Here’s a pretty cool chart showing how Obama’s FY2011 budget compares to the current budget. Some of the biggest cuts include:
Grants to states for Medicaid – 11%
Public health and social services – 80%
Education for the disadvantaged – 32%
Trade adjustment assistance, training – 60%
Veterans benefits – 13%
State & Local law enforcement assistance – 15%
Child & family support programs –25%
Disaster relief – 62%
Newsweek’s Joe Klein reminds us how memories get muddled. Ronald Reagan, the man conservatives love to love, in fact recognized that his early tax cuts were a mistake and that he actually raised taxes two years after being elected.
[S]ince deficits do matter — and since Reagan’s so-called supply-side cuts blasted an enormous hole in the budget — the President had to come back in 1982 with the largest peacetime tax increase in American history: the Tax Equity and Fiscal Responsibility Act, which raised $37.5 billion, or 1% of gross domestic product (GDP), per year. He also signed a $3.3 billion gasoline-tax increase. The next year, he signed another whopping tax hike, designed to save Social Security.
But still the Reagan deficits got out of hand and Presidents Bush I and Clinton raised taxes, and as Klein put it, “Somehow the economy not only survived, it prospered.”
I thought about this after reading Tom Friedman’s Friday column in the New York Times. He argues that President Obama has lacked an overall theme to his change agenda.
He has not tied all his programs into a single narrative that shows the links between his health care, banking, economic, climate, energy, education and foreign policies. Such a narrative would enable each issue and each constituency to reinforce the other and evoke the kind of popular excitement that got him elected.
Without it, though, the president’s eloquence, his unique ability to inspire people to get out of their seats and work for him, has been muted or lost in a thicket of technocratic details. His daring but discrete policies are starting to feel like a work plan that we have to slog through, and endlessly compromise over, just to finish for finishing’s sake — not because they are all building blocks of a great national project.
What is that project? What is that narrative? Quite simply it is nation-building at home. It is nation-building in America.
“Nation building” is not a winning phrase for the president, in my opinion. It makes us sound like a third-world country (even if we are becoming one).
But he does need a larger message. My guess is it’s not that he can’t outline one; he’s afraid to articulate it. We have not raised federal taxes in this country since 1993. That alone is not a reason to. But since then we have skewed the tax system so badly that not only have income disparities grown, but we are losing ground – in healthcare, education, infrastructure.
As I grew up in the 50s and 60s, life was pretty good in this country. Most folks felt a better life was around the corner. Not anymore. We are not necessarily the greatest land of opportunity.
Actually, some other advanced economies offer more opportunity than ours does. For example, recent research shows that in the Nordic countries and in the United Kingdom, children born into a lower-income family have a greater chance than those in the United States of forming a substantially higher-income family by the time they’re adults.
If you are born into a middle-class family in the United States, you have a roughly even chance of moving up or down the ladder by the time you are an adult. But the story for low-income Americans is quite different; going from rags to riches in a generation is rare. Instead, if you are born poor, you are likely to stay that way. Only 35 percent of children in a family in the bottom fifth of the income scale will achieve middle-class status or better by the time they are adults; in contrast, 76 percent of children from the top fifth will be middle-class or higher as adults.
…As a result of economic growth, each generation can usually count on having a higher income, in inflation-adjusted dollars, than the previous one. For example, men born in the 1960s were earning more in the 1990s than their fathers’ generation did at a similar age, and their families’ incomes were higher as well. But that kind of steady progress appears to have stalled. Today, men in their 30s earn 12 percent less than the previous generation did at the same age.
The main reason today’s families have modestly higher overall income than prior generations is simple: More members of the household are working. Women have joined the labor force in a big way, and their earnings have increased as well. But with so many families now having two earners, continued progress along this path will be difficult unless wages for both men and women rise more quickly.
My mother didn’t work when I was growing up, Neither did most of the women in our middle class neighborhood.
We will never go back to those good ol’ days. But Joe Klein argues, we needn’t go that far back to the future.
An antitax fetishism has overwhelmed both parties. Along the way, despite the melodramatic rhetoric, the actual rate of federal taxation has wobbled a bit, from a high of 20.9% of GDP in 2000 to a recession-driven low of 17.7% last year, but averages out to just under 19% from 1980 to today. If the not-so-onerous Clinton tax rates are restored when the economy recovers, the federal Treasury would be enriched by nearly $300 billion per year.
Why does this matter now? Because we are in the midst of a debate over how to fund a health-care-reform plan — and the idea of raising taxes, even just a little bit, to pay for it is causing heart failure among our legislators. They are looking for somewhere between $30 billion and $35 billion per year. If the bill isn’t properly funded — if working-class families don’t receive large enough tax credits to help pay for their newly mandated health insurance, if they’re forced to pay thousands of dollars in new out-of-pocket expenses — Republicans will use "socialized" health care as a bludgeon against Democrats in 2010 and 2012.
…It is a national scandal that we’re nowhere close to having a reasonable discussion about taxes. A Reagan-size increase probably would be unwise right now, given the shaky economy. But the conversation will become unavoidable next year, when the Bush tax cuts expire. A restoration of the Clinton rates would go a long way toward paying down the Bush deficits and the assorted Bush-Obama federal bailouts and creating some breathing space if health reform costs more than expected. One hopes that Democrats, and fiscally responsible Republicans, will locate the backbone between now and then to do the right thing.
No, Obama’s big theme isn’t I’m going to raise taxes. But in defense of higher taxes he needs to make a red,white and blue argument for fairness, something we’ve lost in the past 30 years. Ronald Reagan made it OK to be greedy. It seems with the populist anger against the obscenely wealthy, now is a good time to make that larger argument for justice, a fair, living wage for a fair day’s work, and a level playing field that rewards work and frugality. Once the recession eases, we need to raise taxes not only on the super rich, but the well-to-do also, many of whom will be considered middle class ($100,000 and up). I would gladly pay them if I thought we’d have true healthcare reform, better transportation systems and a vibrant middle class, which is what makes this country great.
It is the common good argument, one that Obama hesitates to make, being perhaps afraid of the rich white men on Fox News
and on talk radio. He’s begun to fight back against right-wing extremists. Now he needs to make the case to the rest of us.
The potential arc of this economic downturn should be sobering for Americans. We are increasing viewed as akin to a third-world country, or at least a developing country. To wit:
[W]ould-be immigrants from India and China are finding new career opportunities at home as those economies grow relatively quickly while the U.S. economy sags and its political climate appears less welcoming.
Vivek Wadhwa, a visiting scholar at the University of California at Berkeley who has studied H-1B visas, said that trend has been compounded by what he sees as rising anti-immigrant sentiment in the U.S. "The best and the brightest who would normally come here are saying, ‘Why do we need to go to a country where we are not welcome, where our quality of life would be less [emphasis added], and we would be at the bottom of the social ladder?’" Mr. Wadhwa said.
The gist of this story is that the H-1B visas that are required for highly skilled people to be hired by American companies are down sharply. Historically, all the allotted visas were snapped up, sometimes in a matter of hours after they are offered by the U.S. government. The reason, for the most part, is that the tanking economy has simply lessened the number of jobs for which these potential employees are needed, mainly in the high-tech industry.
But within the story, there are other dynamics that offer a glimpse of where we’re headed as a country. We like to think of ourselves as the birthplace of great ideas and especially technological innovation. Maybe not.
While the number of visa holders is small compared with the U.S. work force, their contribution is huge, employers say. For example, last year 35% of Microsoft’s patent applications in the U.S. came from new inventions by visa and green-card holders [emphasis added], according to company general counsel Brad Smith.
Google Inc. also says that the H-1B program allowed it to tap top talent that was crucial to its development. India native Krishna Bharat, for example, joined the firm in 1999 through the H-1B program, and went on to earn several patents while at Google. He was credited by the company as being the key developer of its Google News service. Today, he holds the title of distinguished research scientist.
Many politicians like to make the argument that the U.S. has the best and brightest and our systems are the envy of the world. Lately, you hear especially Republicans making the claim (which is patently false) that we have the greatest medical system in the world. Maybe if you want to get a tummy-tuck, but our health outcomes are mediocre compared to other countries. Granted much of that may be due to our poor diet. But we aren’t the best at everything.
The falloff in H-1B visa applications is also attributed to the anti-immigrant prejudice we are perceived as embracing. Moreover, American companies, who must prove they can’t find Americans workers with the skills they need before being granted an H-1B visa, don’t cotton to having their motives questioned.
[I]mmigration lawyers say some would-be employers are put off by a crackdown on fraud. U.S. Citizenship and Immigration Services, which administers the H-1B program, has been dispatching inspectors on surprise company visits to verify that H-1B employees are performing the jobs on the terms specified. The fraud-detection unit in coming months is expected to inspect up to 20,000 companies with H-1Bs and other temporary worker visas.
"It’s an invasive procedure that is both stressful for the employer and the foreign national employee," said Milwaukee lawyer Jerome Grzeca, whose employment-visa business is down 40% since last year.
Politicians, of course, like to claim that these foreigners are taking jobs away from Americans. Well, be careful what you wish for. Soon, they may be taking the best jobs, keeping them for themselves in country, and exporting other jobs to Americans, whose crashing economy has forced them to work for less.
If people, especially those who are driving invention and tech progress, don’t want to come here, in part because they feel their “quality of life would be less,” what does that say about our future?
Will the dynamic that we’ve had for the past decades, indeed centuries, change? Will India and China begin to outsource their work to Americans who are adjusting to lower wages and investments? Will we become the new Indians and Chinese – skilled but more cost-efficient because of our lowered standard of living?
I’m thinking that if newspapers are to survive, they need a better way of delivering information. It’s not only a paper vs. web dichotomy. A lot of folks, me included, cannot envision a world without a paper to hold in one’s hands and the ability to have a story catch your eye while reading another. That’s harder to do on the web.
One way to improve delivery is to re-think the need for every story to be a narrative. But I’ll leave the larger question for a future post.
But certainly, a story that doesn’t lend itself to a narrative is reporting a poll. Sure, some analysis is necessary for some readers. But too often the interpretation inherent in a narrative is worthless. Today’s poll story in The Washington Post is one example, It would have been a better use of newsprint to simply present a chart with the key questions (if the entire poll results are too space consuming).
The problem comes with the headline and adjectives and adverbs that inevitably accompany poll stories. The Post’s headline is “Poll Shows Obama Slipping on Key Issues.” That’s the most many readers will see. It’s accurate, but polls need to be taken in their entirety. And the picture is more mixed.
At the same time, there is no slackening in public desire for Obama to keep pressing for action on the major issues of the economy, health care and the deficit. Majorities think he is either doing the right amount or should put greater emphasis on each of these issues.
So whatever his slackening of support about his specific policies, folks want him to continue fighting to change things. And in many ways, politics is an either or proposition.
Obama’s handling of the economy, the deficit and health care reform outpaces the Republicans by about 20 points.
So if his handling of things is 20 points better that GOPers, and folks want him to continue fighting, a stalemate is not what they’re looking for, much less the GOP solutions (if any).
And while, 49 percent approves of his handling of the healthcare issue,
On health care, the poll, conducted by telephone Wednesday through Saturday, found that a majority of Americans (54 percent) approve of the outlines of the legislation now heading toward floor action. The measure would institute new individual and employer insurance mandates and create a government-run plan to compete with private insurers. Its costs would be paid in part through new taxes on high-income earners.
What that “legislation” is, is questionable as there are several plans now working their way through Congress.
But the problem I have with many of the poll stories is that the reporters feel compelled to interpret them for us. The tenor of this report is that Obama is slipping and people are losing confidence in him, despite the findings that most people still consider him a strong leader.
Obama’s leadership attributes remain highly rated, despite some slippage. Seven in 10 call him a strong leader, two in three say he cares about the problems of people like themselves, and just over six in 10 say he fulfilled a central campaign pledge and has brought needed change to Washington.
As an example of perhaps misplaced adverbs,
More than three-quarters of all Americans say they are worried about the direction of the economy over the next few years, down only marginally since Obama’s inauguration. Concerns about personal finances have also abated only moderately since January. [emphasis added]
That “moderate” abatement in concern about their personal finances is seven percent, from 70 percent in January who were worried to 63 percent today.
Yet the key figures that support the thrust of the story – he’s slipping significantly — are reflected in eight to nine point drops:
Approval of Obama’s handing the economy dropped from 60 percent in February, the earliest date available in the poll, to 52 percent, an eight point drop.
Approval of Obama’s handing the economy dropped from 57 percent in April, the earliest date available in the poll, to 49 percent, an eight point drop.
Approval of Obama’s handing the deficit dropped from 52 percent in March, the earliest date available in the poll, to 43 percent, a nine point drop.
So what makes an eight to nine point drop significant enough to support the thrust of the story but a seven percent drop is only “moderate.”
The answer is simply: If the story was “Obama drop in support for policies is only moderate,” well, it might not make the front page.
The Post would have been better of simply printing a chart of the results, and let us interpret them.
The Washington Post has a poll out this morning (more about it later), but the poll to be worried is the Rasmussen poll number.
Eighty percent (80%) of Americans now say Wall Street benefited more from the bailout of the financial industry than the average U.S. taxpayer.
If Obama is viewed as caring more about Wall Street than Main Street, he’s finished.
I’m sure there are many ways of measuring productivity. The economists have one definition. It is nebulous if you try to fashion a yardstick to measure it. My wife has another. She uses what I call the humping factor, as in “The trash men who jump off the back of the truck, run to the trash can, dump your refuse in the truck, send the can hurling back to the curb and then run to the next can, those guys are productive.” It may be said that those guys are humping it.
Then again, there is the Tax Foundation’s definition of productive. It apparently means anyone who’s rich. Asked to comment by Lori Montgomery, a Washington Post reporter, on the taxes Democrats are considering to pay for health care reform, a senior fellow, Robert Carroll, of the Tax Foundation, said it’s not the poor schleps who toss your trash can around.
"One has to decide whether the health-care reform package they’re talking about is worth imposing such high tax rates on the most productive members of society," Carroll said.
What makes them productive, he doesn’t say, and apparently Montgomery never asked. She just let him make the assertion that rich people are the most productive. Which means the economy lost a great leader when Michael Jackson died.
It also means stenography is alive and well at The Post.
But let me find lemonade in this lemon of a story. Montgomery didn’t identify the Tax Foundation as “liberal” or “conservative,” as is often the case when quoting sources that represent an organization. Thanks for that.
So I get to guess whether this comment is colored by a ideological prejudice. That’s fine. I just wish I had some way of evaluating whether his statement is correct. Ms. Montgomery could have helped me here instead of just recording his comment.
The Washington Post’s Steve Pearlstein argues that the meme that comes mostly from Repugnicans is patently false.
Suffice it to say that, in terms of new job creation, the data show that most of it happens in a small number of very fast-growing companies that are no longer what most of us would consider small. There are lots of reasons for the success of these fast-growing firms, among them the ingenuity and hard work of their founders, the availability of capital and a culture that celebrates risk-taking.
But the dirty little secret is that a lot of small-business job growth has also been driven by the decision of big businesses to outsource many tasks that they used to do in-house. In an economic sense, jobs haven’t been so much "destroyed" and "created" as they have been shifted from one company to another.
Pearlstein says the healthcare debate is colored by this myth. If we have universal coverage that requires all businesses offer healthcare and all employees must buy it, the impact on small business will be nil. If all must offer it, none would get competitive advantage and thus be put out of business.
Pearlstein goes on to explain that many jobs created by small business is because big business has found that it is cheaper to outsource work to small businesses that are not saddled with healthcare costs.
What Pearlstein leaves out is that small businesses cited by GOPers are defined as companies with less than 500 employees. I doubt most Americans think a business of 499 employees is a small mom-and-pop small business operation.
In a predictable piece in The Washington Post this morning, there is this:
At its core, Obama’s domestic agenda is a liberal wish list of health care for all, tough new environmental regulations and government solutions to crises ranging from failing schools to faltering auto companies. But as the party’s ranks expanded in 2006 and 2008, its center of gravity shifted to the middle. And the key to a durable majority, White House officials and party leaders agree, is adapting old policy goals to new political realities. [emphasis added]
Sen. Charles E. Schumer (N.Y.), a member of the Democratic leadership, said the party is coalescing as an amalgam of "activist centrists" who think government has a role in solving problems but are more pragmatic than ideological. "I think that’s where the president is, and that’s where we are," he said. "When you win red states, strange things happen." [emphasis added]
I guess the implication is that since Democrats won, it is because they attracted “centrist” or “moderate” voters. Thus, they must govern not by the demands of their base, but by the whims of the centrists, without whose support, the Dems couldn’t control government.
There are two faults with that thinking, as I see it.
One, if that were true, then the same would hold for the GOPers. If they won, it would be because they attracted moderate voters who would then demand that the Repugnican party would govern from the center. Of course, that has not happened. When they were in power, they moved hard in the direction of their base, except in financial policies, where they ignored responsibility so they could fund their war machine.
Two, such “analysis” – and one of the authors of this article, Dan Balz, is famous for passing off conventional wisdom as analysis – demeans the public. Could it be that the public’s view of what is acceptable has changed dramatically. No matter how “progressive” or “liberal” Obama’s policies are described in polls, he has broad support for his goals. While people are concerned about the growing deficit, few except the hard right think the stimulus package was wrong. In fact, many economists think it was too little and not focused enough on infrastructure spending projects. Obama has broad support for financial re-regulation, and the public seems ahead of him on social issues, especially gay rights.
The new political realities may not be that people are looking for small, incremental change with a slight shift left. I argue that “[w]hen you win red states” it reflects a strong move by the public in a new direction. People aren’t looking for a long-term unemployment rate of 7%, a marked improvement over today’s rate. They are looking for full employment again. They aren’t looking for a couple of wrist slaps and a few regulations that simply increase paperwork on Wall St. They are looking for a new structure that rewards steady, long-term investment.
Why is it that reporters aren’t willing to examine if indeed, what we are witnessing in a time of dramatic change in our lives is a dramatic shift in what Americans expect of their government?
Remember when every dick of a GOPer was blaming Obama for the stock market’s decline?
On March 3, 2009, the Dow Jones closed at 6,726.02, continuing its drop and, despite his claims, Obamanomics (or at least his plans) have contributed to the evaporation of your retirement accounts. Looking at it in perspective, the Dow Jones is:
- Down 7,438.51 (or 52.5%) since its all-time high
- Down 2,899.21 (or 30.1%) since Obama’s election
- Down 1,223.07 (or 15.4%) since Obama’s inauguration
But there is good news to consider in all this while you down your Tums. In 2010, Republicans have the opportunity to retake Congress and overturn the socialist, stock market destroying policies. Two years later, in 2012, Republicans can recapture the White House and reduce all the taxes Obama, Nancy Pelosi, and Harry Reid raised. The campaign to restore fiscal responsibility (Obama spending trillions upon trillions that we don’t have doesn’t qualify, no matter what he says) begins today!
Well, as of yesterday’s close,
The Standard & Poor’s 500 Index has gained (emphasis added) 15 percent since Obama’s Jan. 20 inauguration, compared with a decline of 9.6 percent in the first five months of the Bush administration and an increase of 3 percent under Clinton.
GOPers, I can’t hear you!
By the way, it was shortly after March 3 when Obama said the stock market was probably then a good investment. It’s up more than 30% since then.
At least that’s what Felix Salmon think.
How did Obama manage to spend all his political capital so quickly? Did it all go on the stimulus bill? Wasn’t the whole point of bringing Rahm in as chief of staff that he could work constructively with Congress to pass an ambitious agenda? And isn’t Obama himself the first president since JFK to have entered the White House from the Senate?
With Democrats, it may never have been real.