Globalization

Marc Ambinder over at the Atlantic does a good job summing up today's political messaging as it relates to the economy. In "Fannie, Freddie, or the Future," Ambinder argues that speaking about the future of the American economy is a better political strategy, and, that going for the gutter, as the McCain camp announced they were going to do, while politically enticing, might not be the best way to win (especially executed this poorly).

[Keating economics] successfully jammed up McCain's message of the day, which is that Obama is somehow to blame for the excesses of Fannie Mae and Freddie Mac. Blaming Democrats for Fannie and Freddie's collapse -- implicity, blaming the government for giving people home loans who couldn't afford -- isn't beanbag, but the McCain campaign is using it the way that Democrats used to respond to foreign policy questions: by stumbling around, latching on to a poll-tested response, and ignoring the bigger picture.

Ayers and Keating aside, the leading edge of this debate is about what do we do post-bailout to restore confidence in our economy. The public will rightly pressure both candidates for more answers. It's an opportunity for somebody to come up with a newer, global message. or at least sound like they get the international dimension of our meltdown.

Hitting back with the Keating Five was political necessity from the Obama camp, and as Ambinder writes, has worked today, but Obama's real strength in recent weeks has come on the back of his strong response to the financial crisis. The current narrative about Obama's calm reaction compared with McCain's erratic reaction, believeable because it reinforced preexisting memes about both candidates, will serve Obama well for the next month.

Now, as the Obama campaign launches its Keating Economics piece, Obama himself expands his message on the economy and hits McCain on trying to turn the page. Today in Asheville, North Carolina, Obama had this to say:

We are going to have to then move on an aggressive plan to deal with some of the underlying structural problems in the economy, including the continuing decline in the housing market. Now Senator McCain and I have a debate tomorrow night, and obviously the American people are going to be anxious to hear from one of the two people who’s going to be the next president and responsible for dealing with this economic mess, what their plans are.

As NDN has argued, that plan must include action from Congress and the President to do more to keep people in their homes. For more on NDN's reponse to the financial crisis, visit Keep People in Their Homes.

Two major articles in today's Washington Post and New York Times focus in-depth on how the nation's worsening economy is presenting new opportunities -- and new challenges -- for the campaigns of U.S. Sens. Barack Obama and John McCain.

It looks like things were going McCain's way after the GOP convention -- Alaska Gov. Sarah Palin had electrified the base, Obama was losing ground and the Arizona senator took a slim lead.

Then the nation's finanical markets crashed, Palin-mania has subsided as many Americans didn't like what they've seen post-St. Paul and Democrats traditionally do better with pocketbook issues.

Now McCain has pulled out of Michigan and Obama is competitive in traditionally red states like Florida where foreclosures are epidemic; nationally, the economic news just keeps getting worse.

Amidst all of this, yesterday, I picked up a book, "Deer Hunting with Jesus" by Joe Bageant. It is in turn fascinating, frightening and depressing. The book addresses a question that has always bothered me: why do people who are so clearly hurt by the GOP's economic policies keep voting for them again and again and again? Another article in today's Washington Post highlights the economic struggles of a suburban Michigan enclave and focues on why, while some people there may vote for Obama, others struggling to make ends meet are still planning to vote for McCain, despite the fact that his economic proposals do nothing to help them or their children.

Until progressives find a way to reach the voters written about in "Deer Hunting with Jesus" and the Washington Post article, we will continue to lose their votes because they will continue to vote, not on economic issues, but social "hot button issues" such as abortion, guns and sex education. And, sadly, as many of them admitted, they simply will not vote for an African-American candidate. All in all, it is not their failure, but our failure, to explain to them how we will not allow globalization to leave them behind; how we will invest in their education; how we will ready them as we accelerate toward a 21st century economy.

In 2007, NDN conducted a series of polls on the how Americans view the economy. They are well worth reading here and here. I know I will be looking at them for answers.

Lastly, in what can be at best called a sophmoric effort to change the subject, the McCain campaign said yesterday that:

We are looking for a very aggressive last 30 days," said Greg Strimple, one of McCain's top advisers. "We are looking forward to turning a page on this financial crisis and getting back to discussing Mr. Obama's aggressively liberal record and how he will be too risky for Americans." "We're going to get a little tougher," a senior Republican operative said, indicating that a fresh batch of television ads is coming. "We've got to question this guy's associations. Very soon. There's no question that we have to change the subject here," said the operative, who was not authorized to discuss strategy and spoke on the condition of anonymity. [Washington Post, 10/04/08]

In response, the Obama campaign has launched a new ad on the economy, highlighting what has happened over the last eight years during the Bush-Cheney reign.

Watch it here:

In the presidential debate last Friday, Jim Lehrer asked the candidates about their position on Russia. Characteristic of the dreadfully dull debate, they managed to give precisely the same response. Senators Barack Obama and John McCain both called Russia’s aggression into Georgia “unacceptable,” recognized the need to reassure our European allies, and stressed the importance of working with Moscow, rather than against it

Peering into the recent past, Obama has been consistently firm on Russia, but has stuck to his broader theme of making diplomacy and negotiation a first-string response. McCain takes a harsher tone, and has been accused of trying to take the U.S. back into a Cold War with Russia. He has talked up the threat Russia poses, proposed ejecting Russia from the G-8, and advocated the creation of a League of Democracies—an organization from which Russia would be excluded.

It is true that Russia has been flexing its military muscles recently—most obviously with the incursion in Georgia. In the conflict, however, the Russian military did little to show it deserves to be feared. The army’s most senior commander in the field was wounded when poor intelligence led them into a Georgian ambush. The military’s limited technology was nearly useless—even their radios didn’t work, forcing officers to communicate via cell phone. And most of the bombs dropped were not modern smart bombs, but older, dumber bombs.

Still, by most measures, Russia’s performance in the field was better than in either of the Chechen wars in the ‘90s, and Moscow is getting serious about upgrading everything from equipment to tactics. The Kremlin will increase defense spending by 26% next year, much of which will go toward improving and updating the country’s nuclear program.

Beyond bombs and submarines, Russia has been looking for friends among America’s antagonizers. Moscow just offered a $1 billion military loan to Hugo Chavez’s government in Caracas. In November, Russian warships will enter the Caribbean for the first time since the Cold War, on their way to joint exercises with the Venezuelan Navy. Russia has 10 warships docked in Syria, and is helping to renovate Tartus port; in Iran, Russian technology and fissile material is helping to build a nuclear reactor, and Russian surface-to-air missiles may protect it.

Higher oil prices have gotten Russia back on her feet, and the Kremlin’s activities of late indicate that the government seeks to be taken seriously. Increasingly isolated on the world stage, Russia is responding by building its own coalition and trying to establish power within its historical sphere of influence. Moscow is asserting itself particularly in the Middle East, establishing its own version of the Monroe Doctrine: This is our backyard, so keep your meddling fingers out.

Though Russia’s military is a shadow of its former self, and from a security perspective, Moscow does not presently pose a credible threat, Russia is capable of making life difficult for the U.S., whether by turning off the gas, by giving cover (both literal and political) to Iran, or by bolstering Chavez in Venezuela.

But Russia and the U.S. share a number of interests, many of which were laid out last week by Secretary of State Condoleezza Rice: Fighting terrorism, stopping nuclear proliferation, denuclearizing North Korea and finding a secure, stable resolution between Israel and the Palestinians, among others. John McCain’s aggressive, antagonistic ideas about Russia have the potential to become self-fulfilling prophecy. What we need now is not to escalate tension with a powerful state that has the capability of causing us great trouble, but to work together where we have common ground. The U.S. would be best served by keeping Russia engaged, rather than forcing it out into the cold.

It's been quite a week for NDN in the media.

Yesterday, Fox News gave Michael Moynihan and NDN's Green Project a lot of the credit (or blame? You Decide...) for getting legislation to create a Clean Energy Investment Bank into the House. Michael also got good mentions from the Carbon Tax Center and Carbon Control News.

Rob and Simon's critical work on solving the financial crisis and keeping people in their homes was covered in The Wall Street Journal, The Associated Press (twice, here and here), The Chicago Sun-Times, The Huffington Post,  The Hill, and The Phoenix.

NDN's work on immigration reform and Hispanic issues was covered by several major news sources this week, including Newsweek, The Guardian, and NPR, as well as Fort Collins Now, The Miami New Times, HispanicTips.com, and Scoop.

The Washington Post and HispanicTips.com covered the expansion of NDN affiliate The New Policy Institute's Adelante campaign, which has new ads airing in the DC Metro area in addition to Colorado and Nevada. The Statesman also covered the campaign.

Finally, Simon is quoted in The American Prospect this week on the internal dynamics of the evolving Democratic majority in Congress.

In 2000, Cuban-Americans represented 70 percent of Florida's Hispanic electorate. Today they make up less than half of the Latino electorate in that state, largely attributable to a large influx of new voters originally from Puerto Rico, Colombia, Venezuela and other Central and South American countries. The result: Florida's Hispanic demographic is increasingly reflective of the transformation the Hispanic community has undergone across the country - increasingly diverse and not as party-loyal. As a result, both political parties are working to win over what Newsweek called the "Latino mix" in a piece today by Arian Campo-Flores. NDN has analyzed the trend of Florida's Hispanic population becoming more diverse and less affiliated with the Republican party for years, and conducted a major poll in Florida in 2006.

It is Hispanics who make Florida increasingly relevant this year. By all accounts, U.S. Sen. John McCain would not have won the Florida primary - and thus would probably not have been his party's presidential nominee - had he not won the 54% of the Hispanic vote that he won in the Republican primary election, while he only won 33% of the white vote and took that election with 36% of the vote overall. Thus, U.S. Sen. Barack Obama is fighting in Florida, just today President Bill Clinton - loved by Hispanic Democrats and many overall - was campaigning for him in the state. As explained in Newsweek by our friend and collaborator, Sergio Bendixen:

"Now they need to have a domestic message"-terrain that favors Democrats these days. If he manages to capitalize on the opportunity, Democratic Sen. Barack Obama could outdo John Kerry's performance in 2004, when the Massachusetts senator captured 44 percent of Florida's Latino vote. "If [Obama] gets 55 percent, then he would pretty much ensure winning the state," says Sergio Bendixen, a pollster for the New Democratic Network (NDN) and expert in Hispanic public opinion."

And that is the relevance of the Latino Mix. As NDN explains at length in Hispanics Rising II, party ID among Hispanics can change very quickly, and this election in particular does not favor the party in the White House. Republican anti-immigrant campaigns have been perceived as anti-Hispanic, Latinos have the highest rate of unemployment as a result of this economic crisis, and the latest - now minorities are being blamed by right-wing conservatives for the housing crisis. 2008 primary exit polls showed a 66% increase in Hispanic turnout in Democratic primaries and Hispanic party ID became 72% Democrat, while in 2004 it was closer to 60%. Our latest polling data shows that the Presidential race among Hispanics in Florida is in a dead heat - 42% favoring McCain and 42% favoring Obama.

The question remains - as Florida's Hispanic electorate grows and becomes more complex, who benefits? I would say Hispanics do. The reality of a more complex demographic is that to win Florida, John McCain and Barack Obama will have to do so based on the strength of non-Cuban Hispanic support.

Just now, in some serious high-drama action usually reserved for reality TV, the U.S. House of Representatives just rejected (OK, Simon, you called it) the proposed $700 billion proposal to bail out the nation's financial markets. 

And more bad financial news keeps rolling in: the New York Times reported earlier today that, "Citigroup has reached an agreement early today to acquire the banking operations of the Wachovia Corporation after making a daring bid that pulled the deeply troubled company from the brink of collapse."

Whether Congress ultimately passes the bailout or not, NDN strongly believes that Congress' work has just begun.

Nearly two weeks ago, NDN launched an effort to ensure that the actual cause -- the massive destabilization of the U.S. housing market -- was addressed. Michael, Rob, Simon and Jake have said it much more eloquently, but the bottom line is that faulty financial products were at the bottom of the financial cave-in. An excellent article in yesterday's Washington Post explains why you and I now own millions of properties across America.

For that reason, and because lawmakers should make every effort to help homeowners as much as they are helping Wall Street, Simon, Rob and Michael today issued the following statement:  

While we applaud the bipartisan effort by Congress and the White House to craft a response to the turmoil in the American financial markets, we are concerned that this package does not address critical issues causing the current problems and will not be effective unless additional steps are taken. 

First, Congress and the President must do much more to stabilize the housing market by helping people keep their homes. This crisis began when the home mortgages that had been securitized with massive leverage began a precipitous decline. As housing prices fell and more mortgages defaulted, the decline in the value of the only real assets in this financial house of cards began to pull down the highly leveraged securities and their derivatives. The financial crisis will continue so long as the housing market declines. 

A real solution to this crisis, therefore, must include far-reaching measures to break this vicious cycle and end waves of foreclosures. Last week Senator Obama, Senator Clinton, NDN and others argued that an effective response to the financial crisis must include a mechanism for rapidly renegotiating the mortgages of Americans facing imminent foreclosure, or a direct federal loan facility to help those Americans stay in their homes. 

After Congress finishes with this bill, it should turn immediately to legislation designed to keep people in their homes. Further, if the new legislation fails to restore confidence in financial institutions, as we believe may well be the case, Congress and the Administration should also come together to consider approaches other than a massive bailout to provide stability to the financial sector.

We will have more to say on the bailout bill a little later today, but for now I found these essays by Larry Summers, Paul Krugman, Robert Samuelson and Steven Pearlstein helpful.

For both economic and political reasons, we start the morning disappointed more wasn't done to keep people in their homes.  

This election cycle, many people have complained that the traditional media has not been doing its job all that well. The general complaint is that instead of giving voters the information they need to make informed and intelligent decisions, the ratings-driven mainstream media increasingly focuses on distractions and sound bites. Some have called for the reform of our traditional media; others have simply bypassed it.

We believe in engaging the non-traditional media. Here are a few of our new-media mentions from the past week:

DailyKos, The Latino Journal, and The South Chicagoan referenced our recent polls of Hispanic voters in key battleground states.

Simon and Rob Shapiro are featured in The American Prospect’s blog, Tapped, as well as Biodun Iginla’s BBC weblog, for their joint statement, “Keep People in Their Homes.” Shapiro also appears in Campaign for America’s Future.

Finally, Michael Moynihan, Director of NDN’s Green Project, has posts in The Huffington Post and Gristmill.

In a powerful lead editorial today, What About The Rest of Us?, the NYTimes echoes NDN's calls to make keeping people in their homes the core of the final financial rescue package:

Lawmakers were still wrangling Thursday night about the Bush administration's $700 billion bailout of the financial system. Political theater was mainly responsible for the delay, but it will be worth the wait if lawmakers take the time to make sure that the plan includes real relief for homeowners and not only for Wall Street.

The problems in the financial system have their roots in the housing bust, as do the problems of America's homeowners. Millions face foreclosure, and millions more are watching their equity being wiped out as foreclosures provoke price declines.

The problems became even more evident Thursday night with the federal seizure and sale of Washington Mutual to JPMorgan Chase.

It's unacceptable that lawmakers have yet to come out squarely in favor of bold homeowner relief in the bailout bill. Treasury Secretary Henry Paulson, the biggest advocate of bailing out Wall Street, is also a big roadblock to helping hard-pressed borrowers. He wants to keep relying on the mortgage industry to voluntarily rework troubled loans, even though that approach has failed to stem the foreclosure tide - and does a disservice to the taxpayers whose money he would put at risk in the bailout.

Here's the proposed Economic Recovery Package. The overall intent to "not forget Main Street" and "create good-paying American jobs" is a noble one, I question whether this package achieves such a goal. There is a great deal of progress in the area of Energy, allocating funding for key energy initiatives of which NDN has been an advocate (see NDN's Green Project blog). However, there is no mention of International Trade or initiatives to export new technology; the section on job creation mentions infrastructure, which is an important step forward, but no mention of how to use globalization to create more high skilled, better paying jobs. I would ask why the section designed to help small businesses - by all accounts the "job creators and drivers of the economy" - only allots $275 million for microfinance and other assistance to "Main Street," while it provides $776 million for border facility construction and "other homeland security infrastructure." I hope our taxpayer dollars don't continue to go towards a border fence that has not worked instead of small and medium-sized businesses that sustain our communities. The stimulus includes $466 million for DHS to begin construction of a consolidated headquarters in Washington, D.C., as "DHS has a critical need for a permanent, unified headquarters" - maybe having everyone under one roof will help reduce the backlog in naturalization and immigration applications! THAT must have been the hold-up all this time. While the $466 million are being allocated for offices, only $100 million is going to help communities along the southwest border fight the illegal flow of guns and drugs between the U.S. and Mexico that is fueling violence along the border. Call me crazy, but I think the offices can wait in line behind the safety of border patrol and citizens on both sides of the border. The conflict on the border similarly contributes to the economic downturn in that the violence has effectively killed business and tourism that previously made border cities job creators and places that flourished with commerce and (legal) economic activity.