Author: mhasegawa

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Recovery and Reinvestment

Dean K Baker has posted an interesting story on Alternet about Republican motivations for blocking Obama ‘s American Recovery and Reinvestment Plan.  Baker’s theory?  The Republican fear of 20 years out of power.  Baker argues that despite evidence that the New Deal helped millions Republicans now think no intervention would have been better policy.

At least some Republicans are starting to muster an anti-stimulus drive, claiming that President-elect Obama’s package will not help the economy. Their drive is centered on what they claim is a careful rereading of the history of the New Deal. According to their account, President Roosevelt’s policies actually lengthened the Great Depression.

In their story, we would have been better off if we just left the market to adjust by itself. New Deal programs that directly employed people, or in other ways supported living standards, created an uncertain investment climate. They claim that this uncertainty slowed the process of market adjustment that was necessary for returning to high levels of employment.

The Wagner Act, which created the legal framework for the union organizing drives of the era, stands out as being especially pernicious in their story. The Fair Labor Standards Act, which created the 40-hour workweek and established the first national minimum wage, also gets singled out for criticism. In this new reading of history, what most people consider the great successes of the New Deal simply worsened the Great Depression.

We are hearing Republicans (and some Blue Dog Democrats) worrying about the size of the deficit.  Even though Many economists, including Paul Krugman, argue that the proposed Recovery and Reinvestment dollars are still too little.  Krugman explains what he calls the output gap.

Bear in mind just how big the U.S. economy is. Given sufficient demand for its output, America would produce more than $30 trillion worth of goods and services over the next two years. But with both consumer spending and business investment plunging, a huge gap is opening up between what the American economy can produce and what it’s able to sell.

And the Obama plan is nowhere near big enough to fill this “output gap.”

….

To close a gap of more than $2 trillion — possibly a lot more, if the budget office projections turn out to be too optimistic — Mr. Obama offers a $775 billion plan. And that’s not enough.

Now, fiscal stimulus can sometimes have a “multiplier” effect: In addition to the direct effects of, say, investment in infrastructure on demand, there can be a further indirect effect as higher incomes lead to higher consumer spending. Standard estimates suggest that a dollar of public spending raises G.D.P. by around $1.50.

Both Baker and Krugman worry that we are not planning enough public spending.  Baker again

Roosevelt was too worried about the whining of the anti-stimulus crowd that he confronted. He remained concerned about balancing the budget when the proper goal of fiscal policy should have been large deficits to stimulate the economy. Roosevelt’s policies substantially reduced the unemployment rate from the 25 percent peak when he first took office, but they did not get the unemployment rate back into single digits.

It took the enormous public spending associated with World War II to fully lift the economy out of the depression. The lesson that economists take away from this experience is that we should be prepared to run very large deficits in order to give the economy a sufficient boost to generate self-sustaining growth.

The bottom line is that President Obama and the Democrats in Congress need to get over worrying about deficits and get on with the business of closing the output gap.  As Dean Baker explains, part of the Republican objection is that is the Democats are sucessful is turning around the economy, the Republicans could spent the next 20 years out of power.

However, from the standpoint of Republicans, the more ominous lesson of the New Deal policies is that it left the Democrats firmly in power for more than 20 years. The Republicans did not regain the White House until 1952, 20 years after President Roosevelt was first elected.

Imagine how terrifying the prospect of 20 years of Democratic presidencies must be for the current generation of Republican leaders. This would mean that they would not retake the White House until 2028, just 20 years before the Social Security trust fund is first projected to face a shortfall.

In 2028, Newt Gingrich will be 85 years old; Mitt Romney will be 81; Mike Huckabee will be 73 and Senator McCain will be 98. Even Sarah Palin will be a less than youthful 64. In short, if President-elect Obama is allowed to carry through with his stimulus package and the rest of his ambitious domestic agenda, most of current leadership of the Republican Party can expect to spend the rest of their political career in the political wilderness, far removed from the centers of power

Krugman’s bottom line

… is that the Obama plan is unlikely to close more than half of the looming output gap, and could easily end up doing less than a third of the job.

Krugman suggests that spending on items like health care can help if there are not enough “shovel ready” projects to spend on right away.  Is the current Obama plan really only the first installment?

Obama’s reaction to Krugman’s column was telling:  He’s probably going to end up meeting with Krugman and listen to his ideas.  What a refreshing change from George W.  who didn’t need to talk to anyone or to consult with others because he knew what they thought.  Obama said he had “no pride of authorship”, just didn’t want the debate to hold up action.

President Elect Obama, don’t worry about the deficit.  Get us out of this mess, close the output gap and over the next twenty years we will have another Bill Clinton come and reduce the deficit.  You don’t have to do it all – and you certainly don’t have to do it all right away.

 

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President Obama’s Style

A lot has been written about the President Elect’s style:  his cool, his dress, his parenting skills.  And he has talked a lot about wanting to change the tone in Washington.  Today on Politico.com’s The Arena blog, there was a very insightful entry I want to share.

It was written by Jeffrey C. Stewart, a professor of Black Studies at the University of California at Santa Barbara, in response to a question about Leon Panetta’s qualifications to be CIA director. 

I think the selection of Panetta to run the CIA is a great choice for Obama.

Aside from the complaints of insiders and their allies, who merely want more of the same, the main push back is from politicians who want to keep their validity index high during “Obama change.” But make no mistake, Panetta’s selection signals that “change is coming” to the CIA.

Panetta’s selection shows something important about Obama that is revealed through most of his cabinet-level appointments so far–beyond the obviously political ones like Richardson and Clinton. It has taken me awhile to get it, but my sense now is that Obama is a ex-radical Leftist who has absorbed neo-liberal management strategies. Think about it: The Left has taken power in several European countries in the past, Italy and France to name only two, but failed to hold power because it could not deliver benefits to the people at a consistent, i.e., corporate level of efficiency. Never enamored of ’60s strategies toward power, Obama absorbed through law school the corporatist approach to state power, that is, that management and outcomes are the keys to success.

Panetta is a manager. He’s a quick study. In selecting him, Obama is saying to the CIA: You are going to have to come into the 21st century in terms of how your operations are managed, and part of that operations management is improving your image and more effectively negotiating the tension between getting results from terrorists and respecting the ideals of a republic that needs to win the hearts and minds of the rest of the world to succeed against terrorists. Abuses that are well known and publicly associated with the CIA are part of the management inefficiency of the Agency from Obama’s perspective. Obama is saying, “yes, you are doing a good job in some areas. Let’s keep that. But you are going to have to do more to be a really successful agency for me and for the country’s long term benefit.” Inefficiencies, in other words, have to be eliminated, and Panetta is the kind of manager who can absorb all that the Agency does well and begin to cut out what it doesn’t do well. That is, of course, a corporatist, market-oriented philosophy of what successful management should do.

An interesting notion of the new President as an “ex-radical Leftist” with “neo-liberal” management skills.   The descriptions of Obama running community meetings as an organizer as well as descriptions of how he has run staff meetings as a Senator and candidate remind me of the meetings I attended in the 1960’s – everyone had their say – endlessly – as we tried to reach consensus.  The difference, however, is that Obama will listen to everyone and then make a decision.  He is appointing managers who can then implement the decisions.  It will be interesting to see if he and the men and women he has nominated for cabinet and staff appointments will be able to further translate that vision into a transformation of government.

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Becoming President

President Elect Barack Obama’s transition to becoming President is really in full gear now. Yes, I know he had named his entire Cabinet already, but the real sign of power had to do with travel:  His flight from Chicago to D.C. was on an official Presidential plane.  The New York Times had an interesting piece about the flight.

Aides who boarded the plane in Chicago before Mr. Obama’s motorcade arrived, including David Axelrod, a senior adviser, and Robert Gibbs, the press secretary, were plainly excited at being aboard one of the presidential planes for the first time. Several said the experience drove home the realization that Mr. Obama had won the presidency.

“It’s a little clearer now,” Mr. Gibbs said. “Nice digs.”

The Boeing 757-200, part of the Air Force’s Special Air Mission fleet, bore the distinctive blue and white colors and the words United States of America. But only a plane ferrying the president is designated Air Force One, and, as Mr. Obama and his team repeatedly note, George W. Bush is still the president.

Jackie Calmes went on to describe Obama’s introduction to the crew

On board he met Col. Scott Turner, who will pilot Air Force One when Mr. Obama becomes president, and Reggie Dickson, who will be his chief flight attendant. From Mr. Dickson, he ordered a cheeseburger, fries and water.

And then there are the serious matters like meeting with Pelosi and Reid about the economic recovery plan, finding a new Secretary of Commerce, and naming a new DNC head.

I was not happy to hear that Bill Richardson was being investigated for possible contract irregularities.  I’ve always liked Richardson – I voted for him during the primary.  I have to believe that everything is on the up and up.  But I was happy to hear about my friend, Tim Kaine.  I think Tim will be the right person to take over what Howard Dean started and get to the next stage.  He is no less forceful, but less abrasive.  Now if only Howard can find a new job.  Surgeon General?

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Issac Newton and Sandy Koufax

Sir Issac Newton was born on Christmas Day 1642 according to the Julian Calendar. Or January 4, 1643 if you use the Gregorian one that we use today.  Olivia Judson proposes to resolve this difficulty by celebrating for 10 days – the Ten Days of Newton  or the Newton Birthday Festival.  She has even written the words to a song celebrating his life and achievements. The tune is, of course, the Twelve Days of Christmas.

On the tenth day of Newton,
My true love gave to me,
Ten drops of genius,
Nine silver co-oins,
Eight circling planets,
Seven shades of li-ight,
Six counterfeiters,
Cal-Cu-Lus!
Four telescopes,
Three Laws of Motion,
Two awful feuds,
And the discovery of gravity!

Sandy Koufax was born on December 30, 1935,  He was my first sports hero.  I began following him when the Dodgers were in Brooklyn and continued after the move to LA.  I had an old console radio on which I could, at night, get AM stations from New Jersey (where I grew up) to St. Louis and New Orleans. So in the summertime, I could get the Dodgers playing most of the National League.  Looking back, I think I admired him because he seems to have a life outside of baseball and to be secure in his own person – not that I could  have articulated that as a teenagers.

Koufax was a great pitcher and I’m sure many batters thought he defied the Newtonion Laws of Motion.  It is only right that his birthday comes in the middle of the Newton Festival.

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Pastor Rick Updated

After I did my post on the invocation, I ran across this blog entry by Melissa Etheridge.  She recounts her conversation with Rick Warren and how she now feels about having him do the invocation.

As Bob and I were saying at breakfast this morning, maybe Barack Obama is up to something here – like co-opting the religious right.  Our conversation was triggered by this little note on the Boston Globe editorial page:

Evangelicals: Too outspoken a spokesman
Richard Cizik was forced to resign earlier this month after 28 years as vice president for public affairs with the National Association of Evangelicals, despite expanding the flock among younger evangelicals with his calls for “creation care” on the environment. The last straw for the church hierarchy was Cizik’s Dec. 2 interview with NPR’s Terry Gross of “Fresh Air,” in which he revealed he voted for Barack Obama in the Virgina primary and said he was growing more tolerant of civil unions (though not marriage equality) for gay couples. The worst part is that Cizik’s departure will give cheer to rival Christian activists such as James Dobson, who wanted Cizik fired for his “relentless” campaign against global warming long before gay marriage was a big issue.

As they used to say on Laugh-In,  “Very Interesting.”

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Federal Aid for the Local Economy

I’m off work until the end of the year, but my friends in the budget office are working hard to try to figure out how to cut the city operating budget by 10% because the state will likely cut local aid by that amount.  The state has already made cuts in things like pay raises for direct care workers – the folks who provide care for the disabled and elderly who work for non-profits.  Some of our affordable rental housing construction is not beining constructed because there is no funding either from loans or from tax credits. I think state and local workers may be laid off before this crisis ends.  And, jokes about inefficient govenerment workers aside, do we really need more people with skills and education, unemployed?

Paul Krugman wrote about all this in Fifty Herbert Hoovers.  I know that the governors I know, Deval Patrick and Tim Kaine, do not like the comparison.  I’m sure they understand that cutting spending right now is the worst thing they could do but as Krugman explains

In fact, the true cost of government programs, especially public investment, is much lower now than in more prosperous times. When the economy is booming, public investment competes with the private sector for scarce resources — for skilled construction workers, for capital. But right now many of the workers employed on infrastructure projects would otherwise be unemployed, and the money borrowed to pay for these projects would otherwise sit idle.

And shredding the social safety net at a moment when many more Americans need help isn’t just cruel. It adds to the sense of insecurity that is one important factor driving the economy down.

So why are we doing this to ourselves?

The answer, of course, is that state and local government revenues are plunging along with the economy — and unlike the federal government, lower-level governments can’t borrow their way through the crisis. Partly that’s because these governments, unlike the feds, are subject to balanced-budget rules. But even if they weren’t, running temporary deficits would be difficult. Investors, driven by fear, are refusing to buy anything except federal debt, and those states that can borrow at all are being forced to pay punitive interest rates.

I agree that the state and local governments need help.  Funds to help pay for construction projects, funds for social service programs, funds to help pay for health care and unemployment.  And now for my rant.   But those funds need to have less rigid guidelines than normal Community Development Block Grant (CDBG) and other federal programs.  If AIG, Citi Bank, and the other large lending institutions have no oversight or reporting requirements, state and local governements have too many.  Take the new Neighborhood Stabilization money which is to help purchase, rehab and otherwise get foreclosed properties back online.  I will have to learn an entirely new federal reporting system (the email I got with my password says that there are “navigational problems” with the system) and monitor owners and renters for the next 10 to 15 years, with no increase in staff or administrative costs past the first 3 years.  Does this make any sense? 

Krugman again

What can be done? Ted Strickland, the governor of Ohio, is pushing for federal aid to the states on three fronts: help for the neediest, in the form of funding for food stamps and Medicaid; federal funding of state- and local-level infrastructure projects; and federal aid to education. That sounds right — and if the numbers Mr. Strickland proposes are huge, so is the crisis.

I agree with Governor Stickland with one addition:  money should also go into mass transit and intercity highspeed rail.  This could be part of the green solution at the same time.

If you also want to see and hear Paul Krugman, he was on the Rachel Maddow  show.

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Rick Warren, the Invocation, and Separation of Church and State

I have to admit that I was a bit upset at the announcement that the President Elect had picked Rick Warren to give the invocation, but I did not send an email in protest.  Why?  Well, mostly because I wasn’t sure if this were really a big deal or if  in 50 years it would turn out to be a brilliant move. 

I know that Rachel Maddow called it “Obama’s first big mistake.”  The Nation summarizes

Maddow asked why Obama would want to bestow such an honor on an individual who has compared abortion to the Holocaust, same-sex relationships to pedophilia and incest and has openly advocated for the assassination of foreign leaders.

But I was still with San Francisco Mayor Gavin Newsom who thought it was politics as usual and disappointing, but not a reason to stop supporting President Elect Obama.

Richard Kim  writing in the Nation has espoused a really interesting idea:  Let’s pressure Warren and Obama to join forces and promote civil unions which they both claim to support. 

I understand the left’s sense of betrayal, but this reaction to Obama’s choice is off the mark. It’s a sign of how much we have conceded to the religious right that almost nobody asked why there should be an invocation at all.

What has happened to separation of church and state?   Kim’s idea for those of us who support gay marriage:

But here’s the bright spot for gays and lesbians: there’s actually common ground that they might find with Obama and Pastor Rick–it’s just not on religious terms. Both say they support full equal rights for gays and lesbians. Let’s test this premise by pushing forward a federal civil union bill that guarantees all the rights of marriage for same-sex couples, as Obama has suggested in his platform. Perhaps over time, some straights will want in on this God-free institution too, and we’ll have civil unions for everyone. Then Warren will be free to sanctify as marriages only the unions he likes. And I’ll be free to sanctify mine by whatever idol I choose, or to choose not to at all.

According to my search on European Marriage laws there are four basic categories:

  • marriage
    Where the rights, responsibilities and legal recognition given to same-sex couples who marry is the same as those for married different-sex couples.
  • registered partnership
    Where same-sex couples have the possibility to enter formal registration that provides them with a virtually equivalent status, rights, responsibilities and legal recognition to that of married couples (with some possible exceptions). This form of registration is often exclusively open to same-sex partners; however some countries have also made it available to different-sex partners.
  • registered cohabitation
    Where a number of enumerated rights, responsibilities and legal recognition are given to couples who register their cohabitation. This form of registration is oftentimes available to both same-sex and different-sex couples and requires that the couples prove that they have lived together to a determined period of time before they can accede to their registration.
  • unregistered cohabitation
    Where very limited rights and responsibilities are automatically accrued after a specified period of cohabitation. These rights are almost always available to unmarried different-sex couples as well.

Various European countries have adopted various combinations of these, often offering choices to both straight and same-sex couples.

I found an old (2003) American Prospect article  discussing this.  E. J. Graff wrote

But of course, marriage is not just a legal instrument; it’s also a symbolically powerful institution, a religious and political battleground whose rules and borders have been fought over for millennia. Each country that has tackled this issue has had to figure out how to help same-sex partners according to its own traditions. Which means that looking at civil marriage worldwide offers a number of models that differ dramatically from our own, and from each other.

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Those nations that have gone furthest share at least two out of three key elements: profound cultural, political or constitutional commitments to social justice; legal pragmatism about regulating couples, whether or not they’ve said “I do”; and genuine separation of church and state.

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The French Revolution stripped priests of any legal power over marriage, a concept spread by Napoleon’s conquests across much of the continent (and beyond). From Germany to Belgium, couples must take God-free marriage vows in city hall — and only afterward, if they so choose, may they walk to a church, synagogue or mosque for a second wedding. Europeans are often shocked to find that, in the United States, ministers, rabbis, imams and priests can wave the magic wands of both church and state at the same time. The result: Europeans grasp more easily than Americans that changes in civil marriage make no incursions into religious marriage.

Expanding Richard Kim’s idea, lets go for civil marriage with full rights for both gays and straights.  This could be like a registered partnership.  We could make a civil marriage required for filing joint tax returns and other civil recognition.  If you then want to get married in a church one can do so.  Let’s separate church and state.

How about it Pastor Rick?  President Elect Obama?  Are you up for the challenge?