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"MyDD" - 6 new articles

  1. Krugman on The Economic Narrative
  2. Carly Fiorina vs Barbara Boxer Debate: Live Coverage and Analysis
  3. Joseph Stiglitz: 'Trickle Up Economics' to Blame for Crisis
  4. Midweek Diary Rescue
  5. The Dying Gasps of Nativism
  6. It's Miller Time in Alaska
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  8. Search MyDD

Krugman on The Economic Narrative

Paul Krugman tackles the problem of the economic narrative today:

The way the right wants to tell the story — and, I’m afraid, the way it will play in November — is that the Obama team went all out for Keynesian policies, and they failed. So back to supply-side economics!

The point, of course, is that that is not at all what happened. A straight Keynesian analysis implied the need for a much bigger program, more oriented toward spending, than the administration proposed. And people like me said that at the time — we’re not talking about hindsight.

You can argue that nothing bigger and better was politically feasible; we’ll never know about that. But what we do know is that (1) senior administration officials, even in internal arguments, claimed that half-measures were the right thing to do, based on … well, invented doctrines that certainly weren’t basic Keynesian. And (2), the administration has never said that it had to make do with an underpowered plan; on the contrary, to this day it maintains that what it did was just right. And this just feeds the false narrative.

As Ronald Brownstein noted in the National Journal back in April, the Republicans' narrative about Obama's economic agenda has been straightforward and unrelenting. Brownstein writes "in their telling, Obama is transforming the United States into a sclerotic European social-welfare state; forcing the strained middle class to fund both a "crony capitalism" of bailouts for the powerful (the charge McConnell leveled against the financial bill) and handouts for the poor (through health care reform); and impeding recovery by smothering the economy beneath stultifying federal spending, taxes, and regulation."

The GOP's distorting narrative has been so successful that there are even those on the left who believe that the Troubled Asset Relief Program was some sort of optional exercise, a safety net for Wall Street. There are certainly valid criticisms to be made of the TARP, which is a George Bush/Hank Paulson policy to begin with, but the necessity of preventing a collapse of the banks should be quite clear to everyone. The TARP provided the necessary liquidity to keep the credit markets afloat when the danger was very really of a wider systemic collapse. In December 2009, the Oversight Panel headed by Elizabeth Warren concluded:

There is broad consensus that the TARP was an important part of a broader government strategy that stabilized the U.S. financial system by renewing the flow of credit and averting a more acute crisis. Although the government’s response to the crisis was at first haphazard and uncertain, it eventually proved decisive enough to stop the panic and restore market confidence.

More recently, I covered the Blinder Zandi Report which detailed what would have happened had we not acted. The report, authored by Mark Zandi, Moody's chief economist and a former adviser to both the McCain and Obama campaigns, and Alan Blinder, a Princeton economist who has served as vice chairman of the Federal Reserve's Board of Governors, offers the first comprehensive estimate of our full response to the crisis: Absent the TARP and the fiscal stimulus, "GDP in 2010 would be about 6 ½ percent lower, payroll employment would be less by some 8 ½ million jobs, and the nation would now be experiencing deflation." The TARP worked; the fiscal stimulus worked but should have been $1.3 trillion in size with fewer tax cuts and more actual investment spending.

I'm not sure if the Obama Administration is salvageable to be quite honest. The President and his team may win re-election or they may not depending on the caliber of the GOP opposition and how unemployment tracks between now and 2012. There's not much we can do about the former but there is still much that the Administration can do about the latter.

The GOP has since 1960 demonstrated a tendency to nominate a conservative as their standard bearer after an electoral loss. Thus a Nixon loss in 1960 begot Goldwater in 1964, a Ford loss in 1976 lead to Reagan in 1980, and Dole loss in 1996 brought Bush in 2000. I'm pretty confident that whoever the GOP nominee is 2012, it is going to be someone to the right of John McCain. Still that leaves a lot of ground to cover and dozens of shades of insanity with which to contend. There is a big difference between Mitch Daniels and Sarah Palin, between John Thune and Rick Santorum, between Tim Pawlenty and Mike Huckabee, between Mitt Romney and Newt Gingrich. And while Mitch Daniels may be the sanest of the bunch, he's still quite to the right of John McCain.

Nonetheless, as of now and noting that in politics 26 months is an eternity, I think Mitch Daniels represents probably the toughest challenge for Obama among the potential 2012 Republican nominees. But I don't think that Mitch Daniels can win the GOP nomination as things stand now.

The other moving part on Obama's re-election prospects are how the Administration handles the economy and in particular the vexing issue of unemployment. In this regard, I would like to see the following personnel changes in the Administration: Laura Tyson replacing Lawrence Summers as Director of the White House National Economic Council, Austan Goolsbee taking over for the departing Christina Romer as chair of the White House Council of Economic Advisers, Jon Corzine taking over as Secretary of the Treasury for the hapless Timothy Geithner and John Podesta returning to White House as Chief of Staff. I'd also find a role for Joseph Stiglitz, Simon Johnson and Dean Baker. It should go without saying that Elizabeth Warren needs to be named as the head of new Bureau of Consumer Financial Protection. 

I'll nip in the bud the push back on Corzine as Treasury Secretary: if you want to reign in Wall Street, you'll need someone who knows the major players intimately and who can make some of the more obtuse, like say Dan Loeb and Jamie Dimon, understand that it is in Wall Street's best interest to return to the pre-Reagan regulatory environment. That's going to be a hard sell because these titans of capital now seen themselves as political gatekeepers to a degree that we have not seen since the days of J.P. Morgan a full century ago.


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Carly Fiorina vs Barbara Boxer Debate: Live Coverage and Analysis

Moraga, California is the scene the first U.S. Senate debate between Carly Fiorina and Barbara Boxer. The one hour debate begins at 7 PM Pacific and will be aired live in every media market in California and nationally on C-SPAN.

The stakes are high, according to the two most recent public polls, Senator Boxer is either winning by five points or losing by five points.

The focus tonight should be on jobs. In fact, it would make sense for the debate to only focus on jobs and leave everything else for other debates. California is in a serious jobs crisis. Today's July numbers, showed that 12 of the 17 metro areas with unemployment over 15% are in California. The metro area with highest unemployment is in California, scoring over 30%. When it comes to voting this fall, Californians especially need to know where the candidates stand on jobs.

Live-blog after the jump. Tune in via KTVU or C-SPAN


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Joseph Stiglitz: 'Trickle Up Economics' to Blame for Crisis

Why Joseph Stiglitz isn't in the Administration is beyond me. In this lecture given at the University of Queensland in Brisbane, Australia in late July, Dr. Stiglitz puts the blame squarely for our economic meltdow squarely where it needs to be placed: on Ronald Reagan and his free market and low taxation policies that have redistributed wealth upwards. He argues that "trickle up economics" created the credit bubble that triggered the recent financial crisis. "There was a party going on, and nobody wanted to be a party-pooper," says Stiglitz.

Since 1976, 58 percent of all income gains have accrued to the top one percent of US households. Meanwhile, 25 percent of American workers earn a wage that puts them at or below the poverty level. If the redistribution upwards since 1981 had not taken place, if the average American family in the bottom 90 percent were today getting the same share of the nation's income as the average bottom 90 percent family received in 1973 when income distribution was much more egalitarian, this average family would now be taking home in income over $10,000 more per year. The wealth of the top tenth has come by impoverishing the bottom 90 percent. That's the legacy of Ronald Reagan.

Joseph Stiglitz was chief economist at the World Bank until January 2000. Before that, he was the chairman of President Clinton's Council of Economic Advisers. He was awarded the Nobel Prize in economics in 2001. He is currently a finance and economics professor at Columbia University. He is the author of Globalization and Its Discontents and The Roaring Nineties. The full hour long lecture plus a 30 minute Q&A session is available at Fora TV.


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Midweek Diary Rescue

After a brief hiatus, the diary rescue returns rested, and ready for the midterm ballyhoo.  And speaking of the midterms...


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The Dying Gasps of Nativism

Here's the latest video from Chase Whiteside and Erick Stoll of New Left Media interviewing attendees at Glenn Beck's Restoring Honor rally held this past Saturday in Washington. 

The sentiments being expressed are really no different than say the ones that were expressed at this McCain/Palin rally (video at The Guardian) in Colorado Springs back in late October 2008. The Guardian, at the time, wrote of Palin's adoring crowd that day that "beneath the cheers and applause, there was a lingering mood of defeat - a sense that it was all over, and that as much as anything, this was a goodbye rally for the woman who just months ago had so energised social conservatives." There's no question that "lingering mood of defeat" on the right has over the past two years been further transformed into a Lernaean Hydra of ignorance, anger, bigotry, righteous indignation, fear, sheer stupidity and irrationality.

That these people sincerely hold the belief that Obama is a racist Muslim Socialist born in Kenya underscores the influence of the right-wing propagandist machine that is Fox News and the right-wing blogs. Today a "hydra-like problem" or "hydra" refers to a multifaceted problem that seems incapable of step-by-step solution, or to one that worsens upon conventional attempts to solve it, for example, attempts to suppress a particular piece of information resulting in it being disseminated even more widely.

And we clearly face a hydra-like problem when it comes to the right-wing echo chamber. Let's face it, they have more money and their own media empire, a purveyor of misinformation like no other on the planet. But as Hercules did slay the Lernaean Hydra, so too we will slay the multi-headed serpent that is the nativist right with the sword that is demographics.

Back in 1998 at a speech at Portland State University, President Clinton noted:

Today, largely because of immigration, there is no majority race in Hawaii or Houston or New York City. Within five years, there will be no majority race in our largest state, California. In a little more than 50 years, there will be no majority race in the United States. No other nation in history has gone through demographic change of this magnitude in so short a time ... [These immigrants] are energizing our culture and broadening our vision of the world. They are renewing our most basic values and reminding us all of what it truly means to be American.

Indeed in 2001, California, the nation's most populous state, joined New Mexico, Hawaii and the District of Columbia where non-Hispanic whites are also in the minority. And in 2005, Texas became the fourth state to have a non-white majority population. As of 2008, the percentage of non-Hispanic white residents has fallen below 60 percent in Maryland, Georgia, Nevada, Arizona, New York and Mississippi. 

In thinking about Arizona's anti-immigration SB 2281, my thoughts are that the law is really not much more than an pathetic attempt at ethnic cleansing, a last ditch effort to drive Hispanics from the state. According to a Brookings Institution report, Arizona's Hispanic population has shot up 180 percent in the last 20 years, with the white population dropping from 72 percent to 58 percent. Hispanics account for about one-third of the state's 6.6 million people, and 90 percent of Hispanics under age 18 were born in the US. Even if all immigration from Mexico were halted tomorrow, the high birthrate of this young population would continue Arizona's population boom and its demographic shift. Arizona will become majority-minority state by 2020.

According to the US Census Bureau, the dominance of non-Hispanic white people, who today account for two-thirds of Americans, will be whittled away, falling steadily to less than half in 2042 and just 46 percent by 2050. In the opposite trajectory, those who describe themselves as Hispanic, African-American, Asian and Native American will increase in proportion from about a third now to 54 percent by 2050.

Such a rapid demographical shift is in tune with trends that we have been seeing for quite some time, but it is happening much faster than experts had predicted 12 years ago when President Clinton gave his speech. When I hear Tea Baggers talk about "taking back their country," I can't help but think that what they really mean is reversing that demographical shift. I suspect as that demographical shift takes increasing hold we will continue to be subjected to the dying gasps of nativism but they are grasping at straws if they think that the demographic shift can be reversed.

It's game, set, match for the nativist right but whether the non-nativist right can make inroads into the growing Hispanic electorate will depend on whether they amend their vitriol on immigration issues. For Democrats, it is certainly a political imperative that we enact a comprehensive immigration reform and remain attuned to the social justice concerns of most Hispanics but more importantly, I think, we need to demonstrate that our basic values include tolerance and cultural pluralism. These are the values to which President Clinton was referring to back in 1998 and these are the values that will ultimately assign the nativist right to irrelevancy.


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It's Miller Time in Alaska

Senator Lisa Murkowski has conceded the GOP primary to the Tea Party extremist Joe Miller, a West Point grad with a Yale law degree in private practice up in Fairbanks.

The story in the New York Times:

Mr. Miller shocked the political establishment here and in Washington last week when he emerged with a narrow lead, 1,668 votes, after the primary vote, on Aug. 24. His victory makes him the presumed favorite to win the Senate seat from this heavily Republican state.

Mr. Miller, who has proposed drastic cuts in federal spending, had trailed badly in local polls in the weeks before the election but benefited from a last-minute flood of advertisements, mailings and automated calls casting Ms. Murkowski as a Democrat in disguise. An abortion-related ballot measure also brought conservatives to the polls.

Many people said Ms. Murkowski’s failure to respond aggressively to Mr. Miller’s attacks, including some that distorted her voting record, had played an important role in her defeat. But she suggested on Tuesday that she had no regrets.

“I’m so proud of the campaign that we conducted,” she told reporters at her campaign headquarters here as dozens of friends and family members surrounded her and cheered. “It was honest. It was upright. It was energetic. It was what a campaign in Alaska should be.”

“We stayed on the high road,” Ms. Murkowski said. “We talked about how we move the state of Alaska forward.”

Her concession followed the counting of about 17,000 additional ballots in the race on Tuesday, which left Mr. Miller with a lead of 1,630 votes out of about 104,000 cast. Several thousand more votes were to be counted on Friday, but the trend suggested Ms. Murkowski would not gain enough ground to win.

“Based on where we are right now, I don’t see a scenario where the primary will turn out in my favor,” she said.

It's certainly a feather in Sarah Palin's cap. Another Republican who was beyond ecstatic was South Carolina Senator Jim DeMint. He issued a short statement calling Miller's win "a wake-up call."

Joe Miller’s victory should be a wake-up call to politicians who go to Washington to bring home the bacon. Voters are saying ‘We’re not willing to bankrupt the country to benefit ourselves.’”Now it’s time for Republicans to unite behind Joe Miller and help him win this important race in November. I’m proud to announce that the Senate Conservatives Fund will add Joe Miller to its list of endorsed candidates, and will immediately begin working to raise support for his campaign.”

Joe Miller now faces Scott McAdams, the former mayor of Sitka. A Public Policy Polling survey released Sunday showed McAdams trailing Miller by only 8 points in a two-way race, 39 percent to 47 percent. McAdams would not fared as well if he had run against Murkowski. That same poll showed Murkowski leading McAdams, 60 percent to 28 percent.

There had been talk of replacing McAdams with a higher profile Democratic candidate but Senator Mark Begich and the Alaska Democratic Party have reaffirmed their support. The key now is raising at least a million dollars to run an effective campaign. McAdams had raised less than $10,000 as of his last FEC filing.

Miller is perhaps the most extreme candidate running this cycle and that's quite a statement given the likes of Sharron Angle, Rand Paul and Marco Rubio. Miller wants to eliminate the Departments of Education and Energy. He believes that unemployment insurance and Medicaid are unconstitutional and has called for sweeping cuts to Medicare and Social Security with a goal of phasing them out entirely in favor of total privatization. He wants to ban all abortions, even in the case of rape or incest. And while he favors deep spending cuts to social safety net programmes, the former combat veteran of the first Gulf War does not think the defense budget should be cut.

“If we have one nuclear bomb or one chemical weapon go off in one of our cities overnight, it changes the face of this nation and in a horrific way, not just in loss of life, but in loss of freedom, the impact financially,” Miller told the Fairbanks News Miner. “We still haven’t recovered from 9/11. We can’t afford to have a military that isn’t that strong, but that doesn’t mean we can’t have efficiencies, and I think that’s what the secretary is trying to build.”

 


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