A tough day on the job front. The U.S. Department of Labor reported today that the U.S. economy shed 159,000 jobs in September, the biggest monthly decline since 2003. Earlier estimates had job losses closer to 100,000. These numbers don’t reflect fallout from the most recent financial crisis, since the survey was conducted the week of September 8. Is it any solace that the unemployment held steady at about 6 percent? David Leonhardt of the New York Times has a good analysis of the report.
On the campaign trail today in Pennsylvania, U.S. Sen. Barack Obama spoke of the job losses, while getting in some digs at VP candidate, Gov. Sarah Palin:
You know, there were a lot of noteworthy moments in that debate, but there’s one that sticks out this morning. It’s when Governor Palin said to Joe Biden that our plan to get our economy out of the ditch was somehow a job killing plan.
I wonder if she turned on the news this morning.
Because it was just reported that America has experienced its ninth straight month of job loss. Just since January, we’ve lost more than 750,000 jobs across America, 7,000 in Pennsylvania alone. This is the economy that John McCain said – just two weeks ago – was fundamentally strong. This is the economy that my opponent said made great progress under the policies of George W. Bush. And those are the economic policies that he proposes to continue for another four years.
So when Senator McCain and his running mate talk about job killing, that’s something they know a thing or two about. Because the policies they’re supporting are killing jobs every single day.
As the economy worsens, Obama’s prospects brighten, as politics go. Yesterday’s new Pew survey indicates that in just the past couple of weeks, the number of voters who view Obama more favorably than McCain on the economy and financial crisis has grown. The bad news on the economy has helped to expose McCain’s empty plans to create jobs and restore prosperity, and allowed Obama to flesh out his economic plans and demonstrate his dexterity on the issues. His ads in which he talks directly to the camera about his economic program, feel authentic and reveal an organized, focused mind in the midst of chaos on Wall Street and Capitol Hill.
Earlier this morning, Simon highlighted the findings of a new CBS poll that show U.S. Sen. Barack Obama gaining significant ground on U.S. John McCain. Also in the poll were new findings that economic anxiety is as high as it has ever been in the history of the poll. Now, we don't need polls to tell us that things are grim out there, but the data here was startling nevertheless. Nine in ten Americans say the economy is in very bad or fairly bad shape, the highest measure since The Times and CBS News began asking the question in 1986. Less than one percent of those polled said the economy was in very good shape. Americans aren't seeing an end to the gloom -- 76 percent say the economy is getting worse, the most pessimistic Americans have been since the question was first asked in 1974. Ugh. Sounds like a good time for a changing of the guard at the White House.
I don’t know about you, but the recent financial meltdown has almost brought about paralysis of thought. How to make sense of sense of the flurry of Hill meetings last week, a nearly cancelled presidential debate, a failed bailout vote in the House, bizarre ramblings from a certain VP candidate about “this globalization that we’re a part of in this world,” the drop in the Dow, the endless explanations from economists who struggle to distill the issue into something digestable?
Scouring over the “no” votes on the House bailout package, I saw that the two Representatives that I follow, Republican Jean Schmidt in Ohio and Democrat Elijah Cummings in Maryland, folks who don't agree on much, both voted No. What would I do if I were in their shoes? Would I take the side of the many Americans who disagree with expensive and fast-moving action to bail out Wall Street? Or would I work to do something, anything, to address the unraveling of our financial system, agreeing with the other side that Americans just aren’t getting the severity of the situation (though I did have a good laugh listening to Chris Matthews rail last night that “this issue is so over the heads” of Pres. Bush, U.S. Sen. McCain, and other folks on the Hill). In any event, this brings me to the point of today’s post – a front page New York Times article by David Leonhardt about the public’s skepticism of a $700 billion bailout package. He opens with a parable from the Great Depression:
In 1929, Meyer Mishkin owned a shop in New York that sold silk shirts to workingmen. When the stock market crashed that October, he turned to his son, then a student at City College, and offered a version of this sentiment: It serves those rich scoundrels right.
A year later, as Wall Street’s problems were starting to spill into the broader economy, Mr. Mishkin’s store went out of business. He no longer had enough customers. His son had to go to work to support the family, and Mr. Mishkin never held a steady job again.
Leonhardt goes on to explain that, for now, the crisis has had little effect on most Americans, beyond their 401(k) statements. He, like others, criticizes U.S. Secretary Paulson and Fed Chairman Ben Bernanke for their poor ability to communicate to American voters, in simple and real terms, the crisis and what to do about it. So Leonhardt gives it a try, and I admit that it is one of more cogent, concise explanations I’ve read. He doesn’t get in the weeds or show off his economic acumen, but rather relates the facts of the broader financial crisis to the everyday economic decisions and options facing everyday Americans. His final paragraphs were the most important, and helped to shore up my support (as a voter) for a bailout:
But in the end, this really isn’t about Wall Street. It’s about reducing the risk that something really bad happens. It’s about limiting the damage from the past decade’s financial excesses. Unfortunately, there is no way to accomplish that without also extending a helping hand to Wall Street. That is where our credit markets are, and we need them to start working again.
“We are facing a major national crisis,” as Meyer Mishkin’s grandson says. “To do nothing right now is to do what was done during the Great Depression.”
U.S. Sen. Barack Obama didn't miss a beat in denouncing U.S. Sen. John McCain's assertion that "the fundamentals of the economy are strong" in a speech yesterday. Politics aside, that was an astounding statement amid the collapse of Lehman Brothers and the seven-year low of the stock market yesterday. Take a look at Obama's new ad, "Fundamentals:"
Thank you, New York TimesEditorial board, for saying what we’ve been saying for well over a year now – as productivity and economic growth have gone up, wages and employment have gone down. This “disconnect,” as the Times calls it, was thoroughly detailed in Rob Shapiro’s “The Landscape of Globalization” paper last summer and has served as the basis of much of our advocacy efforts in the last year.
Says the Times:
Fixing that disconnect is the central economic challenge for the next president.
Yes, we agree with that. When NDN talks about our “globalization narrative,” we start by laying out the disconnect between growth and wages. We then identify steps the government can take to ease pressures on wages and new job creation. The Times agrees that while the government can’t do it all, it “can try to stop things from getting much worse, helping to set the stage for a rebound.” NDN argues that we must reform our health care and energy policies; invest in infrastructure and education; and accelerate innovation across the economy.
The Times takes a look at what U.S. Sens. Obama and McCain are doing to address the disconnect.
On Sen. Obama:
Senator Barack Obama has addressed the issue conceptually, rejecting the “you’re on your own” ethos of the Bush years. He has put forth prescriptions, including specific plans to create jobs with public-works investments, and he supports legislation that would make it easier for employees to form unions.
On Sen. McCain:
Senator John McCain has also pledged to address the struggles of working Americans. Both candidates say their energy plans will create jobs. But Mr. McCain emphasizes more high-end tax cuts as the main engine for new jobs. Tax cuts are always politically popular. As job generators, however, they are a loser strategy, especially now. The Bush era, with its huge tax cuts, has the worst job-creation record of any post-World War II economic cycle.
We, like the Times, think that Sen. Obama is on the right track here. Says the Times:
Obama should sharpen his promising ideas. Mr. McCain has yet to address the real economy’s real problems head on.
In related news, Sen. Obama had this to say on new budget deficit numbers:
“Today, we learned that Washington has run up a record budget deficit of $407 billion this year, more than $1 trillion worse than the budget surplus President Bush promised for 2008 in his first budget. John McCain wants us to think he represents change, but he wants to spend $3.4 trillion more than President Bush on tax cuts, most of which will go to the wealthiest corporations and big oil companies and leave more than 100 million middle-class families without a dime of tax relief. Barack Obama will bring real change by cutting taxes for middle-class families and small businesses, paying for all his proposals to reduce the deficit, and will put America on a path towards fiscal responsibility and a stronger economy,” said Senator Barack Obama.
U.S. Sen. Barack Obama flew to Dayton, OH, today to discuss one of the more important issues facing our country – public education. Like Sen. Obama, NDN believes that any economic strategy must include a core commitment to educating our future workforce. Learning how to read, write, and add is simply not sufficient if we hope to compete against the rising giants of India, China, and others. Addressing the issue of education and a prepared workforce is not new to Sen. Obama -- recall that last November, he embraced NDNs’ proposal to provide IT skills and training to our adult workers at local community colleges.
In his speech today, Sen. Obama laid out his arguments for improving U.S. education:
We need a new vision for a 21st century education – one where we aren’t just supporting existing schools, but spurring innovation; where we’re not just investing more money, but demanding more reform; where parents take responsibility for their children’s success; where our schools and government are accountable for results; where we’re recruiting, retaining, and rewarding an army of new teachers, and students are excited to learn because they’re attending schools of the future; and where we expect all our children not only to graduate high school, but to graduate college and get a good paying job.
It’s time to ask ourselves why other countries are outperforming us in education. Because it’s not that their kids are smarter than ours – it’s that they’re being smarter about how to educate their kids. They’re spending less time teaching things that don’t matter and more time teaching things that do. Their students are spending more time in school, and they’re setting higher expectations.
That’s what we need to be doing – because America isn’t a country that accepts second place.
Sen. Obama also hit on McCain’s record on education, saying he’s done “nothing” to improve the quality of U.S. public education. Sen. Obama said he would double funding for charter schools and work with teachers to design performance pay plans. To read Sen. Obama’s speech, click here.
Sen. Obama’s message on education went beyond his speech this morning. He has also released a new ad, "What Kind?" suggesting that, as with other issues, McCain is out of touch with what our country needs to succeed.
The U.S. Department of Labor released this morning new numbers on employment and wages for the month of August. The take-away? The U.S. economy lost 84,000 jobs, the eighth straight month of job losses. The unemployment rate rose to 6.1 percent, the highest since September 2003. Industries hardest hit are manufacturing (housing-related manufacturers and automakers) and services. Healthcare and mining sectors added new jobs. Losses in the construction sector slowed. Average hourly wages crept up a meager 7 cents.
Let’s hope that this new data sounds the alarm for U.S. Sen. John McCain and Gov. Sarah Palin. It’s been a long week of vapid, sarcastic, anecdotal talk about our nation’s economic health. Nary a word about just what Team McSame would do to create jobs, increase wages, grow the economy, or raise the median income. Maybe we can just drill, baby, drill our way out of recession. (See Rob's take earlier today.) U.S. Sen. Obama, on the other hand, has been responsive to news on the economy. In the middle of the DNC in Denver last week, he released a statement on Census’s new report on income, poverty, and health insurance:
"Today’s news confirms what America’s struggling families already know – that over the past seven years our economy has moved backwards. We have now lived through first so-called economic ‘expansion’ on record where typical families saw their incomes fall, and working-age households lost more than $2,000 from their paychecks. Another 816,000 Americans fell into poverty in 2007 – including nearly 500,000 children – bringing the total increase in Americans in poverty under President Bush to 5.7 million. And on Bush’s watch, an additional 7.2 million Americans have fallen into the ranks of the uninsured. This is the failed record of George Bush’s economic policies that Senator McCain has called ‘great progress.’ While Senator McCain is promising four more years of the failed Bush economic policies, my economic plan will restore bottom up economic growth that benefits all Americans by cutting taxes for working Americans, providing affordable, accessible health care for all, and investing in new energy, education and infrastructure so we can create millions of good jobs here in America," said Senator Barack Obama.
Today he released another statement on the August unemployment numbers:
“Today’s jobs report is a reminder of what’s at stake in this election – John McCain showed last night that he is intent on continuing the economic policies that just this year have caused the American economy to lose 605,000 jobs. John McCain may believe that the fundamentals of our economy are ‘strong,’ but the working men and women I meet every day are working harder for less, the typical working age family’s income is down $2,000 since George Bush took office, and their purchasing power is as low as it’s been in a decade. John McCain’s answer is more of the same: $200 billion in tax cuts to big corporations and oil companies, and not one dime of tax relief to more than 100 million middle-class families. If I am President, I will cut taxes for 95% of all working families and provide an immediate $50 billion to struggling states so that they don’t have to cut back on health care and education and can rebuild roads and schools. That’s the change working families need right now,” said Senator Barack Obama.
Sen. Obama is doing the right thing in staying on message on the economy. After all the hubbub about lipstick-wearing pitbulls dies down, Americans will return to the core issues, the main one being the economy. We can’t predict at this point if either candidate’s plan will turn the ship around, but Obama does indeed have a plan and he’s talking about it. He’s offering specifics and inviting debate. And that’s a good start.
On the issue of the economy, check out Alan Blinder’s piece in the New York Times, Is History Siding with Obama’s Economic Plan? Blinder says the facts show that the U.S. economy has grown faster under Democratic presidents than under Republicans. Blinder references a new book by Princeton professor Larry Bartels, who makes the case that:
when Democrats were in the White House, lower-income families experienced slightly faster income growth than higher-income families — which means that incomes were equalizing. In stark contrast, it also shows much faster income growth for the better-off when Republicans were in the White House — thus widening the gap in income.
The article doesn’t provide many explanations for these trends, but Blinder suggests that tax and income transfer policies have played a large role starting with Reagan:
We know, for example, that Republicans have typically favored large tax cuts for upper-income groups while Democrats have opposed them. In addition, Democrats have been more willing to raise the minimum wage, and Republicans have been more hostile toward unions.
And the coup de grace:
The two Great Partisan Divides combine to suggest that, if history is a guide, an Obama victory in November would lead to faster economic growth with less inequality, while a McCain victory would lead to slower economic growth with more inequality. Which part of the Obama menu don’t you like?
Jonathan Stein of Mother Jones blogs today on one of U.S. Sen. Barack Obama's most important pieces of legislation - the Global Poverty Act. This bill would commit the United States to "the reduction of global poverty, the elimination of extreme global poverty, and the achievement of the United Nations Millennium Development Goal of reducing by one-half the proportion of people, between 1990 and 2015, who live on less than $1 per day."
Stein is a strong, and much needed, booster of the Global Poverty Act:
The bill, which has a bi-partisan list of co-sponsors, is a recipe for reintegration into the world community, which suggests Obama sees aid not just as charity but as part of his foreign policy vision.
In April, NDN endorsed the Global Poverty Act, which the U.S. House of Representatives passed last spring. U.S. Rep. Adam Smith wrote and introduced the House bill. In our letter, we encourage the Senate to pass Obama's bill. Although little hope for that remains this year, we remain committed to advancing this legislation because we believe that eradicating global poverty can help to stem the rise of terrorism, spread of disease, environmental destruction, and political instability. The United States lags behind other developed countries in our commitment to helping the poorest of the poor. And as Stein points out, a war on global poverty would cost far less than our current war on terror:
Those critics [of the bill] argue that boosting American aid to UN-approved levels would cost $845 billion over 13 years, meaning the apparently horrifying prospect of waging a global war on poverty that costs along the lines of the war in Iraq, which the Congressional Research Service estimates has cost $653 billion in the six years since its initiation. The Congressional Budget Office estimates that the Iraq War will cost an additional $440 billion over the next ten years, assuming troop levels fall to 30,000 by 2010.
We greatly urge Obama and his allies to talk up this important piece of legislation -- in Obama's platform at the Convention, in Congress, on the blogs, in the mainstream media, and so forth. Along the way and down the road, NDN will remain committed advocates of the Global Poverty Act and we hope to work with Pres. Obama to make it a reality.
It's 9:09 AM on 8.8.2008. Only a few more hours to go till the games. There are big Olympic countdown clocks around town that have been counting the days for the past year. Today all the "day" counters are at "0" and the hours and minutes are ticking away. We're definitely feeling the Olympic spirit here in Beijing.
I attended a Jamaican Olympic team event sponsored by Puma the other night (snapshot included), through work, and the energy was palpable. I felt both the excitement and the nervous energy in the room, as all the athletes tried to enjoy themselves despite the heavy pressure to perform well over the next few days. And the prime minister addressed the crowd via live video conference, and told the athletes, "Go out there and perform your best and make our country proud, and your best will good enough for us." What a great thing to say! Really inspiring. Much better than some Chinese official who said the other day, "If our star sprinter doesn't win gold in Beijing, his past achievements will be worth nothing."
The good news is we can feel the energy of the Games. I had a breakfast meeting at a hotel this AM and the taxi driver, doormen, servers, all projected a certain energy. They smiled a bit wider, opened doors with more gusto and greeted you w/ more curiosity. The bad news is the AIR!!! Yuck. It's just as bad as ever. One of the worst visibility days I've seen. Here's a photo from today. I'm in my office this AM then taking off for the national holiday.
Wonder who will carry the torch for the final leg. It can't be Yao, he's already carried it. Will it be an athlete? A politician? A celebrity? A Sichuan earthquake survivor? A lumbering panda?
When rising food prices caught the world's attention earlier this year, a question kept gnawing at me. For years, it was low prices, not high prices, of agricultural goods that hurt poor farmers. U.S. and EU subsidies made for cheap exports, which discounted world market prices to the disadvantage of poor farmers. Wasn't the Doha Round about limiting such trade-distorting subsidies so that farm prices weren't artificially low? Now, farm prices were high. So wasn't this a good thing for poor farmers? It couldn't be that simple, but I lacked for a good answer from the pros on this one.
So my ears perked up this morning when NPR dived into this question. The opening to the segment nailed my quandry:
For many Third World farmers, the world has turned upside down. They used to complain about low prices, which made it hard to earn a living. They blamed, in part, farm subsidies in rich countries, which encouraged overproduction.
But now grain prices have gone through the roof all over the world. Which raises the question: If low food prices were bad for Third World farmers, are high prices good for them?
The answer? It depends.
No surprise that the answer is a bit complicated. According to the report, yes, high prices have spurred greater production and, in turn, profits for poor farmers. But for other farmers, the price of inputs like fertilizer and pesticide have gone up even more than food prices. Bad roads and lack of seeds, technical assistance, market access, and know-how also hinder poor farmers, no matter how attractive prices may be.
For NGOs and groups like the World Bank, Bill and Melinda Gates Foundation, and the Millennium Challenge Corporation, high food prices suggest that farming (at least for now) may be a path out of poverty. The Gates Foundation, for instance, is spending close to $1 billion in Africa to help poor farmers procure better, cheaper seeds and fertilizer. And the MCC is helping farmers connect to bigger markets.
The NPR report ends on a fitting note, one that reminds us that there are almost always winners and losers in life, but especially so in the realms of international trade and ag policies.
Even the food crisis is helping. It's a two-edged sword: It's causing great suffering, but for some poor farming communities, it's also creating opportunities.
Thoughts about our content? Suggestions for how we can improve our blog? Anything else on your mind that you want to share with us? Please, send it our way - shoot me an e-mail at dboscov-ellen@ndn.org. Thanks, and hope to hear from you!
