Globalization

From recent action on Capitol Hill, it looks as though the federal government may ultimately take action to keep people in their homes. As Sam mentioned in his daily round-up (a relatively new NDN product that has become a must read in the mornings), FDIC Chariman Sheila Bair’s testimony to the Senate Banking Committee yesterday was well-received, and details of the plan are expected in weeks.

From the New York Times:

With foreclosures mounting, Bush administration officials said Thursday that they were preparing to step up efforts to help struggling homeowners.
A senior policy maker told a Senate committee that the administration was working on a plan under which the government would offer to shoulder some of the losses on loans that are modified.

The insurance program could cost tens of billions of dollars, according to a person briefed on discussions about the plan, and would be run by the Treasury Department under the $700 billion financial rescue bill Congress passed earlier this month.

The remarks about the plan, made by Sheila C. Bair, the chairwoman of the Federal Deposit Insurance Corporation, came as a new report showed that foreclosure filings jumped 71 percent in the third quarter from a year earlier. At the hearing, Congressional Democrats criticized the administration for not doing enough to help homeowners even as the Treasury and Federal Reserve have moved to inject hundreds of billions of dollars into banks and the financial system.

Ms. Bair, who has been one of the most ardent proponents of loan modifications, acknowledged that more needed to be done. "We are behind the curve," Ms. Bair told the Senate Banking Committee. "We are falling behind. There has been some progress, but it’s not been enough, and we need to act and we need to act quickly and we need to act dramatically."

The Washington Post's front page also has coverage on the proposal. For well over a month, NDN has been arguing that the federal government must take decisive action to keep people in their homes, as stanching forecloures is a key ingedient to stopping the financial cave in. Thankfully, it finally looks as though the federal government will act. For more on the NDN Keep People in Their Homes campaign, click here.

Barack Obama's latest ad is not only in Spanish, but it has Barack Obama speaking in Spanish through the entire ad - not an easy feat.  He has a good accent, better than George W. Bush's.  And as we saw in the case of then Gov. Bush, the Hispanic community doesn't care so much about a candidate being able to speak perfect Spanish, they care that they try - and I must say, Sen. Obama pulls it off seamlessly here.  By contrast, Sen. McCain hasn't so much as tried to learn the "I'm John McCain and I approve this message" tagline in Spanish.  This ad is part of something historic.  Barack Obama has now spent more than any other presidential candidate in history on Spanish language media.  And he is only the third or fourth candidate that I can count that has cared to speak to this demographic in their language of origin.  As reported in the documentary, "Latinos 08", Jackie Kennedy filmed a message in Spanish on behalf of her husband when he ran for office, George W. Bush spoke some Spanish here and there, and Howard Dean tried his hand at it as well, but the Obama campaign has spent a record amount of resources on a record amount of Spanish language ads.  And it seems to be paying off.  According to the latest polls, Barack Obama now holds a 40-50 point lead among Hispanics.  This is his second Spanish-language address, the first having been an ad in Puerto Rico during the primaries. Here, he is trying to bond with the Hispanic community by speaking of the "American Dream" that motivated so many of them to come to this country, thus trying to add an emotional connection to the support among Hispanics that seems largely driven by issues and party identification. 

And a translation of the ad:
BO: We share a dream,  That through hard work your family can succeed.
That if you're sick, you can have access to medical insurance.
That our children can have a quality education, regardless of whether you are rich or poor.
That is the American Dream.
I ask you for your vote, not just for me and the Democrats, but so that you can keep that dream alive for yourself and for your children.
I'm Barack Obama and I approve this message.

When Congress returns to Washington following the election, its first priority will be to pass another stimulus package for the sinking economy. It’s already clear that the package will involve about $200 billion in new stimulus or a boost equal to about 1.4 percent of GDP. The question is what form the package should take. The path of least political resistance is another round of tax rebates for American families, which they could spend to jumpstart demand and, ultimately, the business investments and jobs to meet that demand. The catch is, that path is very unlikely to work this time. Moreover, the new president-elect and Congress can put that $200 billion to uses that will stimulate long-term growth and income gains much more effectively.

Most people won’t spend small windfalls when they’re worried about losing their jobs or homes next month or finding themselves unable to pay their health care premiums or their kid’s tuition. Instead, they save such windfalls or use them to pay down debts. That’s just what happened this past spring with most of the tax rebate in the last stimulus. With unemployment rising, home values continuing to fall and the stock market down nearly 40 percent over the last year, most Americans are even more anxious today and feeling a lot poorer. In this environment, two-thirds of more of those rebate checks would simply be saved, providing virtually no stimulus.

But we still need that stimulus, if only as an insurance policy against future economic shocks that could deliver serious new blows to the faltering economy, such as a run on the dollar that would drive up interest rates or another wave of financial failures if the deterioration in the housing market gets worse. And since the recessions in countries that suffer financial meltdowns are usually longer and deeper than normal, we should prepare ourselves for another year or more of tight times.

There are better paths for the coming stimulus package than tax rebates. A piece of it should go to ease some of the recession’s immediate pressures and pain: extend unemployment benefits for the millions more Americans likely to lose their jobs in 2009, and give states and cities infusion of funds so they don’t have to make sharp cuts in the payrolls of teachers, police and other public workers, or in Medicaid services for sick, low-income people.

The President-elect-to-be and Congress, however, should direct the lion’s share of the $200 billion in a new direction: investments in the basic elements of growth for the next decade. In effect, we should use the stimulus to drive policy reforms that will affect the shape and strength of the next expansion, rather than simply its timing. A third or more of the new funding should go to infrastructure – and most of that not for traditional roads and bridges, but for the public requirements of the low-carbon, energy efficient economy we know we have to build. The package could provide, for example, the first support for modernizing the nation’s electricity grid. The federal government also could make itself a model of climate-friendly and energy-efficient ways of doing business, with large-scale, new investments to upgrade the heating, cooling and lighting systems of all federally-owned buildings for low-carbon energy efficiency and to shift the federal fleet to hybrid and other energy-efficient vehicles. The package also could include new tax preferences for businesses and households to upgrade their systems. Investments in public transportation could be another important focus for stimulus spending. Today, public transportation accounts for just one percent of U.S. passenger miles, compared to five percent in Canada, 10 percent in Europe and 30 percent in Japan. For the short term, the stimulus package could include subsidies for local transit systems to cut their fares by half or more. For the long term, the package can include down payments on a new national program to promote the construction or extension new light rail systems for metropolitan areas, which can also create jobs quickly.

Through this recession and into the next expansion, wage and productivity gains will increasingly be tied to a person’s capacity to operate in workplaces dense with information and telecommunications technologies. Knowing that, we also can direct some of the stimulus to a plan we developed and which Senator Obama has endorsed, to provide grants to community colleges to keep their computer labs open and staffed in the evenings and on weekends for any adult to walk in and receive free computer training. Since we know that every American student also needs to develop computer and Internet-based skills, the stimulus also can include the first funding for an innovative program to provide inexpensive laptops developed by the MIT Media Lab for every sixth-grade student. Finally, the stimulus package can fund the extension of broadband installation and service for users in every school, local library, and local and state human services offices.

These are all investments which we know we have to make, if we really intend to make the U.S. economy more efficient, innovative, and sustainable. We also know that Congress will pass some $200 billion in new stimulus within a month’s time. The new President-elect can use this coming occasion not only to create more jobs, but to do so in ways that will help drive the development of a real, 21st century workforce and genuine 21st century economic infrastructure. And taking this course could be an early and important opportunity for him to practice both his new politics and a new form of economic leadership.

From the pages of today’s New York Times come two articles on the struggles of millions of Americans who are worried about staying in their homes. The first, from the editorial page, argues that there has been "Only Half a Bailout" and echoes a call made by NDN over a month ago to keep people in their homes. The second, by David Leonhardt, ponders some of the pros and cons of doing just that.

From the Editorial Page:

The unfortunate reality is that as long as millions of Americans continue to default on their mortgages and housing prices continue to slide, banks will continue to suffer big losses. Unless something is done quickly to help American homeowners avoid foreclosure and stay in their homes, those losses could swamp the bailout effort by exceeding the sums being spent to rescue the banks.

Despite the danger posed by foreclosures — to the bailout, homeowners, taxpayers and the economy — the Bush administration and Congress are still depending on banks and other participants in the mortgage industry to voluntarily modify troubled loans, say, by giving borrowers more time to pay or by reducing interest rates.

The voluntary approach hasn’t been enough to stanch foreclosures. As things now stand, some 3.2 million homeowners will likely lose their homes to foreclosure this year and next, and millions more will struggle to catch up on delinquencies. Vacancies and defaults will continue to push house prices down; they have already fallen by 20 percent nationwide and are now expected to fall by at least another 10 percent. There is no time to waste to reverse the spiral.
…
Both John McCain and Barack Obama have recognized that this crisis won’t be solved until a way is found to keep many more Americans in their homes.

The editorial goes on to explain detailed options of the Obama and McCain plans, as well as other potential options. The most important point is that homes are the assets at the bottom of this financial cave-in. If foreclosures continue, so will the meltdown. For more on NDN’s Keep People in Their Homes campaign, click here.

As promised, Palin did give an interview to Jorge Ramos, of Univision, which will be aired on the network's Sunday morning political show, Al Punto, this weekend.  Here's a sneak peek of the interview: she talks about Hugo Chavez, Colin Powell's endorsement of Barack Obama, and Immigration.  On immigration, Gov. Palin accepts that it's impossible to deport all the undocumented, and she emphasized Sen. McCain's view of "enforcement first" as the appropriate path to follow.  When asked if she'd stop the immigration raids, Gov. Palin said she couldn't say that she would, but rather would need to take a case by case approach. 

Yesterday on "Al Punto", Univision's Sunday morning political show, challenger Joe Garcia (D) and incumbent Mario Diaz-Balart (R), had an animated debate on issues ranging from the economic rescue package and Iraq, to Cuba policy and the Colombia FTA. Both are running for the seat in the U.S. House of Representatives representing Florida's 25th district, which encompasses the western portion of Miami-Dade County, including the Everglades National Park. This heated race is a perfect example of what's happening throughout the U.S. - as the country becomes less hard-line Republican or Democrat, more and more "stronghold" districts and states shift into "tossup" territory. Southern Florida, previously considered a solid Cuban-American and Republican area, is changing due to changes in demographics and largely in response to the way the economic crisis has affected this state in particular. Joe Garcia painted Diaz-Balart's vote against the first economic rescue bill as "too little too late" after having had a history of voting with President Bush on all the bills that led to this current economic downturn, siding with "special interests". And Mario Diaz-Balart attempted to paint Joe was a well-versed man with no specific solutions...sound familiar? Yes, much like the Presidential race. On the issues:

On the economy: Mario voted against the rescue bill because he didn't want to give the banks a "blank check", to which Joe responded that he already had - voting to give banks the blank checks through deregulation and by allowing bills to pass that increased credit card interest rates up to 29%. Joe pointed out that while the rescue bill needed safeguards to keep people in their homes, the danger lay in doing nothing, and that he would have voted for the bill to take action to save people in this crisis.

On healthcare: Mario is against nationalized healthcare and proposed to leave insurance decisions in the hands of individuals. His proposal would be to allow for inter-state competition of health care plans. Joe on the other hand, supports Sen. Obama's plan to create a national system of health care. Unlike Mr. Diaz-Balart, Mr. Garcia pointed out the lack of health care in the Hispanic community in particular, and the importance of lowering costs and increasing competition.

On Cuba: Both candidates are firmly against participating in any diplomatic meeting with the Castro brothers, however, Mr. Garcia is for lifting the travel ban on families, and decreasing the restrictions on remittances to Cuba. Mr. Diaz-Balart is firmly against holding talks or contact with Cuba and against fully lifting the travel ban.

On Colombia: Both candidates are for the passage of the FTA. Mr. Diaz Balart noted that President Uribe has been incredibly successful at decreasing the murders of labor leaders and improving security in the country.

As the campaign season enters the final weeks, NDN continues to break through in the media. After the third and final presidential debate, reporter Dan Balz quoted Simon in the Washington Post. From the article:

Democrat Simon Rosenberg said he thought McCain was aggressive and combative, but he did not think it would be enough to change the race. "In the last few weeks, the American people have learned a lot about these two senators. In Senator Obama, they've decided they see a future president. In Senator McCain, they see an admirable but aging politician who seems a little out of step with the moment."

On the Huffington Post blog and in Reuters, Simon also offered some excellent analysis of what may lie ahead in the election.

NDN also remained an important voice on the economy and dealing with the financial crisis; Rob was quoted in the Philadelphia Enquirer, and had this excellent quote in the Washington Times: 

Running up the deficit, through new spending, tax cuts or both, is exactly what a declining economy needs, at least in the short term, the analysts said.

"Definitely in the short term, the policy should be to spend and not worry about the impact on the deficit," said Rob Shapiro, who was a top economic adviser to President Clinton and a specialist in globalization at the center-left NDN think tank.

"Certainly that's the policy you should be following in the face of a deep recession, when there's not a lot of downside risk from inflation."

Finally, Simon was quoted about immigration reform and the Hispanic vote in the San Francisco Chronicle, Bloomberg, and Hispanic Trending,  Andres talked about the importance of the Hispanic electorate in the Latino Journal and La Presna San Diego, and our recent immigration poll of battleground states was featured in a diary on DailyKos.  

Obama's most important lead after last night's debate may have come among Hispanic voters, who favored him by a 50-36 percent margin according to the national Politico/InsiderAdvantage survey of undecided debate-watchers. The candidates were evenly matched among white voters, with McCain holding a 49-46 percent advantage - equal to the three point margin of error. African Americans picked Obama as the winner by 88-10 percent. You can trace Hispanics' support of the presidential candidates through Gallup's weekly poll - the poll shows Obama with a consistent comfortable margin of at least 20-25 points ahead of McCain. The latest Gallup poll shows Obama ahead by a 60-31 percent advantage.

The front page of today’s Wall Street Journal features an article on Federal Deposit Insurance Corp. Chairman Sheila Bair calling on the federal government to do more to keep people in their homes. She echoes an analysis that NDN offered a month ago: that home foreclosures are at the root of this financial crisis and that the federal government must work to keep people in their homes.

Federal Deposit Insurance Corp. Chairman Sheila Bair on Wednesday criticized the federal government for failing to take more aggressive steps to prevent Americans from losing their homes, highlighting a rift between her and other senior U.S. officials over terms of the $700 billion rescue package.

The government plan will help stabilize financial markets but it doesn't do enough to address home foreclosures, the root of the crisis, she said in an interview with The Wall Street Journal."Why there's been such a political focus on making sure we're not unduly helping borrowers but then we're providing all this massive assistance at the institutional level, I don't understand it," she said. "It's been a frustration for me."
…

Ms. Bair has argued the plan should have a bigger focus on homeowners, whose travails are at the heart of the current crisis. Until home prices stop falling, financial markets and the economy are unlikely to stabilize. "This agency, probably as much as anybody, given our genesis in the Depression, has a sense of purpose now perhaps more than any other agency," Ms. Bair said.

Blair’s call is a welcome sign of the growing consensus of the need for a smarter approach from the government on the financial crisis. Keeping people in their homes is not just a moral issue or good politics, it’s crucial to the economy. If the government fails to stabilize the housing market, the financial cave-in will continue. For more on NDN’s campaign to Keep People in Their Homes, click here.

More on John McCain's interview with Univision anchor, Jorge Ramos. Univision has the largest Spanish-language audience in the U.S.

ON LATIN AMERICA- When asked about the prospect of Russia providing Venezuela with training and nuclear arms, and whether he would rule out U.S. military intervention in Venezuela, Sen. McCain responded that he definitely would (keep in mind all those Florida voters who are originally from Venezuela or still have family and ties to the country). Sen. McCain stated his priorities regarding Latin America as: 1) U.S. independence from Venezuelan oil, as there is evidence that Venezuela is helping aid the FARC in Colombia, and 2) passage of a Free Trade Agreement with Colombia.

Last weekend, Barack Obama and Joe Biden appeared with Jorge Ramos on Al Punto. By contrast, when asked about Latin America, Sen. Obama appeared to understand that the United States' relationship with the region has so much more at stake than merely trade agreements and foreign aid, "Trade agreements cannot serve as a substitute to sensible policy...It's not about just sending money [to the region] and forgetting about it...If this hollow policy continues, our children will be in danger...we should be in contact at this critical time." Sen. Biden noted, "..this Administration has no policy towards Russia, or towards Latin America for that matter."

ON OTHER ISSUES - On immigration, Barack Obama said during his interview with Ramos that in order to truly secure the border, we also need to go after unscrupulous employers and to provide legalization to all the undocumented in order to bring them out of the shadows. On the election:

JR: Will Hispanics decide this election? What do you think of Latino voters?
BO: "...The states with the largest Hispanic populations will certainly have a decisive role during this election....Hispanics could be the largest group of voters in New Mexico....I do think Hispanics are going to turn out and vote because they will decide whether they want to continue 8 years of failed policies or not...so I have no doubt that this election will turn out record numbers of Latinos and voters in general."
JR: So will Hispanics decide this election?
JB: In some states, like Florida, yes....in my state for example, small state of Delaware, has among the largest rates of growth of states on the east coast, the population has increased 25% over the last 17 years, and a full quarter of that growth is comprised of Hispanics in my state.

Jorge Ramos also posed a few tough questions to Sen. McCain:

JR: Governor Palin, she said Sen. Obama worked from an ex-terrorist's living room. But she works for the campaign right? So I take it she had your approval to say those things, are you suggesting that [Sen. Obama] tolerates terrorism?
JM: No. We just believe the American people should know more about this relationship.

**Sarah Palin was scheduled to appear with John McCain, but she reportedly had a scheduling conflict. Sen. McCain did say that she will be on Al Punto soon.