2008

Calming the Nation's Nerves: Nothing to Fear More than Fear Itself

Congress tried late last week to stall the financial crisis by pledging to spend $700 billion on devalued securities held by financial institutions, and by Monday morning, it was clear that the pledge wasn’t enough to reassure investors or restart lending.

Instead, a classic panic has set in here and around much of the world as public confidence in banks, other financial institutions and the markets themselves has nosedived; at the same time, banks and other financial institutions are wary of loaning money to potential borrowers. This panicked mindset threatens the economy more today than the continuing turmoil in the housing and financial markets. 

We must now recreate baseline confidence before we can repair the continuing damage to our financial and housing markets.  

Financial and broader economic panics thrive on a combination of huge and unexpected setbacks and a serious absence of information. They unfold when people face enormous uncertainty about matters vital to them, such as the value and security of their homes,  retirement accounts and college savings. Panics thrive when people see everyone else, including those with the power and position to manage such weighty matters, struggling with the same uncertainty. 

People feel threatened and powerless to do anything, not because they have no options, but because they have to evaluate or choose among those options, and they worry that more unexpected calamities could overtake whatever course they decide upon. That’s where tens of millions of Americans – and Europeans and Asians as well – have found themselves this week. They don’t understand why the value of their homes and investments has plummeted so suddenly, and they see that those ostensibly in charge of the economy in Washington and on Wall Street have little grip on this as well. The result is that spending and investment are shutting down, dragging the entire economy into what seems very likely to be the worst downturn since the 1930s. 

The remedy to this panic is information, which only the nation’s leaders can generate and demonstrate they understand. For example, the Federal Reserve and the FDIC should have legions of examiners working around the clock to re-audit the conditions of all major financial institutions, starting with commercial banks. The Treasury and Fed could then report to the public on each institution’s financial health and their confidence in its continuing financial health. The largest group would still be judged healthy; another group could be designated as worth watching, with measures to help it move to the first group; those in trouble would be identified with a plan of action to help them recover, if possible. Without this information, most people have been panicking that almost every institution and every investment might well be in serious trouble.  

This program won’t solve the capitalization crisis across financial institutions, much less the crisis gripping housing markets, which itself has driven so much of the current upheaval. But it would staunch the panic as investors, business owners and families come to feel that they finally know where the problems lie and what the government and nation’s business leaders will do to address them.

At the same time, our leaders can finally begin to address seriously the housing and capitalization crises in an economic environment in which businesses and people will be able respond reasonably and predictably.

Ad Wars: New Obama Ad, "Tested"

US Sen. Barack Obama's campaign released a new TV ad today, entitled "Tested", which hits US Sen John McCain for his newly-announced plan to "order the Secretary of the Treasury to immediately buy up the bad home loan mortgages in America."

Here is the ad:

Will Millennials Vote in November?

The second presidential debate left few observers willing to predict anything but an Obama victory in November. But one nagging question remains in the minds of many pundits. Will Millennials, whose overwhelming support for Senator Obama’s candidacy represents his margin of victory in polls in many battleground states, actually turnout to vote in November?

One such skeptic is Curtis Gans, an eminent researcher on voting trends and turnout at the American University’s Center for the Study of the American Electorate, whose most recent report even goes so far as to deny the existence of the Millennial Generation. Aging Boomers like Tom Friedman have made the same public mistake, demonstrating just how convinced many leading thinkers among that generation, which is well represented among leading political commentators in the media, are that the political style of young people today is not like their own youthful political behavior was and is, therefore, not appropriate or useful.

Since Gans' research report was focused on, in his words, the increased, “almost record,” turnout in this year’s presidential primaries, it is particularly surprising that he chose this vehicle to announce his distaste for the Millennial Generation and its political style. Gans cites the work of William Damon as the source of his knowledge about this generation, which is strange given the large number of more well-documented studies of the Millennial Generation disproving Damon’s contention that the parents of Millennials are “creating a generation of young people who lack confidence and direction.” The evidence shows just the opposite.. If anything, employers and teachers who interact daily with Millennials complain that they are almost too confident, to the point of sounding “cheeky.”

This generation's self-confidence and orientation toward the group and the broader society has important political implications. Recent polling data from USAToday/CNN demonstrate that Millennials are paying close attention to the 2008 election and have every intention of voting, at numbers rivaling those of older voters. Their survey of more than 900 young Americans, taken Sept. 18-28 found that:

• 75 % of Millennials are registered to vote
• 73% plan to vote
• 64% have given "quite a lot" of thought to the election

Even Gans concedes that Millennials may vote in large numbers in this election. But he says that they will do so only be because of their fondness for Senator Barack Obama and not because of any long-term commitment to the political process. Millennials he says “were brought in by the uniqueness of Obama’s candidacy—precisely because he seemed to offer something different than the politics they had been eschewing.” He continues, “they won’t stay in if he’s not elected and their interest and engagement won’t be sustained if he does not live up to the promise of his candidacy once in office.” Nothing could be further from the truth.

There is no doubt that Millennials have responded very positively to Senator Obama and his candidacy and that the Obama campaign has strongly targeted this generation. Millennials supported Obama overwhelmingly in this year's Democratic primaries and virtually all current general election surveys indicate that Millennials favor him over John McCain by at least a 2:1 margin. But the political attitudes and identifications of Millennials were clearly evident long before the Obama candidacy gained widespread visibility. A Pew Research Center survey conducted in March 2007 indicated that Millennials identified as Democrats over Republicans by nearly a 2:1 ratio (52% vs. 30%). And, a study conducted at about the same time by the Millennial Strategy Program of communication research and consultation firm Frank N. Magid Associates showed that Millennials were the first generation since at least the GI Generation to contain a greater number of self-perceived liberals than conservatives. All of this at least raises the possibility that the high level of Millennial political involvement is significantly based on the Democratic and liberal affinities of the generation and would be strong even without Obama's strong candidacy.

Gans makes it clear why he is sure that the political involvement of Millennials stems solely from their attachment to Barack Obama. He yearns for the “idealistic activism” of the 1950s and 1960s when, according to Gans, all of America shared a “different ethos” thanks to an educational system based “on John Dewey’s philosophy.” Since, in Gans' mind, the emerging Millennial Generation doesn’t share the liberal idealism of his own youth, it cannot possibly sustain its current level of political activity.

If only it were so, Curtis.

In fact, the ideological ferment of the late 1960s, led by half of the Baby Boomer Generation’s counter-cultural rebellion against authority, and the reaction against this social turmoil by the other half of Boomer Generation, produced the political gridlock that caused the very cynicism in the older portions of the electorate that Gans decries. Even his own expert on the Millennial Generation, William Damon, concedes that Millennials “are working hard, doing well enough in school, and staying out of trouble.” Indeed, America is enjoying far lower levels of socially deviant behavior, such as teen age pregnancy and crime, since these indicators began to soar during the adolescent years the Baby Boomer Generation with its disdain for social rules and convention.

But Gans' own words demonstrate the flaw in his thinking. The 1950s that he writes about so nostalgically was actually an era dominated by the behavior and ethos of the GI Generation, another “civic” generational archetype, just like Millennials, not by his beloved Boomers. That generation put FDR in the White House, brought about the New Deal approach to progressive government, defeated fascism in WWII, and voted at rates greater than those of previous generations. Their Democratic loyalty lasted a lifetime: the last remaining members of the GI Generation and the first sliver of Millennials provided the only pluralities for John Kerry over George W. Bush among any of the generational cohorts voting in 2004.

The previous falloff in voting by young people described by Gans in his diatribe is completely explained by the generational attitudes and behaviors of Boomers and Gen-Xers as they moved into and out of young adulthood. One generation, Boomers, initially turned out to vote spurred by admirable idealism and then often left the political process when they discovered in Gans’ telling phrase, that “their leaders showed feet of clay.” The other, Generation X, never bothered to participate in large numbers having been discouraged by the political gridlock Boomers had created. Now that Millennials make up the entire population of voters 26 and under in this election, you can be assured that they will not only vote at rates comparable to older voters, just like their GI Generation great-grandparents did, but they will also continue to vote heavily and participate vigorously in the nation’s political process for the rest of their lives.

They will do so, because unlike Curtis Gans and his ilk, which never were able to translate their idealism into action, Millennials are intent on working together to create a better America than the one Boomers have left them as an inheritance. Their confidence, political activism, and unity will begin to initiate that change on Election Day this year thanks to a record turnout of young voters. The 1.7 million vote plurality given to John Kerry by young voters in 2004 will grow to between 8 and 10 million for Barack Obama when this involved and unified generation goes to the polls on November 4. Only Curtis Gans and out of touch Boomers will be surprised.

Cero y Van Dos - En Los Debates No Se Habla de Inmigración

Cero y van dos - se esperaba que los candidatos a la presidencia hablaran sobre el tema de inmigración durante el primer debate, enfocado a relaciones exteriores, pero no sucedió. Entonces se esperaba que seguramente hablarían sobre sus propuestas con respecto a inmigración en el segundo debate, sobre políticas nacionales...tampoco sucedió. Con el empeoramiento de la crisis económica, el tema de inmigración ha sido relegado al olvido durante los debates. Sin embargo, sigue al centro del esfuerzo publicitario de ambos candidatos para ganarse el voto de Hispanohablantes.

La batalla sobre el tema de inmigración continúa. Después del último anuncio del Senador John McCain sobre inmigración, el Senador Barack Obama responde. El reportero Chris Cillizza puntualiza que el Senador Obama esta invirtiéndo lo triple que John McCain en anuncios de televisión.

Por mucho tiempo, NDN ha destacado la importancia del tema de inmigración como un factor que motiva a Hispanos a votar, sin importar si son nacidos en EEUU o en el extranjero, y esto se demuestra en el hecho que los candidatos estan teniendo esta batalla sobre inmigración en español. Con el porcentaje tan importante de votantes Latinos en estados clave en la contienda de esta elección, los candidatos estan luchando para ganarse a este grupo demográfico por medio del tema de inmigración. En este anuncio, Obama reconoce el daño que ha sufrido el partido Republicano en la comunidad Hispana a raíz del tono negativo que tomó ese partido durante el debate sobre inmigración, y relaciona a McCain con su partido y con los ataques anti-inmigrante del partido Republicano.

 

 

Obama Puts Energy First

One of the most daunting challenges any new president faces is prioritizing all the programs that were promised as a candidate. Last night, despite all the grumblings about format, Tom Brokaw got in a very important follow up, when he asked the candidates to prioritize energy, healthcare, and entitlement reform.

Obama, who went second (after McCain argued that we can handle three of the largest issues in a generation at the same time) and made a choice:

We're going to have to prioritize, just like a family has to prioritize. Now, I've listed the things that I think have to be at the top of the list.

Energy we have to deal with today, because you're paying $3.80 here in Nashville for gasoline, and it could go up. And it's a strain on your family budget, but it's also bad for our national security, because countries like Russia and Venezuela and, you know, in some cases, countries like Iran, are benefiting from higher oil prices.

So we've got to deal with that right away. That's why I've called for an investment of $15 billion a year over 10 years. Our goal should be, in 10 year's time, we are free of dependence on Middle Eastern oil.

And we can do it. Now, when JFK said we're going to the Moon in 10 years, nobody was sure how to do it, but we understood that, if the American people make a decision to do something, it gets done. So that would be priority number one.

This debate had a tremendous amount of discussion on energy, which, Americans have realized, is at the center of almost every major issue of the day, from getting the country out of a recession to limiting the power of an emboldened Russia. The fact that Obama has made it clear that energy is his first priority is an extremely welcome sign, and the strong focus on energy policy last night is a watershed moment in Presidential politics.

As Simon pointed out, current proposals on how to reform energy policy illustrate that we may need to come to a much different understanding of the urgency of reducing our dependence on fossil fuels and exactly how much that might cost. If one wants to put energy reform in the context of the Apollo project, it is worth noting that Apollo, in its peak year, represented 2.2% of the federal budget. The proposed $15 billion per year would be more like 0.005% (compared to the 2007 spending). If energy reform is to truly be a major national priority, it must be thought about in that context. 

What One Hand Giveth...

Traditionally, Republicans have headed their campaigns with talk about taxes.  Democrats, they say, will raise your taxes, so vote for us. The McCain campaign hasn't been any different.  What is different this time around is that Barack Obama's tax plan is dramatically better for middle-income families. Accordingly, Obama's been hitting back.

His latest ad, "Taketh," lays the truth on thick. While John McCain's rhetoric about "tax credits for health care" may sound good, Obama points out the fine print: McCain's plan will levy a tax on employee health benefits for the first time ever.

Battle on the Immigration Issue Continues

And the immigration battle continues. After U.S. Senator John McCain's last ad on immigration, U.S. Sen. Barack Obama responds in kind.  Chris Cillizza reports that overall, Obama is outspending McCain 3 to 1 on television.

NDN has long advocated on the importance of immigration as a motivating issue for Hispanics, regardless of whether they are native or foreign born - as demonstrated by this back and forth. With a significant percentage of Latino voters in key battleground states, the candidates are working to win over this important voting demographic by speaking on the issue of immigration. In this ad, Obama taps into the damaged Republican brand among Hispanics, linking John McCain to his party and to the GOP's hateful anti-immigrant attacks and the pressure that party exerted to halt immigration reform. The ad is called, "Otra Vez lo Mismo", or "Here We Go Again".

The translation of the script of the ad:

[Announcer:]
Here We Go Again...
McCain is still manipulating and lying on the issue of immigration.
He wants to hide the fact he's the one who turned his back on us...
[CNN video]
McCain caved to the anti-immigrant crowd
And, along with the Republicans, betrayed our community.
If John McCain is not willing to stand up to his own Republican Party, how will he defend us in the White House?

 

 

Doing More on the Economy

Marc Ambinder over at the Atlantic does a good job summing up today's political messaging as it relates to the economy. In "Fannie, Freddie, or the Future," Ambinder argues that speaking about the future of the American economy is a better political strategy, and, that going for the gutter, as the McCain camp announced they were going to do, while politically enticing, might not be the best way to win (especially executed this poorly).

[Keating economics] successfully jammed up McCain's message of the day, which is that Obama is somehow to blame for the excesses of Fannie Mae and Freddie Mac. Blaming Democrats for Fannie and Freddie's collapse -- implicity, blaming the government for giving people home loans who couldn't afford -- isn't beanbag, but the McCain campaign is using it the way that Democrats used to respond to foreign policy questions: by stumbling around, latching on to a poll-tested response, and ignoring the bigger picture.

Ayers and Keating aside, the leading edge of this debate is about what do we do post-bailout to restore confidence in our economy. The public will rightly pressure both candidates for more answers. It's an opportunity for somebody to come up with a newer, global message. or at least sound like they get the international dimension of our meltdown.

Hitting back with the Keating Five was political necessity from the Obama camp, and as Ambinder writes, has worked today, but Obama's real strength in recent weeks has come on the back of his strong response to the financial crisis. The current narrative about Obama's calm reaction compared with McCain's erratic reaction, believeable because it reinforced preexisting memes about both candidates, will serve Obama well for the next month.

Now, as the Obama campaign launches its Keating Economics piece, Obama himself expands his message on the economy and hits McCain on trying to turn the page. Today in Asheville, North Carolina, Obama had this to say:

We are going to have to then move on an aggressive plan to deal with some of the underlying structural problems in the economy, including the continuing decline in the housing market. Now Senator McCain and I have a debate tomorrow night, and obviously the American people are going to be anxious to hear from one of the two people who’s going to be the next president and responsible for dealing with this economic mess, what their plans are.

As NDN has argued, that plan must include action from Congress and the President to do more to keep people in their homes. For more on NDN's reponse to the financial crisis, visit Keep People in Their Homes.

Unpublished
n/a

Newsweek Cover Blasts Palin

In case you can't make it out, the text reads:

The Palin Problem

Governing requires more than mindless populism

Read here for the story itself.  It is brutal. 

 

Syndicate content