Obama Administration

Recap: Today’s White House Hispanic Policy Conference

Today Kristian and I were lucky enough to be among the participants in the White House's Hispanic Policy Conference.  Issues covered included education, health care, science and technology, immigration, and housing.  The break out sessions I was in were largely participant driven and focused on local leaders and practitioners, not the beltway insiders. 


What I began to notice by the end of the day is that across issue areas there is a common disconnect between what the federal government offers and what the American public, particularly members of the Latino community, know they have access to.  Connecting local communities with the programs that are meant to help them remains the macro structural challenge.


Here's another way of looking at it:  today, #AtTheWH, the Twitter hashtag used for the  policy conference was a trending topic in Washington, DC.  The real measure of success will be making it, along with the information shared, a trending topic across the country. 

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.


Thoughts on Wall Street 2.0

Check out the following passage.  Is it from the Onion?

No, amazingly, it is from the NY Times today:

During World War I, Americans were exhorted to buy Liberty Bonds to help their soldiers on the front.

Now, it seems, they will be asked to come to the aid of their banks - with the added inducement of possibly making some money for themselves.

As part of its sweeping plan to purge banks of troublesome assets, the Obama administration is encouraging several large investment companies to create the financial-crisis equivalent of war bonds: bailout funds.

The idea is that these investments, akin to mutual funds that buy stocks and bonds, would give ordinary Americans a chance to profit from the bailouts that are being financed by their tax dollars. But there is another, deeply political motivation as well: to quiet accusations that all of these giant bailouts will benefit only Wall Street plutocrats.

The potential risks - politically for the administration, and financially for would-be investors - are considerable.

The funds, the thinking goes, would buy troubled mortgage securities from banks, enabling the lenders to make the loans that are needed to rekindle the economy. Many of the loans that back these securities were made during the subprime era. If all goes well, the funds will eventually sell the investments at a profit.

But, as with any investment, there are risks. If, as some analysts suspect, the banks' assets are worth even less than believed, the funds' investors could suffer significant losses. Nonetheless, the administration and executives in the financial industry are pushing to establish the investment funds, in part to counter swelling hostility against the financial industry.

Many Americans are outraged that companies like the American International Group paid out many millions in bonuses despite crippling losses and multibillion-dollar rescues from Washington.

The embrace of smaller investors underscores the concern in Washington and on Wall Street that Americans' anger could imperil further efforts to stimulate the economy with vast amounts of government spending. Many Americans say they believe the bailout programs - and the potentially rich profits they could yield - will benefit only a golden few, including some of the institutions that helped push the economy to the brink.

"This is an opportunity to forge an alliance between Main Street, Wall Street and K Street," said Steven A. Baffico, an executive at BlackRock, referring to the Washington address of many lobbying firms. BlackRock, a giant money management firm, is playing a central role in the government's efforts and is considering creating a bailout fund. "It's giving the guy on Main Street an equal seat at the table next to the big guys," he said.

The new funds are still under discussion, and they are unlikely to be established for several months, if indeed the plans go through at all.

Throughout this financial and economic crisis there has been this lingering sense that those close to Wall Street believe a "recovery" is possible, that our economy and our behaviors will snap back to the pre-crash boom years when cash flowed, government regulators looked the other way and profits were extraordinary.  That those in charge need to channel this "populist" anger towards the Street, calm it down and things will settle back down to normal. 

I just don't think this is going to happen. 

First, economic elites have been deeply and dangerously out of touch with the American middle class this decade. For elites it was a time of boom, appreciating assets, cheap money, and a radical reduction in their taxes.  For those struggling to make it the Bush years were a very different experience - declining incomes, more without health insurance and in poverty, exploding debt and a sense of falling further and further behind. 

Both the intensity of the anger towards the banks and the steepness of our Great Recession can only be understood if one understands that the typical family was already in distress before the Recession began; that for them the economy turned tough years ago and those in power were unconcerned, did nothing about it and if anything told them in a terribly Orwellian fashion that contrary to their experience things were actually good.  This "anger" is not therefore ephemeral, and will not quickly dissipate.  It has built up over a long time, a time when those in power enriched themselves and offered to everyone else a modern version of "let them eat cake."  

Second, what ails the American financial system today is not a crisis in confidence but a crisis of trust; and I agree with Barack Obama that because our families were already in such distress, and have such unsustainable levels of debt the "voracious American consumer" is not coming back soon.  What this means in policy terms is that the Obama Administration should not be focused on saving discredited financial institutions and going back to the good ole days.  Brands like AIG and Citigroup cannot be saved.  Who in their right mind will do business with them given what has happened? What leaders in the developing world, so harmed by this American-led global economic crisis, will allow their citizens or their governments to put money in these wildly irresponsible American institutions?  The government should immediately begin dismembering these companies, selling off whatever valuable parts remain for like Chrysler they are no longer capable of surviving as independent brands. 

For our financial system to regain the trust of Americans and those abroad a much serious effort will have to be made to show that the lax regulatory system has been fixed and consumers better protected; those at the center of the global crisis expunged and damaged brands shut down (and not put in charge of fixing the system itself); and if in any way in this process of fixing everything a small number of elites get super wealthy all these reforms, this effort to build back global trust, may be for naught. 

As I wrote when I returned from my recent trip to Chile, I think the American financial community is in deep denial about the global loss of trust that has come from their reckless behavior.  To many the Masters of the Universe have now become reckless, greedy exporters of economic contagion.  Salvaging the once highly successful American global financial sector will require much more than the firing of a few CEOs or a few slap on the wrists while floating these very same companies trillions of dollars.  It will require first and foremost a rejection of the concept of "recovery;" and it will require a fundamental transformation of Wall Street, a Wall Street 2.0, a new, improved, different and chastened Wall Street, and the sooner we get there the better for all of us.

NDN and other Groups Deliver Letter to the Obama Administration Outlining Priorities to Fix the Broken Immigration System

Over Twelve-Hundred Groups Sign Letter to New Administration

Over 1,200 advocacy and non-profit organizations, including NDN, delivered a letter to the Obama Administration outlining priorities in order to fix the broken immigration system.  The letter stresses the urgency with which the new Administration should approach immigration reform legislatively and administratively, noting that efforts to address the many ills facing our immigration system have become the victim of gridlock in Washington for too long.

"Over the last eight years, immigrants and their families, employers and workers alike, have suffered from our nation's inability to find common ground on the issue of immigration reform," states the letter, which was signed by groups in 39 states plus Puerto Rico and the District of Columbia.

Noting the President's background and the new era his presidency signals, the letter says, "As the son of a Kenyan national and a woman from Kansas, you validate the American dream and we believe that your victory represents a triumph for tolerance and hope."

While we hope the Administration acts swiftly to address the most egregious problems with the enforcement practices and last minute regulatory changes of the previous Administration, there is only so much President Obama and his team can do on their own.

"While President Obama can address some matters administratively, ultimately the President must propose and the Congress must enact meaningful, broad immigration reform to bring order to the current chaos," said Ali Noorani, Executive Director of the National Immigration Forum. "Reform that is fair, respects the rights of immigrants and non-immigrants, strengthens our economy, reduces the black market, and gets immigrants and employers playing by one set of enforceable rules should be the goal.  We know what needs to be done, now we have to summon the political will and focus the President's political muscle on making it happen."

"The urgency for reform cannot be overstated," the letter says.  "Unless and until we recalibrate our policies, all Americans' rights will be at risk, our communities will be divided and the power of our nation's fundamental principle of E Pluribus Unum compromised."

The letter, delivered late last week to the President's transition team, is part of a broad effort to bring together immigrants, advocacy and civil rights organizations, faith leaders, employers, trade associations, and labor unions in an effort to enact immigration reform as quickly as possible.

"In the 2008 elections, immigrant voters and their families turned out across the nation in unprecedented numbers. They were inspired by your message, including your commitment to a comprehensive reform of our nation's immigration system. The reform challenge is formidable, but so is our resolve," the letter states.

For the full text of the letter and list of signatory organizations, click here.

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