportunities to about 1 million 3 and 4-year-old children that meet federal poverty guidelines.  When Head Start was first created, as part of President Johnson’s War on Poverty, the program was designed to help improve the child development and developmental needs of disadvantaged children.

Head Start is a good start to revitalizing national education but there is still room for improvement. 

Head Start is a 8 billion dollar federal grant program that provides preschool and other early childhood learning opportunities to about 1 million 3 and 4-year-old children that meet federal poverty guidelines.  When Head Start was first created, as part of President Johnson’s War on Poverty, the program was designed to help improve the child development and developmental needs of disadvantaged children.

While Head Start has grown slowly since its inception in the 1960s, critics have never been far behind to challenge the programs successes and budget.  Most recently, TIME’s Joe Klein challenged Head Start as a failing to “yield results” and called for the end of the program.  Klein opined that because some studies show that children in Head Start do not see sustained academic and developmental growth after they have finished the program, that the program itself was a failure and a waste of money.  Klein raises some interesting points. First, is $8 billion a year for poor preschoolers a valuable use of the federal government’s money?  Second, does Head Start actually improve academic outcomes long-term? And finally, is there a way to improve the Head Start program or should it just be scrapped as wasteful government spending?

First, is the federal government justified in spending $8 billion a year on preschool education for American’s poorest children?

America provides a system of free public education, usually Kindergarten through Grade 12.  However, most young children often attend a series of private preschool programs before starting Kindergarten.  In contrast, most European countries provide about 2 years of pre-school or early childhood development programs for all young children before the kids begin primary school.  Instead, in America, mostly all preschools are privately run, with average costs of about $3,000 - $12,000 per child per year. 

America does provide limited subsidized preschools at the state and federal levels, usually based on poverty level, and Head Start is one of these programs. But, Head Start only serves about 1 million children a year and in 2010, there were 6.3 million children in poverty.  So maybe the question is not whether the federal government is justified in spending $8 billion a year on preschool programs for poor children, but whether $8 billion is enough to serve the needs of these children.  With potentially 5.3 million children going without adequate access to preschool services every year, it is clear that America’s early childhood education programs benefit those that have the means to access these private programs and harm those without similar access.

But, America is in a recession and the federal government is struggling to allocate money for even well supported government programs, like subsidized student loans.  Before one advocates for expanding a program such as Head Start, it is important to ensure that the program actually works.  This leads to the second question, is Head Start achieving educational and development success among the children it serves?

Head Start’s successes in early childhood development and long-term academic and social outcomes for poor children are disputed.  While there are some studies that highlight the successes of Head Start in terms of keeping people out of prison and leading to higher education rates, other studies, like the Head Start Impact Study show only minimal long-term effects.

Still, many of these minimal long-term effects can be attributed to the weak schools that Head Start graduates will attend upon program completion.  Faced with failing schools, a lack of resources, overcrowded classrooms, and even bad teachers, it is of no surprise that the students targeted for Head Start programs cannot maintain their academic improvements over time because the odds are simply against them.

It’s clear that America has many poor children who go without access to quality preschool programs due to their poverty level and the limited reach of the Head Start program.  Further, poor children who do have access to Head Start often do not see sustained academic outcomes throughout their time in public education. Maybe the true issue is that early childhood education through Head Start is only one part of the process to improve educational and life outcomes for poor children in the United States.  This leads into the third question, can Head Start be improved to ensure effective program performance and long-term benefits or should the program just be scrapped?

Obviously, Head Start should not be scrapped unless the federal government and the states figure out a better way to provide access to high-quality preschool programs for our nation’s poorest preschoolers.  There are too many preschoolers in this country who go without access to early childhood development programs, and while Head Start is just one option, it’s an option that is helping 1 million of these preschoolers.

Still, as with any government program, it is necessary to ensure that federal money is being spent correctly.  In 2007, Congress passed “Improving Head Start for School Readiness,” an act that allows the government to take a stronger federal oversight role of Head Start programs and requires teachers in Head Start programs to hold associates and bachelors degrees.  The Obama Administration has already used its power under this bill to close unsuccessful Head Start programs and provide more funding for programs that were succeeding.  To ensure that federal money is being spent correctly and that children are receiving high-quality preschool education, it is essential that federal oversight of Head Start programs continue.

Finally, the federal government should work to expand access to free and reduced preschool programs for poor children.  Preschool has a profound impact on the educational attainment and development of children.  Further, because most middle-class children have the ability to attend preschool, expanding access to preschool programs for poor children could help close socioeconomic achievement gaps.  Most importantly though, gains made in preschool need to be sustained overtime through strong primary and secondary public education for all students.  American needs to work towards improving its K-12 educational opportunities for all students to ensure that all children have access to high quality education from preschool to college.

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Amy Baral is a Roosevelt Institute Pipeline Fellow.

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Health Care Reform and the Supreme Court: Politics Over Constitutionality

Jun 26, 2012Richard Kirsch

The Obama administration's neglect did not cause this constitutional challenge to the individual mandate. Republican strategy did.

The Obama administration's neglect did not cause this constitutional challenge to the individual mandate. Republican strategy did.

On the eve of the Supreme Court's decision, after numerous lower court opinions and treacherous questioning by conservative justices, the overwhelming consensus in the legal community remains that the requirement in the Affordable Care Act to buy health insurance is unquestionably constitutional. As recently as mid-June, Bloomberg News asked law professors at the nation's top law schools whether they thought there was any question that the Affordable Care Act’s individual mandate requiring the purchase of health insurance was constitutional; 19 of the 21 who responded replied that it was. They were only confirming the opinions of two very conservative appeals court judges, who upheld the provision last year.

But the widespread view that the only reason we have a question before the Supreme Court is their receptivity to right-wing political manipulation of the law was not the story told by the New York Times on Sunday, under the headline, "Supporters Slow to Grasp Health Law's Legal Risks." The Times's Peter Baker faulted the Obama administration and Congressional Democrats for being unprepared for the legal challenge.

Some would view the fact that the Court is seriously debating a question that is so far out of the political mainstream, even among the most respected conservative jurists, as a testament to the groundbreaking work of a small set of conservative lawyers to change jurisprudence. They would compare their work to the careful strategy that led to decisions like the Warren Court's Brown v. Board of Education. I am not so generous. The legal arguments against the individual mandate remain flimsy and there is no comparable history of carefully plotted legal strategy. What has become more solid is the ground that the arguments are being made on, a Supreme Court majority whose magnet is not the Constitution or precedents, but the U.S. Chamber of Commerce.

In drafting what became The Patient Protection and Affordable Care Act, Democrats in Congress and the White House had myriad complex policy and political factors to juggle. The implication that they should have added in the minuscule chance that the mandate would be successfully challenged on its constitutionality is as silly as the opponents' legal arguments.

What might have given the law's drafters pause was the ruling on Citizens United, in which the Court majority dynamited a century of precedent to overturn the ban on corporate campaign contributions. But that decision was handed down in January of 2010, three days after Scott Brown won election to the Senate from Massachusetts, in a seeming repudiation of health care reform, which deprived Democrats of their filibuster-proof majority. At that point, there was neither the time nor the legislative maneuverability to consider changing the structure of the mandate, even if someone had raised their head and said that this Court is capable of doing anything it wants to further the corporate agenda.

In contrast with the Times article, Ezra Klein has a piece in The New Yorker titled "Unpopular Mandate: Why Do Politicians Reverse Their Positions?" Klein points out that the question of the mandate's constitutionality on the right changed when conservative politicians jettisoned their own idea, the mandate, after Obama accepted it. He describes how the Republican message machine legitimized the constitutional challenge once Republican politicians did an about-face.

Two days from now the Court will weigh in. Many of those same law professors surveyed by Bloomberg predict the Court majority will ignore precedent and overturn the mandate. The have reached the same conclusion as many Americans that the Court is driven by politics, not the Constitution. I'm hoping they will be proven wrong, and that the Court will put our founding document and two centuries of precedent before the partisan, corporate agenda. But whatever they decide, I won't blame the fact that the case has gotten this far on Democrats in the White House or Congress.

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.

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Paul Krugman: Europe has Made a Terrible Mistake and Republicans are Completely Mad

Jun 22, 2012

In the latest Next American Economy breakfast series, Roosevelt Institute Senior Fellow Bo Cutter interviews Paul Krugman, Nobel-prize winning economist and New York Times op-ed columnist.

In the latest Next American Economy breakfast series, Roosevelt Institute Senior Fellow Bo Cutter interviews Paul Krugman, Nobel-prize winning economist and New York Times op-ed columnist. Krugman discusses how and why the “two great centers of world economic activity, of democracy, and of everything else are both in deep trouble.” He says, "Europe made the terrible mistake of having a single currency without a single government, and the United States has one of its two major political parties that has gone completely mad.”Watch Krugman explain these two major structural problems causing global economic crisis:   

Interview : Paul Krugman from Roosevelt Institute on Vimeo.

According to Krugman, we are in a “classic depression” for the first time in 80 years, and it is high time for increased government spending to help our economy while our private sector builds itself back up. But “instead, because of the way our politics have worked, we’ve actually had unprecedented fiscal austerity.” He argues that this dangerous paralysis is “exactly what 80 years of economic analysis tells us we should not be doing.” Krugman sighs at the continual Republican assertion that we can’t spend because of our deficit and we instead need to focus on long-run fiscal responsibility. Meanwhile, 8.2 percent of Americans are unemployed, and as Keynes said, “in the long run we are all dead.”

At the same time, Europe is sliding further and further into economic catastrophe. “It’s unthinkable that anybody should leave the Euro, and yet it’s becoming increasingly unthinkable that policymakers will take the steps needed to prevent that from happening.” Europe is basically demanding that Spain slash wages as well as spending, “which is a recipe for depression.”

European will to properly solve this problem is just not there, since “Europe is a currency but not a country.” In contrast, he discusses the fiscal bailouts of Florida and Texas that worked because in America, “we are a nation.” As Cutter notes, “it would be good if we stayed so.”

For more, watch Krugman’s full presentation:

Paul Krugman :: Lecture from Roosevelt Institute on Vimeo.

 

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Paul Krugman: Europe has Made a Terrible Mistake and Republicans are Completely Mad

Jun 22, 2012

In the latest Next American Economy breakfast series, Roosevelt Institute Senior Fellow Bo Cutter interviews Paul Krugman, Nobel-prize winning economist and New York Times o

In the latest Next American Economy breakfast series, Roosevelt Institute Senior Fellow Bo Cutter interviews Paul Krugman, Nobel-prize winning economist and New York Times op-ed columnist. Krugman discusses how and why the “two great centers of world economic activity, of democracy, and of everything else are both in deep trouble.” He says, "Europe made the terrible mistake of having a single currency without a single government, and the United States has one of its two major political parties that has gone completely mad.”Watch Krugman explain these two major structural problems causing global economic crisis:   

Interview : Paul Krugman from Roosevelt Institute on Vimeo.

According to Krugman, we are in a “classic depression” for the first time in 80 years, and it is high time for increased government spending to help our economy while our private sector builds itself back up. But “instead, because of the way our politics have worked, we’ve actually had unprecedented fiscal austerity.” He argues that this dangerous paralysis is “exactly what 80 years of economic analysis tells us we should not be doing.” Krugman sighs at the continual Republican assertion that we can’t spend because of our deficit and we instead need to focus on long-run fiscal responsibility. Meanwhile, 8.2 percent of Americans are unemployed, and as Keynes said, “in the long run we are all dead.”

At the same time, Europe is sliding further and further into economic catastrophe. “It’s unthinkable that anybody should leave the Euro, and yet it’s becoming increasingly unthinkable that policymakers will take the steps needed to prevent that from happening.” Europe is basically demanding that Spain slash wages as well as spending, “which is a recipe for depression.”

European will to properly solve this problem is just not there, since “Europe is a currency but not a country.” In contrast, he discusses the fiscal bailouts of Florida and Texas that worked because in America, “we are a nation.” As Cutter notes, “it would be good if we stayed so.”

For more, watch Krugman’s full presentation:

Paul Krugman :: Lecture from Roosevelt Institute on Vimeo.

 

Broken Euro image via Shutterstock.com.

 

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Reagan Redux: The Truth About Romney Economics

Jun 15, 2012Jeff Madrick

The oversimplification of Romney’s economic plan avoids calling it out for what it really is: an extension of failed Republican economic policies.

In the home of Sarah Jessica Parker and Matthew Broderick this week, The New York Times reported that President Obama described Romney’s campaign attacks, which claim all current problems are “the fault of the guy in the White House,” as “an elegant message. It happens to be wrong.”

The oversimplification of Romney’s economic plan avoids calling it out for what it really is: an extension of failed Republican economic policies.

In the home of Sarah Jessica Parker and Matthew Broderick this week, The New York Times reported that President Obama described Romney’s campaign attacks, which claim all current problems are “the fault of the guy in the White House,” as “an elegant message. It happens to be wrong.”

This is as clear an example as we have of Obama’s inability to make a powerful message in a few words. Sounding professorial, he uses the word “elegant” as if referring to a mathematical proof. Clean and simple, I suppose. But to many a listener and reader, elegant only has positive connotations. Why this loftiness when plain, honest, focused language will do the job?

The fact is that almost all of our current situation is a result of economic policies that were put into effect before Obama took office. Not only is Romney’s message not elegant, but his economic plan will boldly extend these failed policies. His central message is simplistic, ignorant, and, to use a lofty word, ahistorical. In actuality, the plan has been underway since the 1980s and even before, and look where it’s gotten us. It serves the interests of the wealthy very well, but has it served America at all? It’s not the collapse of the welfare state, but the ravages of a rising oligarchy, that are undoing America.

Which brings me to another New York Times piece, today’s David Brooks column. Brooks’s methodology as a “thinker” is to develop arguments that he knows will sound plausible to his readers and maybe to a significant swatch of centrists. He is good at these over-simplifications. Today’s column is as unaware or deliberately neglectful of history as ever. What Democrats don’t understand is that the system is broken, he says. Republicans understand this and want to return us to some early (if mythological) economic state. The welfare state is on the cusp of failing; he quotes a Weekly Standard piece on this idea that he thinks definitive. This welfare model, he goes on, “favors security over risk, comfort over effort, stability over innovation.”

This is breathtaking nonsense. The so-called welfare state—whose main features are benefits to the elderly, by the way—favors opportunity for those who have no access to it,  substantial government investment in education and research, which are the great sources of innovation, adequate transportation to enable business to operate efficiently, and fewer and more moderate recessions so that the nation does not lose investment, human capital, and many good businesses due to short-term fluctuations.

And, oh, yes, the welfare state does promote some compassion for the less fortunate—those thrown out of work through no fault of their own—and a sense that all of us owe something to each other. And, yes, it does require government.

What’s truly mind-numbing about the Brooks view, which clearly represents a Republican body of what is considered highly sensible thought, is that all the Romney proposals have been on the ascendancy since Ronald Reagan, and some of them before. These include lower progressive tax rates (Reagan and Bush); deregulation and weak regulatory implementation (Reagan, Bush I and II, Carter, and most important for financial regulations, Clinton); reduced social spending on many categories, notably welfare (Reagan and Clinton); few new programs even as social needs change; and inordinately tight monetary policy since Paul Volcker’s chairmanship at the Federal Reserve, to keep inflation and therefore wages in check. And what happened? Stagnating wages, modest capital investment, unequal public education, and collapsing infrastructure. These are the results of Romney economics.       

If there is theory at all in the Brooks view, it is of course the spurious generalization that individualism will win the day. Just make everyone take care of him or herself. Republicans love this notion. The other idea is that if business is just allowed to do its job, free of most regulation and taxes, everyone will do just fine.  The historical evidence clearly points to the opposite. Look at the levels of inequality in the good old regulation-free and low-tax days of post-Civil War America. Do you we need a better example?

Returning to Obama—he better fight this battle head on, not in professorial dignities, but on the sweaty mat where victory is won. He better understand that the Brooks's over-simplifications are appealing because they blame victims and relieve the rest of responsibility. Call these things what they are, Mr. President. Make America the responsible society once again. The Romney policies failed not just since George W. Bush, but since Ronald Reagan and even Jimmy Carter. 

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

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