21st Century Agenda for America


Crafting Economic Policy and Rhetoric Responsive to the Struggle of Everyday Americans

This week, EPI released some polling getting at the very core of the political problem around the economy - Americans feel as though the government has been responsive to the needs of banks and Wall Street, not them. Tom Edsall covers the poll in the Huffington Post and includes this slide from the poll results:

EPI poll

The article goes on to argue that the American people have gotten it about right - quoting James Galbraith who says:

"In relative terms, the perceptions are dead-on: the big winners so far are the bailed-out bankers. Meanwhile on the jobs and housing front, things get worse," says University of Texas economist James Galbraith. "You can make an argument that everyone has been helped by the fact that the economy hasn't collapsed even more completely," Galbraith added, but that does not "cut any ice with the population at the moment. What they see is that a top-down bailout works on the top and doesn't go very far down. And they are right."

This sense, true or not, is a massive political challenge that must be addressed over the next year. We've written a lot about the need to adjust rhetoric to be responsive to the struggles of everyday people. This, by the way, doesn't mean some sort of populism, it means having a big conversation about a 21st century economic strategy for America that focuses on broad-based prosperity.

The American people have a better understanding for the global economy than most in Washington give them credit for - as evidence, take a look at this NDN poll released in November of 2007, just before the recession began. Not only did Americans know that the economy was in very bad shape, they understood the shape of the global economy and America's advantages therein.

Friedman on a 21st Century Agenda for Worker Skills

Today, Thomas Friedman writes about the "education breakdown" in America:

“Our education failure is the largest contributing factor to the decline of the American worker’s global competitiveness, particularly at the middle and bottom ranges,” argued Martin, a former global executive with PepsiCo and Kraft Europe and now an international investor. “This loss of competitiveness has weakened the American worker’s production of wealth, precisely when technology brought global competition much closer to home. So over a decade, American workers have maintained their standard of living by borrowing and overconsuming vis-à-vis their real income. When the Great Recession wiped out all the credit and asset bubbles that made that overconsumption possible, it left too many American workers not only deeper in debt than ever, but out of a job and lacking the skills to compete globally.”

This problem will be reversed only when the decline in worker competitiveness reverses — when we create enough new jobs and educated workers that are worth, say, $40-an-hour compared with the global alternatives. If we don’t, there’s no telling how “jobless” this recovery will be.

A Washington lawyer friend recently told me about layoffs at his firm. I asked him who was getting axed. He said it was interesting: lawyers who were used to just showing up and having work handed to them were the first to go because with the bursting of the credit bubble, that flow of work just isn’t there. But those who have the ability to imagine new services, new opportunities and new ways to recruit work were being retained. They are the new untouchables.

That is the key to understanding our full education challenge today. Those who are waiting for this recession to end so someone can again hand them work could have a long wait. Those with the imagination to make themselves untouchables — to invent smarter ways to do old jobs, energy-saving ways to provide new services, new ways to attract old customers or new ways to combine existing technologies — will thrive. Therefore, we not only need a higher percentage of our kids graduating from high school and college — more education — but we need more of them with the right education.

As the Harvard University labor expert Lawrence Katz explains it: “If you think about the labor market today, the top half of the college market, those with the high-end analytical and problem-solving skills who can compete on the world market or game the financial system or deal with new government regulations, have done great. But the bottom half of the top, those engineers and programmers working on more routine tasks and not actively engaged in developing new ideas or recombining existing technologies or thinking about what new customers want, have done poorly. They’ve been much more exposed to global competitors that make them easily substitutable.”

There is no doubt that our education system is badly in need of an upgrade, but we also must be cognizant of fact that much of the current workforce just does not posses the skills to succeed in the globally interconnected, idea-based economy. This isn’t just a phenomenon of this recession; everyday Americans spent much of the Bush era falling behind due to the inability of their government to respond to their struggle and find a way to make the inextricably powerful forces of globalization work for all Americans. 

In that spirit, NDN’s Rob Shapiro has proposed a program to provide free computer training to all Americans, which can be found here and recently passed the House of Representatives in H.R. 3221, the Student Aid and Fiscal Responsibility Act.

What Future for the Innovation Driven American Economy?

Last week, I wrote about a David Brooks column that argued that the next great debate in American society is going to be about the best way to promote innovation in the economy. Indeed, innovation has been the lifeblood of the American economy, and it's heartening to see that much of the national conversation has turned to promoting innovation. But not all innovation is beneficial to society. Indeed, one of the sectors that has seen a great deal of innovation recently, some of which created sub-optimal results, was the financial sector. Calvin Trillin, writing in the New York Times, explains, in a sentence, why:

The financial system nearly collapsed…because smart guys had started working on Wall Street.

What Trillin goes onto explain is that smart people, instead of going into for example physics, started going into finance and started innovating. A lot - and much more than their less talented predecessors. (James Kwak at the Baseline Scenario says that this actually is probably true.) But, as Simon Johnson and Kwak have explained, much of the recent innovation in the financial sector hasn't necessarily been beneficial to anyone other than those doing the innovating. They differentiate between innovation that has made things better for consumers – the ATM for example – and innovation that involves easier access to credit, which isn't always as good:

In short, financial innovations whose sole function is to increase access to credit do not in and of themselves make the world a better place. They can help by providing the credit that people need to make the world a better place, but they can also make it possible for people to do irrational and economically destructive things. So when people say that innovation is the source of all progress, that may be true – but not all types of innovation are equal.

In the most recent Democracy Journal, which features a whole series of articles on innovation (incuding one by Johnson and Kwak), NDN's Dr. Rob Shapiro criticizes a proposal promoting the idea of utility capitalism, essentially government regulated monopolies or cartels. Michael Lind, the proponent of utility capitalism, argues that this framework would encourage innovation, which Shapiro debunks by explaining how, according to Nobel Laureate Kenneth Arrow, innovation really works:

Large, incumbent firms try to enhance the efficiency and reduce the costs of what they already do well. Younger firms have to establish a new place in the market, and since their size precludes competing on price, they have to compete in some area of quality, which often means innovation. [Cartels and monopolies, which preserve the incumbent status of large firms, therefore do not lend themselves toward innovation.]

Most of us can agree that for America to maintain its economic standing, our edge in innovation and the modern idea-based economy is crucial. Unfortunately, maintaining an edge in something so inherently dynamic as generating the ideas that create new and powerful companies, products, and services is difficult, and our ability to innovate is certainly not unlimited. 

Most would agree that it was a mistake in recent years to focus so much innovation on the financial sector as opposed to science, medicine, and making people's lives better, and Trillin's point paired with Shapiro's are crucial: America needs to create the incentives that move talented people into socially useful professions (like center-left Washington think-tanking) and create the economic incentives to produce socially useful innovation.

Mr. Brooks, Mr. Bentham and Mr. Hume On Innovation and Policymaking

David Brooks has authored a somewhat amusing column on the future of innovation policy in the United States. He tells a story of Mr. Bentham and Mr. Hume, each of whom has a distinct approach to innovating toward solutions to major governing challenges. Bentham, the expert, designs complex, wonk informed solutions to the challenges of the day, while Hume, the underachiever, admits that he has no idea how such things work, and just tries to create markets that do the job for him. Here's Brooks' conclusion:

I've introduced you to my friends Mr. Bentham and Mr. Hume because they represent the choices we face on issue after issue. This country is about to have a big debate on the role of government. The polarizers on cable TV think it’s going to be a debate between socialism and free-market purism. But it’s really going to be a debate about how to promote innovation.

The people on Mr. Bentham's side believe that government can get actively involved in organizing innovation. (I've taken his proposals from the Waxman-Markey energy bill and the Baucus health care bill.)

The people on Mr. Hume's side believe government should actively tilt the playing field to promote social goods and set off decentralized networks of reform, but they don't think government knows enough to intimately organize dynamic innovation.

So let's have the debate. But before we do, let's understand that Mr. Bentham is going to win. The lobbyists love Bentham’s intricacies and his stacks of spending proposals, which they need in order to advance their agendas. If you want to pass anything through Congress, Bentham's your man.

In all fairness to Congressional efforts, it's important to note that both Health Care and Energy/Climate legislation include the market based, low government involvement ideas that Brooks/Hume seems to prefer – health care in an exchange and climate in a market based carbon pricing regime.  

The truth is that it’s not as if the Bentham-esque details of reform proposals are some sort of new arrival to policymaking; rather, many are sought to counter decades of policies that benefit incumbents. For example, fossil fuels are still massively out-subsidized compared to clean technology, so of course clean tech advocates should fight for theirs. (Many policy intricacies obviously still do help incumbents – climate legislation does give permits away to energy intensive industries as opposed President Obama’s desired 100% auction.)   

Rather, the question for Brooks is: Who will make Mr. Hume's case? I feel for Brooks, I want his debate to happen now (Can Mr. Hume have Glenn Beck's pulpit?), and I'm all for elegant policymaking. I'm also pretty sure Brooks is right that complexity is going to win because legislating is complex. And the likeliest outcome is that Mr. Hume isn't even going to make it to the table. What I know for certain is that Brooks can't possibly be implying that this Republican Party is capable of assuming the role of Mr. Hume. That would be a party worth having.

Is America Surrendering Clean Technology Leadership to China?

Experience shows that an important key to growing a vibrant renewable energy sector is a strong domestic market. Germany’s feed-in tariffs have helped it become a world leader in solar energy production. China has long been focusing on building their domestic renewable energy industries, and just announced they are upping their efforts to build domestic renewable demand. 

From the AP's coverage of the U.N. Summit on Climate Change:

Chinese President Hu Jintao said his nation will continue to take "determined" action. He laid out new plans for extending China's energy-saving programs and targets for reducing "by a notable margin" the "intensity" of its carbon pollution — carbon dioxide emission increases as related to economic growth.

He said China would greatly boost its forest cover, "climate-friendly technologies" and use 15 percent of its energy from renewable sources by 2020.

That 15 percent renewable energy by 2020 sounds like a Renewable Electricity Standard. It also sounds similar to the one in the ACES bill that passed the House in June, which mandates 20 percent renewables by 2020, but that generally allows for 5 percent of that to come from energy efficiency (which it undoubtedly will, as efficiency is way cheaper than renewables). In fact, the ACES standard can be weakened even further, all the way down to 12 percent renewables in some cases.

So now China's ahead of the United States, and, even if we pass ACES as is, will have a comparable or slightly stronger RES in an economy whose energy use (and therefore said sector) will grow much faster over the next decade than America's will. We'll have the price signal that cap and trade offers, but it’s not nearly as strong as it could be. (China is unwilling to agree to cap emissions and certainly won't ahead of the U.S.) 

Much of the opposition to domestic climate change regimes comes of the idea that American action on climate without China going along hurts the U.S. economy and does nothing to slow climate change. Now, basically the opposite could play out. With China stepping up on an RES and limited movement from the U.S. Congress toward passing a strong climate bill, some Americans seem willing to let China take a leadership role on perhaps the most pressing global governance challenge of the young century and develop an export-capable renewable energy sector that passes ours, thereby surrendering a high potential economic sector to world's most important rising power.

Weekly Immigration Update: Airport Workers Smuggle Immigrants; Latino Lawyers Can Do Much To Help; Antis Have Their Game On

Over Labor Day Weekend, news broke covering a series of airport workers in Puerto Rico who were helping undocumented immigrants enter the United States.  This once again highlights the flaws in an "enforcement-only" system, and showcases the need for a comprehensive strategy to fix the current broken immigration system.    

In other news, with E-verify becoming mandatory for all government contractors this week, Congress will have to decide on how it takes up this issue again as the program is scheduled to expire on September 30.  By dealing with this sub-issue through comprehensive immigration reform legislation, we could finally take this debate off the table.

Several outlets also covered the Hispanic National Bar Association's annual convention in Albuquerque, NM this past week.  I attended as a panelist to discuss immigrant rights.  Many judges, including Chief Judge for the U.S. Circuit in NM, Martha Vazquez, agree that the current broken immigration system is one of "de facto criminalization" of immigrants.  

Latino lawyers can do much to help advise immigrants of their rights, and they can do much to help advocate for reform. However, we have serious obstacles to overcome in having more Latinos - particularly Latinas - represented in the profession, as illustrated by an HNBA study. 

And today Simon highlights a very disturbing and concerted anti-immigrant campaign.  These videos are extremely well done; while the arguments are factually incorrect and based on no empirical evidence, the ads are incredibly effective.  Clearly these guys are elevating their game in preparation for a fight.  What are you doing to prepare?

Hispanic Lawyers' Conference Brings Big Names and Uncovers Even Bigger Challenges

Albuquerque, NM - Reflecting on the 2009 Hispanic National Bar Association's (HNBA), it is of note that public policy and social justice issues (primarily immigration) were such prevalent topics during this conference, aptly themed, "Opening Doors."  And open doors we have, with the first Latina to sit on the Supreme Court soon to hear arguments in that chamber.  However, a report released this week by the HNBA based on a nine month study of Latinas in the profession uncovered some disturbing facts that show how far we still have to go.

During the opening day of the conference Governor Bill Richardson reflected on how Latino lawyers have opened doors for so many to come, and on the importance of this demographic as a group and as an electorate.  In the same fashion, he touched on the responsibility of Latinos to influence younger generations to be involved, to do more.

For his part, Attorney General Eric Holder recognized the role of Hispanics as he addressed the conference: 

The founders of the HNBA used the law to change lives for the better.  For in the final analysis, the law serves as the great equalizer of our society – and it is still our job to make it so.  As we gather for your 34th annual conference, your membership rolls are larger – and your influence is greater – than ever before.

In light of some of the most shocking displays of racism in a generation against Hispanics in the context of the immigration debate, health care debate, etc. and given the dramatic increase in hate crimes against Latinos (which are not always punished or adequately persecuted),  Attorney General Holder highlighted the importance of DOJ and particularly the "crown jewel" of the Civil Rights division:

We seek diversity not just for its own sake, but because our nation is stronger when people from all backgrounds participate in the administration of justice.  When I was confirmed as Attorney General, I made it clear that during my tenure, we would restore luster to the Justice Department’s “crown jewel” -- our Civil Rights Division.  I promised that the Civil Rights Division would fight discrimination as fiercely as the Criminal Division fights crime -- and that we would once again honor the spirit of the movement that inspired its creation.

Let me say this very clearly:  The Civil Rights Division is once again open for business.

Senator Bob Menendez also spoke as eloquently and passionately as always at the Conference, but I should highlight his less-known contribution - of all the panels occurring during Friday afternoon (all important topics) he quietly stepped into the panel on the findings of a report just released by the HNBA "The State of Latinas in the Legal Profession."  Dressed down in kakis, with no staff and no fuss, he quietly stepped in through the back of the room, sat down and listened intently to the panel as they revealed the findings of the HNBA Commission on Latina Lawyers.  As a Latina and as a woman lawyer, it meant a heck of a lot to me that the Senator 1) made time to attend the conference and, 2) chose to spend his time in that panel of all panels.

This report was 100% a labor of love by these Latina lawyers and other collaborators, as the HNBA did not have a grant to cover costs.  At the end of the presentation, as questions surfaced and discussion ensued, Sen. Menendez raised his hand, inquired as to whether the government had supported this important endeavor.  It did not, and so he pledged his help to this group of Latina lawyers to guide and support this Commission as they seek to obtain grants and assistance from the federal government.  

And we need all the help that we can get.  This report uncovered a drastic situation; despite the appointment of Justice Sonia Sotomayor (who sent a moving videotaped message to the HNBA) and the nation’s growing Hispanic population, Hispanic women make up only 1.3% of all lawyers in the United States.  That is the lowest representation of any racial or ethnic group (overall and within their own gender) as compared to their overall presence in the nation - Latinas make up over 7% of the country's population.  Justice Sotomayor shines as a beacon of light to the Judges who served on the bench with her, and/or lawyers who argued before her and can now clearly envision new possibilities in their profession and in themselves, but the reality of today is that Latina lawyers are only a few hundred of the over 1 million lawyers currently in the U.S. 

TODAY: Kicking Off A New Discussion Series on the Economy with Jagdish Bhagwati and Robert Shapiro

Please join NDN and its affiliate, the New Policy Institute, next Tuesday, September 8 at noon for the kick-off a new series of events discussing the challenges facing the American and global economies. The series, coming months after policymakers confronted the most serious global economic crisis of the modern era, will examine domestic and international economic issues with the ultimate aim of envisioning a new economic strategy for the age of globalization. This event comes at a particularly important moment in this conversation as America and the world's leading economic powers prepare for the G-20 meeting in Pittsburgh later this month. 

BhagwatiJoining us next week will be leading international economist Dr. Jagdish Bhagwati, Senior Fellow for International Economics at the Council on Foreign Relations, the University Professor at Columbia University, special adviser to the UN and the World Trade Organization, and author of In Defense of Globalization and Termites in the Trading System. He, along with NDN Globalization Initiative Chair Dr. Robert Shapiro, will discuss America's international economic policy, the upcoming G-20 Summit, and the future of global economic liberalization. Shapiro will open the event with brief remarks and moderate a question and answer period. Both speakers will take questions both from the live audience and those watching online.

Tuesday, September 8; light lunch served at 12:00pm
NDN: 729 15th St. NW, First Floor
A live webcast will begin at 12:15 p.m. ET
RSVP  |  Watch webcast

Background from Bhagwati and Shapiro:


Thursday @ Noon: Watch or Attend "The Dawn of A New Politics"

Plans for lunch on Thursday? Stop by NDN, either in person or online, this Thursday, August 27th and catch Simon's monthly presentation of "The Dawn of a New Politics." We'll start serving lunch around noon here in our offices located just a few blocks from the White House and go live with the presentation at 12:15 pm. But if you aren't in DC or can't pull yourself away from your desk, you can always watch the presentation live online. You can even submit questions and Simon will answer them in real time.

As always, these events are free and open to the public. But be sure to RSVP if you plan to come to NDN for the presentation. (No need to RSVP if you're going to watch online.)

See you on Thursday!

Check out these recent essays from Simon to preview some of his arguments in the Dawn of a New Politics:

Meeting the Challenges of the 21st Century. July 24, 2009, Demos. An essay which ran as part of a leading British think tank's series of essays on the future of center-left politics.

Obama: No Realist He. June 16, 2009, Huffington Post. Simon offers some thoughts about Obama's global brand in the early days of the Iranian uprising.  The essay drew many comments in its more than 24 hours on the front page of Huffington Post.

Making the Case for Comprehensive Immigration Reform: Why We Need it This Year. April 30, 2009, Huffington Post. Simon lays out 7 reasons why Congress should tackle immigration reform this year, or early next.

The Long Road Back. November 18, 2008, NDN Blog. Following the Democratic Party's electoral victories in 2008, Simon wrote this piece to offer some thoughts about the disconnect between the modern GOP leadership and modern Americans.

On Obama, Race and the End of the Southern Strategy. January 4, 2008, NDN Blog. At the height of the 2008 primary season, Simon wrote this essay reflecting on the composition of the field of contendors for the Democratic Party's nomination and how meaningful nominating (then Senator) Obama would be for liberating America from the pernicious era of the Southern Strategy.

The 50 Year Strategy. November/December 2007, Mother Jones. Simon and Peter Leyden offer a landmark vision for how progressives can win and prosper for many years to come.

Syndicate content