Globalization

UPDATE:  This post was picked up by Reuters and internationally syndicated, appearing in papers worldwide over the weekend. From the Reuters article:

Some economists argue globalisation, in the sense of the
increasing integration of different countries in the world economy, is
the cause, acting as a transmission belt from one suffering economy to
the next.

"With globalisation, the world can suffer the central
cost of protectionism -- a deep fall in trade -- without passing any
new laws or regulations," Robert Shapiro, head of progressive think
tank NDN's globalisation initiative, said in a blog.

...

"The crux of it is that as the share
of what the world produces that's traded across borders rises -- 18
percent of worldwide GDP was traded in 1990, compared to 30 percent in
2006 -- a serious recession in a few large places moves quickly around
the world, driving down global trade," said Shapiro of NDN, a former
undersecretary in the U.S. Commerce Department.

In other words weak demand in one country increasingly affects others because they are more dependent on exports.

The new trade data out today show, unhappily, that the surest way to drive down our trade deficit is a deep recession that cuts into the money Americans have to buy imports. In December, the trade imbalance fell to less than $40 billion, a 35 percent drop from its $62 billion level last July. (It’s all seasonally-adjusted). The last time the trade deficit was this low was November 2003. Imports shrank by $74 billion from $230 billion in July to $174 billion in December, or nearly 25 percent. Of course, the same thing is happening to our trading partners: our exports also fell 21 percent, from $168 billion to $134 billion. Since we import so much more than we export, the decline in imports really drives down the overall deficit.

This is a window into something new and important: with globalization, the world can suffer the central cost of protectionism -- a deep fall in trade -- without passing any new laws or regulations. The crux of it is that as the share of what the world produces that’s traded across borders rises -- 18 percent of worldwide GDP was traded in 1990, compared to 30 percent in 2006 -- a serious recession in a few large places moves quickly around the world, driving down global trade. That’s particularly serious for countries that really depend on exports, which means most of the developing world. The global data are still sketchy, but it looks like in the last months of 2008 and the beginning of this year, exports (month-to-month) fell 25 percent in China, 33 percent in Korea, and 40 percent in the Philippines. To see how serious this is, consider that exports represent about 40 percent of GDP in all of those countries. It’s even worse in Taiwan, where exports account for 62 percent of GDP and fell 44 percent rate in November, compared to a year earlier. The other deeply trade-dependent region is Europe, where serious problems coming from this massive slowdown in trade will hit home within the next few months. 

The serious problem which they and others will face is fast-rising job losses by the people who produce the exports and those who make the goods and services that those workers purchase. So, as the world slides into this Great Recession, calls for new forms of protection for export industries are cropping up all over the place. We certainly hear these calls here, even though the United States for decades has been generally more accommodating of our trading partners than they have been toward us. We’ve pressed for more trade liberalization, pressed for it earlier, and stuck with generally low trade barriers and an aggressive global economic footprint more than our major trade partners. Countries like Japan, France and Germany don’t provide a very high threshold on these matters, to be sure, but we have consistently cleared it.  

Yet, here we are today, on the brink of passing a “Buy American” provision that will bar the use of foreign-made manufactured products and goods in many projects supported by the stimulus package. President Barack Obama said he wanted the Senate to dial it back, since he understands that it would invite real retaliation that would injure more export-industry workers. So the Senators added a caveat that the restrictions can’t violate our WTO obligations. Here’s the translation of that: “Buy American” will mainly target developing countries, because Japan, EU nations and other advanced countries are all signatories to WTO agreements to not discriminate against other countries in many areas, including government procurement. China, Brazil, India and most other developing nations are not yet signatories. So, we can expect a good dose of tit-for-tat protection from those countries. And that could disrupt the production networks and supply chains of some of our largest global companies, such as Boeing, Pfizer, Dell and Coca-Cola. At a time of grave economic turmoil and peril, this can’t make any sense.

And we’ll still be vulnerable to legitimate, tit-for-tat from Europe and Japan, since they currently apply lower tariffs in many areas than mandated by the WTO. That means they could raise their tariffs without violating their WTO agreements -- and we could do the same in the next round of retaliation.

The best way to cauterize this drive for protection is to take a deep breath, and make sure that workers have greater means to protect themselves. The Administration is offering some of that, for example in health care benefits for those who lose their jobs. We can go well beyond health care, however, especially in real opportunities for working people to expand or deepen their skills and abilities. That remains a serious gap in the stimulus, which hopefully the first Obama budget can rectify. 

For months, NDN has written a great deal about what we believe should be in an economic recovery plan. We’ve argued for investment in provisions that will both spur the economy now and create the basis for future prosperity.  We’ve argued for investments in clean and traditional infrastructure, broadband access, electronic health records, and computers in schools. While we have some concerns about what will end up in the final bill, all in all we think the recovery plan that is emerging is a good one and should be passed as soon as possible. We applaud the work of this young Administration and Congress for moving so swiftly and so assuredly to take the kind of action required at this challenging time for the nation.  

However, there are two provisions being discussed that we believe should not be in the final bill: mandatory E-verify usage by employers receiving stimulus funds and "Buy American" requirements for materials involved in stimulus funded projects. We believe that, in coming days, these provisions should be removed from the economic recovery legislation. While they are well intentioned provisions, we, like many others, do not believe that they will function as a stimulus for the economy and will do more harm than good.

As President Obama pointed out yesterday in Elkhart, Indiana, there are many effective ways to make America more competitive in the global economy, but we believe that "Buy American" provisions, which, depending on the version of the bill, would force steel, iron, and other materials used in stimulus projects to be American-made, are not among them. We have serious concerns that Buy American provisions, while well-intentioned, place us right on the edge of our international legal commitments and open the door to dangerous retribution from other nations also in the midst of grave economic challenges at home. America not only imports from abroad, but our workers and our companies sell a great deal abroad.   Enacting provisions that would slow American exports and potentially diminish the overall volume of trade at a time of an accelerating global slowdown could tip the world into a global depression. As many have pointed out, America tried this strategy in the early 20th century, and it was instrumental in bringing about the Great Depression.  

Similarly, however laudable the goal of using the nascent E-verify system by all companies receiving stimulus funds to ensure that these funds go to legal workers, the reality is that the system is not yet ready for broad, mandatory deployment. Indeed, mandating its use could have adverse consequences for the economic recovery, as it would almost certainly slow the use of funds, be incredibly costly to employers, and, because of the consequences of false "no matches" (which are easily triggered and all too common), would delay the recovery plan’s goal of putting Americans back to work.  For those policymakers interested in the United States having national, effective electronic immigration verification system, they should work with the President to include it in a broader effort to fix our broken immigration system later this year.  

As members of Congress debate the economic recovery plan in conference committee over the next few days, we trust that they will keep an eye out for provisions that are clearly not in the economic interests of the United States. The inclusion of Buy American and E-verify provisions fall well short of this measure and should be removed from the legislation.

Today, President Obama reasserted ownership of the economic recovery plan in Elkhart, Indiana, going on the road to tell the American people, "that endless delay or paralysis in Washington in the face of this crisis will bring only deepening disaster."

Obama also, in response to a question about what he would do to keep jobs in America, discussed workforce training. He specifically mentioned America’s community colleges as an important resource in remaining competitive in the global economy. NDN has long advocated a proposal, called "Tapping the Resources of America’s Community Colleges: A Modest Proposal to Provide Universal Access to Computer Training" that would, through the computer labs in the nation's community colleges, offer free computer training to all Americans. As a Senator, Obama endorsed this proposal. In it, Dr. Robert Shapiro wrote:

It is time that America ensures that all workers have real opportunities to build the skills necessary to operate one of the most important new technologies of our time, computers. 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, by providing federal government grants to America’s community colleges to keep open their computer labs three nights every week, staffed by instructors who will provide basic instruction to any person in the community who walks in and requests it.

The primary way any nation can ensure that its people enjoy broad-based upward mobility is to raise the productivity of its workers and businesses. Achieving that goal, as the United States has done throughout most of its history, depends largely on three critical factors. First, the economy must promote the development and spread of new technologies, new ways of organizing and operating businesses, and other innovations that create new value and new efficiencies. Second, companies must invest in those technologies and in other business and economic innovations, so workers can use them to perform their jobs more productively. Finally, workers, companies, and the government must provide continuing support for all workers to acquire the skills to operate new technologies and perform well in innovative business environments.

President Obama took his campaign for the economic recovery plan to the road today, heading to the especially hard-hit Elkhart, Indiana. Here's what he had to say about the economy and the recovery plan.

You know, we tend to take the measure of the economic crisis we face in numbers and statistics.  But when we say we’ve lost 3.6 million jobs since this recession began – nearly 600,000 in the past month alone; when we say that this area has lost jobs faster than anywhere else in America, with an unemployment rate over 15 percent; when we talk about layoffs at companies like Monaco Coach, Keystone RV, and Pilgrim International – companies that have sustained this community for years – we’re talking about Ed Neufeldt and people like him all across this country.  

We’re talking about folks who’ve lost their livelihood and don’t know what will take its place.  Parents who’ve lost their health care and lie awake nights praying the kids don’t get sick.  Families who’ve lost the home that was their corner of the American dream.  Young people who put that college acceptance letter back in the envelope because they just can’t afford it.

That’s what those numbers and statistics mean.  That is the true measure of this economic crisis.  Those are the stories I heard when I came here to Elkhart six months ago and that I have carried with me every day since.  

I promised you back then that if elected President, I would do everything I could to help this community recover.  And that’s why I’ve come back today – to tell you how I intend to keep that promise.   

The situation we face could not be more serious.  We have inherited an economic crisis as deep and as dire as any since the Great Depression.  Economists from across the spectrum have warned that if we don’t act immediately, millions more jobs will be lost, and national unemployment rates will approach double digits.  More people will lose their homes and their health care.  And our nation will sink into a crisis that, at some point, we may be unable to reverse.

So we can no longer afford to wait and see and hope for the best.  We can no longer posture and bicker and resort to the same failed ideas that got us into this mess in the first place – and that the American people rejected at the polls this past November.  You didn’t send us to Washington because you were hoping for more of the same.  You sent us there with a mandate for change, and the expectation that we would act quickly and boldly to carry it out – and that is exactly what I intend to do as President of the United States.  

That is why I put forth a Recovery and Reinvestment Plan that is now before Congress.  At its core is a very simple idea: to put Americans back to work doing the work America needs done.  

The plan will save or create three to four million jobs over the next two years.  But not just any jobs – jobs that meet the needs we’ve neglected for far too long and lay the groundwork for long-term economic growth: jobs fixing our schools; computerizing medical records to save costs and save lives; repairing our infrastructure; and investing in renewable energy to help us move toward energy independence.  The plan also calls for immediate tax relief for 95 percent of American workers.

Full text here.

New York City-- On Tuesday, I endorsed a 4% federally guaranteed mortgage to finally give some government aid to homeowners instead of Wall Street and, at the same time, pave the way for household economic security for many years.  For the last few days, Senate Minority Leader Mitch McConnell and the Republican leadership have been calling for a similar plan.  The McConnell variant expands on an earlier, more limited plan proposed by Glenn Hubbard.  The latest version that would benefit all homeowners and indeed all Americans--in line with my proposal--is far larger.  So what do I think about the Republican leadership supporting this idea? 

Very simple.  The Obama Administration and Congressional Democrats should take the Republican support and run with it.

It is, in all likelihood, too late to include a 4% mortgage in the stimulus bill--McConnell's proposal--that could pass as soon as today.  However, if it's a good idea today, it will be a good idea on Monday when the Treasury Department announces its plan to reform the financial sector and address the housing crisis that started the meltdown.  And it will be a good idea, later this month, once this is all debated, when Congress passes legislation to address the financial and housing crises.  It is arguably amazing that Republicans are supporting a 4% mortgage, and the chance for bipartisan action should not be wasted.  If the Obama Administration can pass this proposal into law, it will be one of the best things to happen to the middle class in decades.

Why is this such a good idea?

It is a good idea, first because homeownership remains central to the American Dream.  Notwithstanding the bad rap that homeownership has gotten as a result of confusing, bait and switch mortgages offered during the boom, there is no substitute for owning a home on affordable terms to create middle class family security and stability.  The problem, after all, with the rise in homeowhership over the last decade from about 65 to 70% of American households was not that it happened but that it proved unsustainable.  And it proved unsustainable not because the people at the 30 to 35% level in American society do not not deserve to own a home or participate in the American Dream, but, too often, because the teaser rate mortgages offered them were deceptive, adjustable rate mortgages highly vulnerable to interest rate changes.

Since the mortgage crisis began, efforts to modify problem mortgages to make them sustainable have fallen into three categories: what might be called the good, the well intentioned, and the ugly.  The good modifications took place before TARP.  Then, banks actually changed terms--lowering interest rates and even reducing principle--as a better deal for them than foreclosure.  The labor involved in working out individual modifications, however, meant that these modifications were too few and far between to make a difference to many people. 

The well intentioned mortgage modifications were those imposed by the FDIC--and this appears to be the direction the Obama Administration is now embracing.  Under the FDIC's modification in a box, loans are modified based on borrowers' ability to pay.  However, these modifications only benefit people who have already defaulted, in effect encouraging people to default.  They do nothing to encourage home buying and largely kick the problem into the future by requiring homeowners to pay off principle reductions when they (hopefully) sell the house.  They may make sense for some problem loans the government has assumed but they will do little to address the overall housing crisis.

The ugly modifications are those that banks such as JP Morgan Chase and its Wamu subsidiary adopted after TARP.  Under one program, adopted since TARP, homeowners can swap their current mortgages for a five year one with the entire balance due in five years in a balloon payment.  This was a common mortgage in 1929 and led to millions of Americans losing their homes.  It is no better today.

In contrast to the above modifications, the 4% USA mortgage, as I am calling it, would be open to all, reduce payments for millions of Americans, and stabilize home ownership.  So why isn't everyone rallying around the idea?

It would not help everyone, for example, people who are way underwater in their homes.  However, most of those truy underwater will eventually turn in the keys. If banks want to modify these loans, then modification in a box or a one off modification may make sense.  But these are only a minority of problem loans.

The majority are those where monthly payments are unsustainable.  A simple 4% interest mortgages would help millions of Americans stay in their homes and--over time, free up a great deal of income to create new demand.

The other main objection to a 4% mortgage is it that it would increase the government's exposure to defaults through an extension of its gurantees.

The fact is the government has already guaranteed trillions in loans.  These loans, by contrast, would be comparatively safe--as who would want to default on such an attractive mortgage?  Other objections--for example that banks could not handle the volume--can be easily overcome.

Provision needs to be made to insure that banks don't push truly bad loans into the program to get trash off their books.  However, by limiting the program to a reasonable loan to value ratio and leaving it up to homeowners to elect to refinance, this problem can be overcome, and the program can still benefit millions of homeowners.

Ultimately the appeal of the 4% loan is that, like Social Security and the other most successful US government programs, it is a universal program open to all.  It does not favor those who default, who borrowed more than they could afford or indeed anyone.  And like Social Security, it should be open to everyone.

In short, this is a great benefit for the middle class that the Democrats, in order to stick to their traditional values, should embrace.  It would be a tragedy to miss this opportunity, not only to address the current housing crisis, but also to benefit American families and the American economy for many years.

As the U.S. Senate continues its consideration of the American Recovery and Reinvestment Act, NDN is pleased to offer much of our recent, narrative shaping work on the economy, recovery, and keeping the focus on everyday people. For last week's economic backgrounder, click here. 

• Obama's Post-Partisan Plan Almost Where it Should Be by Dr. Robert Shapiro, 2/4/2009 - Shapiro points out that, despite the predictable partisanship surrounding the economic recovery package, the plan will do roughly what it should. 

• Spend? Save? What is the Right Course Now for Everyday Americans? by Simon Rosenberg, 2/3/2009 - Rosenberg asks if, even at a time of slowed demand in the economy, American families should be focusing on saving.

• The Utter Bankruptcy of Today's Republican Party by Simon Rosenberg, 1/28/09 - Rosenberg argues that Republican opposition to the economic recovery package represents the ideological bankruptcy of the party.

• Clearing the Decks for the Next Expansion by Michael Moynihan, 1/26/2009 - Moynihan envisions the economic situation he would like to see in 2012 and lays out the policy steps necessary to get there.

• NDN: Economic Recovery Package Signals New Priorities, Development of a 21st Century Economy, 1/15/2009 - NDN applauded the new direction signaled in the draft release of President Obama's economic recovery plan that will invest in technology, clean infrastruture, and a low-carbon, 21st century economy.

• Politics and the Economic Crisis by Dr. Robert Shapiro, 1/9/2009 - Shapiro argues that, for an economic recovery plan to be effective, we must also address the underlying causes of the "Great Recession," including the housing crisis.

• Getting the Stimulus Right by Michael Moynihan, 1/6/2009 - Moynihan makes a number of suggestions for ensuring that the upcoming, record-size stimulus package is a success, including a board to oversee the vast expenditures.

• A Stimulus for the Long Run by Simon Rosenberg and Dr. Robert Shapiro, 11/14/2008 – This important essay lays out the now widely agreed-upon argument that the upcoming economic stimulus package must include investments in the basic elements of growth for the next decade, including elements that create a low-carbon, energy-efficient economy.

• Accelerating the Development of a 21st Century Economy: Investing in Clean Infrastructure by Michael Moynihan, 10/18/2008 – NDN Green Project Director Michael Moynihan outlines a strategy for investing in clean infrastructure that will help create long-term prosperity.

• Back to Basics: The Treasury Plan Won't Work by Dr. Robert Shapiro, 9/24/2008 - As the financial crisis unfolded and the Bush Administration offered its response, Shapiro argued that, while major action was needed, the Treasury's plan would be ineffective.

• Keep People in Their Homes by Simon Rosenberg and Dr. Robert Shapiro, 9/23/2008 – At the beginning of the financial collapse, NDN offered this narrative-shaping essay and campaign on the economic need to stabilize the housing market.

• Making the Struggle of Every Day People the Central Focus of the National Debate by Simon Rosenberg, 8/17/2008 - As the 2008 presidential campaign entered a crucial phase, Rosenberg argued that political leaders must focus on raising the wages and incomes of Americans.

• Video: At the 2008 Democratic National Convention in Denver, Newark Mayor Cory Booker discusses his work reinventing a vision for government and innovation. This message of change is timely as America works through these tough economic times and begins to shape a 21st century economy and 21st century government.

Over the past two days, NDN has offered important, leading commentary on economic recovery and the need to keep people in their homes. Dr. Robert Shapiro, Chair of NDN's Globalization Initiative, wrote "Obama's Post-Partisan Plan Almost Where It Should Be."

While the chorus of complaints about President Barack Obama’s spending and tax package was dispiritingly predictable, the post-partisan surprise is that its basic structure is evolving to just about where it should be. The legislative process is adding its normal quotient of special interest subsidies on both the spending and tax sides -- think of it as a "congressional tax," because they really can’t help themselves. And compared to the last decade of limitless tolerance for the unregulated escapades of Wall Street financiers that’s now pushing many of the world’s economies over a cliff, the partisan outrage at this conventional if distasteful part of the legislative process seems pretty hollow.

The important matter here is that at its core, the package should do roughly what we want it to, given the gravity of current conditions and our equally serious, longer-term problems with wages and jobs. (There is one gaping exception: nothing serious yet to address the foreclosure and housing crisis). In effect, the Administration has cleverly packaged some broadly useful, longer-term economic and social initiatives with some traditional “stimulus,” and it’s selling it as the answer to the crisis. It provides some of that answer -- unfortunately, not all of it by a long shot -- but it also offers the Administration’s first responses to other legitimate matters on which President Obama happened to win his election.

Read the full piece here. 

On the need to keep people in their homes, an issue NDN has led on since the financial meltdown, NDN Fellow Michael Moynihan argued that "What America Needs is a Fixed 4% Mortgage."

In short, America needs three things to stimulate the economy: the recovery package that is now approaching passage; a plan to revitalize the banking sector, which the Treasury Department should release soon; and finally, a 4% fixed-rate mortgage to address the housing crisis. Fixing the housing problem was mysteriously absent from the Bush efforts to address the crisis. Now that Obama economic team is in place, the Administration and Congress should work rapidly to develop this critical third piece of the economic recovery.

Read the full piece here.

For more of NDN's leading work on keeping people in their homes, please see the following pieces and click here for the Keep People in Their Homes page:

• The Utter Bankruptcy of Today's Republican Party by Simon Rosenberg, 1/28/09 - Rosenberg argues that Republican opposition to the economic recovery package represents the ideological bankruptcy of the party.

• Notes on the Financial Crisis by Michael Moynihan, 9/26/2008 - Moynihan examines the panic fueled by the Bush Administration's inadequate response to the financial meltdown.

• Back to Basics: The Treasury Plan Won't Work by Dr. Robert Shapiro, 9/24/2008 - As the financial crisis unfolded and the Bush Administration offered its response, Shapiro argued that, while major action was needed, the Treasury's plan would be ineffective. 

• Keep People in Their Homes by Simon Rosenberg and Dr. Robert Shapiro, 9/23/2008 – At the beginning of the financial collapse, NDN offered this narrative-shaping essay and campaign on the economic need to stabilize the housing market.

• NDN to Congress: "Keep People in Their Homes" by Simon Rosenberg and Dr. Robert Shapiro, 9/17/2008 - NDN made this leading statement on the need for the federal government to keep people in their homes.

While the chorus of complaints about President Barack Obama’s spending and tax package was dispiritingly predictable, the post-partisan surprise is that its basic structure is evolving to just about where it should be. The legislative process is adding its normal quotient of special interest subsidies on both the spending and tax sides -- think of it as a “congressional tax,” because they really can’t help themselves. And compared to the last decade of limitless tolerance for the unregulated escapades of Wall Street financiers that’s now pushing many of the world’s economies over a cliff, the partisan outrage at this conventional if distasteful part of the legislative process seems pretty hollow.

The important matter here is that at its core, the package should do roughly what we want it to, given the gravity of current conditions and our equally serious, longer-term problems with wages and jobs. (There is one gaping exception: nothing serious yet to address the foreclosure and housing crisis). In effect, the Administration has cleverly packaged some broadly useful, longer-term economic and social initiatives with some traditional “stimulus,” and it’s selling it as the answer to the crisis. It provides some of that answer -- unfortunately, not all of it by a long shot -- but it also offers the Administration’s first responses to other legitimate matters on which President Obama happened to win his election.

First, there are at least $230 billion dollars in clear economic stimulus -- notably, some $65 billion for more food stamps and an extension of unemployment benefits and $30 billion in other assistance for low-income households, all of which will directly support consumption; and another $80 billion in large grants to states dealing with fast-falling revenues and balanced budget requirements, which will save jobs and so also support consumption. There also are about $50 billion out of a larger pot of infrastructure projects that can properly count as stimulus -- for schools, highways, transit, public hospitals, and so on – because they can get started fairly quickly and absorb idle resources (that’s mainly idle construction and machine workers, and equipment). Then there’s nearly $90 billion for state Medicaid programs. That’s not stimulus precisely, but it will relieve states from having to choose between cutting medical treatment for poor and elderly people or cutting other jobs and purchases to maintain those treatments. Given our circumstances, there are no sensible, post-partisan arguments against these provisions.

The second tranche of the package provides some $250 billion in tax cuts, most of it the first stage of the President’s promised tax relief for the now-famous “95 percent of Americans,” plus another year of relief from the Alternative Minimum Tax’s slide down the income scale. There’s no point calling this stimulus. The fix in the AMT is an annual ritual which would happen with or without the package. A small package of business tax cuts (maybe $20 billion) also will do little economic good or harm. And the same can be said of the personal tax cuts. The best guess of economists is that 75 to 80 percent of those tax cuts will be saved with no stimulus effect, since 60 percent of last spring’s rebates were saved and anxieties over falling incomes, job losses, or worse have all intensified since then. But they’re still worth doing as progressive, post-partisan down payments on using the tax code to respond to the sharp increases in inequality under our recent, unlamented conservative regime. It certainly would be better to adopt these kinds of changes as part of a broader reform of the tax code. But as tax changes go, they have the unusual virtue of actually helping most people.

Finally, there’s a third group of some $220 billion in new public investments -- in education, training, broadband, clean tech, environmental cleanups, modernizing the electricity grid, energy efficiency, health care IT and medical research, and, yes, more as well. The current Great Recession is brutal, and it’s getting worse; but one reason it’s so painful is that it followed an economic expansion in which, the income data tell us, most Americans barely held their own ground. These investments are close enough to a post-partisan agenda for raising the productivity of the overall economy as well as millions of workers, plus a small down-payment on addressing climate change. And the productivity pieces, at least, could begin to address the remarkable, recent stagnation in most people’s incomes. It will take much more than that to restore the strong wage and job gains we saw in the 1990s, notably serious cost containment in health care and a lot more energy efficiency than is in sight right now. But it’s a useful first step, and one for which NDN has long argued.

So it’s not just “stimulus,” but also the heart of the President’s first year agenda – and on balance, that’s a good thing. The missing piece remains what we have lamented for six months now (check NDN's Keep People in Their Homes page) – there’s still no new policy to stem the rising foreclosure rates driving the freeze in the capital markets, which in turn propelled the worst global downturn in 75 years. Without that, the stimulus and the new investments will have little lasting effect. So that remains the most important, unfinished business of the President's first 100 days.

Bridging the gap between winning an election and governing with the help of the Internet and other new political tools has been one of the most interesting subtexts of the Obama transition. President Obama has of course made the weekly YouTube address a fixture of his administration, but in the past week, the Obama administration web team has taken their economic message online with new web sites: strongmiddleclass.gov, the website for the task force led by Vice President Biden on the middle class, and recovery.gov, a web site to be used for tracking the expenditures of the still-to-be-passed American Recovery and Reinvestment Act.

Here's what recovery.gov looks like now: 

NDN has discussed the Wired White House quite a bit. Click here for more of NDN's work on the topic.