NDN Blog

Economist Brad De Long runs on ongoing series of blog posts with the despairing title "Why Oh Why Can't We Have A Better Press Corps?" The same thought crossed my mind when reading this morning's Washington Post report on immigration. The story features a scarily large number without any context: $126bn, say the CBO, would be needed to fund the Senate Immigration Bill. $126bn? Sounds like a lot. They got that figure by adding up various smaller numbers in the report itself (pdf). But within the context of an annual budget of $2.6trn it sounds more palatable. That context was nowhere to be found in the Post piece. What is more, as Dean Baker notes over at TAP, the CBO have produced other, much lower estimate of the Sentate Bill's costs. Again, not worth a mention. But look again even at the Post's figures. The article gives the impression that the $126bn figure is annual. But it is actually change over the course of nearly a decade (2007-2016). This makes for an average annual increase of a touch over $14bn. I'd say roughly $14bn a year for a comprehensive fair reform of a broken immigration system sounds like a fair deal. And if you consider the $180bn a year in average annual lost revenue between 2010 and 2020 to make the tax cuts permanent, it sounds like a steal.

 UPDATE - Amusingly, Mr De Long himself has now blogged this story. Guess what the headline is? 

Pork? Its what's for dinner, or at least so says the newly minted, bipartisan Sunlight Foundation.  The Christian Scinece monitor profiles their efforts to end the increasingly dispiriting rise of earmarks as a day-to-day tool of Republican congressional management: 

"Once you know who the member is, you can start asking questions such as: Is there a direct financial connection with a member of the board of directors who is a [campaign] donor? How was this hospital or training program chosen over another? Sometimes it's because it's the best program; sometimes it's because there's a lobbyist who is paid," says Zephyr Teachout, national director of the Sunlight Foundation. "We hope to turn K Street upside down."

What a difference a weekend makes! We go from panic stations on CNN on Friday:

President Bush will wrap up conferring with his economic team Friday on ways to keep the economy growing against a backdrop of higher interest rates, mixed data and fears of rising inflation.

.... to miraculous optimism in the LA Times following the economic meeting this morning. 

Even though he's not running for re-election this year, President Bush knows just what he would focus on if he were: the economy and taxes. "If I were a candidate ... I'd say, 'Look at what the economy has done. It's strong. "If I were a candidate ... I'd say, 'Look at what the economy has done. It's strong. We've created a lot of jobs. ... I'd be telling people that the Democrats will raise your taxes. That's what they said. I'd be reminding people that tax cuts have worked in terms of stimulating the economy," Bush told reporters at a news conference.

The economy is slowing sharply. Job figures have been disappointing for two months. The housing market is flattening. Commentators think the Fed rate rise "pause" might now be a "full stop." And, if extended in 2011, the tax cuts will create deficits larger than anything yet seen. It tells you something about the rotten state of the Middle East the the President think the economy is his undersold good story. 

This intriguing article from The LA Time's Peter Wallsten and Tom Hamburger caught my eye. (It was originally in the LA Times in June, but for some reason has been reprinted by  the Star Tribune. I didn't catch it first time round.) They disucuss June's election in the California 50th, claiming the GOP won at the last minute by cranking up their legendary vote winning machine: 

The results in the 50th Congressional District did not merely illustrate the potential inadequacy of the Democratic strategy for the November elections; they foreshadowed a much bigger and more startling story line: That even in the face of Republican scandals, sour approval ratings, the aftermath of Hurricane Katrina and growing public rejection of President Bush's policies in Iraq, the Republican Party still holds the lead in the art and science of obtaining power -- and keeping it.

They go on to outline one of the GOP's systems in more detail:

Some of the GOP advantages are recent developments, such as the database called Voter Vault, which was used to precision in the San Diego County special election. The program allows ground-level party activists to track voters by personal hobbies, professional interests, geography -- even by their favorite brands of toothpaste and soda and which gym they belong to..... Democrats also use marketing data, but Voter Vault includes far more information culled from marketing sources -- including retailers, magazine subscription services, even auto dealers.... Voter Vault, although it is a closely guarded GOP trade secret, is nevertheless easily accessible to on-the-ground campaign workers and operatives should they need to mobilize votes in a hurry.

As NDN's ongoing Tool's Campaign has been arguing, if we lose in November at least part of the reason will be that the ongoing gap in campaign kit. Which, given how badly things are going for the GOP on the economy, the war and the rest, would be painful indeed. 

Trade has many enemies and few friends. This was among the most obvious conclusions from the collapse of Doha. Producerist agricultural interests in Europe, America and India all combined to limit negotiator's room for maneuvre. Meanwhile, countervailing pressure from business groups was weak. Ultimately there should have been few surprises that the political scientists favourie scenario - concentrated costs vs diffuse benefits - scuppered the talks. So its nice this morning to see at least the beginnings of a fight back. The Chairman of Citigroup along with a few other CEOs has written to the President, asking for one last push on the talks. What is at stake? A lot. The value of the talks themselves is not insignificant, put at something shy of 300bn by the World Bank. But much more important is the sanctity of the multilateral WTO framework itself. If Doha is junked and replaced by a range of bi-lateral deals, it imperils the authority of the system of trade dispute resolution that the WTO system built. As NDN's Rob Shapiro said at the launch of our Globalization Initiative this system is central to understanding globalization:

More than ever before, everybody shares the same economic rules regarding both how to treat themselves and how to deal with others. This is largely the result of the WTO process, which requires countries like China and India, that used to be organized around monopoly franchises and state enterprises, to open themselves to foreign investment and domestic competition.

Without the WTO system, America has little leverage over its partners in enforcing fair trade rules. That said, we should treat the run in to November with some trepidation. Trade Envoy Susan Schwabb announced a trip to China shortly to discuss ways forward on trade.More worryingly, the coming months are likely to see more trade flare ups, not less. The return of threatened sanctions against China's currency valuation is likely, unless Treasury Sec Paulson borkers a deal. The CFIUS regulations on foreign ownerships are up for review. And electioneering Congressional leaders are unlikely to take kindly to any new job losses that even sniff of having been caused by trade. All in all, choppy times ahead. But one final push by all concerned remains a better option than no push at all.

The argument is often made that the incumbency increases partisanship. If winning the primary is all that matters, why bother seeking the middle ground? Yet this morning's Post seems keen to disprove this. Its profiles one of - it not the - closest house race in the country, the Arizona 8th, is a picture of partisan rancour. Immigration is playing such a hot button role in border state races that, regardless of how close a contest might be, primary campaigns are vying for who has the more extreme message on border control. The same is true in areas without primaries, like the neighboring toss-up Arizon 5th. Here, immigration hardliner Jay Hayworth is in a surprisingly tough race, but has rarely softened his outspoken views on border security. Even Rick Santorum, hardly a border state Senator, is using the issue to try and boost his re-election bid. It seems as if the nearer the election gets the more extreme the rhetoric - and the slimmer the chance of reform - becomes. 

Its propellerhead head morning on the NDN blog. As if the white knuckle excitement of the deficit figures isn't enough, lets talk productivity. Some weeks ago i'm sure we were all shocked that revisions to historic US productivity figures failed to splash accross the front pages. Undiscussed as these figures might have been on Hannity and Colmes, today they get a good going over in the FT. I'm not going to quote from the article; suffice to say its a very comprehensive overview, and a good primer on the various debates about productivity growth in the 90s, and the stellar growth since. These figures - while they might be dull - do pose an intriguing economic problems. Only recently Chairman Bernanke was bullish on continued increases. He might be right; as this chart from Michael Mandel shows, the trend rate of increase is still upwards. From NDN's point of view, productivity is interesting as part of a wider puzzle about what is happening to the American economy. In particular Rob Shapiro has highlighted the theoretical link between productivity increases and wages. Even the newly revised productivity rises are historically pretty impressive. But perhaps the new lower estimates go a little way to explaining why this important link in the economy is, at least temporarily, broken.

The President is off at Camp David today, trying to figure out how to make the economic situation look better. This comes against a backdrop of some brighter budget deficit figures yesterday. Barring a crunching slowdown the budget deficit should continue to improve over the next year, as one might expect at this point in the economic cycle where tax recipts grow to reflect economic growth. The same is unlikely to be true of trade deficit, where only an economic slowdown, which will lower imports, will make much of a difference. Nonetheless, as the Times writes today, the longer term picture still looks bad. The official figures look bad enough, but if you add in continaution of the tax cuts and scrapping of the AMT - a tax originally deisigned to stop the very rich avoiding paying any tax at all - it looks very, very bad. But we knew most of this before. Normally progressives slap their foreheads and sigh; given figures like this, wouldn't it be good if the President could do more to aid the economy? Perhaps instead we should glance at Paul Krugman's collumn, which mentions the consensus on wages before moving onto the more fraught issue of economic inequality:

I've been studying the long-term history of inequality in the United States. And it's hard to avoid the sense that it matters a lot which political party, or more accurately, which political ideology rules Washington.... It seems likely that government policies have played a big role in America's growing economic polarization -- not just easily measured policies like tax rates for the rich and the level of the minimum wage, but things like the shift in Labor Department policy from protection of worker rights to tacit support for union-busting.

Given this analysis, more Presidential action might not be what the economy needs. Perhaps we might simply ask the President to join his colleagues in the Congress, and do nothing?

What is it with Republican and Harley Davidson factories? In January this year Dick Cheney trotted off to one in Kansas to talk about how great the economy was. And yesterday President Bush was in Pennslyvania astride a hog, talking up the benefits of free trade:

"My concern is that this kind of fear of globalization causes a reaction that will cause us to lurch toward protectionism. That's my biggest concern," the president said in a 25-minute interview with USA TODAY. "I am worried that may be where a country that is concerned about the future heads."

The USA Today piece is interesting, containing as it does some sharp words on the President's patchy record on trade. Nonetheless, his remarks are to be welcomed, and mirror almost exactly the sentiments of Treasury Secretary Paulson's speech a week or so back, as quoted in this excellent Post piece on why "openness should begin at home". But what of Harley themselves? It seems the choice of venue has been somewhat controversial. Dean Baker's Beat the Press page at The American Prospect notes the irony that Harley Davidson was the recipient of tarrif protection during the early 1980s. Reagan allowed the protection during the hey-dey of early 80s jap bashing. Protection basically allowed Harley to avoid going bust in the face of competition from much superior Japanese motorcylces. Its a nice debating point. But Baker's none-too-subtle shout out to the wonderous powers of tarrif protection would likely no longer get much of a hearing at Harley's Milwaukee HQ. The manufacturer has spent the last few years badgering the Commerce Department to help them overcome trade barriers, and get a toe hold in the Chinese market.

Can the Democrats take back the House in November? Whisper it quietly, but the new question might soon become "by how much" will we win. So pervasive is the pessimism within the Democratic party, and so mighty is seen to be the tactical superiority of Republican cut and run machine, that commentators are very cautious about predicting a big shift. But, gradually, they are beginning to. Veteran poll watcher Thomas Mann was among the first to do so last month when he wrote that "we could see a national tide in November that will sweep the Democrats back into the majority." In the last few days a few more voices have been added. Yesterday, Chris Cillizza on the excellent Washington Post "The Fix" blog, quoted arguments that ongoing Democratic poll leads allow us to "conclude that a Democratic wave is building that will sweep Republicans out of a House majority in November."

"If you take an average of the last three or four polls, because any one can be an outlier in either direction, you can determine which way the wind is blowing, and whether the wind speed is small, medium, large or extra-large," said [Polster Charlie] Cook. "The last three generics that I have seen have been in the 18 or 19 point range, which is on the high side of extra large. That suggests the probability of large Democratic gains."

Now, in this morning's Post, David Broder reports unheard of GOP weaknesses in the Ohio Governor's race. Another story reports that K Street Lobbyists are hiring Democrats, much in the same way that fund managers re-balance their equity portfolios in anticipation of changes in the market. So why doesn't the story get wider play? Three reasons occur to me. First, the only recent model for a change of leadership is 1994. The lack of either a Democratic Gingrich, or a Gingrich-like agenda, seems to convince analysts that a landslide isn't possible. Second, the almost mythic status of the GOP electoral machine, and the tactical masterminds who drive it, convince people not to be too hasty in writing them off. Finally, Democrats themeslves have a seemingly unshakeable belief in their own innability to promote a coherent, popular message. But perhaps, just perhaps, come November it will turn out that you don't need a Gingrich to win, that the GOP machine is out of gas, and that the Dems have run a more disciplined and organized campaign than anyone noticed.