Clean Infrastructure

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.

New York City -- The New York Times reports this morning that the financial rescue framework to be announced by Treasury Secretary Geithner later today will not include a housing or mortgage component to help keep people in their homes.  Instead, what is best viewed as the third leg of the Administration's economic recovery program--the first two being the Recovery Act and the program to stabilize lending--will be announced next week.  $50 billion of TARP money is said to be on tap to address the housing problem NDN has long argued is central to working through the current crisis.  There is thus time to get this housing proposal right and, I hope, include a new low cost mortgage for American families.

There are a variety of proposed measures to help keep people in their homes.  One simple idea, vigorously opposed by the mortgage lobby but championed by Senator Durbin and many Democrats, would be to allow bankruptcy judges to modify mortgages as they currently may do with commercial loans.  Lenders (except Citi which has dropped its opposition) fear this because, they worry that borrower friendly judges by reducing principle would cloud recovery prospects for any loan.  Their worries are excessive because--even if modifications were allowed--the negative consequence of Chapter 13 are so large that most defaulting borrowers would not opt to go this route.  By the same token, while allowing modifications would improve the leverage of delinquent homeowners, help in some cases and is, thus, on balance a good idea, this change alone cannot resolve the mortgage crisis.

A second idea is to expand cookie cutter modification programs such as the FDIC's modification in a box.  Under this plan which the FDIC is using to modify loans it has acquired in taking over failed banks such as Indy Mac, loans are modified based on the borrower's ability to pay and payments cut to 31% or so of the borrower's income.  However, the borrower still owes the full principle amount upon sale.  So, in the end, this is a recipe for keeping people in their homes but underwater.  It has the downside of encouraging people to go into default to take advantage of the program and would not encourage new purchases of homes.  It is best thought of as a limited program.

A third idea is to encourage investors in the mortgage securities market to buy up mortgages to pump more money into the market.  The Fed has already been buying up mortgage backed securities of Fannie, Freddie and Ginnie Mae but, according to one study, without appreciably impacting the affordability of loans.  The Fed, might, however upon acquiring enough of these, begin to modify them in the event of foreclosure.  This approach is no silver bullet either.

The last idea which I believe has the best prospects of stabilizing the housing market is a 4% fixed mortgage (for the time being) to be guaranteed by the Federal Government.  The potential advantages of a simple, USA mortgage for the American public are huge.  First, a simple program would not discriminate against new buyers or those making their payments, eliminating any incentive to default or go into bankruptcy.  It would end defaults due to option ARMs and, take interest rate reset risk for homeowners off the table for many years to come.  Finally, by lowering the payments of American families it would free up considerable demand in the economy for many years.  It would, in short, go a long way to stabilize housing and strengthen the economy  Of course, certain banks still collecting on high interest loans would lose their supercharged returns.  But reducing risks of default would suitably compensate them.  Like some of the great social programs in American history, such as Social Security and the GI Bill, this program has the advantage of being a universal benefit and would be in the best spirit of putting all Americans on an equal footing.

However, no sooner did I put forth my idea for the USA mortgage than Republican support for a similar idea led to an avalanche of attack, from of all places, conservative economists.  Conservative Harvard urban economist Ed Glaeser said it reminded him of the New Deal and argued that Republicans should look to Ronald Reagan not FDR for inspiration.  And today, none other than Nobel Laureate Gary Becker attacks the idea in the Financial Times.  Becker won his Nobel Prize for extending economic ideas into non monetary social relations such as marriage, fertility and crime.  Along with only a handful of other economists, he helped engineer the spread of faith in markets.  Here's why he is wrong, however, on the 4% mortgage.

His argument against the 4% mortgage is largely that the program would require a substantial government guaranty, cost $100 to $150 billion net and raise home prices by at most 5% if at all.  Let me take these in turn.  First, the government is already guaranteeing about 5 trillion in mortgage backed securities since its seizure of the GSEs, Fannie and Freddie.  A properly structured loan program would be no more risky than these assets and increase guarantees, even using Becker's numbers by about 15%.  Second, the actual cost to the Treasury, if any, would be far less than under alternative scenarios where high interest mortgages would be more likely to encourage defaults.  However, perhaps the real flaw with Becker's argument is that this program is not about raising home prices.  Rather, it is about ending the raft of foreclosures from resets, stabilizing the market so that it can recover in due course and finally increasing demand in the economy by keeping payment manageable.  If it happens to increase home prices by 5%, than that is merely icing on the cake.

Indeed, the assault on the 4% mortgage idea by conservative economists--as brilliant as they may be in their academic work--is evidence that this is a benefit, above all, for ordinary American people, not for the free market faith.

The Obama Administration and Congressional Democrats should take the unexpected support for this idea by Senate Republicans and run with it.  A good starting point is including it in the housing plan to be announced next week  This is a rare opportunity to create a historic benefit for the American economy and the American people.

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.

New York City - Debt crises, as I have written before, are as old as civilization. And history has shown that when debt exceeds the ability to repay, there is only one solution: debt reduction. This can take the form of a general release as in the Biblical jubilee or laws of Solon in ancient Athens, a moratorium on repayment and reduction of interest as in the decrees of the Roman emperor Tiberius, forgiveness of principle as in Bono's initiative for the developing world, bankruptcy at the level of the individual firm, or if all else fails, inflation as in Germany after World War I. However, there is no getting around the fact that when people can't pay, the only real answer is debt reduction. It is time for Congress and the Administration to face up to that fact in the arena of mortgages as we work through the current financial crisis.

Mortgages remain a key part of the current crisis, as evidenced by the vastly different fate of banks that currently hold mortgage-backed securities such as Citi (whose stock is trading at 3.7) and banks that avoided them such as JP Morgan Chase (whose stock is trading at 25).  The biggest casualties of the crisis so far -- such as Bear Stearns, Lehman and AIG, not to mention Fannie and Freddie -- fell, in large part, due to their involvement with mortgage- backed securities. Mortgage-backed securities and the mortgages that underlie them remain at the eye of the financial hurricane.

However, at the level of the individual household, the mortgages that underlie them are also hampering recovery. Forced to choose between keeping their homes and spending, people will try to keep their homes as long as possible. Unsustainable mortgage payments, thus, are a direct challenge to any effort to jump start the economy. Absent real action by the government, these mortgage payments will continue to drive foreclosures, lower home prices and eviscerate household budgets for the foreseeable future. Fortunately, there is something government can do.

While principle amounts as well as interest rates are a problem, the latter can be altered simply by allowing Americans to refinance into affordable fixed rate mortgages. Of course, banks themselves are not about to lend money to mortgage buyers at 4% in the current environment. That is why the federal government needs to step in with an ambitious new federally guaranteed mortgage to solve the mortgage crisis once and for all. 

A new low-interest mortgage is the key ingredient needed to get American households spending again. In other words, it is no exaggeration to say that economic recovery is hostage to mortgage reform.

Someone who has been writing about the need for debt reduction for some time is British historian Niall Ferguson who returns to the subject today in the Financial Times.  He notes that in the 19th century, it was common for governments to replace 5% notes with 3% notes through a process called conversion. When markets are working properly, it is often possible for borrowers themselves to practice conversion by refinancing at a lower rate. However, in today's environment in which underwater mortgages continue to cripple household budgets but replacement mortgages are hard to come by, Ferguson makes the point that conversion of the whole class of adjustable rate mortgages with a new low-interest mortgage is needed to work through the current crisis.

Not everyone would take advantage of the U.S. mortgage, as I would call it, nor should they.  If someone's house has depreciated well below the level of the mortgage, that mortgage is no longer worth par. Provision might be made to permit banks to sell underwater mortgages at a hefty discount. However, a large share of high-interest mortgages that are currently problematic for lenders and crippling for borrowers could be converted into stable-performing mortgages through an orderly refinancing into a 4% fixed-rate mortgage. A universal waiving of pre-payment penalties would be a small price to pay to fix a gigantic problem with one stroke. The program is doable today at rates south of 5% because of historically low costs to the government of borrowing. 

The benefits going forward would be immense. Ferguson argues that "permanently lower monthly payments for a majority of US households would almost certainly do more to stimulate consumer confidence than all the provisions of the stimulus package, including the tax cuts."  In my view, they would complement other efforts. And think of the long-term benefits after the current crisis subsides! A stable, low-cost mortgage for American families would improve family budgets, living standards and the U.S. economy for many years.

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.

New York City -- A little over six months ago, I proposed to the economic team within the Obama campaign and, subsequently, to the world at large, a green stimulus bill that would stimulate the economy in the short term, but also work for the long term to include tax credits and money for renewable energy, weatherization, mass transit, retrofitting buildings and building workforce housing. All of these proposals and more passed an important milestone yesterday on their way into becoming law with the House passage of what has become an $820 billion bill solidly weighted toward green investments. We are very happy to see the President and Congress working to create the foundation for a low-carbon future, independence from foreign oil and the next great wave of economic growth. The action now moves to the Senate where we expect these proposals will be incorporated into similar legislation.

At the same time, however, the nature of the stimulus bill process, in particular, the need to move the money out quickly through previously authorized law, means that this bill represents, as the President has said, only a downpayment on needed investments. It does not, nor could it, given the short time frame, create all the new investments that will be needed to bring the American economy fully into the 21st century.  More work is needed to reform our funding process, for example, and update regulation to make the long-term investments in clean infrastructure needed to update our infrastructure for a more productive 21st century.

Nonetheless, the action by the House represents an important milestone.  We are hopeful the Senate will move rapidly in due course to pass similar legislation that meets the President's goal of signing the American Recovery and Reinvestment Act into law in the next few weeks.

With negotiations on President Obama's economic recovery and reinvestment plan underway, we present much of NDN's key work on the economy, creating a stimulus for the long run, keeping people in their homes, and clean infrastructure:

• Analysis: Obama outreach to GOP a balancing act by Tom Raum, Associated Press, 1/28/2009 - Dr. Robert Shapiro warns against letting the stimulus package degenerate into "politics as usual."

• 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.
• Clean Infrastructure: Transportation Policy for the 21st Century, 1/14/2009 - NDN's Green Project hosted this event on Capitol Hill with Congressman Earl Blumenauer, Chris Leinberger, and Bob Peck on creating a transportation policy aimed at creating 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.

• More Ideas for the Stimulus: Free Computer Training for All Americans by Simon Rosenberg, 12/14/2008 - Rosenberg argues that successfully transitioning America and its people to a technology-rich economy is one of the incoming President's most daunting challenges, and one he seems to understand.

• The Global Economic Crisis and Future Ambassadorial Appointments by Simon Rosenberg, 11/26/2008 - With the mammoth task of rebuilding international financial architecture and recovering from a global recession awaiting the new President, Rosenberg points out the the ambassadors to the G20 nations will be key members of the economic team.

• A Vision for a Modernized Electric Grid: Clean Infrastructure for a 21st Century Economy,
  11/18/2008 - NDN's Green Project hosted this discussion with Congressmen Jay Inslee and Earl Blumenauer, FERC Comissioner Jon Wellinghoff, Kurt Yeager, and Reid Detchon on the benefits of modernizing the nation's electric grid as part of a clean infrastructure agenda.

• 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.

• The Green Economic Opportunity and Energy and the American Way of Life, 8/1/2008 - This two-part event featured an address from U.S. Senate Assistant Majority Leader Dick Durbin on the benefits of a low-carbon economy and Roger Efird, Greg Kats, Jack Hidary, and Shyam Kannan discussing green buildings and clean technology.

• Solar Energy: The Case for Action by Michael Moynihan, 8/1/2008 – This major paper on the dynamic solar industry argues that accelerating the deployment of solar energy must become a top economic policy priority of the United States.

• Trading in the Trading Down Economy by Michael Moynihan, 7/11/2008 - As economic activity trended downward, Moynihan argued for an economic vision that both moved America beyond the recession and positioned the country for long term prosperity.

• The Idea-Based Economy and Globalization: The Real Foundations of American Prosperity in the 21st Century by Dr. Robert Shapiro, 1/23/2008 – In this important paper, NDN Globalization Initiative Chair Dr. Robert Shapiro examines how and why U.S. companies and workers lead the world in developing and applying new intellectual property, and why this leadership in innovation
  constitutes a critical U.S. advantage in globalization.

• Investing in Our Common Future: U.S. Infrastructure by Michael Moynihan, 11/13/2007 - This far-reaching paper proposes a set of measures rebuild and advance our aging infrastructure. These proposals include a GREEN Act to require that federal infrastructure and buildings meet a higher set of environmental standards that not only address issues such as global warming but also establish American leadership in green technologies.
• Tapping the Resources of America's Community Colleges: A Modest Proposal to Provide Universal Access to Computer Training by Dr. Robert Shapiro, 7/26/2007 – This innovative proposal details how every American can have access to computer training, thereby upgrading the skills of the nation’s workforce.

• The New Landscape of Globalization: The Real Foundations of American Prosperity in the 21st Century by Dr. Robert Shapiro, 6/20/2007 – Shapiro offers this forward-looking paper on the current state of globalization and how America can thrive in this new economic era.

• A Laptop in Every Backpack by Simon Rosenberg and Alec Ross, 5/1/2007 – Rosenberg and the One Economy Corporation’s Ross offer a modest proposal for putting a laptop in the backpack of every American sixth grader, as connectivity to and facility with the global communications network are essential for success in the 21st century.

• Video: SEIU President Andy Stern speaks to NDN about the New Landscape of Globalization, 6/20/2007

For more of NDN's 21st century economic strategy for America, please visit our Globalization Initiative page.

New York City -- President Obama's executive orders today on energy that include allowing states to set their own emissions standards and his decision to accelerate standards for 2011 cars are a welcome relief after the climate obstructionism of the Bush years. Welcomed by Republican Governor Schwarzenegger and other governors on both sides of the aisle, President Obama's order will give states the flexibility denied them by the Bush Administration to take action on cleaning their states and taking action on climate change.

The President's statement made clear that the various initiatives are designed to enhance, not in any way harm, the competitiveness of the U.S. auto sector. This quick action on the climate issue is another sign of the urgency with which the new Administration views climate change. We expect more executive orders to help create a clean economy in coming days.