In chapter 6 of Red State, Blue State we talked about some of the fascinating trends in religion and voting, in particular the big jump in the religious/secular voting gap starting in 1992, in parallel with the big jump in the correlation between voting and attitudes on social issues. For example, this plot showing the average position on abortion among Democrats, Independents, and Republicans:
Now that we have the Pew pre-election polls, we could look at what happened in 2008. To start with, we found that the more you go to church, the more likely you were to vote Republican:
No surprise but it's good to start with the basics.
Now let's break things down by religion and denomination:
(The size of each circle is proportional to the number of people represented in the survey. In particular, most of the people who attend church more than weekly are born-again Protestants. Also, some nonreligious people go to church; I assume this is for family reasons but I haven't examined the question in detail.) As in 2004, churchgoing is more strongly associated with Republican voting among Catholics and born-again Protestants than among non-born-again Protestants, and all three of these groups represent approximately equal proportions of the population. Whassup with those non-born-again Protestant regular churchgoers: didn't they get the memo? The patterns for Jews and Mormons are also interesting (and consistent with 2004). Finally, you can see that the "no religion" people continued to be a strong Democratic bloc.
What about income and voting? In Red State, Blue State, we talked about the pattern, consistent with the story of "post-materialism," that religious attendance is a more important predictor of vote choice for the rich than the poor. Here's what we see in 2008:
This is similar to what we saw in 2000 and 2004.
Finally, we can look at voting and income for different religious groupings:
Within the "no religion" group, income is associated very weakly with how you vote. This is consistent with the idea that social issues are more important for richer voters; thus, the richer people with no religion are remaining on the Democratic side because they don't like the Republican Party's socially conservative and religious orientation.
Discussion of methods
I think my style is off-putting to some readers because, rather then state my point right away, I often will lay out an argument and then look at it from different angles. (This isn't such a problem with my own blog because I've gradually built up a readership over several years, and the readers/participants are familiar with my style. But it is an issue when I drop these long graphics-filled posts into Nate's blog, whose readers are more used to his and Sean's more topical approach.) Also, I don't always have a strong conclusion; sometimes I just want to put the data out there and let you draw your own inferences. Synthesis is great, and we try to do some of it in our book, but I think it's also possible to make a contribution just by putting some data out there.
One final remark. After seeing my earlier graph-laden posts, several commenters thought I should be controlling for more variables--for example, in my graphs of political ideology and partisanship among sports fans and nonfans, people wanted me to control for sex. That would be fine--I have no objection to doing separate analyses for men and women, and in any case the GSS data I used are public and so anyone can feel free to do this analysis and send it to me--but for the purpose of answering the original question, the data combining both sexes were fine.
Recall that the original hypothesis of the conservative commentator was that sports fans are disproportionately conservative but not especially Republican, and thus he thought they represented a ripe low-hanging fruit for the Republican Party. Actually, though, the data showed the opposite: sports fans were more likely than the general public to be Republican but they were not particularly likely to be conservative.
So this simple data analysis revealed something. (And, yes, I agree that a serious study of this issue would require the use of more data than a single opinion poll from the 1990s.)
I do run regressions, and I'll report some of these on occasion. But it's a misconception to think that simple comparisons are meaningless or that regression analysis is always necessary. One thing sophistication can give you is an appreciation for the simple things in life.
2.27.2009
Why Does A Person Become a Republican?
@ 7:12 PM
I went to CPAC today, and unfortunately the title of this post is a little more provocative than the substance -- I'm not going to try any comprehensive explanation for why people become Republicans. In some ways I am still adapting to the experience, struggling with a reaction the way Rachel Maddow was speechless after the Bobby Jindal response on Tuesday night.
Ordinarily I wouldn't waste your time with an anecdote, but since it happened immediately after leaving this massive gathering of suit-clad, mostly young Republicans while I was reflecting on the experience, tying the two together is a decent way to close out a Friday afternoon.
The Onmi Shoreham hotel, which hosts CPAC this week, is a block from the Woodley Park Metro station. I have one of the paper cards and not the new plastic card. (For those unfamiliar with the Metro, you insert your card into the turnstile slot, and provided you have money on it to pay the minimum fare, the gates open, your card pops back up, and you go down to your train. At entry, the card captures where you got on, and when you exit and repeat the turnstile slot process it deducts the fare with a newly printed remainder.)
Well, it wouldn't take the card, and I had $9.45 left on it. At the kiosk, the Metro employee told me that the card had become demagnetized and thus I had two choices. First, she could issue me a card to go to my next stop, the value of which was $1.65. That would be it. I'd lose $7.20, but be able to travel to my next stop. Second, I could go to a stop called Metro Center (not my stop, one stop away from mine), which was the only place they could issue me a new card so that I could retrieve the value I'd paid in advance.
Since Metro Center was close to my final destination, I took the second option. She tears a corner of my card, writes "-$1.65 = $7.75" in pen, and lets me go in through a side gate. At Metro Center, I wait in a predictably long 20 minute line. When I finally get to the front of the line, I request the $9.45 restored so that when I exit at my real stop, the $1.65 will come off and I'll be in exactly the position I should have been in, minus the loss of time.
Of course, the Metro employee cannot do this. He can only do what it says on the card. Keep in mind, that "$9.45" is plainly printed as the lowest number on the card, followed by the handwriting. Surely this situation happens routinely. He says he can only give me $7.75.
Except, not really. I have to either give him a quarter so that he can give me an $8 card, or I lose $0.75 and he gives me a $7 card. (I had no quarter on me, because I try and minimize the metal I carry through magnetometers). So, in essence, I am going to get $7 in fare refunded to me, which will then be deducted by another $1.65 when I exit my real exit one stop away. I either had to lose $7.20 (the whole card) or lose $2.45 and some time waiting in line.
I asked him, "Why can you not give me the value that I've paid for?" I explained that I didn't want "more" value, I just wanted to get the value that I'd pre-paid. I wanted the government to honor its small little contract with me. He replies, in that maddeningly passive-aggressive government employee way, "It says $7.75. I can only do what it says." (Unless of course I happened not to have a quarter on me, then I would be further penalized). I pointed out that surely he can see what happened, he can see the $9.45 and that another Metro agent has written this, he knows $1.65 is the cost of the fare to get to Metro Center to this infernal line and that when I exit whatever stop is next, I will have to pay $1.65 or more.
He hunkered down into numbed-over bureaucrat mode and would not budge. After about two minutes of back and forth I gave up, as he surely knew I would, and then he issued me two separate cards that totaled $7. The significance of this? When you get down to the end of a card's use, there is always some leftover change, and you have to exchange the old paper card for a new one and reload. The $3 card can't handle two $1.65 trips; the $4 card can, but would have $0.70 left on it. So two cards just takes more time to redeem the value that's on them than one card.
Now, I can put this all in perspective. The Metro is a great system. The number of positive interactions I've had with it overwhelm the negative ones. Hundreds and hundreds of CPAC attendees rode to the conference on the Metro (all around me) rather than use rugged individualism and walk.
Moreover, it's not just government that provides these moments in life. Anyone who's ever had to deal with Dell customer service knows that, indeed, there IS a company more desperately terrible than Comcast in this department. Conservatives would say that in theory the market would replace those horrorshow companies, but for anyone who lives in the real world and interacts with American customer service knows that the day when market forces push private sector companies asymptotically toward customer service quality is a future day well after every conservative who holds that belief will have been long dead.
Still, I walked away today, having just been in a sea of conservatives who left me speechless, and thought: this is one tiny example of a major reason people become Republicans. Disgust, anger, annoyance with government interaction (ever wait in line at the DMV?) is distorted within an emotional prism, and suddenly someone is receptive to an anti-government message. What just happened becomes explainable by a larger narrative, and now you have somewhere to channel that disgust. People don't like to have loose disgust. It has to be funneled into a rational and ready explanation, a larger story. It helps a person feel they're regaining control over their environment.
When CPAC attendees gather to glory in their hatred of government, the thing Grover Norquist wants to drown in a bathtub, they are insisting that government is the problem. That it cannot be efficient, and that the side effect is to steal from you (who are good and have earned it) to redistribute to others (who haven't).
That the tone coming out of CPAC is as hard-edged as it has been ("Al Franken and ACORN: How Liberals are Destroying the American Election System"; "Health Care: The Train Wreck Ahead"; "Bailing Out Big Business: Are We All Socialists Now?") reflects this core fear that Democratic control of government means more and more aspects of life will be filled with interactions like this one. A lot of the spinoff spew that takes shape in prejudice behaviors of intolerance derives, I believe, from fear that a force bigger than me is taking from me with no recourse. Prejudice is about looking for targets to blame for the powerlessness.
The way that my belief in the moral force of civil rights is the foundation for why I start as less a Democrat than as an anti-Republican, and much of the rest is built outward from there, many Republicans start with the kernel that government's inherent design is to be inefficient, and to take from your deserving pockets and put it in the pocket of passive-aggressive, government job-having bureaucrats. They, too, build outward from that core belief to the rest of the ideology. It's a zero-sum game where limited resources mean its you or the other guy who wins.
Is this way oversimplified? Of course, there are many paths to the Republican Party. Earth-shattering in insight? Not close, since it doesn't take a genius to point out that conservatives hate government. It's more an idle stream of thought on a Friday afternoon from a stunned-into-silence non-conservative leaving the ultra-conservative CPAC, trying to empathize with how that ideology starts.
I mean, there are a LOT of them at this thing.
Ordinarily I wouldn't waste your time with an anecdote, but since it happened immediately after leaving this massive gathering of suit-clad, mostly young Republicans while I was reflecting on the experience, tying the two together is a decent way to close out a Friday afternoon.
The Onmi Shoreham hotel, which hosts CPAC this week, is a block from the Woodley Park Metro station. I have one of the paper cards and not the new plastic card. (For those unfamiliar with the Metro, you insert your card into the turnstile slot, and provided you have money on it to pay the minimum fare, the gates open, your card pops back up, and you go down to your train. At entry, the card captures where you got on, and when you exit and repeat the turnstile slot process it deducts the fare with a newly printed remainder.)
Well, it wouldn't take the card, and I had $9.45 left on it. At the kiosk, the Metro employee told me that the card had become demagnetized and thus I had two choices. First, she could issue me a card to go to my next stop, the value of which was $1.65. That would be it. I'd lose $7.20, but be able to travel to my next stop. Second, I could go to a stop called Metro Center (not my stop, one stop away from mine), which was the only place they could issue me a new card so that I could retrieve the value I'd paid in advance.
Since Metro Center was close to my final destination, I took the second option. She tears a corner of my card, writes "-$1.65 = $7.75" in pen, and lets me go in through a side gate. At Metro Center, I wait in a predictably long 20 minute line. When I finally get to the front of the line, I request the $9.45 restored so that when I exit at my real stop, the $1.65 will come off and I'll be in exactly the position I should have been in, minus the loss of time.
Of course, the Metro employee cannot do this. He can only do what it says on the card. Keep in mind, that "$9.45" is plainly printed as the lowest number on the card, followed by the handwriting. Surely this situation happens routinely. He says he can only give me $7.75.
Except, not really. I have to either give him a quarter so that he can give me an $8 card, or I lose $0.75 and he gives me a $7 card. (I had no quarter on me, because I try and minimize the metal I carry through magnetometers). So, in essence, I am going to get $7 in fare refunded to me, which will then be deducted by another $1.65 when I exit my real exit one stop away. I either had to lose $7.20 (the whole card) or lose $2.45 and some time waiting in line.
I asked him, "Why can you not give me the value that I've paid for?" I explained that I didn't want "more" value, I just wanted to get the value that I'd pre-paid. I wanted the government to honor its small little contract with me. He replies, in that maddeningly passive-aggressive government employee way, "It says $7.75. I can only do what it says." (Unless of course I happened not to have a quarter on me, then I would be further penalized). I pointed out that surely he can see what happened, he can see the $9.45 and that another Metro agent has written this, he knows $1.65 is the cost of the fare to get to Metro Center to this infernal line and that when I exit whatever stop is next, I will have to pay $1.65 or more.
He hunkered down into numbed-over bureaucrat mode and would not budge. After about two minutes of back and forth I gave up, as he surely knew I would, and then he issued me two separate cards that totaled $7. The significance of this? When you get down to the end of a card's use, there is always some leftover change, and you have to exchange the old paper card for a new one and reload. The $3 card can't handle two $1.65 trips; the $4 card can, but would have $0.70 left on it. So two cards just takes more time to redeem the value that's on them than one card.
Now, I can put this all in perspective. The Metro is a great system. The number of positive interactions I've had with it overwhelm the negative ones. Hundreds and hundreds of CPAC attendees rode to the conference on the Metro (all around me) rather than use rugged individualism and walk.
Moreover, it's not just government that provides these moments in life. Anyone who's ever had to deal with Dell customer service knows that, indeed, there IS a company more desperately terrible than Comcast in this department. Conservatives would say that in theory the market would replace those horrorshow companies, but for anyone who lives in the real world and interacts with American customer service knows that the day when market forces push private sector companies asymptotically toward customer service quality is a future day well after every conservative who holds that belief will have been long dead.
Still, I walked away today, having just been in a sea of conservatives who left me speechless, and thought: this is one tiny example of a major reason people become Republicans. Disgust, anger, annoyance with government interaction (ever wait in line at the DMV?) is distorted within an emotional prism, and suddenly someone is receptive to an anti-government message. What just happened becomes explainable by a larger narrative, and now you have somewhere to channel that disgust. People don't like to have loose disgust. It has to be funneled into a rational and ready explanation, a larger story. It helps a person feel they're regaining control over their environment.
When CPAC attendees gather to glory in their hatred of government, the thing Grover Norquist wants to drown in a bathtub, they are insisting that government is the problem. That it cannot be efficient, and that the side effect is to steal from you (who are good and have earned it) to redistribute to others (who haven't).
That the tone coming out of CPAC is as hard-edged as it has been ("Al Franken and ACORN: How Liberals are Destroying the American Election System"; "Health Care: The Train Wreck Ahead"; "Bailing Out Big Business: Are We All Socialists Now?") reflects this core fear that Democratic control of government means more and more aspects of life will be filled with interactions like this one. A lot of the spinoff spew that takes shape in prejudice behaviors of intolerance derives, I believe, from fear that a force bigger than me is taking from me with no recourse. Prejudice is about looking for targets to blame for the powerlessness.
The way that my belief in the moral force of civil rights is the foundation for why I start as less a Democrat than as an anti-Republican, and much of the rest is built outward from there, many Republicans start with the kernel that government's inherent design is to be inefficient, and to take from your deserving pockets and put it in the pocket of passive-aggressive, government job-having bureaucrats. They, too, build outward from that core belief to the rest of the ideology. It's a zero-sum game where limited resources mean its you or the other guy who wins.
Is this way oversimplified? Of course, there are many paths to the Republican Party. Earth-shattering in insight? Not close, since it doesn't take a genius to point out that conservatives hate government. It's more an idle stream of thought on a Friday afternoon from a stunned-into-silence non-conservative leaving the ultra-conservative CPAC, trying to empathize with how that ideology starts.
I mean, there are a LOT of them at this thing.
"By August 31, 2010, Our Combat Mission in Iraq WIll End"
@ 12:10 PM
At Camp Lejeune in North Carolina right now, Barack Obama is announcing that the Iraq combat mission will end by August 31, 2010.
Obama proclaimed, "a new era of American leadership and engagement in the Middle East." That era, Obama said, has just begun.
After the combat brigades are withdrawn, 35,000-50,000 U.S. troops will remain for the transition with three missions: (1) training and equipping non-sectarian Iraqi Security forces; (2) targeted counter-terrorism missions; and (3) protecting ongoing civilian and military efforts.
Under the Status of Forces Agreement, all U.S. troops will be out by 2011.
In addition to the withdrawal of American troops, Obama cited two other strategic priorities: sustained diplomacy with Iraq and "comprehensive American engagement" across the region.
Obama spoke directly to the Iraqi people, saying:
"Our nations have known difficult times together. But ours is a bond forged by shared bloodshed, and countless friendships among our people. We Americans have offered our most precious resource – our young men and women – to work with you to rebuild what was destroyed by despotism; to root out our common enemies; and to seek peace and prosperity for our children and grandchildren, and for yours."
"Hostility and hatred are no match for justice; they offer no pathway to peace; and they must not stand between the people of Iraq and a future of reconciliation and hope."
"The United States pursues no claim on your territory or your resources."
UPDATE: On a conference call just now, Defense Secretary Robert Gates said that the reason for extending from Obama's campaign promise of 16 to his announcement of 19 months was logistical and related to 2010 summer elections. Had troops been out by the end of May, key logistical support for related to protection around those elections "really would present some difficult security and logistical issues."
He also said that setting a fixed date for a change in mission was important for American troops to know and for the Iraqi people. "The President retains the flexibility to make changes, but clearly does not anticipate having to make changes."
Spencer Ackerman of the Washington Independent asked about how the U.S. will ensure that Iraqi forces receiving training and equipment are non-sectarian, a condition Obama stated in his announcement today. Gates replied that "we have been very pleased" that the Iraqi Army had developed along non-sectarian lines. "We have a pretty good feel" that the Iraqis are developing and operating along these lines. The U.S.-Iraqi Army relationship, Gates said, was close enough to spot any sectarian activity and "would be in a position to bring that to the attention of the Iraqi leadership."
Obama proclaimed, "a new era of American leadership and engagement in the Middle East." That era, Obama said, has just begun.
After the combat brigades are withdrawn, 35,000-50,000 U.S. troops will remain for the transition with three missions: (1) training and equipping non-sectarian Iraqi Security forces; (2) targeted counter-terrorism missions; and (3) protecting ongoing civilian and military efforts.
Under the Status of Forces Agreement, all U.S. troops will be out by 2011.
In addition to the withdrawal of American troops, Obama cited two other strategic priorities: sustained diplomacy with Iraq and "comprehensive American engagement" across the region.
Obama spoke directly to the Iraqi people, saying:
"Our nations have known difficult times together. But ours is a bond forged by shared bloodshed, and countless friendships among our people. We Americans have offered our most precious resource – our young men and women – to work with you to rebuild what was destroyed by despotism; to root out our common enemies; and to seek peace and prosperity for our children and grandchildren, and for yours."
"Hostility and hatred are no match for justice; they offer no pathway to peace; and they must not stand between the people of Iraq and a future of reconciliation and hope."
"The United States pursues no claim on your territory or your resources."
UPDATE: On a conference call just now, Defense Secretary Robert Gates said that the reason for extending from Obama's campaign promise of 16 to his announcement of 19 months was logistical and related to 2010 summer elections. Had troops been out by the end of May, key logistical support for related to protection around those elections "really would present some difficult security and logistical issues."
He also said that setting a fixed date for a change in mission was important for American troops to know and for the Iraqi people. "The President retains the flexibility to make changes, but clearly does not anticipate having to make changes."
Spencer Ackerman of the Washington Independent asked about how the U.S. will ensure that Iraqi forces receiving training and equipment are non-sectarian, a condition Obama stated in his announcement today. Gates replied that "we have been very pleased" that the Iraqi Army had developed along non-sectarian lines. "We have a pretty good feel" that the Iraqis are developing and operating along these lines. The U.S.-Iraqi Army relationship, Gates said, was close enough to spot any sectarian activity and "would be in a position to bring that to the attention of the Iraqi leadership."
IL-05: Rahm's Middle Finger
@ 10:59 AM
Since writing ten days ago that Sara Feigenholtz was the favorite in the special primary in Illinois' 5th Congressional District, I've received quite a lot of pushback from both voters and representatives of various candidates in the district. I've also had the chance to speak with one of the candidates personally.
The truth is, nobody quite knows how this race is going to turn out. Candidate forums and joint appearances, of which there have been many, may attract 600 attendees on one night and six then next. We've heard reports of candidates each other up and asking about one another's internal polls. We've heard reports of candidates lowering their turnout estimates, from perhaps 20 percent of the district to as little as 10 or 15 percent (the lower the turnout, the more unpredictable the outcome). About the only thing anyone is certain about is that whomever wins next Tuesday's primary will also defeat the Republican candidate in the general election and become the next Congressman from Illinois.
Making matters more complicated is that many of the political players that would ordinarily be influential in the race, particularly Mayor Daley, have avoided endorsing, either owing to an abundance of strong candidates with whom they have allegiances, or a reluctance to show any appearance of cronyism in the wake of the Rod Blagojevich scandal. But, there are some exceptions. The SEIU, to the surprise of some observers, has made an aggressive play on behalf of Feigenholtz, a state senator, not just endorsing her but also spending a substantial sum on television ads on her behalf, even purchasing some network TV in a market where it is very expensive to do so (Chicago' s television market reaches well beyond IL-05 into perhaps a dozen Congressional Districts, including one in Northern Indiana).
Both the Tribune and the Sun-Times, meanwhile, have endorsed Cook County Commissioner Mike Quigley. Although we are skeptical of the value of newspaper endorsements in general, they can potentially make a fair amount of difference in a race where voters know little about the candidates and are having trouble differentiating between them.
State Treasurer Alexi Giannoulias, a leading candidate for either senator or governor in 2010 and a personal friend of Barack Obama's, has endorsed State Representative John Fritchey, who has a reputation for being a reformer but is also has a somewhat conservative set of economic positions, including favoring an repeal of the estate tax. I've heard reports (though I can't confirm them independently) that SEIU's ad buy on behalf of Feigenholtz was principally motivated by a desire not to see Fritchey win the seat, whom they regard as too tied to corporate interests.
If Fritchey, Feigenholtz and Quigley are the leading "insider" candidates, at least two other "outsiders" who are newer to politics also have a plausible chance at victory. One is labor attorney and author Tom Goeghegan (the last name is pronounced 'Gagen', as in rhymes with 'Ronald Reagan'), whose connections run deep within the blogosphere, and whose undiluted, Paul Wellstone-esque progressivism has differentiated him in candidate forums. The other is Charles ('Charlie') Wheelan, himself a well-regarded author and now a professor at the University of Chicago's Harris School of Public Policy. Wheelan was the candidate who I had the chance to speak with personally; his staff arranged a lunch meeting earlier this week.
Wheelan told me that he decided to get involved in the race only because of the "perfect storm" of circumstances that the race presented him with: the absence of a clear favorite in a contest in his home district, plus the salience of so many of the major issues of the day to his background in economics. If he doesn't win, Wheelan told me, he doesn't envision himself running for office again in the foreseeable future; this is a one-off experiment. (Although, you wouldn't know by talking with him that Wheelan is a political novice, as he's charismatic and fairly polished, especially by the standards of a U of C professor).
The controversial part of Wheelan's candidacy is that, perhaps true to his University of Chicago background, he's a free-marketer at a time when this is not very much in vogue within liberal circles. In particular, he is the only Democratic candidate to oppose the Employee Free Choice Act. I asked Wheelan about this; he hold me that he thinks that improving wages for the working class is the most important economic issue of the day, but that labor unions do not particularly help to accomplish this for the working class as a whole (as opposed to the workers whom they represent). There is very long discussion that we could have about the merits of this position; suffice it to say that these questions are more complicated than either opponents or proponents of labor would generally acknowledge.
In political terms, however, what the anti-EFCA stance potentially provides Wheelan with is some differentiation. In a two-candidate race, coming out against labor would almost certainly be a disaster in a Democratic primary in Chicago. In a multi-candidate race, however, where a winner could plausibly emerge with as little as a 20 percent plurality of the vote, the story could be rather different. Illinois has non-partisan registration, with voters simply declaring what ballot they want once they reach the polling place, and Wheelan told me he thinks it's possible that some independent and Republican voters will pick up a ballot on his behalf. Wheelan has also attempted to differentiate himself through viral advertising that touts his credentials as an economist and picks fun of Illinois' politicians, most notably Emanuel himself (notice the detail, below, on Rahm's missing middle finger).
In any event, we're not in the business of endorsements; suffice it to say that Democrats have a wealth of riches in this race, and that the debates between the candidates have for the most part been remarkably substantive and collegial. If I had to lay odds on the race, however, they would probably look something as follows:
The truth is, nobody quite knows how this race is going to turn out. Candidate forums and joint appearances, of which there have been many, may attract 600 attendees on one night and six then next. We've heard reports of candidates each other up and asking about one another's internal polls. We've heard reports of candidates lowering their turnout estimates, from perhaps 20 percent of the district to as little as 10 or 15 percent (the lower the turnout, the more unpredictable the outcome). About the only thing anyone is certain about is that whomever wins next Tuesday's primary will also defeat the Republican candidate in the general election and become the next Congressman from Illinois.
Making matters more complicated is that many of the political players that would ordinarily be influential in the race, particularly Mayor Daley, have avoided endorsing, either owing to an abundance of strong candidates with whom they have allegiances, or a reluctance to show any appearance of cronyism in the wake of the Rod Blagojevich scandal. But, there are some exceptions. The SEIU, to the surprise of some observers, has made an aggressive play on behalf of Feigenholtz, a state senator, not just endorsing her but also spending a substantial sum on television ads on her behalf, even purchasing some network TV in a market where it is very expensive to do so (Chicago' s television market reaches well beyond IL-05 into perhaps a dozen Congressional Districts, including one in Northern Indiana).
Both the Tribune and the Sun-Times, meanwhile, have endorsed Cook County Commissioner Mike Quigley. Although we are skeptical of the value of newspaper endorsements in general, they can potentially make a fair amount of difference in a race where voters know little about the candidates and are having trouble differentiating between them.
State Treasurer Alexi Giannoulias, a leading candidate for either senator or governor in 2010 and a personal friend of Barack Obama's, has endorsed State Representative John Fritchey, who has a reputation for being a reformer but is also has a somewhat conservative set of economic positions, including favoring an repeal of the estate tax. I've heard reports (though I can't confirm them independently) that SEIU's ad buy on behalf of Feigenholtz was principally motivated by a desire not to see Fritchey win the seat, whom they regard as too tied to corporate interests.
If Fritchey, Feigenholtz and Quigley are the leading "insider" candidates, at least two other "outsiders" who are newer to politics also have a plausible chance at victory. One is labor attorney and author Tom Goeghegan (the last name is pronounced 'Gagen', as in rhymes with 'Ronald Reagan'), whose connections run deep within the blogosphere, and whose undiluted, Paul Wellstone-esque progressivism has differentiated him in candidate forums. The other is Charles ('Charlie') Wheelan, himself a well-regarded author and now a professor at the University of Chicago's Harris School of Public Policy. Wheelan was the candidate who I had the chance to speak with personally; his staff arranged a lunch meeting earlier this week.
Wheelan told me that he decided to get involved in the race only because of the "perfect storm" of circumstances that the race presented him with: the absence of a clear favorite in a contest in his home district, plus the salience of so many of the major issues of the day to his background in economics. If he doesn't win, Wheelan told me, he doesn't envision himself running for office again in the foreseeable future; this is a one-off experiment. (Although, you wouldn't know by talking with him that Wheelan is a political novice, as he's charismatic and fairly polished, especially by the standards of a U of C professor).
The controversial part of Wheelan's candidacy is that, perhaps true to his University of Chicago background, he's a free-marketer at a time when this is not very much in vogue within liberal circles. In particular, he is the only Democratic candidate to oppose the Employee Free Choice Act. I asked Wheelan about this; he hold me that he thinks that improving wages for the working class is the most important economic issue of the day, but that labor unions do not particularly help to accomplish this for the working class as a whole (as opposed to the workers whom they represent). There is very long discussion that we could have about the merits of this position; suffice it to say that these questions are more complicated than either opponents or proponents of labor would generally acknowledge.
In political terms, however, what the anti-EFCA stance potentially provides Wheelan with is some differentiation. In a two-candidate race, coming out against labor would almost certainly be a disaster in a Democratic primary in Chicago. In a multi-candidate race, however, where a winner could plausibly emerge with as little as a 20 percent plurality of the vote, the story could be rather different. Illinois has non-partisan registration, with voters simply declaring what ballot they want once they reach the polling place, and Wheelan told me he thinks it's possible that some independent and Republican voters will pick up a ballot on his behalf. Wheelan has also attempted to differentiate himself through viral advertising that touts his credentials as an economist and picks fun of Illinois' politicians, most notably Emanuel himself (notice the detail, below, on Rahm's missing middle finger).
In any event, we're not in the business of endorsements; suffice it to say that Democrats have a wealth of riches in this race, and that the debates between the candidates have for the most part been remarkably substantive and collegial. If I had to lay odds on the race, however, they would probably look something as follows:
Quigley 2-1
Feigenholtz 5-2
Fritchey 5-1
Wheelan 12-1
Goeghegan 20-1
O'Connor 25-1
Field 20-1
2.26.2009
BREAKING: Press Corps Incredulous That Obama Budget Reflects Campaign Promises
@ 11:20 PM
It felt like a primal whine from rich reporters. Hasn't Barack Obama considered that maybe John McCain's tax policy is the right one? Does Obama not realize that the best way to be a Democrat is preserve conservative Republican tax policy?
Why would Obama raise taxes on people making over $250,000 beginning in two years? If you tamper with trickle-down, the dramatic shift of income toward the wealthy that was the hallmark of George W. Bush's tax policy, don't you know it'll be disaster? It'll be "class warfare!" (The first questioner: Are you worried that the "class warfare" argument could sink the budget?)
In a remarkable scene, Gibbs patiently and repeatedly explained that, no really, Obama actually won the election, that he'd explained exactly what he was going to do during the campaign, the American people understood and voted on it, and now he's doing it. During the campaign, Obama had pledged to cut taxes for 95% of American workers and end the catastrophic non-workingness of George Bush's trickle-down tax policy. Now, among some questioners, there seems to be confusion and alarm that Obama intends to implement that policy.
I actually sort of remember this coming up during the campaign. Those making more than $250,000 will be asked to give a little back, give up the Bush income tax cuts and go back to the marginal tax rates during the Clinton years when the economy was strong and the rising tide lifted all boats.
There were many questions that seemed quizzical about Obama's budget proposal following in line with his campaign rhetoric, but this exchange between Gibbs and CBS' Chip Reid is illustrative:
The Washington Post online afternoon headline blared, "Obama Budget Would Raise Taxes on Wealthy." As a seeming afterthought, the article notes, "At the same time, a refundable income tax credit for 95 percent of American workers would be made permanent under the budget proposal."
The sour mood of the elite press corps was apparent from the first question, by the Associated Press' Jennifer Loven. Noting Obama's quote from earlier today, “There are times when you can afford to redecorate your house and there are times when you have to focus on rebuilding its foundation,” Loven asked whether it was appropriate that the Obamas conduct any re-decorations in the White House as they settle in.
A visibly surprised Gibbs noted that there hadn't been seven and ten year old girls in the house in the previous administration. Then came Loven's "class warfare" question. Apparently, returning to Clinton marginal tax rates two years from now should put the White House on the defensive over "class warfare."
Here was an actual question the Wall Street Journal asked regarding health care:
"As an opening White House position, does President Obama still start with the plan he campaigned on?"
Another exchange, at the end of the briefing:
Indeed, it's right there on Obama's website still:
"Families making more than $250,000 will pay either the same or lower tax rates than they paid in the 1990s. Obama will ask the wealthiest 2% of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility. But no family will pay higher tax rates than they would have paid in the 1990s."
Wealth redistribution! Class warfare! This was what John McCain's campaign was chanting throughout the home stretch of the campaign, and then there was a referendum on it. As it turned out, Americans rejected the argument as alarmist, that tax cuts for 95% and rolling back the Bush tax cuts for the wealthiest to Clinton levels wasn't all that bad an idea.
As one reporter observed after the briefing, "Did you notice all the questions about taxes came from reporters making over $250,000 a year, especially the TV guys?"
If the White House learned from the stimulus debate that it needed to go on the road and have a cohesive, aggressive messaging strategy to push back on criticism, those lessons will have to be applied immediately. Not just to push back on Republicans, but for a significant percentage of the incredulous media.
My instinct says Gibbs was taken a little by surprise at the force and repetition on the questions. Frankly, the White House ought to put out a comprehensive list of the countless explicit statements made by candidate Obama, from stump speeches and debates, to town halls and interviews, listing exactly what and when Obama said about changes to Republican tax policy he intended to make if elected. They ought to count the number of times Obama spoke on the tax issue and drum that number home.
That number, whatever it is, ought to be on the lips of Obama, Gibbs, and every single surrogate. It's certainly well over 100. Obama is very popular; Congressional Republicans are not. Using that number to confront what will surely be strong Republican and some media opposition to the premise that the election was about something reframes the debate as "critics vs. the mandate."
Why would Obama raise taxes on people making over $250,000 beginning in two years? If you tamper with trickle-down, the dramatic shift of income toward the wealthy that was the hallmark of George W. Bush's tax policy, don't you know it'll be disaster? It'll be "class warfare!" (The first questioner: Are you worried that the "class warfare" argument could sink the budget?)
In a remarkable scene, Gibbs patiently and repeatedly explained that, no really, Obama actually won the election, that he'd explained exactly what he was going to do during the campaign, the American people understood and voted on it, and now he's doing it. During the campaign, Obama had pledged to cut taxes for 95% of American workers and end the catastrophic non-workingness of George Bush's trickle-down tax policy. Now, among some questioners, there seems to be confusion and alarm that Obama intends to implement that policy.
I actually sort of remember this coming up during the campaign. Those making more than $250,000 will be asked to give a little back, give up the Bush income tax cuts and go back to the marginal tax rates during the Clinton years when the economy was strong and the rising tide lifted all boats.
There were many questions that seemed quizzical about Obama's budget proposal following in line with his campaign rhetoric, but this exchange between Gibbs and CBS' Chip Reid is illustrative:
Reid: On jobs, which is the big complaint up on Capitol Hill right now from Republicans, that this plan is a job-killer. I mean, the $787 billion plan was all about jobs, more than anything else. And now you have a plan in place that -- how can you possibly tax people making people over $250,000 something like $667 billion over the next ten years and not have a downward effect on jobs?
Gibbs: Well, Chip, how did it work in 1994 and 1995 and 1996 and 1997?
Reid: Well, I guess the argument would be, imagine if they didn't have those taxes... how much better it would have been.
Gibbs: Well, isn't it interesting that there's always some little slip? ... There isn't a member of Congress, if they were to file a single-taxpayer form, who makes above $200,000 a year.
Jake Tapper: There are a lot of millionaires up there.
Gibbs: Well, that's true, but not on their income. I mean, I think it's interesting as people listen to those complaining about some aspects of the budget, I think it's just interesting to note. I think the President was pretty clear on Tuesday. We are talking about people who earn in excess of a quarter of a million dollars a year.
Reid: And a huge percentage of those people are small business owners.
Gibbs: Some of them are, sure. Some of them are big business owners. Some of them are home run hitters in Major League Baseball. Some of them run kickoffs back for a living. Some of them are the President of the United States.
Q (off mike): -- create jobs?
Gibbs: Certainly some of them, that's what their job is. But I would reject this overall premise that when we're asking for tax fairness from the American people, that this is going to kill jobs. I guess if I follow the logic of the Republicans on Capitol Hill, how do you explain last month's unemployment figures? (Pause.) Under current tax rates? 550,000 jobs.
Reid: (Long pause) It's a unique moment.
Gibbs: (Laughs heartily) Apparently, it always is.... The president ran specifically on the promises that are contained in what he believes is a blueprint and a vision for our future. And that's what the the American people, that's the result they rendered in November.
The Washington Post online afternoon headline blared, "Obama Budget Would Raise Taxes on Wealthy." As a seeming afterthought, the article notes, "At the same time, a refundable income tax credit for 95 percent of American workers would be made permanent under the budget proposal."
The sour mood of the elite press corps was apparent from the first question, by the Associated Press' Jennifer Loven. Noting Obama's quote from earlier today, “There are times when you can afford to redecorate your house and there are times when you have to focus on rebuilding its foundation,” Loven asked whether it was appropriate that the Obamas conduct any re-decorations in the White House as they settle in.
A visibly surprised Gibbs noted that there hadn't been seven and ten year old girls in the house in the previous administration. Then came Loven's "class warfare" question. Apparently, returning to Clinton marginal tax rates two years from now should put the White House on the defensive over "class warfare."
Here was an actual question the Wall Street Journal asked regarding health care:
"As an opening White House position, does President Obama still start with the plan he campaigned on?"
Another exchange, at the end of the briefing:
Question: Critics of the budget blueprint that has been put out today charge that this is a form of wealth redistribution. Even the New York Times in its front page story, fourth paragraph, talks about the idea of wealth redistribution. How do you respond to that?
Gibbs: The same way I did to the other questions: that the president campaigned on explicitly promising that he would cut taxes for 95% of working Americans if he was elected president. We did that in the reinvestment and recovery plan, and those tax cuts are also contained within this budget. The president also said that for families that make more than a quarter of a million dollars, $250,000, are likely to see their tax rates revert back to the way they were for most of the 90s. That's also in this budget. The President believes we have a plan that will lead to long term economic growth, sustained long term economic growth, while making those important investments. That's what this budget blueprint does, that's what he campaigned on, instituting fairness -- more fairness in our system, and that's what he's done.
Indeed, it's right there on Obama's website still:
"Families making more than $250,000 will pay either the same or lower tax rates than they paid in the 1990s. Obama will ask the wealthiest 2% of families to give back a portion of the tax cuts they have received over the past eight years to ensure we are restoring fairness and returning to fiscal responsibility. But no family will pay higher tax rates than they would have paid in the 1990s."
Wealth redistribution! Class warfare! This was what John McCain's campaign was chanting throughout the home stretch of the campaign, and then there was a referendum on it. As it turned out, Americans rejected the argument as alarmist, that tax cuts for 95% and rolling back the Bush tax cuts for the wealthiest to Clinton levels wasn't all that bad an idea.
As one reporter observed after the briefing, "Did you notice all the questions about taxes came from reporters making over $250,000 a year, especially the TV guys?"
If the White House learned from the stimulus debate that it needed to go on the road and have a cohesive, aggressive messaging strategy to push back on criticism, those lessons will have to be applied immediately. Not just to push back on Republicans, but for a significant percentage of the incredulous media.
My instinct says Gibbs was taken a little by surprise at the force and repetition on the questions. Frankly, the White House ought to put out a comprehensive list of the countless explicit statements made by candidate Obama, from stump speeches and debates, to town halls and interviews, listing exactly what and when Obama said about changes to Republican tax policy he intended to make if elected. They ought to count the number of times Obama spoke on the tax issue and drum that number home.
That number, whatever it is, ought to be on the lips of Obama, Gibbs, and every single surrogate. It's certainly well over 100. Obama is very popular; Congressional Republicans are not. Using that number to confront what will surely be strong Republican and some media opposition to the premise that the election was about something reframes the debate as "critics vs. the mandate."
Did Race Win the Election for Obama?
@ 1:13 PM
At the end of this post I have some pretty pictures showing the near-uniformity of the vote swing from 2004 to 2008 (and thus, by implication, the importance of national rather than local or demographic factors in understanding what happened).
But before displaying these, let me discuss a particular factor that many have noticed: the differing voting patterns of people in different ethnic groups. Carl Bialik discusses an article by Steve Ansolabehere and Charles Stewart, who write:
This is consistent with instant election-night analysis (see item 4 here).
But I want to move on to a part of Ansolabehere and Stewart's article that I disagree with, and which I want to avoid becoming part of the accepted narrative of Obama's election.
They write, "had Blacks and Hispanics voted Democratic in 2008 at the rates they had in 2004 while whites cast 43 percent of their vote for Obama, McCain would have won." I don't think that's really a reasonable model, though, because that would be assuming that Obama would've outperformed Kerry more among whites than among nonwhites, which hardly seems plausible. To put it another way, Obama's baseline swing among any group is his national swing, not zero. Given the state of the economy in November 2008, zero just doesn't make sense as a baseline.
Similarly, Ansolabehere and Stewart write, "Had Obama relied only on a surge among young voters, holding other groups at the 2004 voting behaviors, he would have fallen short of victory." Again, I think this is slightly misleading: Obama's strategy was not to do better only young voters but rather to improve upon Kerry's performance in general, but piling up a particular margin among the young. Which is what he did.
You can also slice up the vote swing geographically, by counties in different regions of the country, and you find that Obama did close to uniformly better than Kerry nearly everwhere, except for Republican-leaning poor counties in the South (where Obama pretty much stayed even with Kerry). The geographic patterns are striking (see graph at the end of this post).
Race matters, yes, but we're still seeing a national swing.
Finally, I noticed that some of Bialik's commenters focused on Obama's racial appeal. I'd like to remind them that the Democrats gained even more in elections for the House of Representatives (compared to 2004) than Obama gained on Kerry. The House gains just weren't so obvious because they were spread over two elections.
2008 was a Democratic year, Obama was a Democrat, and he won in one of the ways the Democrats could've won. With a different candidate there might have been different demographics but roughly the same national swing, and maybe a slightly different electoral map with a similar electoral vote total.
I think Ansolabehere and Stewart are right on the money when they write, "the results of the 2008 election challenge much of what has been conventionally thought about race and politics in America. Barack Obama has accomplished an astonishing political move [by] disproportionately energizing nonwhite voters and converting erstwhile Republican supporters within the minority community without alienating white voters."
My summary: as Carl said, the election outcome is multidimensional. Because Ansolabehere and Stewart were writing a short article, they very properly focused on a single feature of the election--race. My disagreement with them over emphasis is in no way intended to represent a criticism of their scholarship. Once you want to break the vote down by demographics, I agree that ethnicity is the biggest factor (with age being an important predictor also, much more than in the past). But when it comes to the national outcome, I'd say that the #1 feature of the election was a bad economy that produced a national swing toward the Democrats in general and Obama and particular.
P.S. Comments here from John Sides. who links to this article by Mark Blumenthal and this by Marc Ambinder. John writes that "Most likely, the economy and race both mattered. Andy sees the economy as more important. I'm inclined to agree, but ultimately time, and more evidence, will tell."
My response: I'd say the economy was more important in determining the ultimate outcome of the election, and that race was more important in describing relative differences between the Obama and Kerry vote.
That is, the economy predicted the uniform partisan swing, and race described much of the discrepancies from uniform partisan swing.
P.P.S. Here's further discussion from Blumenthal.
But before displaying these, let me discuss a particular factor that many have noticed: the differing voting patterns of people in different ethnic groups. Carl Bialik discusses an article by Steve Ansolabehere and Charles Stewart, who write:
Obama won because of race . . . Obama captured ten million more votes in 2008 than John Kerry did in 2004, resulting in a 4.6 percentage point swing toward the Democrats from 2004 to 2008. This swing did not occur similarly or uniformly among all politically relevant groups, as forecasting models might suggest. Most of the additional Democratic votes were cast by black and Hispanic voters--4.3 million and 2.7 million more, respectively. Democrats also gained among white voters, but the increase was a modest 3 million votes. . . . Obama gained not only by bringing new minority voters into the electorate, but also by converting minority voters who had previously been in the GOP stable.
This is consistent with instant election-night analysis (see item 4 here).
But I want to move on to a part of Ansolabehere and Stewart's article that I disagree with, and which I want to avoid becoming part of the accepted narrative of Obama's election.
They write, "had Blacks and Hispanics voted Democratic in 2008 at the rates they had in 2004 while whites cast 43 percent of their vote for Obama, McCain would have won." I don't think that's really a reasonable model, though, because that would be assuming that Obama would've outperformed Kerry more among whites than among nonwhites, which hardly seems plausible. To put it another way, Obama's baseline swing among any group is his national swing, not zero. Given the state of the economy in November 2008, zero just doesn't make sense as a baseline.
Similarly, Ansolabehere and Stewart write, "Had Obama relied only on a surge among young voters, holding other groups at the 2004 voting behaviors, he would have fallen short of victory." Again, I think this is slightly misleading: Obama's strategy was not to do better only young voters but rather to improve upon Kerry's performance in general, but piling up a particular margin among the young. Which is what he did.
You can also slice up the vote swing geographically, by counties in different regions of the country, and you find that Obama did close to uniformly better than Kerry nearly everwhere, except for Republican-leaning poor counties in the South (where Obama pretty much stayed even with Kerry). The geographic patterns are striking (see graph at the end of this post).
Race matters, yes, but we're still seeing a national swing.
Finally, I noticed that some of Bialik's commenters focused on Obama's racial appeal. I'd like to remind them that the Democrats gained even more in elections for the House of Representatives (compared to 2004) than Obama gained on Kerry. The House gains just weren't so obvious because they were spread over two elections.
2008 was a Democratic year, Obama was a Democrat, and he won in one of the ways the Democrats could've won. With a different candidate there might have been different demographics but roughly the same national swing, and maybe a slightly different electoral map with a similar electoral vote total.
I think Ansolabehere and Stewart are right on the money when they write, "the results of the 2008 election challenge much of what has been conventionally thought about race and politics in America. Barack Obama has accomplished an astonishing political move [by] disproportionately energizing nonwhite voters and converting erstwhile Republican supporters within the minority community without alienating white voters."
My summary: as Carl said, the election outcome is multidimensional. Because Ansolabehere and Stewart were writing a short article, they very properly focused on a single feature of the election--race. My disagreement with them over emphasis is in no way intended to represent a criticism of their scholarship. Once you want to break the vote down by demographics, I agree that ethnicity is the biggest factor (with age being an important predictor also, much more than in the past). But when it comes to the national outcome, I'd say that the #1 feature of the election was a bad economy that produced a national swing toward the Democrats in general and Obama and particular.
P.S. Comments here from John Sides. who links to this article by Mark Blumenthal and this by Marc Ambinder. John writes that "Most likely, the economy and race both mattered. Andy sees the economy as more important. I'm inclined to agree, but ultimately time, and more evidence, will tell."
My response: I'd say the economy was more important in determining the ultimate outcome of the election, and that race was more important in describing relative differences between the Obama and Kerry vote.
That is, the economy predicted the uniform partisan swing, and race described much of the discrepancies from uniform partisan swing.
P.P.S. Here's further discussion from Blumenthal.
OMB Director Orszag Budget Press Conference
@ 11:15 AM
Office of Management and Budget Director Peter Orszag is speaking right now to introduce the budget in the Executive Office Building next door to the White House. He and Council of Economic Advisers Chair Christina Romer will be taking questions momentarily. The White House posted the budget here at the top of the hour.
Orszag's remarks:
Energy, health care, and education are our primary budget goals, but it's difficult because we inherited two different trillion dollar deficits. The first trillion dollar deficit is the difference between what the economy could produce each year and what it is producing. That's why we passed the stimulus, to jump start the economy and close that gap.
The second deficit is the budget deficit. Under current policies and without shifting, we'd face $9 trillion in budget deficits over the next decade. First step in addressing this problem is honesty. We know there will be emergencies like hurricanes, we know the AMT system exists and has to be accounted for in the budget, Iraq and Afghanistan really do exist.
After honesty, reorienting the federal budget is the next step. We've had six weeks to do six months of work. This is an overview, so more detail available in April.
By the end of the president's first term, the budget deficit will be reduced in half. Unlike what you saw in the papers this morning, we aren't raising the price before the sale. This is deficit reduction relative to the deficit we inherited before the stimulus and before any policy interventions.
How do we get there? Four main categories. First, the stimulus and normal business cycle, eventually the economy will recover. That helps. Second, as the president campaigned, the high income tax provisions expire when they are scheduled to expire at the end of 2010. Families making more than $250,000 will have to pay more in 2011. Also, we're closing corporate tax loopholes, especially in international transactions. Third, we are winding down the war. Fourth, we're making government more efficient.
Under efficiency of government, solid evidence suggests that each dollar spent in program integrity results in $1.60 savings. For example, erroneous Medicare payments. All told, $50 billion in ten years in reduced errors and improper payments both on the benefit side and revenue side.
Also we're ditching stuff that doesn't work. For example, we like the earned income tax credit, but there's an advanced form of the credit that only 1% of eligible people actually use and there's a very high error rate with this program, so it's over. On agricultural side, an example would be there are direct payments to farmers based on land rather than based on what they actually farm. 36% of farmers actually get these payments, and for farms with revenue of more than $500,000 per year those payments are ending. That saves $10 billion a year.
All told, $2 trillion of deficit reduction in this budget, roughly $1 trillion in reduced spending compared to current policies and path and $1 trillion in additional revenue compared to current path.
Three key areas to promote long term economic health. Energy, health care and education, as noted in the president's speech the other night, are the investment priorities in the budget.
In addition to stimulus spending on early education, the budget has more because evidence suggests high quality early ed programs pay off over time. Higher education through expansion of PELL grant system and more reliable funding for it and simplification of application process, which is more complicated than the tax code right now.
In energy, reduce dependency on foreign oil and improve operational efficiency of gov't by 25% by 2013. $15 billion/year in energy efficiency investments, including creating an electricity superhighway that would allow transportation of wind energy from the Dakotas to the population centers that need the energy. This expenditure would be financed through cap-and-trade, in a "market-friendly" way.
Health care is the most important driving force in our long term economic health. It's underappreciated how much health care costs are hurting worker pay right now. It's killing higher education priorities at the state level, for example. We have to bend the curve on long-term costs this year because it's the lynchpin to everything.
Yesterday, new Dartmouth College research showed substantial variation in health care costs in various parts of the country without corresponding outcome variation. $634 billion as a "down payment" toward health care efficiency, including reducing overpayments to private insurance firms that cover beneficiaries under Medicare. We'll introduce a competitive bidding process where those firms will bid for covering those beneficiaries and then pay them the average of those bids. We estimate this to save over $170 billion over those years.
Romer's remarks:
The economic assumptions underlying these projections. Starting with total production, we're projecting year over year growth of -1.2%. Real GDP will "fall significantly" in the first quarter and will bottom out mid-year. It'll begin growing again by the end of the year, and 3.2% GDP growth in 2010. More robust growth in 2011, 2012, and 2013. Long run growth rate of 2.6% after 2013, roughly the average f past decade.
Unemployment rate forecasted to rise in first half of 2009 because output continues to fall, predicted to average just over 8% in 2009. It will not come down all that much in 2010, but then will come down more rapidly in 2011 and 2012 as economy grows. Unemployment assume to settle down to 5% in the long run.
Forecast for inflation consistent with drop in output. Should be about 1.1% each of next two years. Then will return to 1.8% for the longer run.
All forecasts are subject to a substantial margin of error, and we're economists, not soothsayers. This is a once-in-a-century series of macroeconomic shocks, so usual patterns don't supply as much guidance, but this is our best estimate.
Q-and-A session.
[Note: this is not an exact transcript; it's a summary of the questions and answers.]
First question is about those making over $250,000, how about charitable giving? About 1/3 of these organizations took a big nose dive (Salvation Army, Red Cross, etc.). Won't this incentive reduction hurt the those organizations and the economy?
Answer: The president put $100 million in the stimulus for non-profits and charities. In addition, the recovery itself will boost the economy and to individuals who contribute to those organizations. When a middle income family contributes $10,000, they save $150 in taxes, when Bill Gates makes that same contribution, he saves $3,500. We think Bill Gates should still get a tax break when he gives charitably, but a slightly smaller one ($2,800).
Followup: But won't the people who'd give start saving instead of giving?
Answer: What drives charitable giving is economic growth and other considerations such as benevolence.
Question: If $634 billion for health care as a "down payment," what's the total price tag? Same with future bailout monies. Did you guys come up with a formula for determining the size of that figure?
Answer: The president wanted to be responsible in this budget. There is a placeholder for potential additional financial stabilization efforts in the budget. We hope it won't be necessary, we don't plan to go to Congress to ask for additional money, but just in case it is we put it in there out of responsibility. On the health care reserve, there are different plans out there, this is a substantial down payment in any of those plans. We'll work with Congress and want to get it done this year.
Question: Where does boosting primary care physicians fit in the overall health care component?
Answer: Boosting primary care physicians seems to be effective based on the evidence. A lot of the variation across the country (referring to the Dartmouth report) without corresponding benefit is related to the ratio of primary care to specialists. One thing we could be doing, though we don't want to pretend we're going to reduce primary physician benefits by 20% this year which is what the previous budget assumed, we are looking to reform the payment system to encourage quality.
Question: Do you want to see more primary care physicians?
Answer: The evidence suggests primary care physicians provide cost-effective, high quality care. In stimulus, there's significant funding for community health centers, which have also been a proven effective method of delivering health care.
Question: Can you walk us through cap and trade, can you explain why there won't be a pass-along to consumers from utilities where their rates will go up? And can you explain why the economic projections are more bullish over the first couple, three years than the CBO projections?
Answer: We're trying to address global climate change and reduce dependence on foreign oil and do it in a fiscally responsible way. It will have an impact on households but that's why we're linking cap-and-trade to "Making Work Pay," the tax credit for working families, to provide them relief in their budgets.
We're less pessimistic than some forecasts but we're very much in the same ballpark. The CBO forecast is pre-policy, and we had inside information because we knew a lot about what the policy would be, we knew what the stimulus package and financial rescue would look like, plus the housing plan.
Question: We've been hearing denunciations of Bush admin for dishonesty in the way they presented numbers and hid expenditures, isn't your optimism dishonest also, aren't you trying to gild the lily?
Answer: Reject the premise that we're noticeably rosier. We're certainly in the ballpark, and this is an honest forecast. We feel confident in the numbers.
Question: Does the assumption include the $250 billion placeholder for financial institutions, is that planned for in the assumption?
Answer: It's a contingency. We know what the overall plan is, the president has said "we will do what it takes," so we're planning a contingency. We want to err on the side of caution, since many things are uncertain.
Question: But the contingency assumes unemployment above 10% and none of your assumptions allow for that.
Answer: We have to realize we're in a period of significant uncertainty. We wanted to be responsible and err on the side of a placeholder. Part of the "rosiness" is the long-term projection. 2.6% long-term growth forecast is completely in the middle of the pack of estimates. A lot of it is public investment in the recent stimulus. So the forecast is sensible.
Question: The total hit on upper income taxpayers, is it right to say that you're raising over $10 trillion total in 10 years from upper income folks?
Answer: You can slice and dice a lot of ways. We face a structural deficit for the last two or three decades. The top 1% has gone from owning 10% to 20% of its share of national income, so we are asking them to pitch in a bit more, after we get out of this downturn. There has been a structural imbalance of monies going to the top 1%, that is going to change.
Question: You've got $500 billion deficits going right through the next 10 years, the accumulated size of the debt public and gross will be $23 trillion in that time. How do you justify that to Congress?
Answer: Let's be clear, we're starting with an inherited deficit of $9 trillion. We have to start working that down, this budget does that. Some may want more, some less. We're being simultaneously hit by people saying this is too painful, and others saying we're not doing enough. More important than what happens over the next 5-10 years with the buget is the rate at which health care costs grow. The health care situation is going to be the single most important thing we do for our nation's financial health, and when we get reform going, we will be saving money long term. But so much is tied to whether we're successful in reforming health care. It's the most important thing.
Question: Any estimates as to how much energy prices might rise through cap-and-trade?
Answer: We have principles on cap-and-trade outlined in this document, there are a whole bunch of paths to get there, we have to work together with Congress on the specifics.
Question: Follow up on cost of primary care physicians in Medicare.
Answer: Previous budgets would dishonestly assume that physician payments would be dramatically reduced in past budgets, and then Congress would actually never allow that to happen, so they'd go back and have to fill that hole back in, and we're just being honest in our budget. We're not playing that game.
Question: Walk us through Afghanistan costs. And is there historical precedent for swing in growth after a recession?
Answer: On the cost of the war, the budget shows the combined cost of Iraq, Afghanistan, and other overseas contingencies. This year $141 billion. Next fiscal year $130 billion, then purely as a placeholder contingency for future years, $50 billion per year thereafter.
Answer to second part: In normal history, the worse the contraction, the faster the recovery. Cites Great Depression, 10% per year growth during the 30s. The swinging growth we're predicting is in line with most estimates out there and not out of line with previous recessions.
Question: Are you concerned you're raising costs on businesses during a recession?
Answer: That is factually wrong. We're not doing that. The first time the rates revert is 2011. So it's not raising taxes during a recession. That's factually wrong. In fact we just cut taxes in the stimulus.
At the health summit next week you'll hear more from us about the down payment on health care. We're trying to correct the mistakes of the past. We're putting money on the table, we'll look forward to working with Congress members on both sides of the aisle.
Question: Are you concerned you're asking Congress to do too much? Cap-and-trade, health care reform. Giant things.
Answer: We put the country back on a fiscally sustainable course with this budget, it's an honest budget. The key to getting the budget under control after 10 years is health care. We can't wait to address health care.
Question: On the deficit forecast, it bottoms out in 2013 and then begins to rise again in nominal dollars, is that the growth of entitlements? Is the trendline concerning to you? And are you factoring any economic impact from the tax increases in 2011?
Answer: The way most economists look at deficits is as a share of the economy, and that's what we're trying to stabilize. As the economy becomes larger, it's natural for everything that we're dealing with to get bigger. So looking at it like a share of the overall economy is the best metric that professional economists use, and that's why it becomes stable.
Question: Can you explain some cuts in some of these farm programs, when they have had champions in Congress for decades, how will you be able to get this through Congress?
Answer: Every line in the budget has something that someone cares about very strongly. It is difficult to shift direction, but it's absolutely what we need to do, that's what the President wants.
[End of conference]
Orszag's remarks:
Energy, health care, and education are our primary budget goals, but it's difficult because we inherited two different trillion dollar deficits. The first trillion dollar deficit is the difference between what the economy could produce each year and what it is producing. That's why we passed the stimulus, to jump start the economy and close that gap.
The second deficit is the budget deficit. Under current policies and without shifting, we'd face $9 trillion in budget deficits over the next decade. First step in addressing this problem is honesty. We know there will be emergencies like hurricanes, we know the AMT system exists and has to be accounted for in the budget, Iraq and Afghanistan really do exist.
After honesty, reorienting the federal budget is the next step. We've had six weeks to do six months of work. This is an overview, so more detail available in April.
By the end of the president's first term, the budget deficit will be reduced in half. Unlike what you saw in the papers this morning, we aren't raising the price before the sale. This is deficit reduction relative to the deficit we inherited before the stimulus and before any policy interventions.
How do we get there? Four main categories. First, the stimulus and normal business cycle, eventually the economy will recover. That helps. Second, as the president campaigned, the high income tax provisions expire when they are scheduled to expire at the end of 2010. Families making more than $250,000 will have to pay more in 2011. Also, we're closing corporate tax loopholes, especially in international transactions. Third, we are winding down the war. Fourth, we're making government more efficient.
Under efficiency of government, solid evidence suggests that each dollar spent in program integrity results in $1.60 savings. For example, erroneous Medicare payments. All told, $50 billion in ten years in reduced errors and improper payments both on the benefit side and revenue side.
Also we're ditching stuff that doesn't work. For example, we like the earned income tax credit, but there's an advanced form of the credit that only 1% of eligible people actually use and there's a very high error rate with this program, so it's over. On agricultural side, an example would be there are direct payments to farmers based on land rather than based on what they actually farm. 36% of farmers actually get these payments, and for farms with revenue of more than $500,000 per year those payments are ending. That saves $10 billion a year.
All told, $2 trillion of deficit reduction in this budget, roughly $1 trillion in reduced spending compared to current policies and path and $1 trillion in additional revenue compared to current path.
Three key areas to promote long term economic health. Energy, health care and education, as noted in the president's speech the other night, are the investment priorities in the budget.
In addition to stimulus spending on early education, the budget has more because evidence suggests high quality early ed programs pay off over time. Higher education through expansion of PELL grant system and more reliable funding for it and simplification of application process, which is more complicated than the tax code right now.
In energy, reduce dependency on foreign oil and improve operational efficiency of gov't by 25% by 2013. $15 billion/year in energy efficiency investments, including creating an electricity superhighway that would allow transportation of wind energy from the Dakotas to the population centers that need the energy. This expenditure would be financed through cap-and-trade, in a "market-friendly" way.
Health care is the most important driving force in our long term economic health. It's underappreciated how much health care costs are hurting worker pay right now. It's killing higher education priorities at the state level, for example. We have to bend the curve on long-term costs this year because it's the lynchpin to everything.
Yesterday, new Dartmouth College research showed substantial variation in health care costs in various parts of the country without corresponding outcome variation. $634 billion as a "down payment" toward health care efficiency, including reducing overpayments to private insurance firms that cover beneficiaries under Medicare. We'll introduce a competitive bidding process where those firms will bid for covering those beneficiaries and then pay them the average of those bids. We estimate this to save over $170 billion over those years.
Romer's remarks:
The economic assumptions underlying these projections. Starting with total production, we're projecting year over year growth of -1.2%. Real GDP will "fall significantly" in the first quarter and will bottom out mid-year. It'll begin growing again by the end of the year, and 3.2% GDP growth in 2010. More robust growth in 2011, 2012, and 2013. Long run growth rate of 2.6% after 2013, roughly the average f past decade.
Unemployment rate forecasted to rise in first half of 2009 because output continues to fall, predicted to average just over 8% in 2009. It will not come down all that much in 2010, but then will come down more rapidly in 2011 and 2012 as economy grows. Unemployment assume to settle down to 5% in the long run.
Forecast for inflation consistent with drop in output. Should be about 1.1% each of next two years. Then will return to 1.8% for the longer run.
All forecasts are subject to a substantial margin of error, and we're economists, not soothsayers. This is a once-in-a-century series of macroeconomic shocks, so usual patterns don't supply as much guidance, but this is our best estimate.
Q-and-A session.
[Note: this is not an exact transcript; it's a summary of the questions and answers.]
First question is about those making over $250,000, how about charitable giving? About 1/3 of these organizations took a big nose dive (Salvation Army, Red Cross, etc.). Won't this incentive reduction hurt the those organizations and the economy?
Answer: The president put $100 million in the stimulus for non-profits and charities. In addition, the recovery itself will boost the economy and to individuals who contribute to those organizations. When a middle income family contributes $10,000, they save $150 in taxes, when Bill Gates makes that same contribution, he saves $3,500. We think Bill Gates should still get a tax break when he gives charitably, but a slightly smaller one ($2,800).
Followup: But won't the people who'd give start saving instead of giving?
Answer: What drives charitable giving is economic growth and other considerations such as benevolence.
Question: If $634 billion for health care as a "down payment," what's the total price tag? Same with future bailout monies. Did you guys come up with a formula for determining the size of that figure?
Answer: The president wanted to be responsible in this budget. There is a placeholder for potential additional financial stabilization efforts in the budget. We hope it won't be necessary, we don't plan to go to Congress to ask for additional money, but just in case it is we put it in there out of responsibility. On the health care reserve, there are different plans out there, this is a substantial down payment in any of those plans. We'll work with Congress and want to get it done this year.
Question: Where does boosting primary care physicians fit in the overall health care component?
Answer: Boosting primary care physicians seems to be effective based on the evidence. A lot of the variation across the country (referring to the Dartmouth report) without corresponding benefit is related to the ratio of primary care to specialists. One thing we could be doing, though we don't want to pretend we're going to reduce primary physician benefits by 20% this year which is what the previous budget assumed, we are looking to reform the payment system to encourage quality.
Question: Do you want to see more primary care physicians?
Answer: The evidence suggests primary care physicians provide cost-effective, high quality care. In stimulus, there's significant funding for community health centers, which have also been a proven effective method of delivering health care.
Question: Can you walk us through cap and trade, can you explain why there won't be a pass-along to consumers from utilities where their rates will go up? And can you explain why the economic projections are more bullish over the first couple, three years than the CBO projections?
Answer: We're trying to address global climate change and reduce dependence on foreign oil and do it in a fiscally responsible way. It will have an impact on households but that's why we're linking cap-and-trade to "Making Work Pay," the tax credit for working families, to provide them relief in their budgets.
We're less pessimistic than some forecasts but we're very much in the same ballpark. The CBO forecast is pre-policy, and we had inside information because we knew a lot about what the policy would be, we knew what the stimulus package and financial rescue would look like, plus the housing plan.
Question: We've been hearing denunciations of Bush admin for dishonesty in the way they presented numbers and hid expenditures, isn't your optimism dishonest also, aren't you trying to gild the lily?
Answer: Reject the premise that we're noticeably rosier. We're certainly in the ballpark, and this is an honest forecast. We feel confident in the numbers.
Question: Does the assumption include the $250 billion placeholder for financial institutions, is that planned for in the assumption?
Answer: It's a contingency. We know what the overall plan is, the president has said "we will do what it takes," so we're planning a contingency. We want to err on the side of caution, since many things are uncertain.
Question: But the contingency assumes unemployment above 10% and none of your assumptions allow for that.
Answer: We have to realize we're in a period of significant uncertainty. We wanted to be responsible and err on the side of a placeholder. Part of the "rosiness" is the long-term projection. 2.6% long-term growth forecast is completely in the middle of the pack of estimates. A lot of it is public investment in the recent stimulus. So the forecast is sensible.
Question: The total hit on upper income taxpayers, is it right to say that you're raising over $10 trillion total in 10 years from upper income folks?
Answer: You can slice and dice a lot of ways. We face a structural deficit for the last two or three decades. The top 1% has gone from owning 10% to 20% of its share of national income, so we are asking them to pitch in a bit more, after we get out of this downturn. There has been a structural imbalance of monies going to the top 1%, that is going to change.
Question: You've got $500 billion deficits going right through the next 10 years, the accumulated size of the debt public and gross will be $23 trillion in that time. How do you justify that to Congress?
Answer: Let's be clear, we're starting with an inherited deficit of $9 trillion. We have to start working that down, this budget does that. Some may want more, some less. We're being simultaneously hit by people saying this is too painful, and others saying we're not doing enough. More important than what happens over the next 5-10 years with the buget is the rate at which health care costs grow. The health care situation is going to be the single most important thing we do for our nation's financial health, and when we get reform going, we will be saving money long term. But so much is tied to whether we're successful in reforming health care. It's the most important thing.
Question: Any estimates as to how much energy prices might rise through cap-and-trade?
Answer: We have principles on cap-and-trade outlined in this document, there are a whole bunch of paths to get there, we have to work together with Congress on the specifics.
Question: Follow up on cost of primary care physicians in Medicare.
Answer: Previous budgets would dishonestly assume that physician payments would be dramatically reduced in past budgets, and then Congress would actually never allow that to happen, so they'd go back and have to fill that hole back in, and we're just being honest in our budget. We're not playing that game.
Question: Walk us through Afghanistan costs. And is there historical precedent for swing in growth after a recession?
Answer: On the cost of the war, the budget shows the combined cost of Iraq, Afghanistan, and other overseas contingencies. This year $141 billion. Next fiscal year $130 billion, then purely as a placeholder contingency for future years, $50 billion per year thereafter.
Answer to second part: In normal history, the worse the contraction, the faster the recovery. Cites Great Depression, 10% per year growth during the 30s. The swinging growth we're predicting is in line with most estimates out there and not out of line with previous recessions.
Question: Are you concerned you're raising costs on businesses during a recession?
Answer: That is factually wrong. We're not doing that. The first time the rates revert is 2011. So it's not raising taxes during a recession. That's factually wrong. In fact we just cut taxes in the stimulus.
At the health summit next week you'll hear more from us about the down payment on health care. We're trying to correct the mistakes of the past. We're putting money on the table, we'll look forward to working with Congress members on both sides of the aisle.
Question: Are you concerned you're asking Congress to do too much? Cap-and-trade, health care reform. Giant things.
Answer: We put the country back on a fiscally sustainable course with this budget, it's an honest budget. The key to getting the budget under control after 10 years is health care. We can't wait to address health care.
Question: On the deficit forecast, it bottoms out in 2013 and then begins to rise again in nominal dollars, is that the growth of entitlements? Is the trendline concerning to you? And are you factoring any economic impact from the tax increases in 2011?
Answer: The way most economists look at deficits is as a share of the economy, and that's what we're trying to stabilize. As the economy becomes larger, it's natural for everything that we're dealing with to get bigger. So looking at it like a share of the overall economy is the best metric that professional economists use, and that's why it becomes stable.
Question: Can you explain some cuts in some of these farm programs, when they have had champions in Congress for decades, how will you be able to get this through Congress?
Answer: Every line in the budget has something that someone cares about very strongly. It is difficult to shift direction, but it's absolutely what we need to do, that's what the President wants.
[End of conference]
FiveThirty ... Nine?
@ 7:22 AM
For those of you who don't know (and unless you're a true-blue political nerd or have read the FAQ, you probably don't), this site is named after the number of electors in the Electoral College, a number which, since the passage of the 23rd Amendment in 1961, has been fixed at 538, equal to the 100 members of the United States Senate, plus the 435 members of the United States House, plus three more for the District of Columbia. But this number is not fixed by the Constitution. If the number of persons in the Congress changes, so will the number of votes in the Electoral College.
And it looks like the number of votes in the Congress will in fact be changing. On Tuesday, the Senate achieved cloture (broke a filibuster) on S.160, the District of Columbia House Voting Rights Act of 2009, which would (1) permanently expand the size of the House from 435 to 437 members and (2) give one of these additional seats to the District of Columbia. This measure is quite likely to formally pass the Senate soon, be followed up with a vote in the House, and be signed by the President. Unless it is struck down on a Constitutional basis (and it will certainly be challenged), it will become the law.
So in all likelihood, we'll have two new Congresspersons beginning with the meeting of the 112th Congress in 2011. This will in turn affect the Electoral College. The reason the number of electors will increase from 538 to 539 (rather than 540) is because, under the 23rd Amendment, D.C. is already essentially given credit for having a having a vote in the House and so adding an additional voting member in the House is redundant. This has the convenient feature of placing an odd number of total electors in the Electoral College, which means that an Electoral College tie will be impossible in a two-candidate race.
If you've been following the D.C. Voting Rights Act, you might have sometimes heard it said that the Congress was trading a (presumably Democratic) vote in D.C. for a (presumably Republican) vote in Utah. This is not technically true. All the measure does is apportion one additional vote in the House between the 50 states based on the existing formula. It just so happened that, under that formula, Utah got the the short end of the stick and was the next state in line for an additional Congressman anyway. For the 112th Congress, which will be elected in 2010 and whose membership is still determined by the 2000 Census, Utah will gain an additional elected member. But there are no guarantees about which state will benefit in 2012 and beyond ... it could be that the extra seat helps a Republican state like Utah to gain an additional member (in fact, Utah is nearly certain to gain a voting member anyway because of its high population growth), or it could be that the extra vote saves a deep blue state like New York from losing one. So this is a pretty good trade-off for the Democrats: they'd essentially gain a vote in the House permanently (unless aliens take over and D.C. turns Republican) in exchange for giving Utah an extra vote for just two years.
As for this website, we will not be changing our name. FiveThirtyNine.com was already purchased by an forward-thinking German entrepreneur last summer, and besides that, we've built up quite a following for ourselves under this brand name.
But if the Supreme Court finds some excuse to strike this down ... well, I wouldn't entirely mind.
And it looks like the number of votes in the Congress will in fact be changing. On Tuesday, the Senate achieved cloture (broke a filibuster) on S.160, the District of Columbia House Voting Rights Act of 2009, which would (1) permanently expand the size of the House from 435 to 437 members and (2) give one of these additional seats to the District of Columbia. This measure is quite likely to formally pass the Senate soon, be followed up with a vote in the House, and be signed by the President. Unless it is struck down on a Constitutional basis (and it will certainly be challenged), it will become the law.
So in all likelihood, we'll have two new Congresspersons beginning with the meeting of the 112th Congress in 2011. This will in turn affect the Electoral College. The reason the number of electors will increase from 538 to 539 (rather than 540) is because, under the 23rd Amendment, D.C. is already essentially given credit for having a having a vote in the House and so adding an additional voting member in the House is redundant. This has the convenient feature of placing an odd number of total electors in the Electoral College, which means that an Electoral College tie will be impossible in a two-candidate race.
If you've been following the D.C. Voting Rights Act, you might have sometimes heard it said that the Congress was trading a (presumably Democratic) vote in D.C. for a (presumably Republican) vote in Utah. This is not technically true. All the measure does is apportion one additional vote in the House between the 50 states based on the existing formula. It just so happened that, under that formula, Utah got the the short end of the stick and was the next state in line for an additional Congressman anyway. For the 112th Congress, which will be elected in 2010 and whose membership is still determined by the 2000 Census, Utah will gain an additional elected member. But there are no guarantees about which state will benefit in 2012 and beyond ... it could be that the extra seat helps a Republican state like Utah to gain an additional member (in fact, Utah is nearly certain to gain a voting member anyway because of its high population growth), or it could be that the extra vote saves a deep blue state like New York from losing one. So this is a pretty good trade-off for the Democrats: they'd essentially gain a vote in the House permanently (unless aliens take over and D.C. turns Republican) in exchange for giving Utah an extra vote for just two years.
As for this website, we will not be changing our name. FiveThirtyNine.com was already purchased by an forward-thinking German entrepreneur last summer, and besides that, we've built up quite a following for ourselves under this brand name.
But if the Supreme Court finds some excuse to strike this down ... well, I wouldn't entirely mind.
Quick Internship Update
@ 12:50 AM
This is a good problem, but there were an unexpectedly large number of replies on the internship, so bear with us. The spring deadline has passed, and we're just barely into our replies. No news isn't necessarily bad news. Thanks to everyone who contacted us, and thanks for your patience.
For the vast majority who we won't be able to accommodate, your letters have been read and appreciated, and if you sent us an app, you will have a reply, even if it takes a little while longer than we'd all like. The high quality of the candidates is a little stunning. (We've privately joked about an intern assigned individually to every member of Congress.) Also, for those who specifically sought something for the summer, you should anticipate that you will be contacted somewhat after the folks here or who are ready to move here and ready to start immediately.
For the vast majority who we won't be able to accommodate, your letters have been read and appreciated, and if you sent us an app, you will have a reply, even if it takes a little while longer than we'd all like. The high quality of the candidates is a little stunning. (We've privately joked about an intern assigned individually to every member of Congress.) Also, for those who specifically sought something for the summer, you should anticipate that you will be contacted somewhat after the folks here or who are ready to move here and ready to start immediately.
2.25.2009
In Post-Speech Afterglow, Obama Lays Out Regulatory Reform Principles
@ 6:08 PM
Jindal v. Obama continues to dominate the storyline, on a day when the reviews for each were so strong that the White House has little incentive to change the story.
As mockery poured in from all partisan corners, here's what happened to Bobby Jindal-for-President in 2012 on Intrade after reaction to his speech last night:
Meanwhile, polling reaction to Obama's speech was as good as the White House could have hoped for: CBS News showed a 17% bump, from 63% before the speech to 80% after the speech. Additionally, Obama gained a 15% bump in respondents who believed Obama's economic plans would help them personally, from 36% to 51%.
The post-speech CNN/Opinion Research poll concurred. 68% of viewers reacted to the speech "very positively," 24% reacted "somewhat positively," and 8% negatively.
Today, Obama sought to parlay the afterglow of a strong previous evening into his layout of principles on regulatory reform. In remarks, Obama disputed what he argued was a false choice characterized by much of the debate that has dominated the "nationalization" discussion.
While eschewing specifics (like the budget, this is a week of "stay tuned"), the seven principles on regulatory reform Obama outlined in remarks this afternoon were:
1. The big financial institutions that can have systemic impact if they fail need strict regulatory oversight.
2. Modernizing and streamlining the regulatory structure to strengthen the markets.
3. Openness and transparency lead to trust in the markets.
4. Strong and uniform supervision for financial products based on actual data rather than abstract bank-created models.
5. Strict accountability for executives.
6. Comprehensive, loophole-free application of regulation.
7. Challenging other countries to adopt similar high regulation standards so their crises don't virally hurt the global economy.
In testimony to the House Financial Services Committee, Fed Chairman Ben Bernanke continued to push back on "nationalization" as he saw it: “Nationalization, to my mind, is when government seizes the banks, zeros out the shareholders and begins to manage and run the bank, and we don’t plan anything like that."
Last week, knowing that the markets were taking the measure of every carefully-parsed word, Robert Gibbs took tremendous care in his language on the subject. Today, Bernanke's attempt to define "nationalization" as "seiz(ing)" banks and "zeroing out" shareholders, as well as Obama's pushback on unhelpfully caricatured language ("oppressive government-run economy" vs. "chaotic and unforgiving capitalism"), clearly signals that as we move into further and further specifics, the White House is sensitive to and even worried about letting the terms of the debate get away from them.
Where we go tomorrow -- as details begin emerging over the next 12-18 hours on budget specifics (the wire services are upstairs in a bloc getting the embargoed scoop), you should anticipate Republicans eager to put the Jindal black eye behind them and onto a redux of picking out projects and screaming "pork!"
The big question. Will any Republicans see the way the public has reacted to Obama versus their caucus on the stimulus debate, the reactions to the speeches last night, and will those lessons inspire any have a change of heart (dose of sanity) on throwing Obama some support?
As mockery poured in from all partisan corners, here's what happened to Bobby Jindal-for-President in 2012 on Intrade after reaction to his speech last night:
Meanwhile, polling reaction to Obama's speech was as good as the White House could have hoped for: CBS News showed a 17% bump, from 63% before the speech to 80% after the speech. Additionally, Obama gained a 15% bump in respondents who believed Obama's economic plans would help them personally, from 36% to 51%.
The post-speech CNN/Opinion Research poll concurred. 68% of viewers reacted to the speech "very positively," 24% reacted "somewhat positively," and 8% negatively.
Today, Obama sought to parlay the afterglow of a strong previous evening into his layout of principles on regulatory reform. In remarks, Obama disputed what he argued was a false choice characterized by much of the debate that has dominated the "nationalization" discussion.
The choice we face is not between some oppressive government-run economy or a chaotic and unforgiving capitalism. Rather, strong financial markets require clear rules of the road, not to hinder financial institutions, but to protect consumers and investors, and ultimately to keep those financial institutions strong. Not to stifle, but to advance competition, growth and prosperity. And not just to manage crises, but to prevent crises from happening in the first place, by restoring accountability, transparency and trust in our financial markets.
While eschewing specifics (like the budget, this is a week of "stay tuned"), the seven principles on regulatory reform Obama outlined in remarks this afternoon were:
1. The big financial institutions that can have systemic impact if they fail need strict regulatory oversight.
2. Modernizing and streamlining the regulatory structure to strengthen the markets.
3. Openness and transparency lead to trust in the markets.
4. Strong and uniform supervision for financial products based on actual data rather than abstract bank-created models.
5. Strict accountability for executives.
6. Comprehensive, loophole-free application of regulation.
7. Challenging other countries to adopt similar high regulation standards so their crises don't virally hurt the global economy.
In testimony to the House Financial Services Committee, Fed Chairman Ben Bernanke continued to push back on "nationalization" as he saw it: “Nationalization, to my mind, is when government seizes the banks, zeros out the shareholders and begins to manage and run the bank, and we don’t plan anything like that."
Last week, knowing that the markets were taking the measure of every carefully-parsed word, Robert Gibbs took tremendous care in his language on the subject. Today, Bernanke's attempt to define "nationalization" as "seiz(ing)" banks and "zeroing out" shareholders, as well as Obama's pushback on unhelpfully caricatured language ("oppressive government-run economy" vs. "chaotic and unforgiving capitalism"), clearly signals that as we move into further and further specifics, the White House is sensitive to and even worried about letting the terms of the debate get away from them.
Where we go tomorrow -- as details begin emerging over the next 12-18 hours on budget specifics (the wire services are upstairs in a bloc getting the embargoed scoop), you should anticipate Republicans eager to put the Jindal black eye behind them and onto a redux of picking out projects and screaming "pork!"
The big question. Will any Republicans see the way the public has reacted to Obama versus their caucus on the stimulus debate, the reactions to the speeches last night, and will those lessons inspire any have a change of heart (dose of sanity) on throwing Obama some support?
Sports Fans as Potential Republicans?
@ 10:07 AM
Brad Miner wrote:
What do the data say?
Yu-Sung and I looked at the "attended sporting event in the past year" item in the General Social Survey. (Unfortunately, the question was only asked once, in the 1993-1996 survey.) 56% of respondents said they attended an amateur or professional sports event" during the past twelve months. How do they differ from the 44% who didn't?
So, at least in the mid-1990s, sports attenders were quite a bit more Republican than other Americans (the categories in the graph above are Strong Democrat, Democrat, lean Democrat, Independent, lean Republican, Republican, strong Republican), but not much different in their liberal-conservative ideology.
So these data do not appear to support Miner's claim. Miner expected sports fans to be label themselves as more conservative but maybe not to be more likely to vote Republican; actually, sports fans were more likely to call themselves Republican but no more likely to describe themselves as conservative.
Some other issues:
1. The sporting event attended could be the Super Bowl or your kid's soccer game. Maybe more dramatic results would be obtained by considering a more restricted group of sports fans.
2. There are lots of surveys of TV watching, so I'm sure there are tons of data that would let you crosstab ideology, voting, and spectator sports watching.
3. More generally, we never want to rely too strongly on just one survey. Still, it's fun to look.
Those of you who see this and think you could do better: You're probably right, and I encourage you to dig up some additional survey data on this topic that connects Nate's two biggest professional interests.
With the Super Bowl coming up this weekend, I [Miner] want to write about sports, which I consider a key to building a larger conservative coalition in America. . . .
If you did a survey of the political philosophies of 75,000 randomly selected Americans you'd expect the usual--if somewhat mystifying--results: "Only about one-in-five Americans currently call themselves liberal (21%), while 38% say they are conservative and 36% describe themselves as moderate." So said the folks at Pew Research, and this was after the November election.
Do that same poll among the fans at Raymond James Stadium in Tampa on Sunday and the results would likely be more like 15% liberal, 30% moderate, and 50% conservative. And a bunch of those liberals would probably be gun owners.
Obviously those numbers are just speculation on my part, but I guarantee that Steelers fans are more conservative than all Pennsylvanians and ditto Cardinals devotees and the rest of Arizona. Which is not to say that these folks cast their ballots in November more for McCain than Obama. That's the problem.
What do the data say?
Yu-Sung and I looked at the "attended sporting event in the past year" item in the General Social Survey. (Unfortunately, the question was only asked once, in the 1993-1996 survey.) 56% of respondents said they attended an amateur or professional sports event" during the past twelve months. How do they differ from the 44% who didn't?
So, at least in the mid-1990s, sports attenders were quite a bit more Republican than other Americans (the categories in the graph above are Strong Democrat, Democrat, lean Democrat, Independent, lean Republican, Republican, strong Republican), but not much different in their liberal-conservative ideology.
So these data do not appear to support Miner's claim. Miner expected sports fans to be label themselves as more conservative but maybe not to be more likely to vote Republican; actually, sports fans were more likely to call themselves Republican but no more likely to describe themselves as conservative.
Some other issues:
1. The sporting event attended could be the Super Bowl or your kid's soccer game. Maybe more dramatic results would be obtained by considering a more restricted group of sports fans.
2. There are lots of surveys of TV watching, so I'm sure there are tons of data that would let you crosstab ideology, voting, and spectator sports watching.
3. More generally, we never want to rely too strongly on just one survey. Still, it's fun to look.
Those of you who see this and think you could do better: You're probably right, and I encourage you to dig up some additional survey data on this topic that connects Nate's two biggest professional interests.
Jindal Versus the Volcano
@ 2:09 AMWhile some of the projects in the [stimulus] bill make sense, their legislation is larded with wasteful spending. It includes ... $140 million for something called 'volcano monitoring.' Instead of monitoring volcanoes, what Congress should be monitoring is the eruption of spending in Washington, DC.-- Bobby Jindal
Before the cataclysmic eruption, roughly one million people lived in the region around Mount Pinatubo, including about 30,000 American military personnel and their dependents at the two largest U.S. military bases in the Philippines--Clark Air Base and Subic Bay Naval Station. The slopes of the volcano and the adjacent hills and valleys were home to thousands of villagers. Despite the great number of people at risk, there were few casualties in the June 15 eruption. This was the result of intensive monitoring of Mount Pinatubo by scientists with the Philippine Institute of Volcanology and Seismology (PHIVOLCS) and the USGS.-- The United States Geological Survey
The first recognized signs that Pinatubo was reawakening after a 500-year slumber were a series of small steam-blast explosions in early April 1991. Scientists from PHIVOLCS immediately began on-site monitoring and soon declared a 6-mile-radius danger zone around the volcano. They were joined in a few weeks by USGS scientists from the Volcano Disaster Assistance Program, a cooperative effort with the Office of Foreign Disaster Assistance of the U.S. Agency for International Development.
[...]
The USGS and PHIVOLCS estimate that their forecasts saved at least 5,000 lives and perhaps as many as 20,000. The people living in the lowlands around Mount Pinatubo were alerted to the impending eruption by the forecasts, and many fled to towns at safer distances from the volcano or took shelter in buildings with strong roofs. Additionally, more than 18,000 American servicemen and their dependents were evacuated from Clark Air Base prior to the June 15 eruption. In the eruption, thousands of weaker roofs, including some on Clark, collapsed under the weight of ash made wet by heavy rains, yet only about 250 lowland residents were killed. Of the 20,000 indigenous Aeta highlanders who lived on the slopes of Mount Pinatubo, all but about 120 were safely evacuated before the eruption completely devastated their villages.
In addition to the many lives saved, property worth hundreds of millions of dollars was protected from damage or destruction in the eruption. When aircraft and other equipment at the U.S. bases were flown to safe areas or covered, losses of at least $200 to 275 million were averted. Philippine and other commercial airlines prevented at least another $50 to 100 million in damage to aircraft by taking similar actions. By heeding warnings of hazardous volcanic ash clouds from Pinatubo, commercial and military pilots avoided severe damage to their aircraft and potentially saved hundreds of lives.
Such a strange thing for Jindal to say, especially since he hails from the state that was ravaged by Katrina. (Which, ironically, was the subject of its own equally awkward moment). The volcano monitoring program was on a list of Republican talking points at one stage, but virtually none of them ran with it, apparently figuring that there were much better scabs to pick at.
And I know: I'm piling on a little. This was going to be an awfully tough speech to deliver, almost no matter what its content. With the possible exception of Jim Webb in 2007, the minority party reaction speeches have always tended toward extreme lameness.
I just want to know who wrote the speech and who vetted it. Because it was manifestly at odds with the talents of the guy who delivered it.
2.24.2009
Obama Joint Session (and Jindal Reply) Liveblog
@ 8:50 PM
12:26 EST: (Sean) "Nihilism." Per MyDD, David Brooks on Jindal: "In a moment when only the federal government is actually big enough to do stuff, to just ignore all that and just say 'government is the problem, corruption, earmarks, wasteful spending,' it's just a form of nihilism.... I think it's insane, and I just think it's a disaster for the party."
More Kenneth: Jason Linkins of Huffington Post posts comparative videos. Sullivan "can barely count the number of emails" about it. And: the Facebook group.
11:11 EST: (Nate) The full text of Jindal's speech can be found here.
10:56 EST: (Sean) Josh Marshall has "Kenneth the Page" up; it's everywhere... all anyone will remember about this night three months from now is Obama gave a great speech and Bobby Jindal = Kenneth the Page. Big Republican winner tonight: Mike Huckabee.
10:36 EST: (Nate). OK: positives on Jindal. He comes across as sincere, very likable, and I think ultimately can be a better spokesperson for conservative principles than a frosty old white guy. He's just not there yet. Not by a long shot.
10:32 EST: (Sean) "Saddle our children with debt." Alternate reality. I hear Facebook is lighting up with "Kenneth the Page" to the point that this may go down as the Kenneth the Page Speech. This guy is the anointed Republican rising star, by the way. Obama's gotta be laughing about this.
10:29 EST (Nate): If it sounds like Jindal is targeting his speech to a room full of fourth graders, that's because he is. They might be the next people to actually vote for Republicans again.
10:25 EST: (Sean) This guy Jindal sounds like every tour guide ever. Ever been to Monticello? Here's where Thomas Jefferson slept! A friend is insisting "Kenneth the Page" from "30 Rock" though I have never seen the show. (There's no basement in the Alamo!)
10:20 EST: (Sean) Where's Jindal? We heard the reply was supposed to begin sooner than this.
10:14 EST (Nate). And notice that he did pretty much everything that Lakoff suggested.
10:10 EST (Nate). I thought that was done, very, very well. If the country/markets/etc. were looking for a symbolic pivot point, this might have been it.
10:09 EST: (Sean) Who ever wants to volunteer to follow Big Speech Barack? What was Jindal thinking?
10:08 EST: (Sean) "Something worthy to be remembered."
10:03 EST: (Sean) Trademark Obama cynicism-to-hope pivot begins. We're near the close of the Obama part. Bobby Jindal really wanted to follow this?
9:57 EST: (Sean) "For seven years, we have been a nation at war. No longer will we hide its price." Yet, unresolved is whether photographs of flag-draped caskets at Dover AFB will be allowed. No photos = hiding the price.
9:54 EST: (Nate): Cut agricultural subsidies? We ain't in Iowa anymore, Barack.
9:52 EST: (Sean) Obama translation: "did you realize there wasn't any bit of pork or earmarks?" Republicans boo. So deep in the wilderness.
9:45 EST: (Nate). Just like he used the inaugural address to sell the stimulus, he's using this one to sell health care -- hard. Although, I think his pitch is much more effective tonight.
9:42 EST: (Sean) Obama strong rhetorical rhythm point of the speech on "a retooled, re-imagined auto industry.... Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it."
9:41 EST (Nate). Bipartisan applause for cap-and-trade.
9:38 EST: (Sean) Sneak preview on high school dropouts: "Every American will need to get more than a high school diploma. And dropping out of high school is no longer an option. It’s not just quitting on yourself, it’s quitting on your country."
9:33 EST (Nate). More prosaic than poetic tonight, but I think he's communicating very, very well. Frankly, I think this is the approach that a lot of folks were expecting at the inauguration.
9:30 EST (Nate). The Straits Times index is up almost 0.21 percent since the top of the hour! Rejoice!
9:29 EST: (Sean) We have a drinking game winner. The Empathizer-in-Chief uses "you/your" 48 times.
9:25 EST (Nate). The GOP needed to have a better clapping gameplan. Mitch McConnell not clapping (and, in fact, looking like he's getting ready to pick his nose) at college tuition tax credits = bad.
9:20 EST: (Sean) Nate’s here. I accidentally keep erasing his posts. I have been meaning to ask, of Sean Penn and Taraji Henson, which is Indiana and which is Omaha? “Omaha Sean Penn” kind of rolls off the tongue pretty well, I think.
9:14 EST: (Sean) Obama enters the chamber just ahead of Unfrozen Caveman Lawyer.
9:11 EST: (Sean) Look for an emotional moment in the speech involving a certain Senator from Massachusetts.
9:07 EST: (Sean) Starting late. Word search is fun.
Health: 23 (usually health care)
Education: 16 (once is educate, once is educators)
Challenge: 7
Responsibility: 13
Jobs: 14
CEOs: 1
9:05 EST (Nate): Probably not a coincidence that they wanted Geithner (least popular cabinet member) and Clinton (most popular cabinet member) in the same frame.
9:02 EST: (Nate) For those obsessed with the market's reaction to all of this: the Nikkei index, which is trading at this hour, now sits at 7,383.91.
9:00 EST: (Nate). CNN has already called Massachusetts, Rhode Island and Connecticut for Obama.
8:57 EST: (Sean) Chris Matthews not impressed "at all" with Jindal's speech, cites "Disneyland" mockery of light rail. Matthews loves rail.
8:55 EST: (Sean) A few more.
Recover/Recovery: 15
Crisis: 11
Recession: 6
Democrat/s/ic: 3
Republican/s: 3
8:50 EST: (Sean) 10 min to go, though they're supposed to be running late. The text has the following words this many times:
America/American/Americans: 38
Economy: 22
Congress: 11
Confident/Confidence: 7
Optimism/Optimist: 0
Difficult: 4
Also, I wonder if anyone messes with Joe Biden.
More Kenneth: Jason Linkins of Huffington Post posts comparative videos. Sullivan "can barely count the number of emails" about it. And: the Facebook group.
11:11 EST: (Nate) The full text of Jindal's speech can be found here.
10:56 EST: (Sean) Josh Marshall has "Kenneth the Page" up; it's everywhere... all anyone will remember about this night three months from now is Obama gave a great speech and Bobby Jindal = Kenneth the Page. Big Republican winner tonight: Mike Huckabee.
10:36 EST: (Nate). OK: positives on Jindal. He comes across as sincere, very likable, and I think ultimately can be a better spokesperson for conservative principles than a frosty old white guy. He's just not there yet. Not by a long shot.
10:32 EST: (Sean) "Saddle our children with debt." Alternate reality. I hear Facebook is lighting up with "Kenneth the Page" to the point that this may go down as the Kenneth the Page Speech. This guy is the anointed Republican rising star, by the way. Obama's gotta be laughing about this.
10:29 EST (Nate): If it sounds like Jindal is targeting his speech to a room full of fourth graders, that's because he is. They might be the next people to actually vote for Republicans again.
10:25 EST: (Sean) This guy Jindal sounds like every tour guide ever. Ever been to Monticello? Here's where Thomas Jefferson slept! A friend is insisting "Kenneth the Page" from "30 Rock" though I have never seen the show. (There's no basement in the Alamo!)
10:20 EST: (Sean) Where's Jindal? We heard the reply was supposed to begin sooner than this.
10:14 EST (Nate). And notice that he did pretty much everything that Lakoff suggested.
10:10 EST (Nate). I thought that was done, very, very well. If the country/markets/etc. were looking for a symbolic pivot point, this might have been it.
10:09 EST: (Sean) Who ever wants to volunteer to follow Big Speech Barack? What was Jindal thinking?
10:08 EST: (Sean) "Something worthy to be remembered."
10:03 EST: (Sean) Trademark Obama cynicism-to-hope pivot begins. We're near the close of the Obama part. Bobby Jindal really wanted to follow this?
9:57 EST: (Sean) "For seven years, we have been a nation at war. No longer will we hide its price." Yet, unresolved is whether photographs of flag-draped caskets at Dover AFB will be allowed. No photos = hiding the price.
9:54 EST: (Nate): Cut agricultural subsidies? We ain't in Iowa anymore, Barack.
9:52 EST: (Sean) Obama translation: "did you realize there wasn't any bit of pork or earmarks?" Republicans boo. So deep in the wilderness.
9:45 EST: (Nate). Just like he used the inaugural address to sell the stimulus, he's using this one to sell health care -- hard. Although, I think his pitch is much more effective tonight.
9:42 EST: (Sean) Obama strong rhetorical rhythm point of the speech on "a retooled, re-imagined auto industry.... Millions of jobs depend on it. Scores of communities depend on it. And I believe the nation that invented the automobile cannot walk away from it."
9:41 EST (Nate). Bipartisan applause for cap-and-trade.
9:38 EST: (Sean) Sneak preview on high school dropouts: "Every American will need to get more than a high school diploma. And dropping out of high school is no longer an option. It’s not just quitting on yourself, it’s quitting on your country."
9:33 EST (Nate). More prosaic than poetic tonight, but I think he's communicating very, very well. Frankly, I think this is the approach that a lot of folks were expecting at the inauguration.
9:30 EST (Nate). The Straits Times index is up almost 0.21 percent since the top of the hour! Rejoice!
9:29 EST: (Sean) We have a drinking game winner. The Empathizer-in-Chief uses "you/your" 48 times.
9:25 EST (Nate). The GOP needed to have a better clapping gameplan. Mitch McConnell not clapping (and, in fact, looking like he's getting ready to pick his nose) at college tuition tax credits = bad.
9:20 EST: (Sean) Nate’s here. I accidentally keep erasing his posts. I have been meaning to ask, of Sean Penn and Taraji Henson, which is Indiana and which is Omaha? “Omaha Sean Penn” kind of rolls off the tongue pretty well, I think.
9:14 EST: (Sean) Obama enters the chamber just ahead of Unfrozen Caveman Lawyer.
9:11 EST: (Sean) Look for an emotional moment in the speech involving a certain Senator from Massachusetts.
9:07 EST: (Sean) Starting late. Word search is fun.
Health: 23 (usually health care)
Education: 16 (once is educate, once is educators)
Challenge: 7
Responsibility: 13
Jobs: 14
CEOs: 1
9:05 EST (Nate): Probably not a coincidence that they wanted Geithner (least popular cabinet member) and Clinton (most popular cabinet member) in the same frame.
9:02 EST: (Nate) For those obsessed with the market's reaction to all of this: the Nikkei index, which is trading at this hour, now sits at 7,383.91.
9:00 EST: (Nate). CNN has already called Massachusetts, Rhode Island and Connecticut for Obama.
8:57 EST: (Sean) Chris Matthews not impressed "at all" with Jindal's speech, cites "Disneyland" mockery of light rail. Matthews loves rail.
8:55 EST: (Sean) A few more.
Recover/Recovery: 15
Crisis: 11
Recession: 6
Democrat/s/ic: 3
Republican/s: 3
8:50 EST: (Sean) 10 min to go, though they're supposed to be running late. The text has the following words this many times:
America/American/Americans: 38
Economy: 22
Congress: 11
Confident/Confidence: 7
Optimism/Optimist: 0
Difficult: 4
Also, I wonder if anyone messes with Joe Biden.
Obama Joint Session Speech Preview
@ 8:15 PM
We'll be liveblogging tonight. Get your bingo sheets and shot glasses ready.
Barack Obama began crafting this expected 50-minute speech the day after the inauguration, co-writing it with speechwriters Jon Favreau and Ben Rhodes, as well as senior adviser David Axelrod.
We're tagging it a State of the Union speech, even though it's technically not. It was a very quiet day in Washington, as everything has centered around tonight's event (and Jindal's response).
Below are released excerpts of Obama's speech:
The Call-to-Arms Money Shot:
But while our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before.
The weight of this crisis will not determine the destiny of this nation. The answers to our problems don’t lie beyond our reach. They exist in our laboratories and universities; in our fields and our factories; in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth. Those qualities that have made America the greatest force of progress and prosperity in human history we still possess in ample measure. What is required now is for this country to pull together, confront boldly the challenges we face, and take responsibility for our future once more.
.....
The "Day of Reckoning":
We have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election. A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day.
Well that day of reckoning has arrived, and the time to take charge of our future is here.
Now is the time to act boldly and wisely – to not only revive this economy, but to build a new foundation for lasting prosperity. Now is the time to jumpstart job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down. That is what my economic agenda is designed to do, and that’s what I’d like to talk to you about tonight.
.....
On Budget, All Must Compromise, Plus When Jindal Talks Next He's Wrong:
The recovery plan and the financial stability plan are the immediate steps we’re taking to revive our economy in the short-term. But the only way to fully restore America’s economic strength is to make the long-term investments that will lead to new jobs, new industries, and a renewed ability to compete with the rest of the world. The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care; the schools that aren’t preparing our children and the mountain of debt they stand to inherit. That is our responsibility.
In the next few days, I will submit a budget to Congress. So often, we have come to view these documents as simply numbers on a page or laundry lists of programs. I see this document differently. I see it as a vision for America – as a blueprint for our future.
My budget does not attempt to solve every problem or address every issue. It reflects the stark reality of what we’ve inherited – a trillion dollar deficit, a financial crisis, and a costly recession.
Given these realities, everyone in this chamber – Democrats and Republicans – will have to sacrifice some worthy priorities for which there are no dollars. And that includes me.
But that does not mean we can afford to ignore our long-term challenges. I reject the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity.
.....
Expect to See Some Budget Cuts on Thursday:
Yesterday, I held a fiscal summit where I pledged to cut the deficit in half by the end of my first term in office. My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs. As you can imagine, this is a process that will take some time. But we’re starting with the biggest lines. We have already identified two trillion dollars in savings over the next decade.
In this budget, we will end education programs that don’t work and end direct payments to large agribusinesses that don’t need them. We’ll eliminate the no-bid contracts that have wasted billions in Iraq, and reform our defense budget so that we’re not paying for Cold War-era weapons systems we don’t use. We will root out the waste, fraud, and abuse in our Medicare program that doesn’t make our seniors any healthier, and we will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.
.....
The Tone of Political Debate (Or 'What I've Figured Out To Say that Republicans Haven't'):
I know that we haven’t agreed on every issue thus far, and there are surely times in the future when we will part ways. But I also know that every American who is sitting here tonight loves this country and wants it to succeed. That must be the starting point for every debate we have in the coming months, and where we return after those debates are done. That is the foundation on which the American people expect us to build common ground.
.....
Where American Inspiration Comes From:
But in my life, I have also learned that hope is found in unlikely places; that inspiration often comes not from those with the most power or celebrity, but from the dreams and aspirations of Americans who are anything but ordinary.
I think about Leonard Abess, the bank president from Miami who reportedly cashed out of his company, took a $60 million bonus, and gave it out to all 399 people who worked for him, plus another 72 who used to work for him. He didn’t tell anyone, but when the local newspaper found out, he simply said, ''I knew some of these people since I was 7 years old. I didn't feel right getting the money myself.”
I think about Greensburg, Kansas, a town that was completely destroyed by a tornado, but is being rebuilt by its residents as a global example of how clean energy can power an entire community – how it can bring jobs and businesses to a place where piles of bricks and rubble once lay. “The tragedy was terrible,” said one of the men who helped them rebuild. “But the folks here know that it also provided an incredible opportunity.”
And I think about Ty’Sheoma Bethea, the young girl from that school I visited in Dillon, South Carolina – a place where the ceilings leak, the paint peels off the walls, and they have to stop teaching six times a day because the train barrels by their classroom. She has been told that her school is hopeless, but the other day after class she went to the public library and typed up a letter to the people sitting in this room. She even asked her principal for the money to buy a stamp. The letter asks us for help, and says, “We are just students trying to become lawyers, doctors, congressmen like yourself and one day president, so we can make a change to not just the state of South Carolina but also the world. We are not quitters.”
Barack Obama began crafting this expected 50-minute speech the day after the inauguration, co-writing it with speechwriters Jon Favreau and Ben Rhodes, as well as senior adviser David Axelrod.
We're tagging it a State of the Union speech, even though it's technically not. It was a very quiet day in Washington, as everything has centered around tonight's event (and Jindal's response).
Below are released excerpts of Obama's speech:
The Call-to-Arms Money Shot:
But while our economy may be weakened and our confidence shaken; though we are living through difficult and uncertain times, tonight I want every American to know this: We will rebuild, we will recover, and the United States of America will emerge stronger than before.
The weight of this crisis will not determine the destiny of this nation. The answers to our problems don’t lie beyond our reach. They exist in our laboratories and universities; in our fields and our factories; in the imaginations of our entrepreneurs and the pride of the hardest-working people on Earth. Those qualities that have made America the greatest force of progress and prosperity in human history we still possess in ample measure. What is required now is for this country to pull together, confront boldly the challenges we face, and take responsibility for our future once more.
.....
The "Day of Reckoning":
We have lived through an era where too often, short-term gains were prized over long-term prosperity; where we failed to look beyond the next payment, the next quarter, or the next election. A surplus became an excuse to transfer wealth to the wealthy instead of an opportunity to invest in our future. Regulations were gutted for the sake of a quick profit at the expense of a healthy market. People bought homes they knew they couldn’t afford from banks and lenders who pushed those bad loans anyway. And all the while, critical debates and difficult decisions were put off for some other time on some other day.
Well that day of reckoning has arrived, and the time to take charge of our future is here.
Now is the time to act boldly and wisely – to not only revive this economy, but to build a new foundation for lasting prosperity. Now is the time to jumpstart job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down. That is what my economic agenda is designed to do, and that’s what I’d like to talk to you about tonight.
.....
On Budget, All Must Compromise, Plus When Jindal Talks Next He's Wrong:
The recovery plan and the financial stability plan are the immediate steps we’re taking to revive our economy in the short-term. But the only way to fully restore America’s economic strength is to make the long-term investments that will lead to new jobs, new industries, and a renewed ability to compete with the rest of the world. The only way this century will be another American century is if we confront at last the price of our dependence on oil and the high cost of health care; the schools that aren’t preparing our children and the mountain of debt they stand to inherit. That is our responsibility.
In the next few days, I will submit a budget to Congress. So often, we have come to view these documents as simply numbers on a page or laundry lists of programs. I see this document differently. I see it as a vision for America – as a blueprint for our future.
My budget does not attempt to solve every problem or address every issue. It reflects the stark reality of what we’ve inherited – a trillion dollar deficit, a financial crisis, and a costly recession.
Given these realities, everyone in this chamber – Democrats and Republicans – will have to sacrifice some worthy priorities for which there are no dollars. And that includes me.
But that does not mean we can afford to ignore our long-term challenges. I reject the view that says our problems will simply take care of themselves; that says government has no role in laying the foundation for our common prosperity.
.....
Expect to See Some Budget Cuts on Thursday:
Yesterday, I held a fiscal summit where I pledged to cut the deficit in half by the end of my first term in office. My administration has also begun to go line by line through the federal budget in order to eliminate wasteful and ineffective programs. As you can imagine, this is a process that will take some time. But we’re starting with the biggest lines. We have already identified two trillion dollars in savings over the next decade.
In this budget, we will end education programs that don’t work and end direct payments to large agribusinesses that don’t need them. We’ll eliminate the no-bid contracts that have wasted billions in Iraq, and reform our defense budget so that we’re not paying for Cold War-era weapons systems we don’t use. We will root out the waste, fraud, and abuse in our Medicare program that doesn’t make our seniors any healthier, and we will restore a sense of fairness and balance to our tax code by finally ending the tax breaks for corporations that ship our jobs overseas.
.....
The Tone of Political Debate (Or 'What I've Figured Out To Say that Republicans Haven't'):
I know that we haven’t agreed on every issue thus far, and there are surely times in the future when we will part ways. But I also know that every American who is sitting here tonight loves this country and wants it to succeed. That must be the starting point for every debate we have in the coming months, and where we return after those debates are done. That is the foundation on which the American people expect us to build common ground.
.....
Where American Inspiration Comes From:
But in my life, I have also learned that hope is found in unlikely places; that inspiration often comes not from those with the most power or celebrity, but from the dreams and aspirations of Americans who are anything but ordinary.
I think about Leonard Abess, the bank president from Miami who reportedly cashed out of his company, took a $60 million bonus, and gave it out to all 399 people who worked for him, plus another 72 who used to work for him. He didn’t tell anyone, but when the local newspaper found out, he simply said, ''I knew some of these people since I was 7 years old. I didn't feel right getting the money myself.”
I think about Greensburg, Kansas, a town that was completely destroyed by a tornado, but is being rebuilt by its residents as a global example of how clean energy can power an entire community – how it can bring jobs and businesses to a place where piles of bricks and rubble once lay. “The tragedy was terrible,” said one of the men who helped them rebuild. “But the folks here know that it also provided an incredible opportunity.”
And I think about Ty’Sheoma Bethea, the young girl from that school I visited in Dillon, South Carolina – a place where the ceilings leak, the paint peels off the walls, and they have to stop teaching six times a day because the train barrels by their classroom. She has been told that her school is hopeless, but the other day after class she went to the public library and typed up a letter to the people sitting in this room. She even asked her principal for the money to buy a stamp. The letter asks us for help, and says, “We are just students trying to become lawyers, doctors, congressmen like yourself and one day president, so we can make a change to not just the state of South Carolina but also the world. We are not quitters.”
in re: Sun Rises, Market Falls
@ 7:15 PM
George Bittlingmayer and Thomas Hazlett, the professors whose article I had criticized ("Sun Rises, Market Falls") for its assertion that the stock market had reacted negatively to the stimulus package, have issued to me a reply of their own. It is reprinted, in full, below. I will have a response to their response in a separate thread.
To: 538.com
From: George Bittlingmayer & Thomas Hazlett
Date: 23 Feb. 2009
Re: Response to posted critique
Nate Silver comments on our recent article using the descriptors “stupid” and “unapologetically idiotic,” suggesting that President Obama’s heralded campaign to raise the level of civil discourse is yet a work in progress. We’d like, however, to do our little part in that effort, responding to the substance of Silver’s objections that are not “unapologetically idiotic” but, in our opinion, wrong.
Our article, “The Market is Shorting Obama’s ‘Stimulus,” reported on investor reaction to the recent legislation put forth, and successfully enacted, by the Administration. While macroeconomic intervention anticipated to increase economic growth should be reflected in positive stock returns, we find Dow Jones Index movements generally negative vis-a-vis the stimulus plan. Our take, based on this and other evidence, was that the market is looking for effective reform of the banking sector; stimulus-without-end is at best a distraction and, based on the evidence, a big fat downer.
Silver lodges two objections. First, that the market response may as easily be a verdict that the stimulus was too small as that it was too large. Second, that we cherry-pick our data points and count only DJI downturns, ignoring positive reactions to the stimulus package. On the first point: in theory yes, but in practice unlikely. On the second point: Silver mis-states the positive reaction to Obama policies, which have been (as we stated) a reaction to good news for reform of the financial sector, not to the advance of the Obama “stimulus.” No evidence he cites undermines our conclusion that the fiscal plan has been met with negative movements in the DJI.
Objection 1. Were the market shorting the stimulus because it was lower than expected our basic conclusion would still be correct: the market is shorting Obama’s stimulus. The “too little” interpretation is implausible, however. First, a substantially larger deficit package would have been unlikely to pass Congress. As it was, the most important news generated following the Obama plan’s introduction was the measure narrowly passed because three Republican Senators endorsed it (and refused to back a filibuster). Market investors would not likely have held expectations that were disappointment by the announcement of a plan that was “too small” when the package was effectively the maximum that could be obtained.
Second, the size of the U.S. plan is extremely large by historical U.S. standards and by current international standards. The Obama plan costs about 4% of 2009 GDP and raises the deficit to about 12%. As noted in our article, this deficit is twice the previous largest in post-WWII American, and far higher than any during the Great Depression of the 1930s. Other leading countries are today much below both levels. The IMF is urging countries to enact stimulus measures equal to 2% of GDP, and having limited success. In terms of 2009 deficits, France is 4.4% of GDP; Germany’s only 3%. It begs credulity to think that investors were expecting the U.S. deficit to exceed international debt financing levels by even larger margins. That a Democratic Party operative says that the greatest danger is in “too little” is fully consistent with this. When advancing a political agenda, one inevitably seeks to undercut the strongest counter-argument. The warning in the WSJ report signals that many were surprised by the scope of the deficit.
Objection 2. As for sample selection, Silver’s post notes that we did not include the Jan. 29 event featuring House passage of the stimulus bill, when the DJI exhibited a large negative return (-2.7% one day return). We excluded this event precisely because its implications were ambiguous. Republicans were unified in opposition; until this point the bipartisan plan was afforded a reasonable chance of success. But, by the same token, the Democrats were almost entirely unanimous in support. This had also been in doubt. We did not count House passage a pro-stimulus event, which would support our conclusion. And we disagree with Silver, who claims that we should count it as a clear anti-stimulus event.
Silver also states that our bias is revealed in omitting the Obama press conference held in Chicago:
Here Silver misreads our paper. We explicitly take the large positive reaction to the news that Timothy Geithner would be named Treasury Secretary on Friday, Nov. 21, as evidence that the markets favorably viewed the choice. The three-day return for this event includes the 400 point jump on Monday, Nov. 24. That day (Monday, Nov. 24) also featured the official announcement of Geithner and other members of the economic policy team. But the Administration’s stimulus plan had still to be released; neither the WSJ article cited by Silver nor other news reports revealed its size. Indeed, the CBS story that day -- Obama Introduces Economic Team – noted:
The fact that the ultimate magnitude of the plan was considerably under-estimated by the top-end estimate given prior to its announcement is consistent with our view that new information was later revealed. And, when it was, the market reacted negatively.
There is surely room for a friendly exchange on the methods used and the conclusions reached in interpreting stock market reactions to the Obama stimulus plan. We would be happy to have one.
George Bittlingmayer, University of Kansas
Thomas Hazlett, George Mason University
To: 538.com
From: George Bittlingmayer & Thomas Hazlett
Date: 23 Feb. 2009
Re: Response to posted critique
Nate Silver comments on our recent article using the descriptors “stupid” and “unapologetically idiotic,” suggesting that President Obama’s heralded campaign to raise the level of civil discourse is yet a work in progress. We’d like, however, to do our little part in that effort, responding to the substance of Silver’s objections that are not “unapologetically idiotic” but, in our opinion, wrong.
Our article, “The Market is Shorting Obama’s ‘Stimulus,” reported on investor reaction to the recent legislation put forth, and successfully enacted, by the Administration. While macroeconomic intervention anticipated to increase economic growth should be reflected in positive stock returns, we find Dow Jones Index movements generally negative vis-a-vis the stimulus plan. Our take, based on this and other evidence, was that the market is looking for effective reform of the banking sector; stimulus-without-end is at best a distraction and, based on the evidence, a big fat downer.
Silver lodges two objections. First, that the market response may as easily be a verdict that the stimulus was too small as that it was too large. Second, that we cherry-pick our data points and count only DJI downturns, ignoring positive reactions to the stimulus package. On the first point: in theory yes, but in practice unlikely. On the second point: Silver mis-states the positive reaction to Obama policies, which have been (as we stated) a reaction to good news for reform of the financial sector, not to the advance of the Obama “stimulus.” No evidence he cites undermines our conclusion that the fiscal plan has been met with negative movements in the DJI.
Objection 1. Were the market shorting the stimulus because it was lower than expected our basic conclusion would still be correct: the market is shorting Obama’s stimulus. The “too little” interpretation is implausible, however. First, a substantially larger deficit package would have been unlikely to pass Congress. As it was, the most important news generated following the Obama plan’s introduction was the measure narrowly passed because three Republican Senators endorsed it (and refused to back a filibuster). Market investors would not likely have held expectations that were disappointment by the announcement of a plan that was “too small” when the package was effectively the maximum that could be obtained.
Second, the size of the U.S. plan is extremely large by historical U.S. standards and by current international standards. The Obama plan costs about 4% of 2009 GDP and raises the deficit to about 12%. As noted in our article, this deficit is twice the previous largest in post-WWII American, and far higher than any during the Great Depression of the 1930s. Other leading countries are today much below both levels. The IMF is urging countries to enact stimulus measures equal to 2% of GDP, and having limited success. In terms of 2009 deficits, France is 4.4% of GDP; Germany’s only 3%. It begs credulity to think that investors were expecting the U.S. deficit to exceed international debt financing levels by even larger margins. That a Democratic Party operative says that the greatest danger is in “too little” is fully consistent with this. When advancing a political agenda, one inevitably seeks to undercut the strongest counter-argument. The warning in the WSJ report signals that many were surprised by the scope of the deficit.
Objection 2. As for sample selection, Silver’s post notes that we did not include the Jan. 29 event featuring House passage of the stimulus bill, when the DJI exhibited a large negative return (-2.7% one day return). We excluded this event precisely because its implications were ambiguous. Republicans were unified in opposition; until this point the bipartisan plan was afforded a reasonable chance of success. But, by the same token, the Democrats were almost entirely unanimous in support. This had also been in doubt. We did not count House passage a pro-stimulus event, which would support our conclusion. And we disagree with Silver, who claims that we should count it as a clear anti-stimulus event.
Silver also states that our bias is revealed in omitting the Obama press conference held in Chicago:
And how about November 24th, when Obama rolled out his economic advisory team and prompted the Wall Street Journal headline "Obama Signals Big Stimulus Plan"? Bittlingmayer and Hazlett forget to mention this date. And little wonder why: the Dow had closed up by almost 400 points.
Here Silver misreads our paper. We explicitly take the large positive reaction to the news that Timothy Geithner would be named Treasury Secretary on Friday, Nov. 21, as evidence that the markets favorably viewed the choice. The three-day return for this event includes the 400 point jump on Monday, Nov. 24. That day (Monday, Nov. 24) also featured the official announcement of Geithner and other members of the economic policy team. But the Administration’s stimulus plan had still to be released; neither the WSJ article cited by Silver nor other news reports revealed its size. Indeed, the CBS story that day -- Obama Introduces Economic Team – noted:
[Pres. Obama] declined to say how big a spending package he wants to revive the economy, but he said, "It's going to be costly." Some Democratic lawmakers are speculating about a two-year measure as large as $700 billion.
The fact that the ultimate magnitude of the plan was considerably under-estimated by the top-end estimate given prior to its announcement is consistent with our view that new information was later revealed. And, when it was, the market reacted negatively.
There is surely room for a friendly exchange on the methods used and the conclusions reached in interpreting stock market reactions to the Obama stimulus plan. We would be happy to have one.
George Bittlingmayer, University of Kansas
Thomas Hazlett, George Mason University
Steele's Idle Threat
@ 2:52 PM
Republican chairman Michael Steele took Neal Cavuto's bait and suggested that he might be amendable to punishing the three Republican senators -- Susan Collins, Olympia Snowe, and Arlen Specter -- who voted for the stimulus package by supporting primary challenges and/or cutting off funding.
There's just one problem with this. In Pennsylvania and especially in Maine, having a (R) by your name is a liability, not an asset. With leaners included, Democrats have roughly a 19-point partisan ID advantage in Maine and 16 points in the Keystone State. Collins, Snowe and Specter get re-elected in spite of being Republican, not because of it.
Theoretically, moreover, there would be little to stop any of them from pulling a Jeffords and caucusing with the Democrats. If one assumes that the principal motivation of each Senator is to win re-election -- and that's never a bad guess -- then the three Republicans must already be wondering whether life might be easier in the Democratic Party (or more likely, as independents who caucused with the Dems). If Steele pushes too far, he risks actuating this outcome.
There's just one problem with this. In Pennsylvania and especially in Maine, having a (R) by your name is a liability, not an asset. With leaners included, Democrats have roughly a 19-point partisan ID advantage in Maine and 16 points in the Keystone State. Collins, Snowe and Specter get re-elected in spite of being Republican, not because of it.
Theoretically, moreover, there would be little to stop any of them from pulling a Jeffords and caucusing with the Democrats. If one assumes that the principal motivation of each Senator is to win re-election -- and that's never a bad guess -- then the three Republicans must already be wondering whether life might be easier in the Democratic Party (or more likely, as independents who caucused with the Dems). If Steele pushes too far, he risks actuating this outcome.
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