economy; globalization

New TNR Piece on Obama Team's Economic Debate

Thoughtful piece by Noam Schieber now running on TNR.  It contains the following passage:

The biggest problem facing the Clintonites back in 1993 was arguably political: The bond market assumed the first Democratic president in twelve years would unleash a wave of pent-up spending. Long-term interest rates stayed stubbornly high as a result. Hence the theory, embraced by Clinton adviser Robert Rubin (and another Clinton economic aide named Larry Summers), that a credible plan for deficit reduction could chip away at long-term rates and boost the economy. The Clintonites were gambling, in effect, that deficit reduction could itself be a form of stimulus because of the unique historical moment--that they might not have to choose between the two. Sure enough, interest rates abruptly fell, and the '90s boom commenced.

Alas, there’s no such win-win solution this time around--among other things, there’s little room for historically low rates to fall much further--meaning the only way to further stimulate the economy is to spend. “Now is not the time politically or economically to emphasize fiscal austerity,” says Simon Rosenberg, president of NDN, a Washington think tank. “That day will come.”

The President is significantly wading into now the most important issue in Washington - how to get employment and wages/incomes moving in the right direction again.  His speech and subsequent events are a welcome sign that the Administration will be making the core economic issues a much bigger priority this year. 

For the Democrats the goal has to be now to unify behind a single strategy early next year, and prevent the year long drawn out negotiations over health care reform be replicated around the economy and budget next year.  The Democrats should pass their new economic strategy in the winter, early spring and spend the rest of the year touting the investments being made on the ground. 

I also believe, strongly, that the President needs to repackage the global economic gatherings into a much more serious set of events, one which show that he is working with foreign leaders on a global strategy to bring about a better economic day. For as this President knows, our economy is much interdependent now than we were in the past, and our new economic strategy will have to be a global not just national one.

So kudos the President for engaging more forcefully on these matters, and congratulations to the House for the encouragement they gave the Administration to do so.

Bush Re-emerges

Tonight we all learned that "the plan" being discussed in Congress is actually President Bush's.  Not Paulson's plan, nor Bernanke's.  But George W Bush's.  Not sure what this will end up doing to the process, but I cannot imagine it is good.

Obama Finds His Voice on the Economy

From a new 2 minute Obama ad: 

In the past few weeks, Wall Street's been rocked as banks closed and markets tumbled. But for many of you - the people I've met in town halls, backyards and diners across America - our troubled economy isn't news. 600,000 Americans have lost their jobs since January. Paychecks are flat and home values are falling. It's hard to pay for gas and groceries and if you put it on a credit card they've probably raised your rates. You're paying more than ever for health insurance that covers less and less. This isn't just a string of bad luck. The truth is that while you've been living up to your responsibilities Washington has not. That's why we need change. Real change. This is no ordinary time and it shouldn't be an ordinary election. But much of this campaign has been consumed by petty attacks and distractions that have nothing to do with you or how we get America back on track. Here's what I believe we need to do. Reform our tax system to give a $1,000 tax break to the middle class instead of showering more on oil companies and corporations that outsource our jobs. End the "anything goes" culture on Wall Street with real regulation that protects your investments and pensions. Fast track a plan for energy ‘made-in-America' that will free us from our dependence on mid-east oil in 10 years and put millions of Americans to work. Crack down on lobbyists - once and for all -- so their back-room deal-making no longer drowns out the voices of the middle class and undermines our common interests as Americans. And yes, bring a responsible end to this war in Iraq so we stop spending billions each month rebuilding their country when we should be rebuilding ours. Doing these things won't be easy. But we're Americans. We've met tough challenges before. And we can again. I'm Barack Obama. I hope you'll read my economic plan. I approved this message because bitter, partisan fights and outworn ideas of the left and the right won't solve the problems we face today. But a new spirit of unity and shared responsibility will.

This is a powerful message.  And a 2 minute direct to camera spot is very smart.  Obama is convincing, persuasive in his direct to camera spots - as the campaign learned in Iowa.  As I wrote below, the Republicans do not have an answer to this argument, and is further evidence that the Obama campaign is in the process of seizing control of the race.

I offered these thoughts on the making the struggle of every day people the central focus of our politics a few weeks ago.

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