Globalization Initiative

NDN's Globalization Initiative was established to promote economic growth and restore broad-based prosperity in our globalized economy. Chaired by Dr. Robert Shapiro, Under Secretary of Commerce for Economic Affairs under President Bill Clinton, the program works to address the structural changes affecting the American and global economies. NDN argues that a "lost decade," marked by declining household incomes, remains the most important factor in the American economy and politics.

Our agenda for addressing the structural changes inherent in the era of globalization includes three key components: modernizing our healthcare and energy policies, investing in 21st century skills and infrastructure, and accelerating innovation across the economy. NDN also continues to play a major role in the debate over how to best manage the Great Recession and fosters dialogue around renewing the national consensus on global economic liberalization.

Papers and Memos

A New, Progressive Economic Strategy for America released 5/11: By Robert J. Shapiro
Written over a series of weeks in April 2010, this collection of four pieces lays out a new economic strategy for America that creates broad-based prosperity and addresses the America's great economic challenges in the era of globalization.
Building on recent struggles in Congress to do more for the economy than pass the extension of unemployment insurance, NDN outlines a political and policy framework to take steps in 2010 that promote near-term job creation and economic growth.
In this white paper, Globalization Initiative Deputy Policy Director Jake Berliner describes the rise of new economic powers and the challenges and opportunities they are presenting the American and global economies.
Keeping the Focus on the Struggle of Everyday People: 2010 Edition 1/26/10: By Simon Rosenberg
This memo argues that the nation would benefit from a shift to economic rhetoric and policy geared towards the struggle of everyday Americans. 

Crafting an American Response to the Rise of the Rest 1/21/10: By Simon Rosenberg  Cross posted on and
Simon argues that the second generation Obama narrative must be a strategic response to the most significant transformation taking place in the world today, what Fareed Zakaria has called the “rise of the rest.” While the true scope of this transformation is only really becoming apparent now, it leaves our new President with the historic opportunity, and tremendous responsibility, to craft a comprehensive strategic response to this global “new politics” of the 21st century.
A Lost Decade for Everyday Americans 12/17/09:  By Jake Berliner
In this paper, Jake Berliner, Deputy Policy Director of NDN's Globalization Initiative, argues that everyday Americans are at the end of a “lost decade” and explains the still misunderstood causes of the virulence of the recession.
The Key to the Fall Debate: Staying Focused on the Economy 9/03/09: By Simon Rosenberg
The last few months have not been good ones for Democrats, but there is a road map for how they can get back on track, and it revolves around staying relentlessly focused on the economy and the struggle of every day people.
A Stimulus for the Long Run 11/14/08: By Simon Rosenberg and Robert J. Shapiro
Congress and President-elect Obama can use the stimulus not only to create more jobs, but to do so in ways that will drive the development of a 21st century economic infrastructure.
This narrative setting essay argues that leaders must do more to staunch the foreclosure crisis, which was at the heart of the financial meltdown.
The Idea-Based Economy and Globalization 1/23/08: By Robert J. Shapiro
U.S. companies and workers lead the world in developing and applying new intellectual property, a critical advantage in innovation that policymakers should seek to advance in the age of globalization.
Investing in Our Common Future: U.S. Infrastructure 11/13/07: By Michael Moynihan
Michael Moynihan looks at the current state of public investment in infrastructure and proposes a set of measures to restore our national political will and improve funding mechanisms to rebuild and advance U.S. infrastructure.
This presentation details the results of extensive polling conducted by NDN and Benenson Strategy Group in October of 2007 on the American public's opinions about globalization and the changing economy.
NDN Poll: Americans’ Views of the Present and Future Economy - Anxiety and Opportunity 11/6/07: By Pete Brodnitz
NDN, a progressive think tank and advocacy organization, completed a national survey on the economy and globalization on October 15th. This memo is the second of two memos outlining key findings and analysis from the poll.
NDN Poll: Clamoring for Change, Persistent Pessimism, Democrats Dominating on Economic Issues
11/2/07: By Pete Brodnitz
NDN, a progressive think tank and advocacy organization, completed a national survey on the economy and globalization on October 15th. This is the first of two memos outlining key findings and analysis from the poll.

Tapping the Resources of America’s Community Colleges: 7/26/07: By Robert J. Shapiro

Young Americans are increasingly adept at working with computers, but many American workers still lack those skills. Here, we propose a direct new approach to giving U.S. workers the opportunity to develop those skills.

We can address the challenges of the 21st century economy without sacrificing the benefits of globalization and technological advance, principally by expanding public investments in critical areas and reforming health care and energy policies.
A Laptop in Every Backpack 5/1/07: By Simon Rosenberg
We believe that America needs to put a laptop in every backpack of every child. We need to commit to a date and grade certain: we suggest 2010 for every sixth grader.
Voters Deliver a Mandate for a New Economic Strategy 11/10/06: By Simon Rosenberg
The American people want the new Democratic majorities in the House and Senate to focus and pursue an aggressive strategy to help them and their families get ahead.
Crafting a Better CAFTA 6/9/05: By Simon Rosenberg
We believe that an agreement with Central America is so important to how Americans approach the 21st century that we must commit ourselves to help negotiate and pass a better CAFTA.

Major Events

Growing the Next Economy 12/7/11
On Wednesday, December 7th, NDN hosted the Director of Multi-State Initiatives in the Office of Oregon Governor John Kitzhaber and Karl Agne, a partner at GBA Strategies, for a lunchtime discussion about bottom up economic growth, accelerating the ideas that work, and creating the Next Economy. Joining us were 

A Look at Current Global & Domestic Economic Challenges 7/26/11
On Tuesday, July 26th NDN hosted a morning conversation about the economic challenges facing America and the world featuring views from the United States Senate, House and the British House of Commons.

Under Secretary of Commerce for International Trade Francisco J Sanchez at NDN 4/26/11
On Tuesday, April 26, NDN hosted Under Secretary of Commerce for International Trade Francisco J Sanchez. Sanchez was joined by NDN Globalization Initiative Chair and former Under Secretary of Commerce for Economic Affairs Dr. Robert Shapiro.

National Economic Council Deputy Director Jason Furman on Winning the Future 2/22/11
Following the release of the President's budget, Jason Furman, the Principal Deputy Director of the National Economic Council joined NDN for a discussion of the budget, the economy, and the President's strategy to make America competitive in the global economy of the 21st century.

Under Secretary of State for Economic Affairs Robert Hormats on Global Economic Challenges 11/15/10
On November 15, NDN hosted Under Secretary of State for Economic, Energy, and Agricultural Affairs Robert Hormats for an important address on global economic challenges.

US Ambassador to the OECD Karen Kornbluh on Jobs for the Future 7/27/10
On July 27, NDN hosted the United States' Ambassador to the Organization for Economic Cooperation and Development (OECD), Karen Kornbluh. Ambassador Kornbluh, who previously served as Senator Barack Obama's Policy Director and as Deputy Chief of Staff at the Treasury Department, discussed a wide range of issues in creating "Growth and Jobs for the Future," from youth unemployment, to innovation, to U.S. engagement at the OECD.
On Wednesday, June 16, NDN hosted a speech by Congressman Ron Kind (WI-3), Vice-Chair of the New Democrat Coalition and Co-Chair of the NDC Task Force on Innovation and Competitiveness. Kind spoke about the value of innovation to the American economy and the recently released New Dem Agenda for Innovation and Entrepreneurship. Kind was joined by NDN President Simon Rosenberg.
Fred Hochberg, Chairman and President of the Export-Import Bank of the United States, Speaks at NDN. 6/10/10
On June 10 NDN hosted a speech from the Chairman and President of the Export-Import Bank, Fred Hochberg, on the National Export Initiative and the work of the Export-Import Bank. NDN Globalization Initiative Chair Dr. Robert Shapiro moderated a discussion and Q&A following the Chairman's remarks.
Senator Mark Warner on Economic Competitiveness and Innovation 3/18/10
On Thursday, March 18, Senator Mark Warner joined NDN to address America's economic competitiveness in a rapidly changing global economy. He discussed the role of innovation in creating prosperity and offered his perspective on the Senate's work to craft a new economic strategy for America, which includes reforming the nation's health care and financial sectors.
FCIC Chairman Phil Angelides on “Examining Our Financial Past to Secure Our Economic Future” 2/2/10
On Tuesday, February 2, NDN hosted an address from Phil Angelides, Chairman of the Financial Crisis Inquiry Commission. Formerly the Treasurer of the State of California, Mr. Angelides has been charged by Congress to lead the effort examining the causes of the worst financial crisis since the Great Depression. He discussed the commission's work, which began in earnest in February with much anticipated hearings. NDN Globalization Initiative Chair Dr. Robert Shapiro introduced Mr. Angelides and opened the event with contextual remarks.


Visit the Globalization Initiative blog for more of our ongoing work.

Visit Globalization Initiative Chair Robert Shapiro's blog.

Visit Globalization Initiative Deputy Policy Director Jake Berliner's blog.

Rob on CNBC's "The Call"

Yesterday, Rob Shapiro, the Chair of NDN's Globalization Initiative, went on CNBC to discuss Secretary Geithner's trip to China. Check it out:

The Waxman-Markey Bill: Politics-as-Usual Meets Climate Change

The House Energy and Commerce Committee’s recent approval of the cap-and-trade bill penned by its chairman, Henry Waxman, presents a crucial test for serious advocates of measures to control climate change.  The Waxman-Markey plan won committee approval with backing from some environmental groups that have promoted cap-and-trade for 15 years, as well as industry groups representing companies that produce most of our greenhouse gases.  The disappointing truth is, the bill combines the inherent problems of cap-and-trade long noted by economists with a large catalog of giveaways and exceptions for industries now supporting it.

By any measure, the bill would do little to address the climate challenge.  For example, the International Panel on Climate Change figures that the United States will have to reduce its greenhouse gas emissions by 2025 to 25 percent less than in 1990.  The official line is that the bill would cut emissions in 2020 to 17 percent less than 2005 levels – but that comes to just 3 percent less than the 1990 levels.  Moreover, the actual reductions would be even less: Greenpeace has calculated that because the bill provides “offsets” to power companies and energy-intensive industries – letting them emit more greenhouse gases so long as they take “offsetting” steps such as planting trees – its actual caps “could be met without any reduction in fossil fuel emissions for more than 20 years.”

Or consider the bill’s implicit price for the permits to emit carbon.  Climate scientists figure that a price of $50 per-ton of carbon dioxide should be sufficient to discourage people from using carbon-intensive fuels and encourage businesses to develop and adopt more climate-friendly energy and technologies.  The bill, however, would end up pricing carbon dioxide at less than $20 per-ton, or less than half the level needed to spur the green changes necessary to protect the climate.  To make matters worse, it gives away 90 percent of the permits to the utilities and other industries that produce most of the emissions.  The result, in the judgment of Carl Pope, who heads the Sierra Club, is a “congressional bailout” for carbon-intensive industries, as well as a bonanza for Wall Street institutions that would happily reap windfall profits from trading and speculation in some $1 trillion in new permits.

The bill also does nothing about the deep economic drawbacks of all cap-and-trade schemes.  It has no provisions to prevent insider trading by utilities and energy companies or a financial meltdown from speculators trading frantically in the permits and their derivatives.  It also ignores the basic conundrum of capping emissions when we don’t know what the demand for energy will be in any year – because we can’t predict how cold the winter will be or how fast the economy will grow.   The result in every cap-and-trade system ever tried has been enormous volatility in permit prices.  For example, the price of permits in the European cap-and-trade scheme moves up and down by an average of more than 20 percent per-month.  Imagine that on top of normal fluctuations in energy prices, gasoline moved up or down by another 70 to 80-cents per-month.  And without a predictable price for carbon, businesses and households won’t be able to calculate whether developing and using less carbon-intensive energy and technologies make economic sense.

There’s a much better, more fair and progressive way to deal with climate change:   Apply a steady tax of $50 per-ton of CO2 and use the revenues to cut payroll taxes and so help average Americans deal with the higher energy prices, and to support climate-friendly R&D and technology deployment.   It’s the approach long favored by Al Gore, by Jim Hansen, the NASA scientist who first drew public attention to climate change, by a growing number of environmental groups, and most recently, even by some large energy companies.  Its’ only drawback is political: It can’t be easily gamed by powerful industry groups, and it’s not the approach a few environmental groups have used for a generation to recruit new members.  With the planet’s climate hanging in the balance, shouldn’t politics-as-usual give way to sound environmental and economic policy?



NDN Backgrounder: The GM Bankruptcy and the Future of the Auto Industry

With General Motors filing for bankruptcy this morning, and the federal government taking a 60 percent stake in the company, NDN offers some recent thinking on the American automobile industry.

  • Fuel Economy in Context by Michael Moynihan, 5/19/2009 - Moynihan welcomes the Administration's steps on fuel economy, but points out that CAFE standards are imprecise tools that must be viewed as part of a larger series of complex policies.
  • Here in the Real World They're Shutting Detroit Down by Morely Winograd and Mike Hais, 4/30/2009 - NDN Fellow Winograd and Hais pont out that GM's problems come at a time when the inherent tension between the investor class and the country's manufacturing sector have never been greater.
  • Should We Try to Save the Damaged Brands? by Simon Rosenberg, 4/30/2009 - Rosenberg asks if these mainstay, now troubled American brands - AIG, Chrysler, Citi, GM - can be saved by being propped up by the government or if their brands are permanently insolvent.
  • Carbonomics by Michael Moynihan, 4/2/2009 - Moynihan looks at the connection between pricing carbon and the future of the American automobile industry.
  • Sympathy for the Car Guys by Michael Moynihan, 12/5/2008 - Moynihan compares Capitol Hill's treatment of Wall Street CEOs to that of the automakers.

Gordon Brown: Restraining Trade Will Prolong the Recession

NDN's Dr. Rob Shapiro recently discussed on how the Great Recession has created protectionism without passing any protectionist laws. In today's Wall Street Journal, British Prime Minister Gordon Brown writes to American audience, arguing that, "The collapse of global trade is the most immediate issue we face. We must show once again our determination to fight back." An excerpt:

The simple truth is that trade is the most serious casualty of the global financial crisis, with a vicious circle emerging of falls in exports leading to falls in production and rising job losses leading to further falls in consumer demand, exports, etc. We used to think that the countries most affected by the global financial crisis would be those with the largest financial sectors. But it has become increasingly clear that the countries hardest hit are those most reliant on exports.


Developing countries have been particularly hard hit as a result of declining world trade and falling commodity prices. Some 100 million more people are in poverty as a result of the crisis. All the progress we have made to reduce poverty is in danger of being wiped out.

Just a few months ago, the WTO forecast global trade to fall by 9% in 2009. In simple terms, a banking crisis has become a trade crisis.

There can be no recovery in the global economy without a revival of world trade. Trade was the driver of postwar recovery in Japan, Germany, the rest of Europe and the U.S., and the engine of growth in Asia in recent decades. We must ensure that a revival of world trade leads the global economy once again out of recession.

More here.



NDN Plan to Offer Free Computer Training to All Americans Gains Support on Capitol Hill

As readers of the blog probably know, NDN has long advocated a proposal from our own Dr. Robert Shapiro that would offer free computer training to all Americans through the nation's community colleges. House Democratic Caucus Chair John Larson recently offered a bill based on that proposal - H.R. 2060, The Community College Technology Access Act of 2009.

I'm pleased to inform you that H.R. 2060 is recieving strong, bipartsian support in the House. Here are the 25 cosponsors:

Rep Bordallo, Madeleine Z. [GU] - 4/23/2009
Rep Castle, Michael N. [DE] - 4/27/2009
Rep Costello, Jerry F. [IL-12] - 4/27/2009
Rep Edwards, Donna F. [MD-4] - 4/23/2009
Rep Ehlers, Vernon J. [MI-3] - 4/23/2009
Rep Grayson, Alan [FL-8] - 4/27/2009
Rep Hare, Phil [IL-17] - 4/23/2009
Rep Himes, James A. [CT-4] - 4/23/2009
Rep Honda, Michael M. [CA-15] - 4/23/2009
Rep Kennedy, Patrick J. [RI-1] - 4/28/2009
Rep Kilpatrick, Carolyn C. [MI-13] - 4/23/2009
Rep Markey, Betsy [CO-4] - 4/23/2009
Rep Matsui, Doris O. [CA-5] - 4/23/2009
Rep McGovern, James P. [MA-3] - 4/23/2009
Rep Miller, Brad [NC-13] - 4/23/2009
Rep Murphy, Patrick J. [PA-8] - 4/23/2009
Rep Napolitano, Grace F. [CA-38] - 4/23/2009
Rep Polis, Jared [CO-2] - 5/6/2009
Rep Reyes, Silvestre [TX-16] - 5/4/2009
Rep Ros-Lehtinen, Ileana [FL-18] - 5/18/2009
Rep Ross, Mike [AR-4] - 4/23/2009
Rep Sablan, Gregorio [MP] - 4/23/2009
Rep Sestak, Joe [PA-7] - 4/23/2009
Rep Smith, Adam [WA-9] - 4/23/2009
Rep Wu, David [OR-1] - 4/23/2009

Urge your member (or boss) to get on board with H.R. 2060 - it's key to creating a 21st century economy.

Meeting the Challenges of the 21st Century – Crafting a Better CAFTA

The United States Congress has begun consideration of the Dominican Republic – Central America – United States Free Trade Agreement (CAFTA-DR).  While many progressives have reasonably rejected the Bush Administration’s proposal as inadequate to the task and an abandonment of the formula that worked so well in the 1990s, we believe that an agreement with Central America is so important to how Americans approach the 21st century that we must commit ourselves to help negotiate and pass a better CAFTA.

At its core, the debate over this agreement requires progressives to face squarely our own vision of how globalization can and should work, as well as how America can best promote economic and political progress by our Latin American neighbors.  

This memo makes our case for why progressives should not let the Bush Administration’s flawed agreement doom a good idea.  We describe how progressives can improve CAFTA-DR so it can pass with broad bipartisan support, with changes that would both reinforce our commitment to a prosperous and democratic Latin America and make 21st century globalization work better for the American people. 

Observation 1.  Bringing nations into an open, global trading community has been a pillar of America’s successful foreign policy for 60 years.

In the 1940s, after years of devastating world war, America, led by Harry Truman, crafted a new progressive internationalism committed to spreading democracy, free markets, freedom, and the rule of law around the globe. This progressive vision, backed up by American resolve and global initiatives like the Marshall Plan, the U.N., the General Agreement on Tariffs and Trade (GATT), the World Bank, and NATO, led much of the world allied with America to an unparalleled period of peace and prosperity.    

Liberalized trade has always been an essential part of this successful strategy.  In the 1950s and 1960s, America unilaterally opened its economy to foreign imports as part of a grand strategy to contain and counter the Soviet Union by creating strong economic ties with both the world’s developing countries and industrialized nations.  It worked: Not only did America boom, but the Soviet Union was never able to extend its influence much beyond the countries it occupied with military force. 

After the end of the Cold War in 1989, America led the fight to bring this formula of democracy, free markets, freedom, and the rule of law to the nations newly freed from Soviet influence.  Just as we fought to keep Western Europe free from communism after World War II, America worked with other great democracies to bring billions of people from Russia to China to India into the global family of nations.  The 1990s was a period of rapid liberalization in all parts of the world and across many sectors.  Our foreign and trade policies explicitly worked to expand the circle of modern market economies, ending a remarkable decade by helping China and India gain access to the World Trade Organization (WTO) and the global trading system.   

In just the past twenty years, the share of the world’s people living in extreme poverty (less than $1 a day) has fallen by half, from 40 percent to 21 percent.  America itself went through its greatest economic expansion in history in the 1990s. While there have been bumps along the way, the world continues to grow and has been largely at peace. Most nations today are democracies or attempting to become so, members of the United Nations, and members of the WTO.  The American strategy crafted during the difficult struggles of World War II has succeeded, and while there is still much to do, it is clear that the world has benefited from this period of Pax Americana

The one part of the world that has resisted the formula of greater economic and political freedom, the Middle East, is still exporting chaos and instability while its own social conditions deteriorate.   Successfully bringing this formula to the Middle East must be one of top priorities for progressive politics in the years ahead. 

In recent years, it has also been the policy of the United States to work with foreign governments particularly in the developing world to improve their labor practices, protections for human rights, and treatment of their environment, because we know how important all of these areas are to achieving stable and just societies. 

Observation 2.  Completing an agreement will make an important statement about America’s commitment to encouraging the democratic and free market aspirations of Latin America.

The agreement comes at a critical time in our relations with Latin America.  Completing an improved agreement will send a very clear signal across this region – including many still struggling to emerge from extended periods of autocratic regimes – that America supports their inclusion in the modern family of free nations.  Completing this agreement can also help reverse a growing anti-Americanism in parts of Latin America arising from the Administration’s clumsy handling of our relations with our neighbors.   

Completing an improved agreement will also send a powerful signal that the United States understands that, more than any time in our history, our destiny and Latin America’s are bound together.  One of eleven U.S. voters today are Hispanic, and if current trends continue, Hispanics will number a quarter of the American population by 2040.  More than ever, the United States is the capital of all the Americas.  

A sustained American commitment to extending the formula of political and economic freedom to Latin American nations will not only foster their long-term development and growth, it is also an essential part of any successful strategy to stem the tide of illegal immigration into the United States.   

For all these reasons, CAFTA-DR is not an ordinary trade agreement.   Failure to pass an improved version would be a true setback at a critical time for an increasingly important part of the world.   For more on the importance of the economic and political integration with Latin America to the growing U.S. Hispanic population, see our previous memo.

Observation 3.  As globalization has evolved in recent years, so must our policies.  With more nations and people in the global trading system today, competition has become more relentless.   We do not face the same challenges we did in the 1990s.   

While on the whole, the rapid liberalization of the 1990s has been a success, it has also made it easier to move American work to lower wage countries.  While good for profits and often for American consumers, these pressures are also hard on many U.S. workers.  In recent years, even many jobs previously touted as ‘jobs of the future’ have been moved to other countries, creating even greater anxiety among many American workers who wonder where their future employment will come from.

Moreover, this rapid liberalization has generally intensified competitive forces across the global economy, making it harder for U.S. companies to raise their prices when their energy, pension and health-care costs rise.  Those pressures now cost Americans’ jobs and put a lid on their wages and benefits. 

The result: Despite the healthy GDP and productivity growth of recent years, average American wages and median incomes have dropped.  This means that while overall economic measures may show recovery and growth, American workers are not benefiting as they usually do when growth is strong.   Capital and corporations are prospering; many American workers are not. 

In his new book, The World is Flat: A Brief History of the Twenty-first Century, Tom Friedman argues persuasively that these and other changes in recent years makes this new wave of globalization not just different in degree from what we faced in the 1990s, but different in kind.  We face much tougher challenges that cannot be fully met with merely the approaches of the 1990s.  

Observation 4.  The failure of the Bush Administration’s fiscal and economic policies has made the challenges of 21st century globalization more difficult. 

In a previous memo, NDN detailed how President Bush’s reckless fiscal policies are weakening the United States and America’s middle class. On top of that, the lack of a 21st century strategy to help workers compete in this much more competitive global economy also is taking its toll on working people in the United States. 

Let’s look at the record since President Bush took office.  For the first time since the Hoover Administration, America saw a net loss of private sector jobs over an entire presidential term. Poverty, unemployment, health-care costs, the number of Americans without health insurance, personal and business bankruptcies, family energy costs, budget deficits and the national debt are all way up – and median family incomes, the stock market, and the dollar are all down, reducing middle class purchasing power. 

America has dropped to 16th in the world in broadband access and still maintains a mobile phone architecture inferior to most other developed nations.  Mr. Bush has even under-funded his own signature education initiative by $30 billion, relegating to a hollow slogan what could have been a critical 21st century tool to equip our future workers with more skills.  And as was reported recently in news media, even wages for highly-skilled American workers declined this past year, for the first time in over 10 years. 

Observation 5.  The Bush version of CAFTA-DR turned its back on a hard-fought bi-partisan consensus on labor standards and ignores the realities and challenges of 21st century globalization.  Progressives are right to demand changes.   

In the 1990s, President Clinton pursued a highly successful economic and fiscal strategy that created the longest economic boom in American history, turned Republican deficits in Democratic surpluses and rapidly liberalized trade.   This strategy of fiscal responsibility, opening foreign markets, investing in people and raising environmental and labor standards around the world helped usher in our prosperity and forged a bipartisan strategy for responding to globalization. 

Since taking office in 2001, the Bush Administration has abandoned the formula that worked so well in the 1990s.   Profligacy and deficits have replaced responsibility and surpluses; the approach to labor and environmental standards best captured in the Jordan Free Trade Agreement has been reversed; and even existing programs to help the middle class have been under funded or in some cases cut.    In short, it is the Republicans, not the Democrats, who have abandoned America’s commitment to an effective and modern globalization policy. 

It is time for a better way. 

An improved CAFTA-DR which progressives should support would have two essential new parts: tougher labor provisions in Central America, and a commitment to do more for the American people.

Recommendation 1.  A new CAFTA-DR should include tougher labor provisions. 

We should insist that CAFTA-DR does more to ensure that labor conditions in Latin America meet internationally recognized standards.  We should encourage both parties to explore ways to improve labor conditions, considering a variety of possibilities such as higher standards, tougher enforcement, more public accountability, and greater involvement of the International Labor Organization.  Including tougher labor provisions can help restore a broad bipartisan consensus for CAFTA-DR and responsible liberalized trade.

Recommendation 2.   A 21st Century Compact for 21st century American workers.

American workers need a 21st Century Compact, a new bargain to help them compete and prosper in the tough global economy of the 21st century.  In the great balancing between capital and corporations and people, the benefits have tilted too far away from working Americans.  

Because globalization makes it harder for many American workers to succeed, our leaders must offer new solutions equal to the challenge of 21st century capitalism.  NDN proposes that we undertake to seriously invest in and equip the workers of today and tomorrow (our children) with the tools they need.   

Among the policies we should consider:

·        Fully fund education reform, especially our poorest schools which have been received $30 billion less than President Bush promised in the No Child Left Behind Act

·        Ensure that all Americans have health insurance, and find ways to slow the increase in health care costs

·        Raise the minimum wage

·        Make quality child care and universal preschool accessible to all families

·        Adopt a national strategy to ensure universal broadband access, upgrade our wireless networks, and develop the next generation Internet

·        Strengthen community colleges and other workforce development programs

·        Expand trade adjustment assistance to cover service workers, to help them retrain for new jobs

·        Create a clear path to legal status – and better worker protections – for immigrants already working in the U.S.

·        Support initiatives which encourage U.S. students to pursue math, science, and engineering and improve math and science teaching

To ensure that these investments do not increase U.S. debt and weaken our economy, we should pay for them by letting President Bush’s tax cuts for the wealthy expire, including restoring the tax rates for the wealthiest Americans to their level in the 1990s, the period of the longest economic expansion in American history.


The times demand a new and better approach to globalization, one that works much smarter and harder to give current and future workers the very best chance possible to prosper in a world of increased competition and rapid change.

The foreign policy benefits of a trade agreement with Central America are clear.  Many Latin American nations have moved only in recent years from dictatorships and oppression to democracy and freedom.   A trade agreement with the United States has become an important symbol in much of Latin America of their inclusion in the family of democratic nations.  Rather that continue to press for an agreement that will not pass, the Bush Administration should negotiate a deal that can.

With the case for greater economic and political integration with Latin America so compelling, it is critical that progressives do everything they can to encourage the creation of an agreement that can pass, while staying true to our principled advocacy for the middle class of this country.

21st century progressives must vigorously defend the global strategy that has led America and the world to 60 years of progress.   We must also recognize when new times demand new solutions.  The rigors of 21st century globalization and the failed policies of President Bush must be met with new ideas and strategies to ensure that as the world comes together, the vast American middle class thrives.  Let us be the heirs of FDR in our compassion for those struggling today and for our children who deserve better than Mr. Bush’s narrow vision.  

Let us work with the majority to craft a better CAFTA-DR agreement, so it can pass with broad, bi-partisan support, reinforce our commitment to a prosperous and democratic Latin America, and make 21st century globalization work better for workers and families here in the United States and around the world.


The Courage, Cunning and Shortcomings of the Administration’s Health Care Plans

The Administration’s new health care initiative has the distinctive “yes, but” quality of the Obama banking and housing plans: The focus is correct -- here, address sharply rising health care costs before moving on to guarantee universal coverage -- even as the details fall short and the proposed execution remains up in the air.

Let’s start by recognizing the political courage and cunning involved in the way the White House is framing the issue. Facing growing unease about forecasts of years of stupendously and dangerously large budget deficits, the President has faced up to the prime driver of those deficits: It’s two programs vital to his core support -- Medicare for retirees and Medicaid for lower-income Americans. He did so certainly knowing full well that most liberal parts of his political base see universal insurance as the number one priority.

The cunning lies not in a naïve delusion that measures to slow the pace of health care cost increases from a gallop to a brisk trot will attract bipartisan support. It is sadly evident that the Republican strategy for the party’s short-term revival pivots on the President’s failing, and GOP leaders will not countenance support for Administration measures whose passage voters will greet as notable achievements.

Rather, the President’s cunning lies in his apparent, long-term strategic view. First, he appears to know that the economic recovery on which his larger agenda probably depends could hit the rocks in a year or two, unless he can bring down the long stream of huge, expected deficits. His only option here is to slow health care cost increases, starting with the public programs whose costs he can influence most directly. He also seems aware of the danger from certain other forces that could make his presidency look a lot like George W. Bush’s. For example, he may recognize, as we have argued for several years, that slowing cost increases for employer-provided health care coverage is vital to relieving financial pressures on businesses which, under Bush, drove down wages even as productivity rose. And unless President Obama and his team can figure out how to contain those costs, the end of his second term, like Mr. Bush’s, could also see the insolvency of a vital American institution -- in this case, Medicare and Medicaid. And like Bear Stearns and Lehman Brothers, Medicare’s insolvency would trigger cascading effects across the country and the economy, and about which he could do little in the time he would have left.

The best way to avoid such a string of setbacks and an ignominious end is to recognize and address the problem -- so unlike Bush -- before it becomes a crisis.

The potential social and political benefits go far beyond avoiding Bush’s sorry fate. Most important, any realistic prospect for financing universal coverage depends on getting those costs under control. Otherwise, President Obama will likely find his Administration caught in the same vise that has immobilized health-care reformers for two decades, pressed between the social imperative to cover everyone and understandable resistance to paying for it from the majority of voters who are already covered. On the current path of medical cost increases, the taxpayers’ tab to pay for universal coverage would rise by five to seven percent every year, with damaging effects for other programs that the President would have to pare back to protect the new achievement.

Then comes the sticky matter of actually slowing down those increases. Earlier this week, the White House presented a roster of medical and insurance organizations who pledged together to support $2 trillion in cost reductions over the next decade. The main strategy is to attack “overuse and underuse” of health care. But it doesn’t include many details about how to do it. The administration’s program to computerize health care records over the next five years makes sense here, to help avoid wasteful or needlessly dangerous treatments. The hurdles will be very high, however, to actually putting in place a workable system covering tens of thousands of hospitals, clinics and doctors’ practices across the country.

The stimulus also includes $1 billion for prevention and wellness programs to improve diets, encourage exercise, reduce smoking and drinking, and detect cancers and other conditions early. Various studies have shown that some community-based intervention programs in these areas achieve very high returns, especially those aimed at young people. An analysis of several community-based programs to promote physical exercise, better nutrition and stop smoking, for example, found long-term reductions in diabetes, high blood pressure, heart and kidney disease, with a financial payoff of $5.60 in savings for every $1 invested. Large, long-term savings also were reported in a Michigan program that provides continuing education to prevent, recognize and treat athletic injuries, as well as a number of local programs that counsel low-income, first-time mothers on how best to care for their infants. But there also are many other programs that save little or nothing; and it could prove very difficult for Washington to identify and responsibly scale up those that work best.

The other large, promising approach, touted for several years by this writer and, of late, by OMB Director Peter Orszag, involves developing and applying data about what medical treatments work best, or work as well at less cost. The Dartmouth Atlas study of 2008, for example, found that the costs of treating older people for nine serious conditions, with the same outcomes in each group across five leading medical centers, varied by 30 percent to 45 percent based on where it was done. We could develop much more information in this area, identify those “best practices,” and mandate their use by health care facilities that accept federal money (which is almost all of them).

So the Administration’s health care focus, goals and priorities are right in the ways that matter. Now they need to provide a more detailed blueprint of how they intend to reach those goals and achieve those priorities.

The Economic Conversation Enters a New Phase: Putting Consumers Front and Center Now

Today President Obama is conducting a town hall meeting in New Mexico focusing on the issue of credit card debt.  This is a welcome turn in the national economic conversation from the plight of big institutions and the financial system to what is perhaps the most important part of the story of the Great Recession still not adequately understood - the weakened state of the American consumer prior to the recent recession and financial collapse. 

We've told this story many times - despite robust growth in the Bush Era, incomes for a typical family fell.  Most measures of consumer health during the Bush went in the wrong direction.  We saw an increase in those without health insurance, in poverty, incomes fell.  The lack of income growth - coupled with a flood of cheap money - helped drive increased consumer indebtedness - mortgages themselves, credit cards, home equity loans.   People borrowed to maintain their lifestyles, and to keep up with the Jones.  The continued consumption and borrowing was justified in the minds of consumers by the power of the wealth effect brought about the rapidly increasing value of homes and stocks.  But we know what happened next.  Assets fell.  Incomes did not appreciably rise.  The debt remained.  People lost jobs.  The already very weakened balance sheet of a typical family grew much much worse. 

And then the inevitable happened - consumption plummeted.  Repeatedly throughout this crisis the "experts" have been surprised by the weakness of the typical American consumer.  They are not acting like consumers in a typical recession because for consumers the recovery they just experienced was not a typical recovery.  Typical Americans have been in their own "recession" for almost a decade.  Look at the Post headlines today: "More Homeowners Getting Aid, But Demand Keeps Rising," and "Weak Retail Sales Dash Recovery Hopes."

The reason that this matters so much is that consumer spending in the US is 70 percent of GDP, and it has been the mighty American consumer who has been fueling the recent global expansion.  The length and depth of the current Great Recession will be driven to a great degree by the ability of consumers to start buying things again.  We maintain that given their weakened home balance sheet that this could be a while.  Which is why the next stage of our recovery will not be so much about liquidity or confidence.  It will be about actually improving the financial position of the typical American consumer, which inevitably lead us to discussions of "deleveraging," or reducing the amount of debt on the balance sheets of American families.

Which is why what the President is doing today is so important.  He is beginning a conversation now about what is happening with American families.  What is best for American families now - to spend or save?  Do we really want, as a matter of national policy, Americans to spend, to take on more debt? Or is it best for them to save, pull back, spend less, pay down their debts, get their own balance sheets in order?  The answer to this question - being put on the table by the President today - will have a lot to do with how the current global recession ends. 

My own view is that just as we have tried to figure out how to get the debt off the balance sheet of the banks so they can resume their work, we will have to talk about how to reduce the indebtedness of American consumers, and encourage those nearing retirement to save much more to replenish the losses in their retirement savings.  This may mean a period of slower growth and less consumption of course - but what other choice do we have?

Update: Just found this Christina Romer quote from an interview earlier this week:

The economic recovery, Ms. Romer said, will be driven by business investment in sectors like renewable energy rather than consumer spending. She echoed the views of other economists who expect a long-term economic shift.

“The chance that consumers are ever going to go back to their high-spending ways is not very plausible, nor do I think they should,” she said. “We were a country that needed to start saving more.”

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