NDN Blog

SF Chronicle: Simon on the future of the Democratic Party

In a recent piece, "Democratic infighting between establishment, progressives sweeping the country," John Wildermuth interviewed Simon about the evolution of the party. Simon takes the position that this is an important, cathartic process and will strengthen Democrats. Here’s Simon’s quote:

But what looks like division might actually be a good thing for Democrats, argued Simon Rosenberg, founder and president of NDN, a liberal think tank and advocacy group formerly known as the New Democratic Network.

“It’s a sign of health,” he said. “Where parties get into trouble is when they’re stale and these debates don’t happen.”

While it’s always possible for these policy debates to slip into rancor, the Democrats’ desire to oust Trump is enough to keep even squabbling factions on the same path, Rosenberg added. “

Trump will create consensus,” he said. “He’s a common opponent, and the need to blast the Trump presidency will outweigh everything else.”

You can read the full piece here.

 

Friday, September 15th - Simon speaks at New Leaders Council’s Conference

On Friday, September 15th Simon will present at the New Leaders Council’s Chicago conference, “NLC Millennial Compact National Conversation.” Simon and OSET’s Greg Miller will lead a discussion about how to renew American democracy in the years ahead. Simon and Greg will place a particular emphasis on the need to improve our elections infrastructure to both make it easier for all to vote and to protect the nation from foreign interference. You can learn more about the conference and register here.

Trump is right to be worried about Arizona (and Texas too)

When Donald Trump returns to Arizona tomorrow, he is returning to a state that is now among the most important Presidential battlegrounds in the country.

Though it was not heavily contested by the Clinton and Trump campaigns in 2016, a combination of Trump’s structural weaknesses with Hispanic and Millennial voters and the growing share of the vote in Arizona of both these groups have made this state far more competitive than it has been in the past. Some background, and data:

Arizona now a large, core Presidential battleground state. Of the 15 expanded 2016 battleground states (AZ, CO, FL, GA, IA, ME, MI, MN, NC, NH, NV, OH, PA, VA, WI), Arizona was Clinton’s 11th best (losing by a margin 3.5% points). Clinton performed worse in NC (3.7), GA (5.2), OH (8.4) and IA (9.1). Arizona has more Electoral College votes (11) than 6 of these battlegrounds – WI (10), CO (9), IA (6), NV (6), ME (4), NH (4) – and almost as many as VA (13) and NC (15).

Arizona is trending Democratic. In an election that swung 1.8 % points from 2012 towards Trump, the GOP margin slipped in AZ from 9.1% points in 2012 to just 3.5 in 2016. This 5.5 point shift was the 3rd largest shift towards the Democrats of any medium to large state in 2016, only outpaced by CA (7.0) and TX (6.8). According to the 2016 exit polls, 18-29 year olds went 53-35 for Clinton and 18-44 overall went 49-39. Non-white voters, making up a quarter of the electorate, and growing rapidly, went 61-31 for Clinton. This number could clearly get much worse for Trump and Rs given Trump’s embrace of a politics seen as anti-immigrant and anti-Latino.

Arizona a sign of continued Democratic gains in the “Latin Belt.” While much attention has been given in recent months to the Rust Belt, it is important to also pay attention to what I call the “Latin Belt” – AZ, CA, CO, FL, NM, NV and TX – states with large, growing Hispanic/Latino populations. The slow migration of these states from Nixon/Reagan Sunbelt Republican states to more competitive and even now Democratic states have been one of the most important demographic stories in American politics in recent years. This region includes the 3 biggest states in the country and has 29% (153) of all the nation’s Electoral College votes. According to 538, it will add another 7 Electoral Votes in 2024 due to reapportionment.

As recently as 1984, all of these states voted Republican. All but California voted Republican in 1988. Florida remains a contested battleground. New Mexico has moved solidly into the Democratic column. Colorado (4.9) and Nevada (2.4) gave Clinton two of her four biggest margins of victory in the battleground. The remaining two – AZ and TX – moved dramatically towards Democrats in 2016.

As I wrote prior to the election, it is possible that Texas joins Arizona as a new Presidential battleground in 2020. Texas has among the highest Millennial and Hispanic share of population of any state in the US, comparable to the shares of each of these fast growing and Democratic-leaning groups in true blue California. Trump did very poorly with both of these groups in 2016 – losing 18-29s 55-36, 18-44s 49-43 and Hispanics 61-34. In a recent Texas Tribune/UTexas poll Trump’s job approval was 43-51, one of the most dramatic drops of approval he has seen in any state (TT/UT poll has similar findings as the Gallup poll referenced here).

While Trump should be comforted that he won Texas by 9 points in 2016, if Texas sees a shift in 2020 comparable to its 2016 shift of 7 points Texas could indeed join Arizona as a new Presidential battleground.

Trump’s Presidency Has Been Hostile To The Southwest/Border Region In Ways Which Are Already Causing Him Problems – While focused like a laser beam on the industrial north, Trump’s Presidency has been hostile to much of the Latin Belt, the southwestern/border region in particular. The demonization of Mexico, the border wall, the renegotiation of NAFTA, the anti-Hispanic/anti-immigrant /intolerant stances are controversial and difficult positions for him in a region of the country with many recent immigrants and which has deep cultural and economic ties with Mexico.  According to the exit polls, 2016 Presidential voters in Arizona choose legal status over deportation by 76-18 (higher than the nation), and opposed a border wall 51-45.  A new poll just released in Arizona has Trump at a dangerously low 42-55 approval, and a clear majority opposing a possible Arpaio pardon. 

I warned the White House about misunderstanding these politics in a recent US News column, "Steve Bannon Meet Russell Pearce." 

It should be instructive that among the most important opposition to Trump in both parties is coming from this region of the country. Senators Flake and McCain have become perhaps Trump’s most important GOP opponents in the US Senate, and Gov. Jerry Brown, Sen. Kamala Harris and Rep. Ruben Gallego have become nationally recognized leaders of the Democratic opposition.

Whatever Trump does in Arizona tomorrow – pardon Arpaio, endorse Flake’s GOP primary challenger – he returns to a core 2020 battleground state that appears to be slipping away from him and more broadly, the Republican Party. He is right to be concerned.  Whether what he does tomorrow in Arizona helps or hurts him remains to be seen.

Note: Earlier this year Simon did a longish interview with Phoenix's KJZZ 91.5 on Trump, Arizona and immigration.    

It’s Still the Economy, Stupid!

Republicans know that the terrain for next year’s midterm elections could be treacherous. Off the record, they bemoan their inability to enact their agenda and mourn President Donald Trump’s unpopularity. In principle, the GOP still might get its act together and pass a tax reform with new tax breaks for middle class taxpayers. Events unforeseen and unimagined could offer Trump a platform to renew his poplar appeal. Even so, they’re ignoring the signs that a sagging economy next year will dominate the 2018 campaigns.

The current expansion is old – it turned eight years old this month – and its fundamentals are weak. Neither Trump nor Congress has done anything to perk it up. Only the 1990s expansion lasted longer, and it expired two years after its eighth birthday. Comparing the two will not cheer Republicans. At a comparable point in the expansion that defined the Clinton era, March 1999, GDP was growing at nearly a 5 percent rate; over the last year, GDP has edged up barely 2 percent.

The most important difference is what was happening then with productivity, and what’s happening now. In the three years leading up to each expansion’s eighth birthday, productivity had expanded at a 2.4 percent annual rate in the 1990s, compared to 0.7 percent this time. Without decent productivity gains to lift wages and fuel demand, incomes stall and growth slows.

The main reason we’re not in a recession today is the strong job gains of the last three years, and the current 4.4 percent unemployment rate is comparable to the 4.2 percent rate in March 1999. Full employment normally presages a slowdown in job creation. We avoided that in the late 1990s, because the strong productivity growth supported more demand by raising wages. The best measure of that is personal consumption spending, which increased at a 5.9 percent rate in the year leading up to March 1999. But our current predicament includes such weak productivity gains that personal consumption spending edged up just 2.6 percent over the last year.

It’s the same story with business investment, the other domestic source of new demand. In the year preceding the eighth birthday of the 1990s expansion, fixed business investment rose 8.5 percent; over the past year, it grew 4.2 percent or half that rate.

All of these measures presage a slowdown in the U.S. economy next year – GDP gains of 1.5 percent in 2018 is a fair guess – and we could slip into a recession if some adverse event provides the trigger.

Last October, I cautioned Hillary Clinton that she would face these same conditions if she won, but that three initiatives could breathe new life into this old expansion. The first order of business is a dose of demand stimulus, preferably through large infrastructure investments paid for down the line. Trump promised the same thing; but he and the GOP Congress moved quickly beyond it.

The second initiative would focus on energizing productivity growth. My own recommendations last October started with measures to help average Americans upgrade their skills, by giving them free access to training courses at local community colleges. The Trump and GOP budget proposals would cut the inadequate training programs already in place.

The third initiative is a companion piece to promote higher productivity: Jumpstart business investment in new technologies and equipment. That will be harder for Trump than it would have been for Secretary Clinton, because it requires setting aside the supply-siders’ faith in the power of cutting marginal corporate tax rates. Instead, we should focus for now on lowering businesses’ upfront costs to purchase the new technologies and equipment that make skilled workers even more productive.

The measure would offer businesses a choice: deduct the full cost of those new purchases in the year they buy them – it’s called “expensing” – or stick with the current system where businesses depreciate the cost and deduct the interest on funds borrowed to cover it. Expensing is a feature of the Trump and GOP tax proposals, but both plans offer more sweeping and much more expensive changes that appear headed for the same fate as Trumpcare.

The election of Trump and the GOP Congress buoyed business confidence precisely because investors believed they would follow through quickly with an infrastructure stimulus and business tax reforms. Neither seems likely today; and even if one or the other somehow passes in some form late this year, it will probably be too little and too late to revive growth and wages by November 2018. If neither happens, it will take more than tweets to explain to voters why Republican control of both branches of government has failed to improve their lives.

This post was originally published on Dr. Shapiro's blog.

A Department of Jobs, Skills and Economic Development

This essay was originally published on Medium.

Much of the structure of the government of the United States was designed and built in the middle part of the last century. The creation of the Department of Homeland Security in the aftermath of 9/11 was the last big structural change. In a time of rising global competition and technological change, it is time to fashion a new government department focused solely on creating good jobs for Americans, and helping American succeed in a new world of work that requires very different skills. Let’s call it the Department of Jobs, Skills and Economic Development.

It is remarkable to consider that the executive branch of our government has no one person or department truly responsible for creating good jobs for the American people, and ensuring our workers have the skills to succeed in a changing world. These responsibilities are scattered throughout the federal government, residing in the Departments of Commerce, Labor, Treasury, Housing and Urban Development, Education and Agriculture, the United States Trade Representative, the Export-Import Bank, the Overseas Private Investment Corporation, the Small Business Administration and throughout the White House itself. A new Department of Jobs, Skills and Economic Development would consolidate these many disparate activities and programs in a single place, allowing for greater efficiency but also far greater strategic focus and coordination. The process of building the Department would force a debate about all the programs it would inherit, and whether they are working or can be improved. Redundant or under-performing programs could be eliminated, freeing up resources for higher priority projects. It would be a powerful department, but also should by design be a modern and skinny one — lean and mean.

 

Congress and the White House would ultimately decide what would end up in this new department and what would remain in other places, but certainly one could imagine some of these other departments and agencies getting subsumed entirely into this new mission. This new department (DJSED) would work closely with the economic development agencies and other agencies of the states, and learn from their best practices. Policymakers can also study how other nations tackle these challenges, and draw from their experience. The balkanization of these responsibilities in Congress would also end, and allow far greater strategic focus from our elected representatives.

One of the things this new Department can focus on is what I call a “safety net of skills and knowledge.” In the industrial age we created a safety net for our people, one that included health care and income support. It is also now time we committed to create a true system of lifetime learning, one that anticipates our citizens will need the acquisition of new skills to become routine and persistent throughout their lives. There are many ways this new 21st century safety net can get constructed and built, many pieces of it already exist, and it will evolve and mature over time. But it is something that our emerging Millennial politicians should put their minds to and help build over the coming decades. Like the Department itself, this new digital age safety net would be about taking things that are already getting done and organizing them in a way that makes them far more focused and effective.

The Department could also expand the small Economic Development Administration currently in the Commerce Department, and give it a more expansive mission that could even include national infrastructure and transportation planning and travel, tourism and trade promotion. It would work closely with the fifty states, supporting their ongoing locally driven initiatives. All fifty states have an economic development agency focused on creating growth and good jobs for their communities for a reason. It works. It is long past time the federal government and the nation had one too.

Perhaps the most important reason to create this new Department is that in my mind the only way we can respond to both the enormity of the task in front of us, and its urgency. We simply have to do more than we are doing today to help the American people succeed. And whatever we do needs to be dramatic, something real and tangible, not something that is nibbling around the edges of what is perhaps the most important challenge America faces today. We need to let the American people know we hear them, and are changing the way we do business here in Washington to make their lives better. There may be other ways of attacking this problem but creating a super-sized but lean and mean Department would be an important first step that will give us a chance of coming up with approaches commensurate to the size of the problem itself.

And the problem is real. With billions of people today contributing to the advancement of knowledge every day, our already fast world will continue to speed up. Skills and knowledge acquired in high and school and college will be far more likely to become obsolete in one’s lifetime in the 21st century, and we need ways to make continuous learning more than a slogan. Additionally, with nations across the world rising and growing modern companies, global competition for our businesses and workers is likely to get more far more intense. The time when America stood like a conquering giant above the economies of the world is long in the past, and a new age of competition and progress is with us. Our government must help its own institutions become as fast and innovative as the global economy itself, and to do far more to effectively support good, deserving Americans who work hard and play by the rules and expect more from all of us.

Perhaps this project is the Kennedy Moonshot of our time, something we know we have to do but are not quite sure how to get there. Creating a new Department with a new mission and lots of capacity and focus is a good way to start. Perhaps it is old Washington think — a reorganization! — but am open to better ideas on how we can get this done in the years ahead. Whatever you think let the debate begin. The good people of the United States deserve more from all of us in Washington as they look to compete and prosper in a far more challenging 21st century global economy.

Simon on Democrats Embracing Patriotism

Bill Lambrecht interviewed Simon for a recent San Antonio Express-News article, "Veterans lining up for the Democrats in congressional races."  Here is the excerpt with Simon's analysis:

Simon Rosenberg, founder of NDN, a Democratic-aligned think tank in Washington, has spoken with Kopser about his candidacy.

“The issue of whether America has been betrayed and whether our homeland has been violated by an outside foreign power creates an environment where patriotism and love of country become important in a way that they haven’t been for a very long time,” he said, a reference to Russian intrusion into U.S. elections last year.

Rosenberg said he believes that veterans “are going to drive a very different sensibility in the Democratic Party than we’ve had over the last generation. If we can mount a big argument to the American people based on love of country and patriotism, I think we are going to be a formidable political party in 2018.”

 

Release: Trump/WH/DHS must explain their plans to protect American democracy

Washington, DC – “With the President now expressing so much interest in Russia’s attacks on our democracy in 2016, it is time that he and his Administration lay out in plain, simple terms what they plan to do to prevent it from happening again.

Failure to offer such a plan – already months late – will leave America’s homeland more exposed to foreign threats than perhaps any time in the last 200 years of American history (since the War of 1812). The gravity of this challenge cannot be overstated, and by working together with leaders of Congress and both parties the President can help assuage legitimate concerns many have about his willingness to do what it takes to keep America and Americans safe.”

-Simon Rosenberg, NDN

 

Readings for Simon's Webinar/Presentation, "On Patriotism and Optimism - Not Pessimism"

We've developed a big picture webinar/presentation on patriotism, optimism and America. It is designed to be a rebuttal to President Trump's poisonous pessimism, and his false argument that this great country is in decline. We will be showing it weekly through this summer as it moves from beta to formal release this fall.

To learn more, see the schedule for future showings and to register go here. It will be worth your time – we promise! Below we've put together some of our work over the years that will provide more context and background for the presentation. We hope you find them helpful.

Patriotism and Optimism, Not Pessimism – Thoughts on the Future of America's Center-Left (Preview Slides), Simon Rosenberg and Chris Murphy, NDN.org, 3/13/18. Here are key slides from deck which demonstrate through various economic and societal data that America is not in decline and in fact doing as well as it has in any point in our history.

The Case for Optimism: Rejecting Trump's Poisonous Pessimism, Simon Rosenberg, Medium, 6/2/17. In an essay that originally was published on Medium, Simon argues that the great rationale of Trump's Presidency - that America is in decline - simply isn't true, and must be challenged more forcefully.  This is the piece that spurred the creation of the presentation. 

Trump's Iran deal withdrawal is an arrogant rejection of the post-war system America built, Simon Rosenberg, NBC News THINK, 5/10/18. Simon discusses how Trump is dangerously undermining the global order America imagined and built.

Rebutting Trump's Ridiculous Attacks on "Chuck and Nancy", Simon Rosenberg, Medium, 11/28/17. Contrary to the President's absurdly false claims, under President Obama crime rates and the flow of undocumented immigrants into US plummeted. The economy also grew, incomes rose, the stock market soared and the annual deficit dropped.

In A New Global Age, Democrats Have Been Far Better for the US Economy, Deficits, and Incomes, Simon Rosenberg and Chris Murphy, NDN.org, 2/27/17. In a new memo NDN finds that over the past generation of American politics Democrats have been far better for the economy, deficits and incomes.  Some of the most important graphs of the presentation come this from this study. 

Chin Up, Democrats, Simon Rosenberg, US News and World Report, 1/20/17. In his column Simon argues that Democrats should have pride in their historic accomplishments and optimism about the future of their politics. This one is very relevant to the presentation itself. 

Rediscovering the Democrats' North Star, Simon Rosenberg, US News & World Report, 12/9/16. In his column Simon offers some thoughts on the path forward.

Patriotism and Optimism - Thoughts About The Future of America's Center-Left

This summer I began giving a presentation that has evolved into a new 30 minute deck called "On Patriotism and Optimism, Not Pessimism - Thoughts On The Future of America's Center-Left." The presentation, a lively talk with filled with nerdy charts and graphs, will attempt to make the case that America is not in decline and is in fact doing as well as it has in any point in our history. It is meant to be an implicit rebuttal to the core argument Trump is making about America and its decline, an argument which is malevolently selling America and its people short every day.

This deck, and the arguments within it, are my effort to help fashion a comprehensive response to the rise of Trump’s new politics. It has evolved over dozens of showings over the web and live in person to policy makers here in Washington and around the country.

There are several ways to tap into the thinking in this deck:

Watch – We show the deck live on the Internet a few times each month and do an in-person presentation once a month. Use this registration page to sign up for an upcoming webinar and this registration page for our July 11th luncheon. For additional showings, be sure to review the full schedule here.  All are welcome.

Read – We’ve put together some background reading for those who want to join us by diving into this space. It starts with the article I wrote on Medium this summer which got the ball behind “Patriotism and Optimism” going.

Review Core Slides – Below you can find some of the core slides in the deck, in PDF form. Take a look. Will give you a sense of where we are going with this, and of course leave you wanting more.

We have been pleased with the response the big arguments in this deck have received. Check it all out, and if you are interested in having me do a private showing for groups of 20 or more, please contact Chris Murphy here at NDN at cmurphy@ndn.org.

Best,
Simon

 

How to Raise Incomes and Delay the Next Recession

Last October, mulling over the economic environment the next President would face, I sent Hillary Clinton memos on how she should provide some stimulus to sustain the current expansion and raise incomes by boosting business investment and productivity. Alas, she did not become President; but that didn’t change our current economic challenges. To be sure, President Trump’s manifold troubles may preclude Congress from doing anything meaningful until after the 2018 elections. But if that’s not the case, here’s some advice for both sides.

The White House, above all, should appreciate the stakes: Without some form of serious stimulus, the U.S. economy almost certainly will slip into recession well before 2020. From Trump’s recent statements about “priming the pump,” he already understands that the eight-year-old expansion needs a boost. The GOP plan for sweeping tax cuts won’t work here, even if it could pass Congress. To begin, it devotes most of its resources to high-income people and shareholders, who will just save most of their tax savings. More important, the plan would vastly expand federal deficits on a permanent basis. If that happens, the Federal Reserve almost certainly will hike interest rates considerably higher and faster than they now contemplate, and those rate hikes would likely end the expansion.

Washington needs to prime the pump in a way that directly supports employment over the next two years and carries no long-term costs for the deficit. As it happens, Trump and Democrats already support a reasonable way to do just that – enact a large, two-year increase in public investments in infrastructure. But the plan will attract Democratic support only if Trump gives up the idea of using tax breaks to leverage private investment in new infrastructure projects. Democrats won’t (and shouldn’t) go along, because that approach tilts the program towards infrastructure projects in high-income areas that can generate strong profits for its investors.

I assume that the President’s economic advisors also have briefed him on the recent, serious slowdown in business investment and productivity growth. Unless Trump addresses those problems as well, most Americans will make little income progress. The challenge here is to focus on changes that will boost business investment in way that strengthen productivity, and do it without raising deficits on a permanent basis.

One approach that congressional Republicans and some Democrats could support entails allowing businesses to “expense” their investments in equipment – that is, deduct the entire cost in the year they purchase the equipment. This change focuses on equipment investments, because they have the greatest impact on growth and productivity. The catch is that this approach still costs the Treasury many tens of billions of dollars per-year, especially if it covers both corporations and privately-held businesses (like the Trump Organization), as it should.

Trump could draw some support for the plan from congressional Democrats by insisting that Wall Street pay for it. First, he could deliver on his campaign promise to end the notorious “carried interest” loophole that lets the managers of private equity, venture capital and hedge funds use the capital gains tax rate to shelter most of their income from their funds. Fund managers certainly can afford to pay the regular income tax like the rest of us: In 2016, the top 25 hedge fund managers altogether earned $11 billion or an average of $440 million each.

To pay for the rest of equipment expensing, Trump should support the call by many Democrats for a small tax on financial transactions – three one-hundredths of one percent of the value of all stock, bond and derivative purchases should do it. (Stock and bond IPOs and currency transactions would be exempt.) Wall Street will howl in protest – music to most Americans’ ears – but the economics are sound. On the plus side, the tax would reduce market volatility by discouraging short-term speculation and ending most high-frequency computer trading. Moreover, today’s short-term speculators and high-frequency traders will have to invest those resources in more productive ways. The negative is that the tax would raise transaction costs and thus dampen investment on the margins. But since the tax would finance a serious reduction in the cost of business investments in equipment, the overall impact on the markets will be positive.

This plan is far from the dream agenda of either party. A Hillary Clinton presidency would have included many other measures to boost productivity and incomes, from access to tuition-free college for young people and greater access to bank loans for new businesses, to broad retraining opportunities for adults and a path to citizenship to expand job opportunities for immigrants. For their part, congressional Republicans still believe in their trinity of huge tax cuts, drastic deregulation, and deep cutbacks in Medicare, Medicaid and Obamacare benefits. But the economics of stimulating an aging expansion and restoring business investment are non-partisan, and both parties should have an interest in reviving income progress for most Americans.

For President Trump, this plan has three simple parts consistent with his positions: Increase public infrastructure investments, lower the cost of business investments, and make Wall Street pay more of its fair share. If he can cut this deal, nearly everybody will win – but if he can’t, no one will lose more than he will.

This post was originally published on Dr. Shapiro's blog.

Syndicate content