For a President, having one recession might be unfortunate. But to have two? That must be considered careless. Yet Sterling Newbury, a private equity analyst who writes over at TPM, thinks carelessness has been the order of the day. Since last week's slower than expected GDP figures there has been much discussion the extent of the upcoming slowdown. Newbury is more bearish than most:

"The reason, ultimately, that the "doom and gloom" caucus is predicting recession, is that the economy is tearing through the net of housing and federal stimulus that has held growth up, and there is very little but the cold, cold ground to break the fall. With inflation here, people are pulling out of short bonds, expecting more rate increases, this is forcing up short term rates."

The chances of slowdown are greatly hastened by any number of grim possibilities: the possibility that foreign central banks will stop buying American assets leading to a declining dollar, a further (unexpected) oil shock, a decline in the housing market or an economic shock caused by a security event. Even without these, Newbury says thinks that 2007 will see a signifcant GDP slowdown, with certain areas of the country in recession. If he's right, it will turn conventional wisdom on its head. Economists traditionally worry that Politicians will cynically engineer economic pre-election booms. The idea that they might be able to bring about a bust the year before an election..... well that would take a President of extraordinary economic vision, wouldn't it?

Treasury Secratery Paulson gave his first big speech yesterday. His bipartisan tone and policy priorities were, i thought, encouraging. He comes accross as engaged and thoughtful. And significantly he made stangant incomes one of his four top priorities, along with reform of social security, energy, and protecting open trade. This is a big switcheroo, and backs up what Rob and Simon said in their memo last week. Pressure from progressive organizations is helping to put the issue up the agenda. This change of emphasis was picked up by Ed Luce in the FT, and the Times.

But is it a change of heart? Not really. Last month Olympia Snowe asked Paulson about wages at his confirmation hearings. He said nothing was going on that further rises in productivity wouldn't fix. That sentiment did not change yesterday, as you'll see if you read the full remarks. Key quote:

"But we still have challenges, and amid this country's strong economic expansion, many Americans simply aren't feeling the benefits. Many aren't seeing significant increases in their take-home pay. Their increases in wages are being eaten up by high energy prices and rising health-care costs, among others."

The explanation in the rest of the passage - wage growth will follow economic growth, wages rises below productivity rises is a long-term trend, lots of factors are responsibile - doesn't show much of a change of thining. The only switch is a more New Dem style focus on helping people get access to training. Two bottom lines. First, while its nice to see the change of emphasis, there hasn't been a change of analysis. Second, on wages, free trade and the deficit, it isn't enough to say you are on the right side. You actually have to do something about it too.

When discussing the conflict between Israel and Hezbollah, the administration likes to talk about finding a resolution that does not lead to a return of the "status quo ante."  Fantastic use of Latin aside, I'm not sure that Secretary Rice's two weeks of diplomatic efforts have overcome the main obstacle to reaching a lasting cease fire.  Put simply, Israel will not leave Southern Lebanon until an international force has secured the region, preventing Hezbollah from moving back in. 

In unsurprising news, there are not a lot countries volunteering to send troops to stand between Hezbollah and Israel.  An anonymous senior European official in the must-read New York Times article on the topic was quoted saying “All the politicians are saying, ‘Great, great’ to the idea of a force, but no one is saying whose soldiers will be on the ground...Everyone will volunteer to be in charge of the logistics in Cyprus.” 

People like Republican Senator Chuck Hagel are seeing the bottleneck of volunteers for logistical duty in Cyprus and the complete lack of combat forces available and are calling for an immediate cease fire, even without an international force. 

Lest we forget why there are no American or British troops available to police South Lebanon, there is this article from the LA Times.  The deteriorating situation in Baghdad is a reminder that after almost three and a half years it is unclear when the situation in Iraq is going to improve. 

Joe Garcia, Director of NDN's Hispanic Strategy Center, is in the New York Times today discussing Fidel Castro temporarily ceding power to his brother Raúl Castro:

“Obviously something has happened,” said Joe Garcia, a political strategist for Democrats and the former executive director of the Cuban American National Foundation, the largest exile group. “This is a guy who, the last time he went into surgery that we know of, made a point of saying he had no general anesthesia and was on his cellphone giving orders the whole time. He was unwilling to cede the stage at all. That he did so now in such a dramatic fashion implies something big.”

Evolution, the evironment, and the minimum wage - three areas highlighting GOP troubles in the news as of late.

With evolution, voters in Kansas elected school board officials "who believe evolution is well-supported by evidence," the AP reports. The article references the late night fun poked at the state, namely The Daily Show's "Evolution Schmevolution," a four part series that, while lengthy, is worth a look.

Second, displaying the unwillingness of his own party to address environmental issues, Governor Scharzenegger said "California will not wait for our federal government to take strong action on global warming," in an LA Times piece covering UK's new accord with the state.

The Governator continues...

"International partnerships are needed in the fight against global warming, and California has a responsibility and a profound role to play to protect not only our environment, but to be a world leader on this issue as well."

...showing, sadly, that the Bush-led US won't be world leader, but our largest populated state will. Blair, adding insult to injury, called global warming "long term, the single biggest issue we face." The PM also appears in an LA Times op-ed, in which he urges for more American leadership.

Finally, Harold Meyerson of the Post has a fiery op-ed about minimum wage, declaring...

"In dealing with the major issues of our time (global warming, immigration, the diminishing benefits and stagnant wages that characterize today's economy) or in discharging its oversight duties over administration policies that have failed (the war in Iraq) or were stillborn (the rescue of New Orleans), the Republican-controlled Congress has been nowhere to be found...Still, the one thing that should engender more fear than the current Congress's doing nothing is the current Congress's doing something."

Enter the minimum wage bill (if you can call it that with a clear conscience).

There is something of the horrow movie villain about the doha round. You knows its going to die, but it keeps looking like it might come to life, just to be killed one last time. If you can't quite follow what is going on, don't worry. Neither, it appears, can EU Trade boss Peter Mandelson. UK Prime Minister Tony Blair made a speech in California the day before yesterday saying:

I have not at all given up on the WTO trade round. After a long discussion with President Bush after our press conference on Friday, we both agreed we needed to make one final effort to re-energise the negotiation and I hope we can do so within the next few weeks.

A sidenote in this morning's FT claims that Mandelson - formerly Blair's closest advisor - was "slightly baffled" as to what the Prime Minister was going on about. While Mandelson had previously blamed "US Greed" for talk's collapse, today Bruce Bartlett puts the blame squarley on President Bush. Bartlett, who worked for Jack Kemp, knows irresponsible economic policy when he sees it. And he sees it here:

Last week, the Doha Round of trade talks collapsed. Future historians may well conclude that of all the Bush administration's economic mistakes, this one was the biggest. That is because we may have just seen the end of the free-trade consensus that has been at the core of U.S. international economic policy for both parties since World War II. The result may be a new era of protectionism that could be extraordinarily costly and painful.

On that note, i was almost tempted to get a copy of Senator Dorgan's new book, to see how frayed the rope tethering the trade debate to the realities of planet earth has become. But Daily Kos publishes a review, so i don't have to. And yes, Ladies and Gentelman, from the tone of it's comments about "The Toxic Waste of World Trade" we are indeed now floating in space.

What is the chinese for crocodile? Nope, me neither. But Lacoste are working it out. Daniel Altman, an editorial writer at the Herald Tribune, points to a new move in the ongoing attempts of the French clothing manufacturer to stop Chinese manufacturers waddling into the marketplace sporting what they call "spurious crocodiles".(Lacoste launched new action yesterday; read what the People's Daily has to say here.)

As NDN has said before, protection of IP has not been front of mind for the current administration. It is worth remembering, though, that there was a time when IP was even less of a priortiy. Following the revolutionary war, the considered view of the sitting administration was that it should get hold of as much foreign (normally, British) patented and copyrighted material as possible. (This book tells the story, while this was the result.) Now the boot is on the other foot. But, being fair, there is at least one obvious difference between 2000 and 1800. Two hundred years ago there was no way dominant European powers were going to let their valuable technological know-how slip out of their mercantalist trading areas. While India might get the tools, America had little choice but to steal and borrow its way to industrial might.

Today these ideas are widely available to any regime which shows a willingness to protect them. This is even more so in China. Companies are, at least to some extent, willing to trade-off the security of their assets for a foot-hold in a growing market. Its a complicated issue for sure, with some clever people on both sides. (I was surprised, for instance, to see a long passage in Jagdish Bhagwatti's excellent In Defence of Globalization in which he argued in favour of less stringent IP protection for medicines and software.) Yet, as our own Rob Shapiro noted earlier in the year, without these technological injections, there isn't much made in China that anyone would want to buy:

Most of the value of everything produced in China – from computers to automobiles -- comes not from the inexpensive labor and materials that China contributes, but from those who developed the products and the ideas that animate them, here in the United States or in other advanced countries. Yet, our government will nearly go to war with Europe over bananas and beef, while barely protesting which companies in India, China or Brazil rip off the ideas behind our pharmaceuticals, software and entertainment.

Lacoste might be french. But in filing suit to protect their famous crocodile they are acting in way that the Bush administration would do well to copy.

Like most Millennials, I have a Facebook account. Up until now it has allowed me to keep up with friends I haven't seen in quite some time, as well as join groups relevant to my interests. However, Facebook recently took on an entirely new (though predictable, as our New Politics Institute has been saying) role. It has become a new political tool, used to define and communicate with a targeted audience. Check out this e-mail from Evan Bayh:

Dear College Democrat,

Thank you for allowing me to address the 2006 College Democrats of America National Convention. The College Democrats are the most fun and energetic wing of the Democratic Party, and I was glad to hear that more than 500 of you took time out of your summer to attend this year's convention. The work that all of you are doing gives me confidence that our Party will not only be victorious this November, but that our country's future is both bright and secure.

Congratulations to new CDA President Lauren Wolfe and CDA Vice-President Awais Khaleel. I am confident that they will serve CDA well. I was also especially proud to hear that Indiana's own Bess Evans was elected to the National Council Chair and that Indiana was runner-up to the Tennessee College Democrats for "State Federation of the Year." Congratulations to all of you and the rest of the newly elected officers of the College Democrats of America!

The All America PAC has posted video of my address at the CDA Convention on the AAPAC Blog and on YouTube.com. I hope that you will view these videos and share them with all of your friends. The AAPAC Blog also has video of DNC Chairman Howard Dean's speech online for your viewing pleasure, as well as guest blogs and interviews of many of your fellow College Democrats from the convention, including an exclusive interview with your new President and Vice-President!

Lastly, thank you for making a US Senator feel welcome on thefacebook.com. I hope that you will add me as your friend, and I hope you will post comments on my wall and send me facebook messages. I also hope that you take the time to join other students on the All America PAC facebook group.

From an old College Democrat at heart, keep up the good work!

Sincerely,

Evan Bayh

P.S. Check out the following links:

• Watch the "Facebook Evan Bayh" Video!
• Facebook me!

Congressional Democrats are working to put their stamp on this election.  Last week they offered their New Direction agenda and a well-done video companion. Yesterday they offered a plan for strategic redeployment of our troops in Iraq, a plan clearly inspired by CAP's foreign policy work. 

After the election we will look back at this decision to embrace "strategic redeployment" as one of the most critical decisions of the year.  I argued against it on a recent television appearance.  We know the Bush plan isn't working.  That staying the course when the course is failing isn't a good plan.  But is this strategic redeployment a better option? Or just an option? Whether this is good politics or not, are we ready to fight for this option on the world stage if we win back one of the Chambers? Are we ready to take responsibility at this moment for what will happen in Iraq when our troops begin to leave, as instability in the Middle East rises and the Iraqi Sunnis ask us to stay?

I wrote last week that I worried that the events in Lebanon had rendered obsolete the Democrats Iraq frame.  After reading the Democrats Iraqi letter I still feel that way.  That doesn't mean Democratic leaders aren't right about Iraq.  It just means that Democrats have now joined this debate in a very specific way, in a time of profound transformation and confrontation in the Middle East, and will have to stand and defend a position that somehow seems a little more spring than fall. 

The Times this morning has an interesting piece that reveals how conservatives are propelling their philosophy using "boot camps." The Ronald Reagan Leadership Academy kicks off with a class of 26 young people who read the ideological underpinnings of the conservative movement - the conservative canon beginning with none other than Russel Kirk . However...

"Every political movement has its texts. But James W. Ceaser, a professor of politics at the University of Virginia, argues that the conservative focus on core thinkers has no exact parallel among liberals. 'It doesn’t mean they’re not interested in ideas,' Professor Ceaser said. 'It means their approach to politics doesn’t rest on theory in the same way.'"

I beg to differ: liberalism's tenants were described much earlier. John Stuart Mill defended it 150 years ago in his essays. The Bush administration should read what he has to say about differences of opinion, namely "We can never be sure that the opinion we are endeavouring to stifle is a false opinion; and if we were sure, stifling it would be an evil still." Others have realized the importance of updating the groundwork to confront modern challenges. In an excellent op-ed in the LA Times, Kenneth Baer and Andrei Cherny, founding editors of Democracy: A Journal of Ideas, recognize just that. They end with these goose-bump-giving lines:

"Having seen the failure of a generation of conservative ideas on fiscal and foreign policy, Americans are ready to listen to an alternative. Now is the moment for Democrats to offer a set of breakthrough ideas that will create a governing majority for a generation. But this will happen only if they are willing to be more than the railroad conductor making sure the trains run on time, and instead put America on a new and different track."

Let's hope we can do just that.