Progress on Texas Wind Energy Jobs

Natasha Chart — Fri, 20 Nov 2009 13:17:22 -0800

The dispute over whether or not a Texas wind farm receiving federal subsidies would source its components from a Chinese manufacturer has come to a more agreeable solution, with the partnering companies agreeing to open a 1,000 person turbine factory in the US and offering as an explanation their intent all along to source 86 percent of the installation's components by weight from within the US.

The new turbine factory won't provide the parts for this particular wind farm, but it seems like a better solution than either cancelling a wind power array or going on as if nothing had happened. Considering how unresponsive corporations can be to public protests over their business practices, I'm taking this as a win and going home.

Thing is, a wind turbine is a big, complicated gearbox with nacelle blades sitting on top of an enormous pole secured firmly to the ground by a big block of concrete or similar. Saying that you're going to get 86 percent of your components by weight in the US can easily mean, and does in this case, getting mostly the heavy and simple things here. So as much of an improvement as this outcome is, it's important to keep an eye on what American workers are getting pigeonholed into making.

Beyond even windmills, the important thing to know about the jobs leaving for China is that they aren't always jobs that can be replaced by educating or training our workforce for even better jobs. These are the better jobs. It's objectively a more complicated task to fabricate a gearbox or nacelle blade than to build a pole or mix concrete.

Now if Texas were a country, it would be sixth in the world for installed wind capacity (pdf) and has plans to add more. So chances are that this new factory will eventually be selling its products to new Texas wind installations, so not getting it ready for this time, not terrible. It isn't like US wind manufacturers are laying people off, and wind power is behind only natural gas in its share of new installed capacity in the US.

Yet going forward it's going to be essential to continue looking out for the health of this industry and to fight at every step to ensure that wind manufacturing in the US grows to meet domestic demand and stays abreast of other nations' industries in terms of technological sophistication.

If the principle can be established for this industry, that supporting our self-reliance and domestic employment are worthy goals, it can be established for other industries.

Wouldn't it be great if globalization ended up meaning that every country got to have a strong middle class, rather than that no one did? The Chinese should definitely have good jobs, but if that's allowed to be a zero-sum equation where Americans have to lose them, everyone will suffer for it. Even China. They are, after all, invested in our success up to their eyebrows.

Easy Choices

Terrance Heath — Fri, 20 Nov 2009 09:23:28 -0800

The first time I heard it, I did a double-take, because I thought I heard it wrong. The second time I heard it, I rolled my eyes. The third time I heard Sarah Palin, in her interview with Oprah Winfrey, suggest that women who choose to terminate pregnancies are essentially "taking the easy way out."

There is much — so much, really — that I object to here, but I'll start with one really simple point.

I don't know, and can't know, what it's like to decide whether or not to have an abortion. But I can listen — and have listened — to the voices and experiences of women who have. None of the women I've known who have faced that choice, based on what they told me, experienced it as an "easy" choice.

Such choices — the ones that have unknown and unknowable, long-term consequences for ourselves and our families — are almost never easy choices to make. As both Republicans and Democrats demonstrate, it's the choices we make for other people — people who are not "us" — that are the easy choices.

Palin's remarks on Oprah virtually echoed what she said earlier this year, in a speech at a fundraising dinner.

The Alaska governor told the Vanderburgh County Right to Life banquet, billed as the largest annual event of its kind, that she learned she was pregnant with her fifth child while on an out-of-state trip at an oil and gas conference.

"There, just for a fleeting moment, I thought, I knew, nobody knows me here. Nobody would ever know. I thought, wow, it is easy. It could be easy to think maybe of trying to change the circumstances. . . . No one would ever know."

Palin was 44 years old with four children already. Less than a year into her tenure as governor, she had trouble imagining "putting down the BlackBerry and picking up the breast pump," AOL.com reported.

It was her faith, she said, that made her realize that ending her pregnancy "wasn't any answer." But she said the experience helped her relate to the many women and girls who face unwanted pregnancies.

"I do understand what these women, what these girls go through in that thought process," she told the crowd, who gave her two standing ovations during her remarks.

On the same day of Palin's sit-down with Oprah, I read Emily Douglas' column about Rep. Bart Stupak's (D-MI) amendment to the House health care reform bill.

"That's the price of healthcare reform." That's what plenty of oh-so-well-meaning pundits have told those of us making a fuss over the Stupak amendment, the late-night attachment to the House healthcare reform bill that will leave virtually any woman accessing insurance through the health insurance exchange without abortion coverage. (Another argument that's cropped up is that the Stupak amendment won't actually affect abortion access for that many women, a claim that's based on faulty analysis of Guttmacher data on billing for abortion care, as Adam Sonfield explains.)

But both pro-choice and progressive healthcare reform leaders and members of Congress have come out swinging against the amendment, some going as far as to make it clear they'll refuse to support reform if Congressional Democrats decide to pay for it with women's healthcare. Calling the amendment a "middle-class abortion ban," Planned Parenthood president Cecile Richards said Wednesday that her organization would not support healthcare reform with an amendment further limiting access to abortion. Meanwhile, Senators Barbara Mikulski and Diane Feinstein have begun strategizing how to keep Stupak off the Senate bill, the New York Times reports.

I'll say it again. Whether it's Sarah Palin's self-serving contradictions, or Democrats' and Republicans' cynical political compromises, in the realm of politics, the choices we make for others are the truly easy choices.

Predictably, it's easy for Sarah Palin to say that women facing unplanned or unwanted pregnancies shouldn't take "easy way" out of their circumstances, with no apparent consideration of the full context of the circumstances in which women make these decisions — deeply personal circumstances that are easy to exploit politically, when decisions are made about policies that make those already difficult circumstances even moreso.

By the same token, it's easy for Rep. Stupak to say that his amendment essentially does nothing and changes nothing and then, without a sense of irony, go on to make the case for its necessity and blame progressives for making it necessary in the first place. (It's worth nothing that the Stupack amendment doesn't quite do everything Stupak initially wanted it to distinguish between "forcible rape" and, well, the other kind I guess.) It's easy for Stupak to ignore that both recent academic reports and health insurance executives say that his amendment will limit access to abortion. services.

Because, though it would initially be limited to those women covered by health care exchanges, in all likelihood insurance companies will gradually stop covering abortion services themselves.

"I really think it would be impractical," says Robert Laszewski, a health insurance industry consultant. Several health insurance companies contacted for this story declined to comment, citing the sensitivity of the subject matter.

Laszewski says the problem is that by all estimates, the vast majority of people who will be shopping in the new exchanges will be getting subsidies, so they won't be allowed to get abortion coverage. Thus, if a health insurer did offer a separate plan with abortion coverage, it would only be available to a small universe of buyers, and it simply wouldn't make much business sense.

"It's not an ideological issue, it's not about abortion or not abortion," Laszewski says. "It's about what is administratively simpler, easier to administer. It just adds a level of complexity they will likely avoid."

Sara Rosenbaum, a health lawyer and professor at George Washington University, agrees that it's impractical to expect health insurance plans to cover abortion in the exchanges, even for people paying the full premiums without federal help.

"If you speak to insurers in the industry, they will tell you that they simply can't operate under these circumstances," Rosenbaum says. "They need to be able to offer standard products that get administered in a standard way for everybody."

And that's also the death knell for the supplemental policies Stupak points to as evidence of how little his amendment (which, nonetheless, he says must be in the final health reform legislation) actually does.

"As a result, Stupak/Pitts can be expected to move the industry away from current norms of coverage for medically indicated abortions. In combination with the Hyde Amendment, Stupak/Pitts will impose a coverage exclusion for medically indicated abortions on such a widespread basis that the health benefit services industry can be expected to recalibrate product design downward across the board in order to accommodate the exclusion in selected markets."

Furthermore the study finds that the supposed fallback option for impacted women--a "rider" policy that provides supplemental coverage for abortions only--may not even be allowed under the terms of the law. "In our view, the terms and impact of the Amendment will work to defeat the development of a supplemental coverage market for medically indicated abortions. In any supplemental coverage arrangement, it is essential that the supplemental coverage be administered in conjunction with basic coverage. This intertwined administration approach is barred under Stupak/Pitts because of the prohibition against financial comingling."

Again, Stupak's and Palin's political choices are easy choices, because they deny or simply ignore the circumstances of those "others" who will bear the consequences.

§§§

It would seem like a lot to ignore, but they make it appear quite easy.

In the aftermath of Dr. George Tiller's murder, a lot of people writing about his murder in the context of the increasingly angry rhetoric of the extreme right. But I found myself drawn into the story of why Tiller chose to continue his father's practice of offering abortion services to women, and eventually ended up writing a series of posts about Tiller's medical practice as a matter of conscience. I had written previously about late-term abortion, and the reasons why some women seek abortion services.

The stories goes that when his father, who was also a physician died, Tiller took over his father's practice, intending to phase it out and pursue the dermatology practice he'd wanted to start after medical school. But in the process of taking over his father's practice, he learned that his father had performed abortions during the 50s and 60s (illegal, in those pre-Roe v. Wade days), prompted by guilt over the death of a woman he'd refused to help. Tiller spoke with a number of his father's patients, and learned from them how much his father's services meant at a time when their options were much fewer.

And just as offering abortion services became a matter of conscience for his father, so it became for George Tiller, who would become one of a handful of doctors offering late-term abortion services. He was one of a handful because few doctors, hospitals or medical schools wanted to deal with the threats and violence that inevitably came with the territory.

The result is that threats and violence curtail the availability of abortion services, to the point that there was no one willing to help the 9-year-old girl who was one of Tiller's patients.

The 9-year-old girl had been raped by her father. She was 18 weeks pregnant. Carrying the baby to term, going through labor and delivery, would have ripped her small body apart.

There was no doctor in her rural Southern town to provide her with an abortion. No area hospital would even consider taking her case.

Susan Hill, the president of the National Women’s Health Foundation, which operates reproductive health clinics in areas where abortion services are scarce or nonexisistent, called Dr. George Tiller, the Wichita, Kan., ob-gyn who last Sunday was shot to death by an abortion foe in the entry foyer of his church.

She begged.

“I only asked him for a favor when it was a really desperate story, not a semi-desperate story,” she told me this week. Tiller was known to abortion providers — and opponents — as the “doctor of last resort” — the one who took the patients no one else would touch.

“He took her for free,” she said. “He kept her three days. He checked her himself every few hours. She and her sister came back to me and said he couldn’t have been more wonderful. That’s just the way he was.”

After reading about a the death of 12-year-old girl after a painful childbirth — in Yemen, where abortion is illegal except to save a woman's life, and then only if the mother's death is imminent — I can only imagine the fate of this 9-year-old girl if Tiller had refused to help her as other doctors and hospitals had done.

How’s that? Why was there no physician in her rural southern town who could or would help her? Why would no area hospital — where people would surely have known the risks this young girl (no doubt already traumatized by being raped by her father) would face during delivery? (Vaginal or c-section, it seems like there are no good choices here.)

Why is abortion not readily available in 87% of counties in the U.S.? Why, between 1992 and 2005, did more than 250 hospitals and 300 private practitioners stop providing abortion? Why do so few medical schools train doctors to do these procedures? Why do 74% of ob-gyn residency programs no train all residents in abortion procedures? (Figures via The Gutmacher Institute.)

Why would a nine-year-old girl, raped and impregnated by her father, have nowhere to turn except to Dr. Tiller, and then 18 weeks into pregnancy? (Where will others like her turn now that there’s one less doctor willing to help? It’s likely that, because of all of the above, her pregnancy went on that long because of the time it took for someone willing to help her?

Why was no one willing to help her?

...What hospital or doctor wants to face thousands of protestors, not to mention shootings, bombings, and other violence? What doctor wants to risk his or her life, and take a chance of being added to the list of physicians murdered to help a nine-year-old girl in those circumstances? After all, no protestors will show up if she’s turned away, no headlines will be printed, no television vans will show up, and neither will bombers and gunmen.

She might very well have died, just as the 12-year-old Yemeni girl, in a long and painful childbirth that ended up killing the fetus as well. If she had died, it would not only have been because she was impregnated by the father who raped her, but also because refusing to help her became the easy choice. After all, there are fewer consequences for saying no to a pregnant nine-year-old. perhaps several hundred or even thousands fewere, depending on how many protesters show up in response to saying "yes" to a pregnant, 9-year-old rape victim.

Yemen, by the way, is among those countries that have seen a rise in abortions in the Middle East.

Despite legal and religious restrictions against abortion in much of the Arab world, changing social values and economic realities as well as demographic shifts have contributed to an apparent increase in the number of the procedures in the Middle East.

"There's definitely an increase compared to 10 to 15 years ago," said Mohammed Graigaa, executive director of the Moroccan Assn. for Family Planning. "Abortion is much less of a taboo. It's much more visible. Doctors talk about it. Women talk about it. The moral values of people have changed."

In most Middle East countries, the 15-to-24-year-old age group has grown to make up about a third of the population, but the percentage of early marriages is dropping. In Egypt, only 10% of 15-to-19-year-old females were married in 2003, down from 22% in 1976.

...In addition, Arab youths receive little in the way of birth control or sex education, say family planning experts in the Middle East, many of whom work discreetly to provide reproductive health services in conservative Muslim societies that hold women's maternal roles as sacrosanct.

"If access to contraceptives was widely and freely available, abortion wouldn't be necessary," said an official at a Western family planning organization in Yemen. She spoke on condition of anonymity for fear her organization would be targeted. Abortion, she said, is "a last resort."

According to most interpretations, Islam strictly forbids abortion after the fetus has reached 4 months, and allows it before then only in cases of violent rape or when birth poses an extreme threat to the physical or psychological health of the mother.

It's not just the Middle East, either. African women, in countries where the procedure is banned, have been maimed and killed by illegal abortions performed by amateurs.

A handwritten ledger at the hospital tells a grim story. For the month of January, 17 of the 31 minor surgical procedures here were done to repair the results of “incomplete abortions.” A few may have been miscarriages, but most were botched operations by untrained, clumsy hands.

Abortion is illegal in Tanzania (except to save the mother’s life or health), so women and girls turn to amateurs, who may dose them with herbs or other concoctions, pummel their bellies or insert objects vaginally. Infections, bleeding and punctures of the uterus or bowel can result, and can be fatal. Doctors treating women after these bungled attempts sometimes have no choice but to remove the uterus.

Pregnancy and childbirth are among the greatest dangers that women face in Africa, which has the world’s highest rates of maternal mortality — at least 100 times those in developed countries. Abortion accounts for a significant part of the death toll.

Maternal mortality is high in Tanzania: for every 100,000 births, 950 women die. In the United States, the figure is 11, and it is even lower in other developed countries. But Tanzania’s record is neither the best nor the worst in Africa. Many other countries have similar statistics; quite a few do better and a handful do markedly worse.

For years, even despite the comeback of left-leaning political parties, illegal abortions have killed women in Latin America.

For proof that criminalizing abortion doesn't reduce abortion rates and only endangers the lives of women, consider Latin America. In most of the region, abortions are a crime, but the abortion rate is far higher than in Western Europe or the United States. Colombia - where abortion is illegal even if a woman's life is in danger - averages more than one abortion per woman over all of her fertile years. In Peru, the average is nearly two abortions per woman over the course of her reproductive years.

In a region where there is little sex education and social taboos keep unmarried women from seeking contraception, criminalizing abortion has not made it rare, only dangerous. Rich women can go to private doctors. The rest rely on quacks or amateurs or do it themselves. Up to 5,000 women die each year from abortions in Latin America, and hundreds of thousands more are hospitalized.

Abortion is legal on demand in the region only in Cuba, and a few other countries permit it for extreme circumstances, mostly when the mother's life is at risk, the fetus will not live or the pregnancy is the result of rape. Even when pregnancies do qualify for legal abortions, women are often denied them because anti-abortion local medical officials and priests intervene, the requirements are unnecessarily stringent, or women do not want to incur the public shame of reporting rape.

But Latin Americans are beginning to look at abortion as an issue of maternal mortality, not just maternal morality. Where they have been conducted, polls show that Latin Americans support the right to abortion under some circumstances. Decriminalization, at least in part, is being seriously discussed in Colombia, Brazil, Venezuela, Uruguay and Argentina, and perhaps will be on the agenda after the presidential election in July in Mexico.

One story, from a BBC article, sounds vaguely familiar.

Every year four million women in Latin America have an illegal abortion, according to the World Health Organisation.

Preventing illegal abortions, which leave hundreds of thousands of woman dead or seriously injured, has been the focus of the conference in Mexico. Many groups present believe the only way to reduce the numbers is to make the practice legal.

"It is the first to the third cause of maternal death in different countries in Latin America," the chair of the conference, Maria Consuelo Mejilla - director of Catholics For The Right To Decide, a Mexican pressure group - told BBC World Service's Outlook programme.

"It is affecting mostly poor women.

"Unsafe and illegal abortion in Latin America is a social justice problem. Women who have no resources die."

...Ms Mejilla of Catholics For The Right To Decide said that doctors' opposition to abortions could lead to some women being "maltreated" at hospitals.

She outlined the case of one 15-year-old Mexican girl who became pregnant after being raped and wished, together with her mother, to have an abortion.

However, the doctor they saw was against the practice, and delayed any help until eventually the girl had no option but to give birth.

"It is mostly affecting poor women... Women who have no resources die."

It may be considered cliché and "alarmist" to point to stories like those above as examples of what might could happen if access to safe, legal abortion is restricted — which seems to be the likely outcome of the Stupak amendment. The poor, who don't currently have access to the medical care they need, won't have access to abortion services, and the practice of not covering abortion services will very likely spread to private insurers and affect virtually all women who rely on private insurance.

If the examples of other countries bear out, effectively cutting off access to legal abortion — as the Stupak amendment would likely do — would immediately impact "women who have no resources", but eventually all women could be affected. Still, for an ideologue these are easy choices to make.

The newly unveiled Senate health care reform bill takes a more nuanced approach to abortion than the House bill does with the Stupak amendment.

The health care reform package unveiled by Senate Majority Leader Harry Reid (D-Nev.) Wednesday night bars the use of federal funds for abortion services, but does not go as far as the House bill -- which prevents women in many cases from buying insurance with their own money that covers abortion.

The Senate version would require at least one plan within the health insurance exchange that the bill sets up to offer a plan that covers abortion and one that doesn't. It would also authorize the Health and Human Services Secretary to audit plans to make certain that abortion isn't being paid for with federal dollars.

Igor Vlosky further explains the Senate compromise.

The bill maintains the Senate Finance Committee’s immigration language and preserves much of the more moderate Capps-abortion compromise. Federal dollars can only be used to pay for abortions when the pregnancy threatens the life of the mother or results from rape or incest; private premiums must be used to pay for any other type of abortion, including those for health reasons. Each plan in Exchange will decide whether to cover additional abortion services and at least one plan in each market must offer abortion services and one plan must not. In the public option, the Secretary can cover abortion only if the procedure is financed with private funds.

I am still wrapping my brain around how the Senate bill changes the debate over abortion in health care reform. Ruth Marcus and Lisa Miller make compelling arguments for a more nuanced debate on both sides. And while I'm still undecided on the seemingly Solomon-like compromise of the Senate bill, this latest debate over reproductive freedom and choice makes it clear that some choices are disturbingly easy for Democratic leaders to make.

§§§

The choice is front of Democratic leadership is spelled out pretty clearly by Tim Fernholz.

Peter Beinarthad a cheekily counterintuitive piece in The Daily Beast yesterday, arguing that the Stupak Amendment is good politics, since it represents the functional "big-tentism" of the Democratic party, which hearkens back to the days of FDR and LBJ, when a big-tent Democratic party built the modern welfare state we know and love.

In general, I agree with Peter: The Democratic party is better for being bigger, even it is trickier to assemble decent legislation because of that fact. Sometimes the sausage-making is going to get ugly and compromises will be hard for progressives to stomach. In this case, though, Peter is wrong. For him, the Stupak Amendment is just one of those ugly compromises, but his analysis is flawed -- and offers a warning today's progressives and Democrats would be wise to heed.

As Emily Douglas wrote, what's only slightly more disturbing than the Stupak amendment itself is the speed with which so many Democrats accepted its "necessity" and hinted that this is one of those times for pro-choice progressives to "take one for the team." It's a pattern that's cropped up again and again in progressive/Democratic politics — perhaps due to the Democratic party getting "bigger." During the Bush administration, when Republicans held the White House and the Congress it morphed into a strategy for getting Democrats back into power, and now it's apparently morphing into a strategy to keep Democrats in power.

Maybe it's that the party never got over losing the "Reagan Democrats" and have never stopped trying to get them back, but above strategy has the added effect of putting on the back burner constituencies whose numbers put them in the majority and/or whose specific issue-related concerns are not or are not perceived to be "majority issues" — the kinds of issues that are "safe" for politicians to risk taking a stand on, because they sufficiently popular or a matter of concern a vast majority of voters.

It doesn't mean that political leaders are "flip-flopping" on those particular issues. It just means that the message to those constituencies is, "You're right. But not right now."

No one in the blogosphere, I think, has summed it up better than Kos did a few years ago.

One of the key problems with the Democratic Party is that single issue groups have hijacked it for their pet causes. So suddenly, Democrats are the party of abortion, of gun control, of spottend owls, of labor, of trial lawyers, etc, etc., et-frickin'-cetera. We don't stand for any ideals, we stand for specific causes. We don't have a core philosophy, we have a list with boxes to check off.

So while Republicans focus on building an ideological foundation for their cause, we focus on checking off those boxes on the list. Check enough boxes, and you're a Democrat in good standing.

And again here.

And while there are Democrats in the Colorado House that are less than optimal on any number of progressive issues, the entire movement benefits from having a friendly party in control.

It's an attitude that, as a gay activist, I've heard too many times — and one I railed against upon my return from YearlyKos a year later.

I’ve written before about my dismay with Democrats when it come to gay issues, and my frustration with Howard Dean and the direction the party seems to be taking where LGBT issues are concerned. And I suppose going into YearlyKos I should have known what I was getting into. Kos is, after all, known for saying that us “single issue” folks should zip it, sit tight on the back burner and support the party no matter what, even when it backs candidates that don’t support our concerns or issues. I should have known what to expect based on the comments I’d seen when the subject came up on netroots sites like MyDD and DailyKos. I should have figured I’d hear the same things I’d heard all along, even during the FMA debate.

I guess just hoped being there and bringing it all up might help, or might mean something. But I heard the same thing, even from gay folks who are just as frustrated as I am, and from supportive straight people too: this is what we have to do to win, and if gay issues have to take an extended back seat consider it taking one for the team.

The thing is, there comes a point when those of us consistently asked or expected to "take one for the team" start to wonder whose team it really is.

You know what I don't want to hear right now about the Stupak-Pitts amendment banning abortion coverage from federally subsidized health insurance policies? That it's the price of reform, and prochoice women should shut up and take one for the team. "If you want to rebuild the American welfare state," Peter Beinart writes in the Daily Beast, "there is no alternative" than for Democrats to abandon "cultural" issues like gender and racial equality. Hey, Peter, Representative Stupak and your sixty-four Democratic supporters, Jim Wallis and other antichoice "progressive" Christians, men: why don't you take one for the team for a change and see how you like it?

...Women Democrats have taken an awful lot of hits for the team lately. Many of us didn't vote for Hillary Clinton in the primary because the goal of electing a woman seemed less important than the goal of electing the best possible president. Only a self-hater or a featherhead didn't feel some pain about that. And although women are hardly alone in this, we've seen some pretty big hopes set aside in the first year of the Obama administration. The Paycheck Fairness Act, which would expand women's protections against sexism in the workplace, is on the back burner. Meanwhile, the Office of Faith-Based and Neighborhood Partnerships is not only alive and well; it's newly staffed with antichoicers like Alexia Kelley of Catholics in Alliance for the Common Good, who, as Frances Kissling notes in Salon, has compared abortion to torture.

I know what you're thinking: conservative Democrats like Stupak took Republican districts to win us both houses of Congress. Thanks a lot, Howard Dean, whose bright idea it was to recruit them, but those majorities would not be there, and Obama would not be in the White House, if not for prochoice women and men--their votes, talent, money, organizational capacity and shoe leather. We knocked ourselves out, and it wasn't so that religious reactionaries like Stupak--who, as Jeff Sharlet writes in Salon, is a member of the Family, the secretive right-wing Christian-supremacist Congressional coven--would control both parties. Elections have consequences, you say? Exactly: Obama, the prochoice, prowoman candidate, won. Stupak didn't put him in the White House, and neither did the Catholic bishops or the white antifeminist welfare staters of Beinart's imagination. We did. And we deserve better from Obama than sound bites like "this is a healthcare bill, not an abortion bill." Abortion is healthcare. That's the whole point.

And — something I've been writing about for a few years now, and that Katha Pollitt expressed in the post I just quoted — we begin to wonder why we're "knocking ourselves out" for it.

This is the crux of the problem I have with this strategy for Democrats, and calls to put "party unity" above single issues, with promises that the party will get back to those issues after it’s safely back in power. But if they regain power, with narrow margins and while winning the support of moderate-to-conservative voters by stepping back on issues like gay equality and reproductive choice, will those same moderate-to-conservative voters let Democrats return to progressive positions on those issues and remain in power?

Probably not, at least not without the help of the very people from whom the Democratic party is distancing itself; help by working on those issues in our own back yard, moving the ball down the field against some pretty tough opposition while the party watches and waits from somewhere near the end zone. We have to get the ball down the field on our own. In states like Maine, it might happen. In states as conservative as Texas it ain’t gonna happen. And on a national level chances are slim we’re going to get much support. We’re basically abandoned on the field, at least until we’ve moved our issues far enough that it’s safe for the Democratic party to take them up again. Even if we’re able to do that, we’re probably going to take several hits and get rather bloodied in the process.

It won’t surprise me if Democratic candidates attempt the same strategy in other states, and with some degree of success. It will surprise me even less if the same strategy is evident in the Dems’ 2008 presidential and congressional campaigns. Successfully, even. That will essentially leave gay and lesbian Americans out in the cold politically, without a (major, viable) party that has a clear position of standing up for our equality.

We wonder if we have the same goals as our "teammates" at all, and if we're working against our own interests to some degree while watching them hand the ball to the other(?) team.

A Democrat who wins under those conditions will be hard pressed to govern from a progressive position, and keep the voters who gave him the margin of victory — are decidedly not progressive on some issues. (The best progressive evangelicals can do on gay issues and reproductive choice is to just not talk about them or ignore them. Candidates who want their votes would do well do downplay those issues as well. Note, again, the progressive laundry list petition linked above.)

Progressives, being the base, don’t provide that margin of victory, because they don’t “swing.” And in the current political landscape, they don’t have anywhere else to go. The Greens? Sure, go ahead. Progressives will volunteer, phonebank, fundraise, and canvas for their candidates; everything that any campaign needs hordes of volunteers to do. But we will do it for candidates who aren’t always progressive, and yet believing that we’ll get a progressive-governing elected official after the election. But we do not have to be pandered to, courted, catered to, or convinced, because — again — where else are we going to go?

We can’t afford to stay at home either, which differentiates us from the Republicans’ religious right base. They have less to lose if their candidate doesn’t win because the reality is that if our candidate wins he will probably have to spend so much of his time and energy cleaning up the mess of the last 7 1/2 years that he won’t be able to do much in terms of moving in a more progressive direction. There’s a swamp to be drained, and then alligators to fight as the first order of business. Once that’s done, we might well be half-way through the second term. At which point, the best we can hope for is a couple of Supreme Court appointments, and some executive orders.

Progressive, in a sense, have become political prisoners of a sort. After we work to get a candidate elected, the real work of then moving that candidate towards more progressive positions begins. We will get them elected so that we may begin lobbying and petitioning them and hoping they will listen.

We begin to wonder who our friends are, and if they really are our friends.

I find myself returning the playground analogy; probably something unavoidable in this situation, for a gay man who came out and grew up smack in the middle of the bible belt. Hearing the Republican strategy is reminiscent of hearing the school bully say he’s gonna pound you good after the bell rings.

And sure enough, he’s waiting for you after school. You know he’s big. Too big to take on by yourself. But you have friends, right? They know how big the bully is. Big enough to pretty much control the whole school. But they’re your friends, right? They might get banged up, but surely they’re not going to stand by and watch you take a beating right?

Well.

...To return to the schoolyard for a minute, maybe if you give your "friends" your lunch money, they’ll keep the bully off your back.

Or not.

Sometimes you get to thinking your friends may find it inconvenient to be your friends. Maybe they have an overblown perception of the bully’s popularity, despite evidence to the contrary. And even if he isn’t very popular any more, the bully has a posse that gave him his power, and they’d like to win over that posse for themselves. So, if that posse doesn’t like you much, your friends might have to put some distance between you and them. Like the DCCC suddenly forgetting its non-discrimination policy includes/d sexual orientation.

So, your friends won’t sit next to you in the lunchroom anymore. But if they make new friends at the cool kids table, they’ll say nice things about you. Maybe that’ll get the bully and his posse to ease up on you, right?

Well.

...And if your friends seem likely to stand by and watch you take a beating, and tell you later (when nobody else is watching or listening) what a shame they thought it was ... well, then you don’t have any friends.

§§§

Whether the Stupak amendment ends up in the final health care reform bill or is replaced by the more moderate compromises in the Senate bill, Tim Fernholz is right that both the passage of the amendment and the almost immediate response that women and pro-choice progressives should "take one for the team" hold a lesson and a warning for both progressives and Democrats.

Actually, the warning and the lesson are the same for both progressives and Democrats (note that the two are by no means synonymous).

For progressives, wondering how the Democratic victories of 2006 and 2008 got us here, it means understanding that merely getting Democrats elected is not sufficient.

But over and over I basically hear about all of the above “If that’s what we have to do to win … ”
And then I remembered something I hear a certain A-list blogger (who honestly seems to care about these issues, and keeps asking how Dems should talk about them) say a while back: just getting Democrats elected is not sufficient. Certainly not if they’re going to put their constituents and the convictions in the closet in order to win. A party that believes it has to put its own values on the back burner in order to win must not believe that it can and should win based on its values. It becomes something else entirely, and will find it hard to go back if the trick should work.

At some point, candidates who get our support, our votes, our money, our time, energy, trust and confidence have to face some real consequences when they don't follow through with progressive stands on the issue and progressive changes in policy.

And I don't mean consequences in terms of blog posts and editorials. For example, progressives could take a lesson from the gay community's response to the Obama administration's ill-considered brief on the Defense of Marriage Act.

By now, the Obama Justice Department's "Defense of Marriage" brief, which was filed more than a week ago, has essentially become known as the brief heard around the LGBT world, in large part due to its insulting comparisons of homosexuality to incest, and it's general support for the Defense of Marriage Act (DOMA), which the brief called a "rational" policy.
In response to the DOMA brief, as well as the Obama administration's silence on LGBT rights (the outlier is last week's extension of some limited partner benefits to LGBT employees), many LGBT donors to the Democratic National Committee (DNC) have been making their anger known by bailing on DNC fundraisers. A fundraiser in D.C. scheduled for Thursday night with VP Joe Biden has already seen its fare share of prominent LGBT folks backing out, and now comes word that a fundraiser to be held at Fenway Park in Boston is going to be protested by local LGBT organizers with Join the Impact Massachusetts, who are upset about the DOMA brief. Here's the scoop:

As we've all seen, we've gotten more in the past 6 days for the LGBT community than we have in the past 6 months. Once this firestorm of criticism and public pressure began over the repugnant DOMA brief, we began hearing that the Hate Crimes bill may pass very soon. Then once the boycotting began of the DNC fundraiser in Washington, DC, we then learned about the relocation benefits memorandum which seemed to be a direction reaction to the boycott.
Money talks folks and we have a HUGE opportunity here. Putting on this protest will be emblematic of a larger issue at hand for the Obama administration and the Dems. No longer is the protest singled out just in Washington, DC, but now they're spreading. If the Obama administration and the Dems want to tamper down frustrations, the only way for them to do so will be to take concrete strong action to pass substantive LGBT civil rights measures. Let's make them do it!

That was June. Fast forward to the Obama administration arguing in August that DOMA should be repealed, pledging (again) to end Don't Ask Don't Tell, and signing the Hate Crimes Bill. Of these it remains to be seen how much tangible change the first two actually mean, but the LGBT community has shown at least some willingness to hold the administration accountable. Consequences work, and merely being a Democrat can't be enough for a candidate to earn our trust, confidence, time, energy, and campaign contributions.

These things must no longer be taken for granted, or given unconditionally, but reserved for candidates who stand up for progressive values and have a record of following through. A Democrat who asks for and accepts our contributions and support should be be held accountable, and face the consequence of losing both if he or she doesn't follow through.

For progressives, the lesson is: stop making it easy for Democrats not to stand up for progressive values and ideals in policymaking.

For Democrats, the lesson is: stop making it increasingly easy for progressives not to support you.

There are many constituencies that Democrats may too easily take for granted, among them pro-choice progressives, and the LGBT community. Perhaps that's because we're perceived as having nowhere else to go. But we constitute an energetic part of the Democratic base. Or at least we do when we turn out. But as Tim Kaine pointed out, a Democrat who moves away from progressive values telegraphs that he or she doesn't need our support.

"After the [June] primary was done, his advisers basically said, distance yourself from the president. We think we have our base locked down, we've got to win independents. And we're going to win by being negative about McDonnell," Kaine said. "That was the basic strategy they pursued, despite some significant urging to the contrary."
Asked about his own advice to Deeds, who lost to McDonnell on Nov. 3 by 17 percentage points, Kaine said: "I'd rather not talk about my personal conversations. But what I will say is that I always believed from the very beginning that the paradigm in Virginia had changed and that the way to win the race was to energize voters who had demonstrated they would vote for Democrats. That I did advise him very, very early. I advised all the candidates, prior to the primary, that was a path to victory."
..."I think the issue of being nervous about the Virginia electorate was overdone and I think Creigh did exactly what the McDonnell campaign hoped he would do, which was distance himself from the president and national issues," Kaine said.

The truth is, there's no such thing as a constituency that has "nowhere else to go." It's fine to be a "big tent" party, but if the constituencies that constitute your base are so taken for granted that they are pushed closer and closer to the back of the tent, that just leave them closer to the exits. As Tim Ferholz (again) points out.

Ultimately, he fails to understand that every majority contains the seeds of its own undoing. While Peter focuses on the economic aspects of the previous big-tent Democratic majority, he downplays the advances made on civil rights and gender equality, especially by LBJ. As Peter recognizes, the Civil Rights Act and other culturally progressive victories led to the Democratic majority's defeat as racists and social conservatives fled to the Republican party. He suggests that this was a result of a decision for the party to become more "pure" under pressure from activists, but that's foolish. It was because the party decided to do the right thing under pressure from activists. Does Peter think this was a bad decision? He doesn't say.

Believers in the Big Tent, like Peter and myself, have to be very careful about the compromises they make. If you lose track of what the point of politics is -- what you leave behind -- then you risk betraying the entire progressive agenda. If Peter thinks today's progressives should choose economic issues over other ones, he should make that case explicitly. But he shouldn't pretend that it's a normatively good choice. There's going to come a time when this Democratic majority has the chance to do something so big and important that it will destroy itself by alienating its conservative and moderate members. Maybe it will be gay marriage, maybe it will be the Freedom of Choice Act, who knows. I hope the leadership at the time has the principles and the guts to pass the law and blow up their majority. That's what it's there for, after all.

The warning for progressives is to choose what kind of party we want. The warning for Democrats is to choose what kind of party they want to be. The good of the country may depend upon close we come to making the same choices.

Markos and Jerome opened their book, Crashing the Gate: Netroots, Grassroots, and the Rise of People-Powered Politics, with this quote from Gandhi.

First they ignore you, then they laugh at you, then they fight you, then you win.

I’d like to suggest another Gandhi quote to the netroots and the party leadership.

Be the change you want to see in the world.

If, that is, it’s a change you really want to see.

If that's not an easy choice, it should be.

Watchdogs And Lapdogs On Financial Reform

Isaiah J. Poole — Fri, 20 Nov 2009 07:49:23 -0800

There was a major victory for accountability this week in the financial reform fight, but there was also a demonstration that when it comes to protecting the profits of bankers at the expense of ordinary people, no institution does it better than the Party of No.

First the good news—and it is huge. Rep. Alan Grayson, D-Fla., working with Rep. Ron Paul, R-Texas, managed to get an "audit the Fed" amendment into financial regulation legislation (HR 3996) that is moving through the House Financial Services Committee.

That amendment will for the first time expose the deals that the Federal Reserve has been cutting with the financial services industry and will detail what taxpayers are on the hook for and why. It is a commonsense amendment that has united progressives and conservatives, especially in light of the trillions of taxpayer dollars the Fed has put at potential risk to bail out Wall Street, without accountability to anyone. Grayson made the case for the legislation in a "Dear Colleague" letter in May.

The Fed audit provision was approved by a committee vote of 43-26. In a statement after the vote, Grayson said:

The Federal Reserve has conducted secret bailouts that range in the hundreds of billions of dollars. Congress never voted on them, and the President never approved them. This cannot go on any longer. It’s bad enough that we have bailouts at all. But it is really bad if they are secret, with the Fed transferring money to banks without the public knowing about it.

Bill Scher's Progressive Breakfast today has links to more details on this victory, and The Huffington Post's Ryan Grim has a blow-by-blow account of the drama leading up to the committee vote.

The vote on the final legislation has been delayed until December 1. As Scher's Progressive Breakfast notes, members of the Congressional Black Caucus have withheld their support for the bill out of concern that the Obama administration is not addressing aggressively enough the devastation being wrought on African-American communities by the financial crisis.

This came a day after conservatives in the Senate continued their lapdog obstructionist behavior, in a way that will cost working families millions of dollars as they head into the holiday season.

Sen. Thad Cochran, R-Miss., led a Republican filibuster on Wednesday against legislation offered by Sen. Christopher Dodd, D-Conn., that would freeze credit card rates in advance of legislation that would regulate the credit card industry.

The bill is necessary, as Firedoglake's David Dayen notes, to halt the headlong rush by the industry to increase interest rates and fees they are imposing on their customers to get ahead of new rules Congress approved this year but much of which, at the behest of the banking industry, won't go into effect until February 2010.

Dodd said on the Senate floor:

Consumers obviously have a responsibility to spend within our means and to pay what we owe. We bear that responsibility. But the credit card industry as well has a responsibility to deal with their customers honorably. There is nothing honorable about what’s happened with these significant rate increases and fees. Most importantly, they don’t have a right to rip off American families, especially when the Congress has already gone on record opposing the very actions they’re engaging in.

But The Party of No disagrees. There is something honorable about gouging consumers before the law kicks in that says you can't. Banks do have a right to rip off American families. That is what Thad Cochran and his Republican colleagues are standing up for.

It's another sordid chapter in the record-breaking obstructionism of Senate conservatives. Not content to cripple Congress and overturn the majority demand for change, they now want to steal Christmas. Shame.

Progressive Breakfast: Fed Audit Clears Committee

Bill Scher — Fri, 20 Nov 2009 07:07:56 -0800

The daily Progressive Breakfast serves up what progressive movement members need to know to start their day.

Paul-Grayson Fed Audit Plan Clears Committee

NYT on House committee vote repudiating Fed: "Mr. Paul, a libertarian Republican who has called for abolishing the Fed entirely, has introduced a version of his bill in every session of Congress since the early 1980s and never made any progress. But the Fed’s trillion-dollar efforts to bail out major banks and rescue the financial system provoked a popular firestorm that ignited both right-wing Republicans and left-wing Democrats. Mr. Paul’s amendment would instruct the Government Accountability Office, the investigative arm of Congress, to carry out audits of all the Fed’s operations. Those include an array of emergency lending programs, bailouts of giant financial institutions, dealings with foreign central banks and the central bank’s efforts to drive down interest rates by intervening in bond markets. Mr. Frank had already agreed that the G.A.O. should be authorized to audit all of the Fed’s rescue programs, but he had wanted to wall off the Fed’s more basic job of setting interest rates to steer the economy."

Vote on overall financial reform package stalled by Black Caucus members demanding more action on economy. The Hill: "Frank delayed the panel’s final vote after Congressional Black Caucus members said they would withhold their votes. 'It has nothing to do with the underlying bill,' said Steve Adamske, Frank’s spokesman. 'It has to do with larger economic issues with the African American community.'"

W. Post adds: "Congressional aides said the [CBC's] concerns are similar to those of the Democratic Party's liberal wing. Caucus members are pushing for legislation that would directly lead to new jobs by providing tax benefits, for example, that would provide incentives for home renovations and funding for new infrastructure projects. They also want to extend health-care and unemployment benefits."

Shelby rips Dodd financial reform bill. CQ: "Shelby and other Republican panel members said Dodd’s bill would preserve through law the practice of rescuing companies deemed 'too big to fail,' rather than end it ... Taking into consideration the Republican concerns, Dodd offered to give his panel members more time to fashion a bipartisan bill. He told his colleagues that they should be prepared to work 'virtually around the clock' into next week to iron out problem areas, but that he would not set a deadline on when to proceed with the bill."

Geithner tells Congress of plans to use leftover TARP funds for deficit reduction, while facing calls to resign. AP: "'We are winding it down and will close it as soon as we can,' Mr. Geithner said of the $700 billion bailout fund ... Mr. Geithner said 'substantial resources' remaining in the fund would be used to pay down the national debt ... While pledging to end TARP as quickly as possible, Mr. Geithner also said the administration did not want to repeat the mistake of other countries by ending government support too fast and derailing a fledgling economic recovery. But Representative Kevin Brady, a Republican from Texas, said the economy was such a mess that Mr. Geithner, as the Obama administration’s chief economic spokesman, should resign immediately."

Pelosi pushes international tax of financial transactions. Reuters: "Any tax imposed on financial transactions would have to take effect internationally to keep Wall Street jobs and related business from moving overseas, U.S. House of Representatives Speaker Nancy Pelosi said ... support is tepid among key legislators, especially those from the New York region who worry that finance jobs could disappear if the tax drives trading activity overseas."

White House stimulus watchdog notes imperfect local reporting will both understate and overstate job creation. NYT: "The 640,000 figure, announced by the White House with some fanfare last month, came from reports filed by recipients of the stimulus money, many of which have been shown to be inaccurate or overstated since they were made public. But the watchdog, Earl E. Devaney ... said that it was also possible that the figure understated how many jobs were affected. Up to 10 percent of the recipients had not filed the required reports showing how many jobs they had created or saved, he said." ALSO: White House blog posts "reality check."

President renews prospects of Korea trade deal. NYT: "Mr. Obama and the president of South Korea, Lee Myung-bak, both declared their desire to renegotiate elements of the agreement and to have both countries ratify it as soon as possible ... Democrats from big manufacturing states were already accusing the president of emulating his Republican predecessor and undermining American workers ... [Rep. Sander] Levin has warned the trade deal had no chance of passage unless South Korea agreed to make reductions in import restrictions. But he welcomed Mr. Lee’s apparent willingness to re-open those discussions."

Senate Hopeful To Clear First Procedural Hurdle Tomorrow

Senate expected to have 60 votes to begin health care debate Saturday. NYT: "After getting a look at the contents of the $848 billion legislative package unveiled by Mr. Reid on Wednesday, Democrats were increasingly confident they would be successful on the first crucial vote. That confidence was in part due to Mr. Reid’s shaping elements of his bill to appeal to Ms. Landrieu as well as to two other Democratic holdouts, Senators Blanche Lincoln of Arkansas and Ben Nelson of Nebraska."

Sen. Olympia Snowe looking to weaken employer mandate, public option. W. Post: "...Snowe said she is not happy with Reid's package, and has informed him that he will not have her vote Saturday. But Snowe said she would seek to amend the measure to lighten the financial burden it would place on small businesses whose workers received federal subsidies to buy insurance. She is also pressing for a trigger approach to the public option that would make it available only in states where private firms did not develop broadly affordable policies."

Union leaders remain opposed to tax on expansive insurance plans. LA Times: "...the Senate bill also includes the 40% excise tax on companies that offer high-end insurance plans -- those that cost $8,500 in annual premiums for individuals and $23,000 for families. Proponents argue that would not just raise revenues but also curb costs by discouraging companies from offering expensive plans ... critics warned it would not hit just luxury plans, but also those for middle-class workers whose premium costs are high because they live in high-cost states. A recent study by the Commonwealth Fund projected that the average premium for family coverage in 2015 would be nearly $20,000 in high-cost states. To address those concerns, the Senate bill sets the threshold $3,000 above that for certain states and for plans that cover workers in high-risk professions. Richard Trumka, president of the AFL-CIO, said that was a step in the right direction, but that labor would seek to kill the provision. 'We continue to believe that a tax on working families' benefits is the wrong way to finance healthcare,' he said."

White House squarely in support of insurance tax. WH budget director pens W. Post op-ed: "...will do more than help pay for reform. It also will curtail the growth of private health insurance premiums..."

CBPP largely praises Senate bill. TPMDC: "'The new Senate health bill marks a major step toward comprehensive, fiscally responsible health reform,' said executive director Robert Greenstein. 'It would extend health insurance coverage to 31 million Americans who lack it, reduce the budget deficit, and put long-term downward pressure on health care costs.'" CBPP had been particularly critical of the 'free-rider' employer mandate provision in the Finance bill, which Reid has rectified. Greenstein says the main problem with the bill now is its affordability (or lack thereof) for working-class Americans."

Some business groups oppose, but conflicted on strategy. WSJ: "Several industry groups are banding together to ask Congress to scrap the current bills and start from scratch on a health overhaul. They are stepping up television advertising against Democrats' proposals. The problem for employers is they may lack the power to kill the bill, which is why some are hedging their bets by negotiating on provisions they think they still have a chance of changing ...

Catholic bishops group lambastes Senate bill abortion language: "At the White House on Thursday, health reform director Nancy Ann DeParle praised Reid's effort to find a compromise on abortion ... But Richard Doerflinger, associate director of the bishops' conference Secretariat of Pro-Life Activities, said Reid's 'is actually the worst bill we've seen so far on the life issues.'"

House conservatives flip-flop on fixing Medicare reimbursements to doctors, as bill passes. The Treatment's Suzy Khimm: "The majority of House Republicans opposed the Democrats’ $210 billion physician payment bill--which passed this afternoon on a 243-183 vote--accusing the legislation of increasing the deficit by relying on federal borrowing through Medicare to pay for itself. ... But it was only four months ago that Ways and Means Republicans voted for an amendment that’s nearly identical to the bill being proposed today..."

Pre-Copenhagen International Jockeying Begins

Nations begin laying down markers on emission cuts in advance of Copenhagen. NYT: "...a rapid-fire succession of countries are unveiling national plans that serve as opening bids for reining in heat-trapping emissions ... 'We now have offers of targets from all industrialized countries except the United States,' [UN climate chief Yvo] de Boer said ... [US climate negotiator Todd Stern] noted that bills pending in Congress involved cuts of around 17 percent in emissions by 2020, increasing to much deeper cuts by 2030 ... South Korea said it would cut emissions by 30 percent from 'business as usual' by 2020. Russia’s president, Dmitri A. Medvedev, said his country would try to reduce emissions by 25 percent by then, instead of 15 percent as announced earlier. Last week, Brazil promised reductions of about 40 percent below current projections by 2020. The recent announcements are a mix of aspirations, good intentions and negotiating tactics. In most cases there is no certainty that the targets are politically or scientifically plausible."

Politico assesses Sen. John McCain's flip-flop from climate bill proponent to opponent: "Now the Arizona Republican is more likely to repeat GOP talking points on cap and trade than to help usher the bill through the thorny politics of the Senate. ... Former aides are mystified by what they see as a retreat on the issue, given McCain’s long history of leadership on climate legislation."

Republicans Want the Status Quo for Student Loans

Armand Biroonak — Thu, 19 Nov 2009 21:45:54 -0800

Representative John Kline (R-MN) and Senator Mike Enzi (R-WY) introduced legislation this week that keeps our broken student loan system in status quo, with corrupt private lenders and federal bank subsidies worth billions. This is a move directly against the Democrat-backed Student Aid and Fiscal Responsibility Act (SAFRA) that ends the practice and moves to federal direct lending, thus avoiding the private sector middlemen.

The Republican legislation does nothing to aid students, but sure does resuscitate the private loan industry. The proposal extends the existing Ensuring Continued Access to Student Loans Act (ECASLA) that is the lifeline for the federally-guaranteed, subsidized lender program. ECASLA is set to expire in July 2010, so many in Congress want to make sure lenders’ profits stay fresh.

Proponents of the bill claim that a move to direct lending, particularly during the credit crisis, will jeopardize students ability to gain access to loans they need and that schools are unprepared for the transition –but this is bunk. Deputy Under secretary of Education, Robert Shireman, stated that it takes colleges and universities between three weeks to four months for a complete switch over to direct lending. And even the once hesitant National Association of Student Financial Aid Administrators now recommends that all schools not wait, and prepare to switchover without delay.

Funny enough, Republicans hail their new bill “bipartisan” too, thanks to co-sponsor, and lone Democrat, Senator Ben Nelson (NE). Nelson’s support is no surprise though; his top contributor is the student loan company, Nelnet Inc. He is not alone however, a number of Senate Democrats have expressed that they are on the fence about ending lender subsidies.

Just a signal of who stands to benefit from the Republican bill, private loan companies’ stocks increased nicely on Wednesday when news broke of the proposal. Sallie Mae even responded that, “a delay gives Congress ample time to fully consider how best to reform the student loan program." But also enough time for Sallie Mae and other lenders to ramp up their lobbying to kill SAFRA and protect their profits. In fact, Sallie Mae spent over $3 million lobbying Congress this year so far, and with health care (understandably) clogging the legislative queue, lenders have even more time to scheme.

The Student Aid Bill Must Pass

The alternative bill, the Student Aid and Fiscal Responsibility Act (SAFRA) already passed the House and will actually benefit students, not banks, saving $87 billion by ending subsidies, directing much of the savings in the form of increased Pell Grants, investments to community colleges and strengthening college access and completion programs –and those are just some of the bill’s benefits. SAFRA is truly a game changer for education. The Republicans’ idea? The same old games.

Urge your Senator to pass SAFRA and help students, not banks.

The One Thing That Will Help Restore U.S.-China Trade Balance

Dave Johnson — Thu, 19 Nov 2009 15:01:48 -0800

Have you heard of the U.S.-China Economic and Security Review Commission? Their job is to assess the national security implications of the trade and economic relationship between the United States and the People's Republic of China. Actually, that’s a big deal, especially now.

I joined a conference call today as the Commission today released its 2009 report to Congress. Here is a link to the audio of today's conference call.

Eric Lotke summarizes the report, in the post, Obama’s Home And The Report Is Out: China Takes Us To School

The official, bipartisan China commission held hearings, traveled to China and received closed briefings on classified information. They reported back about expansion of the Chinese navy, China’s stepped-up espionage and cyber-warfare capabilities, and the world’s most sophisticated web filtering and Internet control systems.

But the economy is behind it all. China is quite literally eating our lunch. ...

[. . .] The report reads like an indictment of Chinese behavior and American compliance.

Eric continues with a summary of the report and lays out how the imbalances with China contributed to the economic collapse. Go to his post and read the rest.

One thing that came up in the call—featuring Carolyn Bartholomew, the chair of the U.S.-China Economic and Security Review Commission, and Clyde Prestowitz, the president of the Economic Strategy Institute—is that there is always an excuse not to do something about China's protectionism and the resulting trade imbalances. Today the excuse is that they loan us so much money (because of the Reagan/Bush debt and because we don't make things we used to make, and have to borrow money to buy them from China now) and if we make them mad they will stop loaning us money.

“This is sort of the elephant in the living room, the concern that the U.S. can’t do anything because the Chinese will stop buying our debt," said Bartholomew during the call. Before that, the argument was we couldn't upset the Chinese because then they won't help us with North Korea. At other times we couldn't do it because China had nukes. There is always an excuse for China's trade imbalance. But the fact is that China needs to sell into our market and this gives us a lot of leverage to use to improve the balance of trade.

"This fear that we can’t do anything to stick up for our own rights because if we do they will shop buying up our debt is just false. It’s just not going to happen.”

During the call I asked a question along the lines of, "If we can only do one thing, what’s the one thing we can do to get the greatest bang-for-buck?" The answer was:

1) Currency rates. Chinese manipulation of currency brings them an approximately 40 percent price advantage.
2) Industrial policy, which they prefer to call “innovation strategy.” Every other country has a strategic plan to help their own manufacturers and other businesses compete in the world. We don't.

(Yes, I know that's two things. Nothing is easy. "Nuanced" was the word they used.)

It is critical that we do something about Chinese deliberate undervaluation of their currency. It amounts to a 40 percent subsidy of Chinese goods by their government. That is just huge. and so when people look at where to buy something—consumer goods, steel, etc. they start out with a 40 percent price advantage. Changing China's currency to market rates would remove this price advantage and help bring manufacturing—and jobs—back to the U.S.

The idea that we need to develop a national policy or strategy or whatever you want to call it is essential to our future. And this is something that we aren't doing for ourselves, not something that someone else is doing to us. The first part of this is the language problem. If we try to call it an "industrial policy," the idea is immediately attacked as "the government shouldn't be picking winners and losers." This is, of course, just the usual anti-government nonsense, because by doing nothing the government is currently picking China as the winner and the people of the United States as the losers.

Unfortunately, name-calling seems to be an effective tactic for blocking government action. Some have suggested variations on the wording "economic strategy" or "innovation strategy." Whatever you want to call it, we need to do it. need to have some sort of national economic and innovation policy and strategy that helps Americans organize and helps us figure out how to respond to some of these things," Bartholomew said.

Listen to the call and read the report. We are losing manufacturing, and with it we are losing our ability to compete in the future! We are putting our national security at risk. By losing manufacturing we also lose the supply chain that supplies the manufacturers. And of course we lose the ability to make things which we then sell in order to obtain the money with which to buy things. If you don't make things to trade with you have to borrow.

The worst thing, though, that we lose is the research and development capability that drives the manufacturing. This is the very thing the right and the free-traders said we would keep if we let the outsourcers have their way. They said outsource what someone else does cheaper, and keep the intellectual property. But as Bartholomew points out, we are losing the research and development, and the high-tech, and the manufacturing processes -- the things that people with enough education and skill would be able to do, which are the drivers of the supposed information economy. Right.

"As China is moving up the value-added chain, it's luring r&d, so the research and development is following the manufacturing, and once you've lost your research and development capacity as well as your manufacturing capacity, you lose your innovation capability, you lose your innovative edge," Bartholomew said. "So I think how we talk about this issue moving forward is going to be very important."

Hell if D.C. Didn't Offshore $849 Million in Stimulus for Windmills Already

Leo Gerard — Thu, 19 Nov 2009 08:52:12 -0800

It turns out a Texas windmill farm developer's request last month for nearly half a billion in stimulus funds to create 2,000 jobs in China doesn't rank first on the audacity scale.

Shockingly for American taxpayers, and sadly for the staggering 10.2 percent of Americans who are unemployed, it doesn't even rank second.

That's because Washington already has doled out hundreds of millions in stimulus funds to foreign renewable energy firms. Of the $1.05 billion in clean energy grants awarded by D.C., $849 million -- 84 percent -- went to foreign wind companies, according to an analysis by Russ Choma of the Investigative Reporting Workshop. He wrote:

"The cash grants were given for the installation of 1,763 megawatts of capacity - 1,566 installed by foreign companies. Using the Renewable Energy Policy Project's own numbers, as many as 4,500 manufacturing jobs may have been created overseas."

A strong, broad Buy American clause in the stimulus bill could have prevented the off-shoring of U.S. tax dollars intended to create jobs for unemployed Americans. My union, the United Steelworkers, and the AFL-CIO pushed hard for that language, and polls showed 86 percent of Americans supported it. Republicans and lobbyists for multi-national corporations that wanted to spend U.S. tax money overseas opposed Buy American provisions.

Congress adopted weak, limited Buy American language. Now D.C. exports stimulus dollars to create jobs in foreign countries.

Some of the foreign wind firms that got stimulus funds have American subsidiaries. But most of them shipped major components for wind farms to the U.S. That means American stimulus dollars employed foreign workers. One Spanish company, Iberdrola S.A., got $545 million from U.S. taxpayers.

Sen. Charles E. Schumer, a Democrat from New York, denounced the request to use U.S. tax dollars to create jobs in China and demanded the Obama administration deny funding. But it's too late for the $849 million in stimulus dollars already given away to foreign wind companies. American tax dollars, meant to create jobs and nurture a green energy industry in the U.S., are gone with the wind.

Lavishing stimulus funds on foreign businesses is tragic for another reason: Those overseas companies are competitors to fledgling U.S. firms that were supposed to get the money. President Obama has said he wants the U.S. to be "the world's leading exporter of renewable energy." That's not going to happen if the U.S. pays European and Chinese manufacturers to import wind turbines.

Congress set aside at least $3 billion in the stimulus bill for renewable energy projects. That investment would have two benefits. Growth in renewable energy - from sources such as windmills and solar cells - could reduce dangerous pollution from burning fossil fuels. In addition, the Blue Green Alliance estimated in its report, "Building the Clean Energy Assembly Line," that U.S. manufacturers could create 850,000 jobs if Congress adopted a national standard requiring 25 percent of electricity to be generated with renewable sources by 2025.

The key, obviously, is that the wind turbines and solar cells constructed to meet that standard couldn't be imported for the jobs to be created in the U.S. The U.S. industry, however, needs the kind of help foreign governments give their clean energy manufacturers. The Blue Green Alliance report notes:

"Without new policies promoting domestic manufacturing, an unnecessarily large portion of these jobs will remain overseas."

Keith Bradsher of the New York Times in a July 13 story described China's policy to protect and promote its renewable energy industries: "China is shielding its clean energy sector while it grows to a point where it can take on the world." That includes, Bradsher recounted, a competition last spring where China disqualified all foreign bidders on technicalities for 25 contracts to supply wind turbines. Beijing then awarded the contracts to seven Chinese companies, including some that had never built a turbine.

There's no reason except a desire to shoot itself in the foot for the U.S. not to protect and promote its own renewable energy industries. "The Building the Clean Energy Assembly Line" report provides recommendations for Congress to cultivate American renewable energy industries, including long-term investment tax credits, adopting a national standard requiring a minimum percentage of electricity be generated through renewable energy, passing cap and trade legislation, and providing low-interest financing.

After the Texas windmill incident, I wrote Sen. Schumer asking for bold action to support U.S. clean energy manufacturing. In the letter copied to all members of Congress, I told him we must expand and accelerate the availability of incentives for manufacturing wind turbines and other clean energy technologies - here, in the U.S. One important way to do that is for Congress to extend to the manufacture of components like turbines the funding incentives that are now provided for production of clean energy.

Clearly, another method would be to Buy American. When constructing a wind farm in Texas, why would taxpayers give their money to support importing the turbines from China or Spain when there are perfectly good turbine manufacturers here in the U.S.?

The Texas windmill farm developer announced this week that its Chinese partner plans to construct a $50 million turbine factory in the U.S., according to a story in the New York Times. But that facility won't supply the turbines for the project that the partnership wants $436 million in stimulus funds to support. Those would come from China. So, in the end, it still means nearly half a billion in U.S. tax dollars would create 2,000 turbine-building jobs in China.

When China passed its $600 billion economic stimulus bill this summer, it adopted "Buy China" provisions. Obviously, as far as wind turbines were concerned, it was implementing a "Buy China" policy before that.

Is the U.S. going to continue thwarting itself and tilting at windmills or is it going to adopt and enforce a robust Buy American policy and build some?

Senate Bill as Expected: Not as Progressive as House Bill in Key Areas

Monica Sanchez — Thu, 19 Nov 2009 08:05:35 -0800

Senator Harry Reid, the Majority Leader, has introduced the Senate's health reform bill. The Patient Protection and Affordable Care Act (PDF), H.R. 3590, is projected to reduce the federal budget deficit in the first 10 years. As The Washington Post reports:

"Democratic leaders were jubilant that the nonpartisan Congressional Budget Office determined that the Senate bill would cut federal deficits by $130 billion over the next decade. That projection, released shortly before midnight Wednesday, represents the biggest cost savings of any legislation to come before the House or Senate this year, but the measure's effective date also was pushed back by one year, to 2014."

The House bill takes effect a year earlier in 2013. According to The New York Times, that one-year "delay is intended primarily to reduce the cost of the legislation."

So, other than the start date, how does the final Senate bill stack up against the House bill in the categories I discussed in my previous post ("House Health Bill Should Be A Model For The Senate")? Pretty much as expected.

1. The Health Insurance Exchange.

Unlike the House bill, which gives the federal government the responsibility, the Senate bill puts the states in charge of creating their own health insurance exchanges. As The Washington Post explains:

"The Senate measure is similar in scope to legislation the House approved earlier this month. It would require most people to buy insurance, and if their employers did not offer affordable coverage, they would be able to shop for policies on new state-based 'exchanges' that would function as marketplaces for individual coverage. Insurance companies would have to abide by broad new rules that would ban practices such as denying coverage based on preexisting conditions."

2. The Public Health Insurance Plan.

The public option will work similar to one outlined in the House bill, except states can choose not to have the public plan offered in their health insurance exchange. Like in the House bill, the reimbursement rates for the public plan will not be tied to Medicare. Instead, the public plan will have to negotiate rates with providers. As The New York Times reports:

"Under Mr. Reid's bill, the government would establish a new public insurance plan, which would compete with private insurers. States could opt out of the public plan by passing legislation."

3. Insurer Transparency and Accountability.

The Senate bill falls far short of requiring the type of transparency from insurance plans that will be required to keep them truly accountable. According to the bill's short summary, this is what health plans would be required to disclose:

"The Patient Protection and Affordable Care Act will provide consumers with information about physician ownership of hospitals and medical equipment as well as nursing home ownership and other characteristics."

Read my blog post "Insurers Will Still Not Be Regulated Enough" to see what disclosures should be required of insurers.

4. Affordability.

The Senate bill expands eligibility for Medicaid to include all non-elderly Americans with income below 133 percent of the Federal Poverty Level (FPL), while helping the states with the cost of the expansion. The House bill expands Medicaid to 150 percent of Medicaid.

Both bills provide assistance to people with low incomes (up to 400 percent FPL) to help them afford the health insurance they will be mandated to have.

5. Employer Responsibility.

Unlike the House bill, the Senate bill does not require employers "play or pay" when it comes to providing health coverage to their employees. Instead, it includes a provision that could discourage employers from hiring low-income workers. As The New York Times explains:

"The Senate bill would not explicitly require employers to offer health insurance coverage. But if an employer with more than 50 employees does not offer coverage and if any worker qualifies for a federal subsidy, the employer would have to pay a penalty, typically $750 for each of its employees."

6. Financing.

Unlike the House bill, there's no surtax on the wealthy, but there is a 0.5 percent increase in the Medicare payroll tax for couples who earn more than $250,000 a year.

In addition, the Senate bill imposes a tax on high-premium plans. Health plans that cost more than $8,500 a year for individuals and $23,000 a year for family coverage would have to pay a 40 percent tax on the amount of the premium above those thresholds.

7. Funding of Abortion Coverage and Coverage of Undocumented Immigrants.

The Senate bill makes a less drastic attempt to ensure that there is no federal funding of abortion coverage than the House bill does. As The Washington Post reports:

"Reid took a different approach that may or may not pass muster with abortion opponents, proposing to establish a 'firewall' that would segregate private premiums from federal funding if abortion coverage were offered in the public insurance plan.

"Few details were available Wednesday, but Sen. Barbara Boxer (D-Calif.), an abortion rights advocate who was working to forge a compromise on the issue, said, 'I couldn't be happier. For those who want to keep abortion out of this bill, Senator Reid did it the right way.'

"The National Right to Life Committee, however, called the firewall 'completely unacceptable' and said it utilizes 'layers of contrived definitions and hollow bookkeeping requirements' to permit federal funding of abortion."

In addition, the bills treat undocumented immigrants slightly differently. As The Washington Post explains:

"The Senate bill would bar illegal immigrants from buying insurance through the exchanges, while the House would restrict access only to subsidies and federal programs such as Medicaid, which would be vastly expanded under both bills."

Obama’s Home And The Report Is Out: China Takes Us To School

Eric Lotke — Thu, 19 Nov 2009 08:04:38 -0800

President Obama is home from China and the U.S.-China Economic and Security Review Commission today releases its 2009 report to Congress. What have we learned? That we need to pay attention because we’re getting schooled.

While Obama posed for photos on the Great Wall and talked about a relationship “at an all-time high," China continues to take our lunch money. Hopefully, there were serious back-room negotiations over currency manipulation and illegal subsidies … because if not, we’re in trouble.

Don’t take my word for it. The official, bipartisan China commission held hearings, traveled to China and received closed briefings on classified information. They reported back about expansion of the Chinese navy, China’s stepped-up espionage and cyber-warfare capabilities, and the world’s most sophisticated web filtering and Internet control systems.

But the economy is behind it all. China is quite literally eating our lunch. Since 1980, the U.S. has accumulated a trade deficit with China of nearly $2 trillion. The biggest piece of this trade deficit is in manufactured goods, once the wellspring of American prosperity. And a big piece of that comes from China subsidizing industries and manipulating currency in a way that gives their exports a competitive edge. China then takes our money and lends it back to us, creating both national indebtedness and a destabilizing excess of liquidity that helped fuel our asset bubbles.

This year's report reflects the commission's concern that despite its accomplishments and growing sense of confidence, China may be moving in the wrong direction and that this affects the U.S.-China relationship. China has yet to embrace the challenge first issued in 2005 by the United States that it become a "responsible stakeholder" in world affairs (p. 15).

The report reads like an indictment of Chinese behavior and American compliance. The most glaring problem is the subsidies.

China continues to employ a wide range of subsidies to favored companies and industries within China and to control the value of its currency and provide massive loans from state-owned banks to industries producing over capacity. This approach gives Chinese exporters a substantial price advantage in international markets and disadvantages U.S. companies hoping to export to China.(p. 15).

The report itemizes subsidies in the form of land grants, discounted electricity, and loans from state banks at below market interest rates or “without expectation of repayment” (p. 59). As a whole, the commission concludes that the subsidies and special treatment of Chinese-owned companies “violate China’s obligations as a member of the World Trade Organization” (p. 59).

The report goes on to describe export restrictions (p. 62), currency manipulation (p. 68), double-standards on domestic content (p. 52, 64) and China’s failure to enforce its laws on forced labor, child labor and environmental standards (p. 67) that were key to gaining international investment and foreign government support. The findings go far to explain why products made in China are so much cheaper than products made in America, and the incentives behind our gargantuan and growing imbalance in trade.

The report also explains how the imbalance goes beyond the trade in goods, and helped bring the whole system down. The commission places responsibility for the global economic meltdown “partially on the United States as the world's biggest spender and borrower and partially on China as the world's biggest saver and lender.” But it’s not because Chinese are inherently parsimonious or frugal. “China pursues policies that have the effect of increasing Chinese savings, restraining consumption, and keeping the RMB (renminbi) undervalued” (p. 3). The saving was as out of balance as the spending.

The imbalance extends all the way to the banks. China had hundreds of billions of American dollars, and needed something to do with them all, so they lent them back to us. “The policies that China adopted generated a huge flow of liquidity —or money that can be easily lent to borrowers — into U.S. markets. This excess liquidity created perverse incentives in the United States that encouraged banks to make risky loans to U.S. households, which in turn grew ever more indebted. High U.S. demand for imports allowed China to save even more, creating a vicious cycle and laying the foundation for the current crisis” (p. 4).

So it collapsed. The unstable structure tumbled down.

In the aftermath, the U.S. passed its own Recovery Act and led efforts for international collaboration. But what did China do? More of the same. The commission reports that China stimulated its economy by raising rebates to exporters and offering other advantages to see manufacturers through the downturn (p. 40). In the words of the Commission:

The fact that the government in Beijing is still pursuing an export-led strategy based on a wide variety of subsidies to export industries, including an RMB that remains substantially undervalued, is a cause for concern. If China continues to pursue huge trade and investment surpluses and to accumulate vast financial claims, it will hinder the necessary global economic adjustment, create excess manufacturing capacity, and lay the groundwork for the next crisis.” (p. 2)

We don’t need to watch it fall apart all over again. Cheap Chinese exports to distressed U.S. consumers are not the answer. The report advances 42 specific recommendations, from responding to currency manipulation to increasing our defenses against cyber-espionage. A crucial minimum is aggressive use of World Trade Organization trade remedies. We’ve started moving in that direction with cases on tires and steel pipes. The Commission recommends that the U.S. government preserve and use existing remedy laws “to respond to China's unfair or predatory trade activities” (p. 12).

Obviously, nobody wants to start a trade war and nobody thinks we can unwind the global economy. This isn't about protectionism or going backwards. It’s about building a global economy with agreed-upon rules of free trade that every country follows. From rugby to poker, rules make systems work. Following rules is what China agreed to when it entered the G-20 and was granted permanent normal trade relations with the U.S.

♦ ♦ ♦

There’s a purely domestic angle, too. Between the lines of criticism is a hidden story, implicit advice about fixing our own economy. Parts were illegal and parts were unfair, but China’s success shows how deliberate industrial policy helped it accomplish strategic goals. Indeed, a summary of China’s misdeeds reads almost like a “how-to” list for industrial policy: Subsidize strategic industries, especially energy (p. 57, 65). Enhance innovation by creating “industrial commons,” clusters of producers, suppliers and researchers in close proximity who support each other in uncovering problems and discovering solutions (p. 87). Build an infrastructure, especially on transportation, with domestically produced parts (p. 64).

Now the U.S. can’t be like China in every regard, and we wouldn’t want to be. But we might as well learn some lessons while we’re in school. As the Commission observes, “A widely shared goal in China is to make the country rich and powerful and to regain the nation’s former status as a great power that controls its own fate” (p. 56).

That’s their goal and they made a plan to achieve it. What’s our goal? How are we going to get there?

Progressive Breakfast: One More Deficit Cutting Health Care Bill

Bill Scher — Thu, 19 Nov 2009 07:05:22 -0800

The daily Progressive Breakfast serves up what progressive movement members need to know to start their day

Senate Health Care Bill Cuts Deficit

Senate bill will cut the deficit in each of the next two decades projects CBO. Bloomberg: "[The bill] cleared a major hurdle when the Congressional Budget Office said it would cut the federal budget deficit by $127 billion in the first decade [and] by $650 billion in the second decade..."

W. Post on Senate Dem reaction: "The legislation received a positive response from across the Democratic spectrum. 'This is the bill that we've been fighting for,' said Sen. Sherrod Brown (Ohio), a liberal who pressed Reid to revive the public option. Sen. Kent Conrad (N.D.), the budget chairman and a leading Democratic fiscal hawk, said after a briefing on the bill, 'I was very impressed by what Senator Reid has done.'"

Reid making inroads with Dem holdouts. CQ: "Landrieu and Nelson signaled they were warming to Reid’s proposal after he huddled earlier with them and Lincoln ... 'I would say I’m at neutral' on the [first] critical procedural vote, [Landrieu] said after her meeting with Reid. A day earlier, she said she was 'leaning no' ... [Nelson said] he still needed to study the proposal before he deciding whether to vote to limit debate on a motion to proceed ... Lincoln said after her meeting in Reid’s office that she remained undecided about her vote on proceeding to the bill."

Reid told holdouts he is keeping simple majority vote on the table, reports TPMDC: "Reid let three of his party's key skeptics know that if they join Republicans at any stage of the process to block the bill, he still retains the option of passing major parts of it through the filibuster proof budget reconciliation process ... Nelson said, 'he's not threatening that, but anybody can conclude that if you don't move something on to the floor, that is one of the possibilities.'"

W. Post on House-Senate differences: "The House version would require all but the smallest businesses to offer insurance, while the Senate measure would merely fine companies for not offering affordable coverage ... while the House would impose a 5.4 percent surtax on income over $500,000 for individuals and $1 million for families, the Senate would rely primarily on a new tax on high-cost insurance policies that has been hugely unpopular among House members ... Reid would impose the 40 percent tax on fewer policies [then the Senate Finance cmte version], raising the threshold to $8,500 for individuals and $23,000 for family coverage. That change required him to come up with about $60 billion in additional revenue, most of which would come from raising the Medicare payroll tax from 1.45 percent to 1.95 percent on individual income over $200,000 and household income over $250,000. Reid is also proposing a new 5 percent tax on elective cosmetic surgery."

Wonk Room's Igor Volsky explains Reid's moderate abortion compromise: "Federal dollars can only be used to pay for abortions when the pregnancy threatens the life of the mother or results from rape or incest; private premiums must be used to pay for any other type of abortion, including those for health reasons. Each plan in Exchange will decide whether to cover additional abortion services and at least one plan in each market must offer abortion services and one plan must not. In the public option, the Secretary can cover abortion only if the procedure is financed with private funds."

Politico on what reforms come early, and late: "The Senate bill pushes back implementation of major parts of the reform to 2014 -- a change from 2013 under the Finance Committee bill. This is bad news for lawmakers who will need to explain to constituents why the elements that have attracted the most attention -- the public plan, the Medicaid expansion and the insurance exchanges -- won't be available for four years ... Aware of the political pitfalls, the Senate Democratic leadership compiled a list of early 'deliverables' [including] '$5 billion in immediate federal support for a new program to provide affordable coverage to uninsured Americans with pre-existing conditions ... 'reduce the size of the “donut hole” by raising the ceiling on the initial coverage period by $500 in 2010.'"

W. Post's Ezra Klein worries about the level of subsidies but Change.org's Tim Foley is impressed: "...the tax credits to help subsidize the cost of their premiums [are] much more generous than the previous Senate Finance bill, more generous than the previous Senate Health, Education, Labor and Pensions bill and yes, even more generous than the House bill! The credits are offered on a sliding scale based on income, and go all the way up to 400% of the poverty line (about $88,000 for a family of 4) -- much better than the Finance bill and equivalent to the HELP and House bills. On the low end, individuals and families will only need to pay 2.8% of their income on premiums for a comprehensive plan. On the high end, it’s 9.8% -- an improvement over the 12% maximum in the House bill ... Who saw that coming? I’ll tell you who -- Olympia Snowe. One of her main critiques of the Finance bill she helped put together was that it wasn’t doing enough for families above $66,000, who received no subsidy at all. I think Harry Reid got her attention!"

TPMDC on the next procedural steps: "[Today], Reid will file for cloture on the motion to proceed, which will set off 30 hours of debate before the cloture vote itself is held, likely on Saturday. That could set off yet another delay before the motion to proceed is actually passed, which could take until Monday. If that happens, the debate on the bill--including a reading of its 2000+ pages, won't likely begin in earnest until after Thanksgiving. Got that all? Good."

House to investigate Big Pharma price gouging. CQ: "House Democrats have ordered an investigation into recent price increases by drug manufacturers, out of suspicion that the increases are an attempt to maximize profits ahead of potential price controls included in a health care overhaul."

Senate Conservatives Protect Credit Card Rate Gouging

FDL's David Dayen on procedural move blocking bill to stop dramatic rate hike before previously passed reforms are implemented. "...Republicans objected to a motion by Chris Dodd (D-CT) to immediately take up a bill to move up the effective date on the CARD Act ... the banksters have been gouging their customers one last time, Sen. Dodd wanted to stop them from doing that, and Republicans objected. The bill, which has already passed the House, could come up under regular order in the future, but Republicans basically engaged in a needless delay so credit card companies could wring some more profits from their customers."

Digby sees a political opening: "If Democrats can't make something out of this they deserve to lose their majority and be sued for political malpractice ... These people are sticking up for credit card companies who are gouging their customers during the holidays in the middle of a recession! What do they have to do to provoke some outrage from the Democrats, gun down Tiny Tim?"

Too-Big-To Fail Reform Passes Key Vote, Fed Audit Plan Up Today

The Hill on committee approval of new power to break up big banks. "A key House panel voted on Wednesday to give the federal government broad new powers that could be used to break up large financial firms before they fail. The House Financial Services Committee voted 38-29 to support an amendment sponsored by Rep. Paul Kanjorski (D-Pa.) that drew strong objections from Republicans and wariness from some centrist Democrats ... The Kanjorski measure requires federal regulators to look closely at the 50 largest financial firms by assets and determine whether their size, scope, interconnectedness and other factors need additional regulation. Regulators would then be able to impose stricter regulations, limit a firm’s ability to merge and also possibly sell or divest parts of the firm ... it faces an uncertain future with the full House and Senate."

Bloomberg reports: "[House Financial Services Committee] members will vote on a Democratic proposal to retain a ban on audits of Fed interest-rate decisions. Approval would deal a blow to Representative Ron Paul, the Texas Republican who introduced a bill with 300 cosponsors that would allow audits of interest-rate decisions, a step Bernanke opposes ... The amendment to be offered by Watt ... would limit Government Accountability Office audits of Fed emergency-loan programs to their operations, excluding decisions and internal talks about the facilities. Identities of borrowers may be released a year after the programs end. Watt’s plan has more limits than a proposal unveiled last week by Senate Banking Committee Chairman Christopher Dodd. Paul and Representative Alan Grayson, a Florida Democrat, have drafted a competing measure for broader Fed audits, which would exclude only any unreleased transcripts or minutes of Fed policy meetings."

Frank to close foreign currency derivatives loophole reports HuffPost.

Four bankrupted companies slashed employee retirement benefits, granted nearly $50M in retirement benefits to executives. USA Today: "Top executives at four companies that jettisoned their employee pension plans received $49.5 million in retirement and severance benefits in the years before the companies filed for bankruptcy, while retirees saw their benefits cut by as much as two thirds, congressional investigators conclude in a report to be released today. The Government Accountability Office (GAO) reports that pensions at the companies, United Airlines, US Airways, Polaroid and Reliance Insurance, were underfunded by more than $11 billion when the companies turned them over to a government-backed insurance fund. The report says executives at those four companies and six others that abandoned their pension plans took in a total of $350 million in pay and perks in the years leading up to the bankruptcies."

Jobs Bill Deliberations

CQ reports on Senate Dem brainstorming on possible jobs bill: "Senators at a Wednesday meeting attended by about 20 members said the ideas mentioned most often were funding infrastructure projects, boosting small-business lending using money remaining in the Troubled Asset Relief Program and funding energy efficiency programs."

Gas tax dispute behind transportation bill standoff. GreenWire: "[Sen. Boxer] and six other committee leaders and ranking members -- including EPW Committee ranking member James Inhofe (R-Okla.) -- relented on their ongoing effort to punt the next multiyear highway and transit bill into 2011 and instead called for a shorter, six-month extension that would continue current federal spending until June 2010 ... For most of the summer, [Rep. James] Oberstar had threatened to block any stopgap transportation measure as a way to pressure lawmakers to focus on his six-year, $500 billion proposal. However, when it became apparent that his bill would not see floor time before the end of September he backed down and instead pushed a three-month extension of the law through the House. But the Senate never signed off on the plan, and Oberstar has since refused to give any additional ground in the extension debate ... [Boxer described] the House philosophy as: 'Let's just bring it to a crisis point, then we'll go double the gas tax and solve the whole problem.' Boxer, who also opposes a near-term gas tax hike, said imposing one would be nearly impossible."

Los Angeles seeking fed help on $20B transit initiative: "The mayor said he’ll seek a funding advance from the U.S. government against future local sales tax revenue, along with federal grant money ... Work on the rail lines would create at least 210,000 jobs..."

Moderates Look To Restrict Scope of Carbon Cap

Some senators looking at severely narrow climate bill, but lead negotiator Kerry rejects. GreenWire: "...a small bipartisan faction of Senate moderates is examining the idea of passing a bill that deals only with the heat-trapping emissions from power plants ... aimed at about a third of annual U.S. greenhouse gas emissions ... [Kerry said] he is not planning to write a bill that goes after only power plants. That, he said, would not be a political winner, anyway. 'The problem is you lose countless numbers of entities ... It becomes far more expensive, and they don't get the help you get the other way. You get no transitional cost help that way, so it becomes more expensive. And in fact, you lose three-quarters of the support for the legislation.'"

Inequality's Death Toll: A New Calculation

Sam Pizzigati — Wed, 18 Nov 2009 12:05:33 -0800

What has the potential to save more lives, the insurance reforms in the House health care bill or the higher taxes on the rich the bill imposes to pay for those reforms? This rather odd question, suggests a new study on inequality and health, really does merit asking.

Over the past year, Americans have been heatedly debating how best to help people who get sick. But why do people get sick in the first place? Why do some developed nations seem to have much healthier populations than others? Why do people in Japan live much longer, on average, than people in the United States?

Epidemiologists — the scientists who study the health of populations — have been busily exploring these questions for decades now, and they’ve fixed upon a reality that has stimulated an enormous scholarly debate within the public health community. Equal societies, the researchers have found, consistently exhibit better health than unequal societies.

Why should this be so? Last week, in the British medical journal BMJ, an editorial by epidemiologists Kate Pickett and Richard Wilkinson neatly identified the two competing explanations.

The first explanation suggests “that more unequal societies have worse health simply because they have more poor people.” If poor people had more money, they would likely spend more on “things that benefit health” — better food, for instance, or warmer housing.

But the problems inequality creates, other epidemiologists contend, go far beyond poverty. Income gaps, these scientists argue, corrode social bonds and create a chronic stress that wears away at the health of all people who live in deeply unequal societies, not just the poor.

This second explanation has just gained significant new support — from a new “meta-analysis,” also published last week in BMJ, of previously conducted inequality and health studies.

The new paper’s authors, epidemiologists from Japan’s University of Yamanashi and the Harvard School of Public Health, subjected these studies to a series of complex statistical analyses. Their goal: to offer “quantitative evaluations on the association between income inequality and health.”

Their principal finding: Individuals “living in regions with high income inequality have an excess risk for premature mortality independent of their socioeconomic status, age, and sex.”

In other words, if you’re a middle-income person in an unequal society, you’re going to have shorter life than a similarly situated middle-income person in a more equal society.

How powerful an impact does inequality have on health? In the world’s top 30 industrial nations, the Japanese and American research team concludes, “upwards of 1.5 million deaths” — nearly 10 percent of total mortality in the age 15-to-60 age group — could be prevented by reducing income inequality.

The impact of inequality on the United States turns out to be even more stunning, not surprisingly since no developed nation sports wider gaps in income and wealth. Of the deaths the new BMJ study ties to inequality, almost 900,000 came in the United States.

That total, University of Washington epidemiologist Stephen Bezruchka pointed out last week, amounts to a sizeable share of America's annual death toll.

“We can say,” he calculates, “that one in four deaths can be attributed to our high rates of income inequality.”

Such numbers have, of course, enormous political implications. An unequal society, as last week’s BMJ editorial noted, amounts to a “broken society.” Political leaders, the editorial continued, ought now endeavor to repair that break — “by undoing the widening of inequalities that has taken place since the 1970s.”

Sam Pizzigati edits Too Much, the online weekly on excess and inequality.

The Problem With A Jobs Bill – And Everything Else

Dave Johnson — Wed, 18 Nov 2009 11:57:55 -0800

The country needs a jobs program and needs it right now. Cash for Caulkers would be a good start. A new Civilian Conservation Corps would be another. But let's not allow a jobs program to cover over the need for real changes in the structure and core principles of our economy.

Yes, an effective jobs program can help people hold out a while longer - until necessary changes are made. It can make the unemployment rate will look better, for a while, and maybe the GDP will climb a little bit. But our low-wage, everything-to-the-top economy is not sustainable and needs to be redesigned and reregulated. The economy has to be changed so that it works for all of us, instead of just a few.

What if the government passes a jobs bill, and these new jobs follow the current American job model of paying too little with no benefits? What if the government uses contractors, as they now do for so many government functions, and the contractors “reduce costs” by paying very low wages and no benefits, sending the rest of the cash to a few at the top? Does it really help the economy and the country to provide a bunch of low-paying jobs with no benefits, and make a few wealthy executives even wealthier? Or suppose the government starts a massive infrastructure modernization project? Does it help the economy if they hire construction firms that pay as little as possible or use Chinese steel?

Even if a government jobs effort provides good-paying jobs with good benefits, this still won’t change the need to restructure the rest of our economy so that it, too, provides good pay and benefits to all of us instead of concentrating all wealth and income at the top.

As long as our economy is structured to pass everything up to a few at the top, stimulus can’t work well, jobs bills can't work well. Either can anything else. In the end things will just revert to the old ways and we'll need more bailouts, stimulus and jobs programs.

The problem is that there are two economies now. There is an economy for the top few and an economy for the rest of us. And this problem is global. The world’s economy is structured to send almost everything to a global top few.

Everything just goes to the top now. Companies are structured that way, jobs are structured that way, taxes are structured that way and now even our government is structured that way. Our economy has been turned into a machine that sends every dollar to an already-wealthy few. So efforts to stimulate economic recovery using traditional methods cannot work. It will just make a few at the top even richer.

We need a jobs bill because the economic system has broken down. We needed a stimulus package because the economic system has broken down. All the bailouts and jobs bills and stimulus are just one more stopgap effort to keep a broken system going, for the continued benfit of the few at the top. Changes must be made.

One barrier to fixing our broken economy problem is the structural corruption of our Congress. Every effort to help the people seems to get hijacked - and never mind working on the needed reregulating and restructuring. The recent extension of unemployment insurance, for example, included only $2.4 billion for the unemployed, but had more than $20 billion tacked on, going directly or indirectly to (owners of) big homebuilding companies. Another example, the health care reform bill is turning into a law ordering people to buy insurance from the big insurance companies. This year’s big stimulus package was watered down with even more tax cuts for the few, like getting rid of the Alternative Minimum Tax.

The biggest example, of course, was last year’s financial sector bailout. Taxpayer dollars saved the asses of the companies that caused the collapse and are now serving up $140 billion for financial-sector bonuses but 10% unemployment for the rest of us!

If we want to get out of this mess we have to restructure and reregulate the whole system. We have to change the structure of our economy so that regular people receive the benefits. It is time. There is no more getting around it.

Next post: some of the structural problems that must be changed.

Congress' Choice: Real Derivatives Reform Or Another Wall Street Earthquake

Robert Johnson — Wed, 18 Nov 2009 09:35:48 -0800

This post is an excerpt of testimony presented to the Senate Agriculture Committee on November 18, 2009 in a hearing on legislation reforming regulation of financial markets. The testimony was presented on behalf of Americans for Financial Reform.

When they are properly designed, financial markets play a fundamental role in the resource allocation for our society. Well-functioning markets are an important means to achieve our societal goals. Financial markets, when functioning correctly, serve to aggregate savings and allocate them to productive uses. Financial markets also serve to allocate risk to entities that bear it most comfortably. The system we had in place in recent years, and the one that is still in place as we meet today, has revealed profound flaws.

The Senate Agricultural Committee has, in its history, seen the benefits the derivatives markets can create when they are transparent, have safeguards against manipulation, and restrict excesses of speculation. These markets can provide a powerful resource allocation tool, provide a mechanism to distribute risk and at the same time need not prey upon the resources of civil society.

At the same time, the recent history of unregulated credit default swaps following the passage Commodities Futures Modernization Act that culminated in the failure and bailout of AIG illuminates the danger of potential legislation that does not adhere to basic principles of sound market structure.

Efforts to repair these market structures in light of the diagnosis of the crisis that began in 2007 should, in my view address the elements that caused the crisis. I would suggest that study of the crisis reveals that at the core we have four problems:

1) Excessive leverage
2) Opacity and complexity rather than transparency and simplicity
3) That ability to buy insurance without an insurable risk
4) A misalignment of incentives where the private incentive to take risk exceeds the social desire to bear risk.

Certain types of derivative instruments, their market structures and the associated regulatory structures, have contributed to all of these problems. It is time, in light of experience, for a thorough redesign of these market systems to enhance the real potential of derivative instruments and the repair the obvious flaws in structure have caused so much harm.

Derivative Reform The Centerpiece

Over-the-counter derivatives reforms are, in my view, the centerpiece of the financial reforms that are necessary to address the flaws of our financial system that were revealed by the crisis that began in 2007-8. Derivative instruments are pervasive and their regulation is intimately intertwined with the health of the financial system. The experience of AIG and their exposure to unregulated credit default swaps (CDS) is the most glaring example of the reckless nature of an unregulated derivatives market. CDS buyers in the so-called shadow banking system felt that their purchased protection was a substitute for bank shareholder capital. Yet the writers of the CDS protection, in the case of AIG, did not appear to, and were not required to, set aside adequate capital. As a result, the taxpayer’s capital was extracted to support the counterparties of AIG such as Goldman Sachs and a number of foreign banks who did not pay into any kind of guarantee pool for insurance. This web of connections was considered too dangerous to let fail and it was an example of the hazards of unregulated OTC derivative market breakdown.

The AIG debacle is an important structural episode to learn from, but it is not the only one. Derivatives regulation is not a subject to be treated in isolation. OTC derivative reform impacts all of our financial system’s vital interconnections. It is the very fabric of our financial system.

I believe that the most important dimension of all of the needed financial reforms is the precise intersection between Too Big to Fail financial institutions and OTC unregulated derivatives. This intersection is the equivalent of the San Andreas Fault of our financial system. We are in a new era where the size of the capital markets, and their derivative instruments are a dominant dimension of the intermediation of credit. Derivatives transparency is essential to the safety and soundness of our financial system as a whole and it is essential to the protection of the public treasury. Without OTC derivatives reform enhanced resolution powers for dealing with insolvent institutions could well be rendered impotent and future crises in the credit allocation system will likely be longer and deeper than is necessary.

In recent letters and testimony some end users have emphasized the impact on jobs and the competitiveness of their firms if they were to lose access to customized derivatives and be forced to rely solely upon standardized contracts.

We have a financial architecture in place governing derivatives that has failed profoundly. The bailout costs, lost output around the world, and breathtaking rise in unemployment are the result of that financial failure. When an end user talks about how changing practices in the derivatives market will end up costing jobs at his firm one has to place this in that context. If a dysfunctional derivatives market has led to over use of derivatives throughout the system and has made them too cheap to use because provision for the integrity of the system was not built into the costs, then it is imperative to improve that system architecture and force the end use to incur the costs they rightfully represent that they will experience. The resulting system, fortified and more transparent and well regulated, would reduce the likelihood, and magnitude, of a recurrence of a financial calamity. Not only would society be better off with lower unemployment, but the end user in question would likely experience less disruption to demand for his/her product and not be forced to lay off as many employees in the event of a disruption. Reform would increase jobs and stability of employment in his/her own sector in the larger scheme of things.

We have, in recent years, had a financial system where the private incentive to take risks exceeds the social value of those risky actions. We have subsidized financial speculation indirectly and underpriced insurance by not setting up proper market structures, particularly in the aftermath of the Commodities Futures Modernization Act. When a subsidy is diminished, those who benefit from it are forced to adjust, profits are curtailed, and employment diminished at the margin. Those effects are important to understand, but they do not constitute a reason to refrain from repairing a broken system. Society and the end users are each likely to be better off when the system’s integrity is repaired. The kind of disruptions to commerce we have recently experienced are enormous, dreadful and unnecessary.

In 1970 the automotive industry was at the apex of the world economy. Yet for many years thereafter, as the automotive industry struggled to adjust to the new realities of global commerce, executives from the Big Three spared no effort of time, money or energy to plead with Congress to relax social policy requirements regarding fuel emission standards rather than devoting their energy and resources to R&D directed at improving their products. The result was that together, the auto industry and Congress produced a failure that is all too evident today.

Today Wall Street and the City of London sit at the apex of the economy, not unlike the automotive companies did nearly 40 years ago. It is my hope that our nation will resist “helping” Wall Street adjust in the destructive way they enabled the auto industry to avoid modernization. Wall Street spent many years in public discourse thwarting and resisting the appeals for protection from the declining manufacturing sector. Is it too much to ask them now to practice what they have preached to other sectors of the economy repeatedly? I am confident in the intelligence and vitality of the men and women who work on Wall Street today. They are very able and do not need “Wall Street Protectionism” to survive and to thrive. Would it not be better to inspire them, particularly in light of this crisis, to adapt to a more vital market system rather than to acquiesce to their demands perpetuate a system that protects their profits at the risk of exposing society to a danger to the integrity of our financial system that has caused so much hardship in the present and recent past?

Resisting the demands of Wall Street firms on OTC derivatives reform is easy to agree to, in principle, and difficult to accomplish in practice. Market structures with integrity are a public good. As University of Chicago Professor Luigi Zingales has written recently, “most lobbying is pro-business, in the sense that it promotes interests of existing business, not pro-market, in the sense of fostering truly free and open competition.”

The San Andreas Fault Of the Economy

Wall Street’s leaders cannot control their urge to seek protection despite the fact that it is demeaning to their reputations. Yet the members of this Committee and your counterparts in the Senate are responsible for resisting their demands for the good of society. I do believe that this is no minor matter. The financial security and strength of our nation is in the balance. Confidence in the U.S. dollar as the world’s foremost reserve currency depends upon the integrity of our financial system.

I believe that the intersection between the OTC derivatives market and the large financial institutions is the financial equivalent of the San Andreas fault. Yet there is one difference. The San Andreas fault is a natural occurrence that we must all cope with to mitigate the consequences of an earthquake. It is beyond our power as people to eliminate. The current state of OTC derivatives regulation and its relation to the guarantees of large financial institutions are a man-made fault that is the product of past human errors financial legislation and regulation. It has been revealed by catastrophic events to have devastating consequences. It has produced an avoidable earthquake. That earthquake and its consequences need not be repeated. One can only imagine the consequences for the reputation of those public officials who would choose to act to codify into law this fault line and expose our society to a repetition of the financial crisis that has devastated the world in recent months.

To avoid reform would be harmful enough. We know the fault lines of past human error regarding the regulation of OTC derivatives continue to threaten us. But to affirm the status quo with new legislation that codifies these structural flaws and deems them to be healthy would be far worse. This is not about just leaving a few crumbs on the table for big financial institutions and asking the rest of us to pay a little more. This is about the representative government of our society choosing to affirm a dangerous financial structure that could explosively harm us all again just after we experienced a severe and unnecessary crisis that resulted from these very failures of design.

It would be both dangerous and demoralizing for America and the world if our legislators choose to take that path forward in deference to the parochial desires of a few firms in the financial sector or end users who are clamoring to preserve a subsidy of their risk-mitigation methods.

Robert A. Johnson is director of economic policy at The Roosevelt Institute.

Jobs, Jobs, Jobs -- Finally

Robert Borosage — Wed, 18 Nov 2009 07:56:33 -0800

House Speaker Nancy Pelosi gets it. No wonder she drives the wingnuts batty.

With the Senate befuddled by the antics of Joe Lieberman and Max Baucus on health care and the White House Clintonistas lobbying President Obama to devote his January State of the Union address to deficit reduction, Pelosi ladled up a portion of common sense. Unemployment is over 10 percent and rising. It is time to focus on jobs. Senate Majority Leader Harry Reid added his support. The President announced a job summit for December. Democrats finally got the subject right.

The need is clear. One in six workers is unemployed, has given up looking or is forced to work part-time. For young workers aged 16 to 24, unemployment is 19 percent. For young African Americans, unemployment is at 30 percent. And as Federal Reserve Chair Ben Bernanke testified yesterday, we're likely to see—at best—a slow recovery with no new job growth. That exacts a devastating toll in hopes crushed, families stressed, young people stalled, and poverty and hunger spreading.

And even if we avoid another downturn, the job picture will get worse. Crippling state deficits—over $260 billion over two years—will force layoffs that cost an estimated 900,000 jobs next year if nothing is done.

How do we produce jobs?

Republicans, of course, voted unanimously against Obama's first recovery plan, and have gleefully trumpeted its failure ever since (although many don't hesitate to take credit for local projects that are putting people to work).

What's their plan? It can't be found on the national party's web page. But the perpetually tanned House Minority Leader John Boehner trumpets an October letter that House Republicans dispatched to the president as the essence of their plan.

Turns out it's the same ideas they offered at the beginning of the year—reality has made no impression on these folks. Three of the five suggestions are ways to help small businesses afford health care for their workers—"legal reform and incentivizing wellness" (tort reform), allowing small business to purchase health care collectively (already in the president's plan), and more health savings accounts (a bow to a leading Republican contributor). At a time when small businesses are closing, when customers are drying up, foreclosures rising, and states and localities are laying off teachers, these seem, as the lawyers say, de minimus.

And then of course, the Republicans recycle their panacea for anything that ails you—more tax cuts. One of these, letting businesses write off losses against profits over an extended period of time, has just been signed into law. The other is Bush lite: small tax cuts for everyone but low-wage workers.

Now, despite all the posturing about Obama's red ink, these Republican ideas will create larger deficits and more debt. Is this the best way to spend money we borrow?

Well, we tried the same thing under Bush at the beginning of the Great Recession and it didn't work very well. The reason is pretty simple. Americans have lost some $13 trillion in assets from the housing crash and the stock market decline. They no longer can spend more than they earn, and use their homes as an ATM machine. So they are tightening their belts, paying down debts and rebuilding their savings. Provide them with small tax cuts and they will sensibly save most of the money—and not provide the demand need to get reluctant companies to rehire workers.

What are the Democratic ideas? The current debate is still pretty fluid. Democrats, intimidated by deficits, initially hoped to do a stealth plan piecemeal—$250 for seniors here, extend unemployment there, pump up infrastructure spending in the transport and clean water bill over there.

But Pelosi's call for a jobs agenda and Obama's summit invite more coherent responses, ones that might get closer to the scale needed to deal with the challenge we face.

AFL-CIO President Rich Trumka released a program this week—joining with leaders of the NAACP, the National Council of La Raza, and the Center for Community Change and the Leadership Conference on Civil Rights—that will frame the discussion.

Trumka's agenda features five initiatives:

1. Extend the lifeline to jobless workers, continuing unemployment benefits, food assistance and health care subsidies.

2. Rebuild schools, roads and energy systems. This is the very area that got slashed in the first recovery plan by so called Republican moderates and Blue Dog Democrats. Repairs— to schools, sewers and bridges—can begin rapidly. More ambitious projects—fast trains and a modernized electric grid—take longer, but as Bernanke says, unemployment will be with us a long time.

3. Aid to state and local governments to maintain vital services. This is the least popular but most effective program. It forestalls deep layoffs in basic services, from teachers to police.

4. Direct public service jobs in communities. Congress could dramatically expand the Youth Corps, AmericaCorps and Vista to put young people to work. New initiatives—a Green Corps to rebuild parks, an Urban Corps to build low-cost housing—could be targeted for areas with the greatest job loss.

5. Use Wall Street bailout funds for Main Street. Use the billions still in the TARP to enable community banks to lend money to small and medium sized businesses. Even Republicans might sign onto increasing low-interest-rate loans to small businesses with expansion plans. This surely is a better idea than job tax credits to businesses, almost of all which will reward companies for jobs they would have created anyway.

Obama would be well advised to go even bigger. His most compelling argument has been the simple truth that we can't go back to the old boom-and-bust economy and should not want to. We've got to build a new economy on a strong foundation of basic investment in education and training, in 21st-century infrastructure, in research and development—all of which have got the short end of the stick in the era of tax cut, squander and plunder conservatism. And we've got to insure that the US is a leader in the new green industrial revolution that will be the growth industry of the future.

So devote the State of the Union to lay out the bold agenda on jobs. Make the commitment now to make the investments needed for the new economy, and to drive the green industrial revolution. These will involve large-scale public investments, deficit-financed in the next couple of years while the economy recovers and paid for over time, in part by growth and rising employment and in part by progressive taxes. The latter begins with a securities transactions tax that will curb the Wall Street casino while insuring that Wall Street helps pay for the cleaning up the mess that it made. And the president should be clear: These investments will be linked to procurement policies designed to insure that the plants, supply chains and jobs are built here, not shipped abroad.

Let Republicans ante up their arguments on more tax cuts and tort reform. People can choose. Do we go back to the policies that drove us over the cliff, and didn't work for most Americans even when the economy was growing? Or do we go forward boldly to build a new economy that puts people to work through investments vital to our future? That's an argument that would serve the nation well—and could also give Republican leader Boehner even more time to work on his tan.

Obama's Asian Angst

Scott Paul — Wed, 18 Nov 2009 07:07:34 -0800

I like that President Obama accords his Asian peers with respect, bowing if tradition calls for it, even though it raises the hackles of some wingnuts. But bowing to the wishes of China is another matter altogether. I'm completely underwhelmed with the results of the President's trip to China, especially with so much at stake. And I write this as someone who has had very high hopes for this administration and its fresh approach to trade policy with China in particular.

U.S.-China relations are at "an all-time high" only if the administration is referring to the levels of our bilateral trade deficit and debt financing. On every issue—exchange rates, market access, and even the terms of the broadcast of the town hall meeting—the president was outmaneuvered by a Chinese government that is growing in confidence every day.

A CNN poll released this week revealed that more than 70 percent of Americans believe that China is a serious economic threat. I believe the administration understands what is at stake, but politely and deferentially asking China to make changes is not likely to result in much success.

Most media analysis of the U.S.-China economic relationship has focused on our dependence on China for debt financing. It's true, but we do have other options. China, on the other hand, doesn't have an alternative to America's rich consumer market for its goods. America has much more leverage than most pundits think. And we can wield it without igniting a tit-for-tat trade war.

China, I believe, wants to be treated with the dignity and respect of a rising economic power. The Obama administration should have made clear exactly how that could have been accomplished: playing by the rules of global trade, achieving balance in its current account, and taking steps to ensure that more Chinese are able to share in the country's prosperity.

American voters have a visceral response to jobs shipped overseas, a trend that Obama said he would address as a candidate. Less than a year out from the midterm elections, this looms as a major political problem, as well as an economic one.