Category: Uncategorized

The Inconvenient Truth About Today’s College Grads

Posted on by The Progressive Policy Institute

The job market for new college graduates is healing, but very slowly. The unemployment rate for new college grads was 7.4% in the 12 months ending November 2011, just the same as a year earlier (by our definition, ‘new college graduates’ are people aged 21-26 with a bachelor’s only). That’s up from 3.9% in 2007, according to our tabulations of the Current Population Survey.

And for today’s college grads, a lack of jobs is not the worst of their problems. They are getting the short end of the stick, and the stick is just getting shorter as college costs creep ever higher. Over the last decade, the average amount of student debt for college graduates increased by a staggering 25%, in constant dollars. Yet the reality is this is not surprising, given how tuition costs have skyrocketed in the last ten years. According to the Department of Education, tuition costs and fees across all four-year colleges and universities increased by 32 percent from 2000-2010, with public institutions showing an average increase of 40 percent, all in constant dollars. Families are struggling to keep pace, which lead to two-thirds of 2010 college grads taking on debt before they even finished school.

What’s more, as student debt for young college graduates becoming a bigger burden, their real wages are falling. Over 2000-2010, average wages for full-time workers aged 25-34 with only a Bachelor’s degree fell by 15% percent, after adjusting for inflation. The same jobs their peers got just ten years earlier are paying less. So, just as college is getting more expensive, graduates are less able to pay for it.

This is an inconvenient truth that cannot be wished away. College grads are an important segment of the advanced skill workforce that we are relying on to get America moving again. Instead we find too many them living in tents, spending valuable time wondering how Adele could feasibly “set fire to the rain” instead of developing the next cancer treatment, the next manufacturing technology, or the next software designed to protect America’s borders. If they can’t find work, then where does that leave the rest of us? Perhaps we’ll all be living in tents, playing Hacky Sack and Frisbee, sooner than we think. Like it or not, this truth is here, and until we address it college grads will only become more frustrated and more disconnected. With good reason.

Read more on the debt burden facing today’s college grads: The Payback Stress Index: A New Way to Measure the Pain of Student Debt.

The Payback Stress Index: A New Way to Measure the Pain of Student Debt

Posted on by The Progressive Policy Institute

For new college graduates, the world is their oyster. Without many of the real-world burdens the rest of us face, they can do anything they set their mind to.

That is, unless they start their careers staggering under a pile of student debt. It would appear that student debt is one rather onerous real-world burden bestowed upon college graduates the day they are handed their diplomas—and this burden is causing them more stress now than at any point in the last decade.

Using data on average student debt and wages for young college grads, PPI has calculated the Payback Stress Index. This new measure enables us to quantify, for the first time, the increasing burden of student borrowing for today’s college graduates.

Based on the Payback Stress Index, PPI finds that paying off college debt was 58% more economically stressful for students who graduated in 2010 compared with students who graduated in 2000. Specifically, we calculated how long it would take to pay back the average student loan, given the average earnings of full-time workers aged 25-34 with only a bachelor’s degree. We then indexed that calculation to what the average repayment time was in 2000, assuming an interest rate of 6 percent, and assuming that the representative college graduate paid 5 percent of earnings at each repayment. The chart below of PPI’s Payback Stress Index maps the rise in financial stress facing each class of college graduates.

Climbing Stress Mountain, No End in Sight

The Payback Stress Index allows us to compare different graduating classes within a single framework. To be sure, the PPI Payback Stress Index works with averages, and uses certain assumptions that may not hold true for every graduate—each college graduate with a student loan has their own repayment term and some were able to take on no debt at all. We’re also assuming real earnings don’t change throughout the repayment period, which affects how long it takes to repay student loans.

Still, the sharp climb in student debt payback stress has no end in sight—leading young college graduates to wonder when, or if, they will ever make it to the top and come down the other side. It’s no wonder the younger generation has started giving the traditional benefits of going to college a second thought.

Download the entire report:1.2011-Carew_The-Payback-Stress-Index_A-New-Way-to-Measure-the-Pain-of-Student-Debt

Campaign finance: Calling time-out in money chase

Posted on by The Progressive Policy Institute

PoliticoPPI’s Executive Director Lindsay M. Lewis argues for a time-out from the nonstop campaign in today’s Politico:

Partisan gridlock is the standard explanation for why Congress gets so little done these days. But there’s another reason for lawmakers’ dwindling productivity: They spend too much of their time asking for money instead of legislating.

While there’s no shortage of ideas for campaign finance reform, many run afoul of Supreme Court rulings that treat political donations as a protected form of free speech. But there’s a simple way to ease the fundraising burden that doesn’t require amending the Constitution or passing new laws: Call a “time-out” on collecting cash in non-campaign years.

Specifically, Congress should amend its ethics rules to require an off-year “fundraising quiet period.” House members would be forbidden to accept campaign donations except during an election year. For senators, the time out would apply through the first four years of each six-year term — leaving the last two years to fundraise.

Read the entire op-ed.

Election Watch: Romney Marches On

Posted on by The Progressive Policy Institute

After a campaign often described as “boring,” a New Hampshire Republican electorate showing no great signs of excitement performed its expected duty on January 10, giving Mitt Romney a solid win and making it increasingly difficult to see a path to the nomination for anyone else.

Romney’s 39 percent of the vote in New Hampshire was about what the polls had long predicted, but some last-minute turbulence in surveys and speculation that Paul or even Huntsman could pull an upset reset expectations nicely for Mitt, making his comfortable win look formidable. Paul’s 23 percent of the vote was also pretty predictable, and now that his two best states are behind him, we can expect his campaign to focus on small caucus states where it’s easy to pack rooms. Huntsman, having staked his entire campaign on a New Hampshire breakthrough, campaigning virtually nowhere else, may talk bravely of his third-place (17 percent) finish as giving him a “Ticket to Ride” to later states, but it’s hard to see much of a constituency for his defy-the-Tea-Party campaign in more conservative parts of the country. But like everyone else persisting in this strange nomination contest, Huntsman can help prevent other candidates from consolidating the non-Romney vote, at least until the money runs out.

If there was any surprise in New Hampshire, it’s probably how poorly the “true conservative” candidates performed. Newt Gingrich, who had the coveted endorsement of the New Hampshire Union-Leader, narrowly finished fourth (with 10 percent) ahead of Iowa co-winner Rick Santorum (9 percent), who clearly did not get much of a “bounce.” Rick Perry made no pretense of campaigning in New Hampshire, but still, it’s a bit shocking to see this one-time bully-boy of the field finishing just ahead of Buddy Roemer, with less than one percent of the vote.

Now the campaign will quickly move to its crucial southern phase, with primaries in South Carolina on Saturday, January 21 and in Florida on January 31. Victories by Mitt Romney in both would pretty much wrap up the nomination for him, and the latest polls from South Carolina and Florida have shown him likely to do just that.

Indeed, at the moment the biggest threat to Romney’s candidacy isn’t so much a rival, but a line of attack by rivals that could easily carry over into the general election. A Super PAC (Winning the Future) supporting Newt Gingrich, and brandishing a $5 million contribution from casino magnate Sheldon Adelson has produced a series of ads viscerally attacking Romney’s firm, Bain Capital, for killing jobs and companies in South Carolina. Somewhat more subtly, the ads also associate Romney with Wall Street malefactors, not the most popular people in the country right now. And there’s hardly a millisecond in the ad copy released so far that could not be used against Romney by pro-Obama forces later.

Given the destruction of Newt Gingrich’s front-running candidacy in Iowa by negative ads run by a pro-Romney Super PAC, this development is not terribly surprising, though the lack of inhibition with which both Gingrich and Rick Perry are pursuing the Bain attack line is interesting coming from conservatives who systematically oppose regulation of Wall Street. But the immediate question is whether Winning the Future will have a significant impact in South Carolina, where they have already bought $1.6 million in pre-primary TV ads and could buy more than double that figure.

The Palmetto State is clearly Rick Perry’s Last Hurrah, and right-wing opinion-leader Erick Erickson (at whose RedState annual meeting in South Carolina the Texan announced his candidacy back in August) reports that Perry’s South Carolina effort looks impressive. If so, it hasn’t shown up in the polls, where Perry is running consistently in the mid-single digits in the state. Hard-core anti-Romney conservatives in South Carolina seem evenly split between Gingrich and Santorum, and only if they begin to coalesce around a single candidate could the destructive work of Winning the Future bear fruit, other than in declining favorability ratings for Romney. The poohbah who could easily resolve the indecision among South Carolina conservatives, Sen. Jim DeMint, has said he does not intend to endorse anyone this cycle, and, moreover, has predicted Romney will win his state. There’s no reason at present to doubt he is right.

But without question, the assault on Bain Capital will be watched closely by Democrats, not just because it might hurt Mitt Romney, but because it will test the latent hostility of the voting public (even its most conservative segment) to some of those “wealth creators” Republicans are forever lionizing.

Photo credit: DonkeyHotey

Romney on a Roll

Posted on by The Progressive Policy Institute

Mitt Romney’s campaign for the Republican nomination is unfolding like a well-crafted business plan. He hit his numbers in New Hampshire last night, saw his most dangerous rivals tumble, and reinforced the aura of inevitability that surrounds his candidacy.

Everything seemed to fall Romney’s way. After his dizzying ascent in Iowa, Rick Santorum fell back to earth with a fifth-place finish. Newt Gingrich, who went snarling across New Hampshire like a wounded beast, flamed out. Ron Paul came in second, which suits Romney just fine. Paul’s libertarian purism inspires cult-like fervor among his young followers, but it will never command majorities in GOP primaries.

Yes, it was a good night for John Huntsman, but probably the best he’ll have this year. He did well among independents, moderates and voters who don’t like the Tea Party, a not-so-representative sample of the GOP electorate. He has nowhere to go, and it seems unlikely Romney would put another Mormon on his ticket.

Now it’s on to South Carolina, where Romney already leads, and where Paul’s useful presence will inhibit last-ditch attempts by conservatives to form an “anybody but Mitt” coalition. If he wins in the South, the race is effectively over.

What are the implications for progressives of Romney’s emergence as President Obama’s likely opponent in November? Let me offer four:

First, don’t underestimate Romney. It’s hard not to be impressed by Romney’s methodical, disciplined march to the nomination, even if, like me, you are appalled by his willingness to change positions that get in his way.

On the other hand, Romney has a big structural advantage that is usually decisive in Republican nominating battles. No, it’s not money, it’s the fact that he’s the establishment candidate. Romney ran second to John McCain in 2008, paying his dues and learning lessons that have helped him avoid mistakes this time around. Now he’s the GOP heirarchy’s presumptive choice, even if most conservatives don’t much like or trust him.

Romney may have tepid support from the GOP base, he may be pathetically unable to connect with ordinary Americans, but he is a competent, calculating machine who knows how to map and adapt to challenging political terrain, whether it’s very liberal Massachusetts or the radically conservative Iowa caucuses.

Second, electability is trumping ideology. Nearly 60 percent of New Hampshire voters said their top priority was a candidate who could defeat President Obama. Only 14 percent said they were looking for a “true conservative.”

This of course is bad news for President Obama, who would have loved to face a Tea Party favorite like Michele Bachman, Rick Perry, or even Newt Gingrich. Then the fall campaign would have been about GOP extremism rather than the economy. That the Tea Party’s least favorite candidate appears headed toward nomination is a tacit admission that the party has veered dangerously from the political mainstream.

Third, an Obama-Romney match-up will be a fight for the political center. Newt Gingrich is right: Romney began his career as a “Massachusetts moderate.” That means he will have more “crossover appeal” to swing voters than his GOP rivals, which he’ll need to offset minimal enthusiasm from conservatives. Given his now legendary “flexibility,” it shouldn’t be hard for Romney to pivot back to the center. He might even warm to Romneycare again, to demonstrate his pragmatic acceptance of government’s role in health care, and of his willingness to work across the aisle to get things done.

In any case, neither candidate can rely on a mobilizing their base to win election. That means Obama will have to work harder to win back independent and moderate voters who deserted his party in 2010.

Fourth, the economy is the issue. Much of Romney’s “electability” stems from his cred as a successful businessman and manager who knows how the real economy works. As he made clear in his victory remarks last night, Romney intends to make the 2012 election another referendum on Obama’s economic performance.

Democrats hope to turn Romney’s success as a corporate turnaround artist against him, echoing Gingrich’s claims Bain Capital “looted” firms and cost workers their jobs. But Obama should be leery of hitting the “vulture capitalism” theme too hard.

The swing voters who will decide the election want action to fix the economy, not scapegoating. Rather than allow himself to be lured into a debate over what’s he done to fix it, Obama needs to frame the race prospectively, as a choice between competing paths to economic renewal. His top priority must be to develop a bolder, more compelling plan for reviving jobs, spurring economic innovation, and restoring U.S. competitiveness.

Photo credit: WEBN-TV

Washington Monthly: The Myth of American Productivity

Posted on by The Progressive Policy Institute

PPI Chief Economic Strategist Michael Mandel, writing for the Washington Monthly, challenges the widespread complacency on the right and on the left about American productivity growth:

“In 1939, when John Steinbeck completed The Grapes of Wrath—a heart-wrenching tale of a family of sharecroppers forced out of their home during the Depression— roughly one-quarter of the U.S. population still lived on farms. Today, family farms are increasingly rare, and less than 2 percent of employed Americans work in agriculture.

“But rather than viewing the decline of farming jobs as a tragedy, economists almost invariably count agriculture as a shining American success—the triumph of productivity. And why not? A handful of farmers using GPS-equipped combines and sophisticated moisture sensors can grow far more food than the population of an entire rural county in 1939. Food has become so plentiful and cheap in the United States that it has been blamed for the increase in obesity. And agricultural products have become one of the country’s chief exports, totaling more than $115 billion in 2010.

“As the story of the American economy is usually told, the shrinkage of agricultural employment was a tough but essential part of the march toward higher incomes and a better standard of living. What’s more, this example has been cited time and again to explain subsequent upheavals in employment. In 2003, N. Greg Mankiw, a Harvard economist who then headed President George W. Bush’s Council of Economic Advisers (CEA), told a Washington audience that the more recent fall in manufacturing jobs was an “inescapable” consequence of rapid productivity growth: ‘The long-term trends that we have recently seen in manufacturing mirror what we saw in agriculture a couple of generations ago.'”

Read the complete article at the Washington Monthly.

Can Insourcing Be A Major Source of Job Creation?

Posted on by The Progressive Policy Institute

Can insourcing be a major source of job creation for the U.S.? The answer is yes, with a caveat. Widespread insourcing–or import recapture, as I like to call it–won’t happen without some help from government policy. In particular, the main role of the government is to provide better data about the relative cost of insourcing vs outsourcing.

Why would better statistics help create new jobs in the U.S. and accelerate insourcing? The reason is hysteresis. Hysteresis is defined as a “lag in response” when the forces acting on a situation have changed. Originally hysteresis worked in favor of keeping jobs in this country, because businesses didn’t want to switch their production to a country thousands of miles away, even if it might be cheaper.But now, with production firmly established in China, India, Mexico, and other low-cost countries, hysteresis is working against the U.S.

As a result, even if production costs have converged, there are three big obstacles to bringing jobs back to the U.S.

First, it is expensive to switch suppliers, especially for noncommodity purchases. Contracts have to be negotiated, the quality of the product has to be checked, suppliers have to be integrated into a supply chain. Wal-mart would rather work with suppliers that it already has been doing business with.

Second, it may be expensive and time-consuming to recreate a production ecosystem here in the U.S., especially if an industry has been hollowed out. That is, if you want to start making shoes in the U.S., it’s easier if you have a repairman in the area who knows have to fix shoe manufacturing machinery.

Third, it may be expensive for small and medium-size companies to determine if switching suppliers will raise or lower costs. That’s especially true if all of their current suppliers are in one country. Big multinationals can afford to run studies on relative costs of the different countries, but small and medium businesses cannot.

One cheap way of boost insourcing is for the Bureau of Labor Statistics to provide better data about the relative costs of production in the U.S. versus production overseas. The BLS already collects information on import prices and domestic production prices, but it doesn’t compare the two.

Assuming that production costs really are converging, better information would make it easier for companies to justify the decision to bring jobs back to this country. Right now the safe decision for executives is to continue sourcing from China and India, since they are generally accepted to be ‘low-cost’ countries. It’s like they used to say, you can’t get fired for buying from IBM. It’s the same today–execs can’t get fired for buying from China and India, because everyone assumes that prices are lower there.

In November 2011 PPI proposed a Competitiveness Audit, to be done by the BLS, to help boost insourcing of jobs. For each industry, the Competitiveness Audit would compare import and domestic prices, and give a sense about the size of the gap and whether it was widening or narrowing. This information would be crucial for identifyng the industries where insourcing makes sense. The Competitiveness Audit would also give executives a sense of security that they were making the right decision by bringing back jobs.

A Competitiveness Audit is a good way of accelerating the rate of insourcing. The goal here is to overcome hysteresis and inertia, and create a sort of bandwagon effect of jobs moving back to this country. Better information is essential to create new jobs.

Crossposted from Innovation and Growth.

The Truth About New Hampshire: It’s the Government Spending, Stupid

Posted on by The Progressive Policy Institute

The AtlanticPPI Chief Economic Strategist Michael Mandel explains in the Atlantic how government spending is responsible for nearly all of the income and job growth in New Hampshire, contrary to what GOP presidential candidates might say:

New Hampshire, scene of the upcoming GOP presidential primary, seems like the perfect illustration of the Republican low-tax philosophy. With no state income tax and one of the lightest tax burdens in the U.S., New Hampshire enjoys an 8.3% poverty rate, the lowest in the country, and an unemployment rate of only 5.2% as of November, far below the national rate.

But here’s a surprise: The “Live Free or Die” State, having lost much of its manufacturing base, seems to be thriving mostly on a steady diet of government spending and public jobs. For one, government employment in New Hampshire is up 14% since 2000, compared to 6% for the country as a whole.

What’s more, real personal income growth in New Hampshire over the past decade has been driven almost entirely by government spending. Here’s how it breaks down: From 2000 to 2010, real personal income in the state rose by $4.6 billion, in 2005 dollars. Out of that, $3 billion, or 66%, came from the growth of government transfer payments such as Medicare, Medicaid, and Social Security. Another $1.4 trillion, or 31%, came from increased wages and benefits to government employees (numbers are rounded and in 2005 dollars).

Read the full article at the Atlantic.

Why Obama Needs to Cut and Invest

Posted on by The Progressive Policy Institute

This article is part of a a series of international responses to Policy Network‘s discussion paper In the black Labour: Why fiscal conservatism and social justice go hand-in-hand.

To most Americans, fiscal responsibility is a question of political morality. If Democrats allow the debate to be framed as a choice between more deficit spending and debt reduction, they lose

Much to the perplexity of US liberals, the politics of debt reduction dominated Washington in 2010, despite a faltering economic recovery.

No one was more incensed by the seeming illogic of this than Paul Krugman. The influential New York Times columnist railed often against “premature austerity” and urged President Obama instead to open the spigots of federal spending. It was the standard Keynesian prescription, but it betrayed a political tin ear. To a public alarmed by large-scale public borrowing and spending, it sounded like throwing good money after bad.

After 2007, US budget deficits ballooned as the Bush and Obama administrations spent heavily to bail out the big banks (plus insurance and auto companies) and counter the worst recession since the 1930s. The federal deficit, $469 billion in 2008, zoomed to an eye-popping $1.3 trillion in 2011. Coming on top of the Bush tax cuts and two costly wars, this emergency spending pushed the US national debt over 70% of GDP.

Had this torrent of spending – reinforced by generous doses of monetary “easing” – unlocked business investment and cut the jobless rate, all might have been forgiven. But it didn’t, and public apprehension about exploding debts amid a jobless recovery rose steadily, reaching a crescendo in the 2010 elections. Republicans swept House races and, lashed on by the Tea Party, stormed into Washington determined to cut government down to size.

Thus 2011 became a year of fiscal brinkmanship. First the government was almost shut down last spring when budget talks broke down. Then came the summer showdown over raising the debt ceiling, which ended when Obama blinked and agreed to GOP demands for spending cuts rather than let America default on its debts for the first time ever. In the fall, a bipartisan “supercommittee” that was granted extraordinary powers to rein in deficits failed to reach agreement, triggering automatic domestic spending cuts in 2013.

Despite such nips and tucks, US leaders thrice failed to come to grips with the structural causes of America’s debt crisis: tax revenues well below historic norms, and the rapid growth of public health and pension costs as the baby boomers throng into retirement. This ensures that the debate over how to control the national debt – $15 trillion and growing – will be front and centre in the 2012 presidential election.

The public’s top priorities are jobs and reviving US competitiveness. But fiscal discipline also matters to most voters, especially the moderates and independents who hold the balance in close races. Only by embracing both goals can progressives forge an electoral majority in 2012. If Obama and the Democrats allow the fiscal debate to be framed as a choice between more deficit spending or debt reduction, they lose. If instead they champion fiscal restraint and focus the debate on the fairest and most growth-friendly way to achieve it, they can win.

That’s because Republicans have painted themselves in a corner by refusing to raise any new tax revenue to help solve the debt crisis. Americans don’t relish paying higher taxes, but they do want their elected leaders to work together to solve the country’s problems. House Republicans have repeatedly put their anti-tax dogma before their responsibility to govern, and have seen their public approval ratings tumble as a result.

In contrast, Obama appears eminently reasonable in calling for “shared sacrifice”, which in practice means reducing the debt with a mix of spending cuts and tax revenues. He has also put Republicans on the defensive for opposing tax hikes on the rich, even to pay for tax relief for working families.

But Obama can’t let his own party off the hook, either. If Republicans are in denial about the need for higher revenues, Democrats have yet to get serious about the other side of the fiscal equation – slowing the unsustainable cost growth of the big “entitlement” programmes: Medicare, Medicaid and Social Security. Washington has promised more to future retirees than it can afford to pay; the government recently put the funding gap at $34 trillion, many times larger than the entire US economy.

There’s nothing “progressive” about denying hard fiscal facts, yet many liberals cling to the habit of opposing any cuts in future benefits – even for wealthy Americans – as a breach of faith, if not a plot to kill social insurance in America. Not only is this stance blind to demographic and budget realities, it’s morally dubious as well.

If benefits for the elderly are deemed untouchable, then Congress will have to either raise taxes on everyone, including working families, or cut domestic spending to the bone, or both. Domestic spending (including defence) has already borne the brunt of the spending cuts agreed to last year. It is only 12% of the budget, but it includes all the key public investments progressives should be for – in infrastructure, education and workforce skills, science and technology – not to mention public health and safety and measures to alleviate poverty. To shield entitlements from cuts is, in effect, to give priority to retirees’ consumption over strategic investments in a more prosperous and equitable society.

There is little mystery over what it will take to solve America’s debt crisis. President Obama’s own Fiscal Commission says $4 trillion in debt reduction over the next decade is necessary to stabilise the national debt at around 60% of GDP. Hitting that ambitious target will require a political “grand bargain” in which Republicans accept increased tax revenues, and Democrats agree to trim benefits for affluent retirees in the future. Unfortunately, Obama’s reluctance to endorse his Commission’s blueprint has left his own party as well as the public in doubt about the depth of his commitment to fiscal stabilisation.

As the presidential race begins in earnest, Obama will come under growing pressure to offer bigger and more specific ideas for spurring economic growth and shrinking the national debt. He needs a concrete plan for restoring fiscal responsibility gradually, through a combination of tax and entitlement reform, while also boosting public investment. Properly sequenced, a “cut and invest” approach can attenuate the dilemma Krugman and others point to – the collision between the stimulative effect of public spending (and tax cuts) and the contractionary impact of fiscal retrenchment.

Adopting a 10-year framework for debt reduction will reassure nervous investors that Washington is determined to get its borrowing under control and protect the nation’s credit. By cutting debt service payments, it will redirect public spending from consumption to productive investment. It will reduce America’s dependence on foreign lenders (especially China) and rebuild the nation’s “fiscal reserve” so that it can borrow to meet future emergencies or downturns without plunging into Greek-style levels of debt.

The economic case for providing certainty about debt reduction is compelling. But most Americans don’t wear green eyeshades; for them, fiscal responsibility is a question of political morality. They see the nation’s runaway debt as emblematic of a corrupt political class that doles out slices of the public weal to privileged interests and rent-seekers in return for campaign contributions. The image of a bloated state that lives beyond its means powerfully buttresses the anti-government populism that resonates not only with Tea Partiers but also with the independent voters that progressives need to win back this year.

The good news for Obama is that the demands of economic growth and fiscal rectitude point in the same direction – away from America’s old economic model of debt-fueled consumption, towards a new progressive growth strategy based on higher levels of investment, faster innovation and expanded production.

Photo credit: Andrew.Speight

Will Marshall on Romney’s Win in Iowa

Posted on by The Progressive Policy Institute

PoliticoWill Marshall explains Mitt Romney’s big win in Iowa for Politico’s Arena:

“Let’s not overthink the Iowa result. Mitt Romney won big, pure and simple.

Despite dampening expectations, he finished first. Not a back trick for a candidate who has never had the support of more than a quarter of Iowa Republicans. Romney deftly played a divided field, laying low as one “real conservative” after another stepped into the spotlight, only to be dismissed by a fickle and unsettled electorate. Had Iowa been a two-man race again as it was in 2008, Romney would have finished a distant second, and someone else would be headed to New Hampshire with the Big Mo.”

Read the entire post.

Election Watch–After Iowa: Is the Right Ready to “Settle” for Mitt?”

Posted on by The Progressive Policy Institute

So voters finally got into the act in the Republican presidential nominating contest, and the results from Iowa were about what anyone reading the late polls might have expected. With Ron Paul apparently taking a bit of a hit from bad publicity about his extremist past and attacks on his current foreign policy views by other candidates, he fell just short of Romney and Santorum, who almost literally tied. In many respects, the caucuses were a re-run of 2008: turnout was very much the same despite all the talk about a super-psyched GOP base; the composition of caucus-goers was very similar; and Mitt Romney got about the same number of votes. The main difference is that Romney spent much less time in Iowa than in 2008, and more crucially, the non-Romney vote was more divided. It’s also significant as a sign of politics to come that Mitt didn’t have to spend nearly as much of his own money in 2012, because a “Super PAC” supporting him did the dirty work of destroying Newt Gingrich’s credibility with Iowa conservatives (with some help from Ron Paul’s campaign).

The free-falling Gingrich campaign did have enough energy left to beat Rick Perry in Iowa (Newt got 13 percent of the vote, Perry 10 percent), dealing a huge blow to the candidate still generally thought to be the only enduring threat to a Romney nomination (Perry considered dropping out of the race Tuesday night, but reconsidered, probably after taking a good long look at the poor positioning of the rest of the field in South Carolina and Florida). Michele Bachmann, the winner of the Iowa GOP straw poll back in August, which croaked Tim Pawlenty’s candidacy, had the wheels fall off in the final week before the caucuses and finished a poor sixth, subsequently folding what was left of her campaign.

So technically, at least, Rick Santorum, who benefitted mightily from a last-minute consolidation of social conservative support, is the unlikely winner of the conservative-alternative-to-Romney sweepstakes that Iowa hosted for so many months. I qualify his victory because there are many doubts about his post-Iowa viability, and aside from Paul, who will be in the race to the bitter end, there remains a slim possibility that Perry or Gingrich can rise from the dead to attempt one more comeback when the calendar turns to the South after New Hampshire. Indeed, one of the grand ironies of this entire contest is that perceptions of Romney’s weakness have kept candidates in the field who are mainly keeping each other from consolidating non-Romney support.

Santorum has spent little time outside Iowa, and does not have deep pockets. More importantly, he’s a career politician with a domestic policy record that troubles some conservatives (notably pundit Erick Erickson, who has taken to attacking Santorum regularly and savagely). As a conservative Catholic, he has ties to evangelical activists via the anti-abortion movement (in which he is heavily involved, taking positions that won’t wear well with more moderate voters), but does not have the kind of natural connections to southern political culture that 2008 winner Mike Huckabee enjoyed.

Given Romney’s big lead in New Hampshire, it’s unlikely Santorum will take the time and money to seriously challenge him there, though Newt Gingrich is promising to launch a vengeful attack on Mitt in the Granite State. But the next critical (and perhaps final) phase of the campaign could well be played out behind the scenes, as conservative opinion-leaders decide whether or not to get behind Romney and end the contest before it gets truly ugly and expensive. South Carolina’s Jim DeMint, for example, could send a very big signal that the battle to deny Romney the nomination has become too dangerous for the conservative movement to sustain. A Romney win in the Palmetto State would pretty much wrap things up unless Mitt does or says something uncharacteristically stupid, though rivals (obviously Paul, probably Gingrich, and perhaps even Huntsman if he chooses to spend his family fortune) may stick around in case that happens.

It bears repeating at this point that there are few signs of a general-election “conservative revolt” against a Romney-led ticket, beyond a smattering of evangelicals who really don’t like Mormons. The best way to describe the wingnut mood about this contest is that a Romney nomination would deny them their ideal aspiration of a Goldwater-style candidacy (one, of course, that won this time) aimed at repealing the entire Great Society/New Deal legacy. But that would be considered a tactical setback other than an intolerable defeat, simply delaying the great-gittin’-up-morning they are convinced is on the horizon once those vote-buying socialists in the Democratic Party are driven from power. An early Romney nomination victory, on the other hand, might save the candidate a lot of heartburn by giving conservative activists time to heal their wounds and get used to him as the nominee, while limiting the gestures he will have to make to earn their enthusiastic support, if not their trust or affection.

Nuclear Risk in Perspective: Making Fact-Based Energy Choices

Posted on by The Progressive Policy Institute

March 11, 2011 was a day of calamity the Japanese people will never forget. According to the National Police Agency of Japanthe Tōhoku earthquake and tsunami left 15,841 dead, 5,890 injured and 3,490 people missing (as of December, 2011). Mother Nature’s freakish, one-two punch also triggered the partial meltdowns of four reactors in the Fukushima Daaichi complex, one of the worst commercial nuclear power plant disasters in history.

The Fukushima incident has stoked nuclear dread around the world and led some to conclude that nuclear power is too risky. Perhaps the most dramatic shift in public attitudes has been in Germany, where a conservative-led government recently unveiled a plan to close down all the country’s nuclear power plants by 2022.

Americans, however, should not endorse this knee-jerk anti-nuclear policy. For the foreseeable future, nuclear power will remain a vital part of a balanced and realistic national energy portfolio. Moreover, as champions of reason and science, U.S. progressives have a responsibility to avoid panicky overreactions and instead undertake a clear-eyed assessment of the actual risks of nuclear energy.

Generating electricity—like getting out of bed in the morning, or any other human activity—carries inherent risks. That’s true regardless of the fuel used to generate power. Instead of carefully weighing and comparing such risks, however, some environmental activists have tried to pose a false choice between “clean” and presumably safe renewable fuels like wind, solar and geothermal energy, and “dirty” fossil fuels or allegedly “unsafe” nuclear power. This dichotomy has nothing to do with science.

No sensible person is against renewable energy. But it will probably be a long time—likely decades, not years—before such sources have a realistic prospect of providing the base load needs of our national economy, let alone meeting the growing requirements of the entire globe. The Obama administration takes a more realistic approach in including nuclear energy along with other non-carbon emitting sources in its “Clean Energy Standard.” To understand why this is the case, we first need to review a few of the often overlooked, but important subtleties of electrical power generation.

Download the memo.

Wingnut Watch: Ideology Versus Electability

Posted on by The Progressive Policy Institute

Up until now, the right-wing conquest of the Republican Party that reached critical mass immediately after Barack Obama’s election in 2008 has not involved a lot of soul-searching questions about the relative value of ideology and “electability.” Indeed, it’s been an article of faith on the right—for some dating all the way back to Phyllis Schlafly’s 1964 book A Choice Not An Echo—that insufficient ideological rigor was precisely the reason for the GOP’s electoral problems. And nothing much has happened since the beginning of 2009, when the GOP made the unusual decision to move away from the political center after two straight electoral debacles, to disabuse them of the idea that they would be rewarded at the ballot box for fully indulging their ideological appetites and thrilling the conservative activist base.

That may be about to change. The House Republicans’ rejection of a two-month stopgap agreement to preserve a payroll tax cut and extend unemployment benefits has finally earned the Tea Party Movement full blame for gridlock and dysfunction in Congress (an institution whose approval rating dropped to 11 percent last week according to Gallup). Opinion surveys indicate that the deeply satisfying sabotage game (i.e., deliberately screwing up the operations of the federal government and then benefitting from public disgruntlement with the competence of said federal government) conservatives have been playing may be coming to an end as Republicans become more firmly identified with unpopular positions on spending, taxes, and the willingness to cooperate across party lines. Even the president’s approval ratings are looking better by comparison.

In other words, Republicans are at long last having to choose between ideology and popularity—or to put it another way, between the “base” and the general electorate—and the current behavior of House Republicans indicates it’s no real contest: ideology comes first.

Many non-conservative political observers think the same choice is at the heart of the turbulent presidential nominating contest, and wonder if and when Republicans will finally “settle” on Mitt Romney as the obvious candidate with the best chance of winning in November. But polling on “electability” indicates that most actual rank-and-file Republicans think whatever candidate they happen to prefer is also the most electable (conservative opinion-leader Erick Erickson is hardly alone in arguing that regardless of the polls, Romney is actually the least electable of the viable candidates), and a steady majority appear to consider electability less important than ideology, values or “character.”

Yet less than two weeks before the Iowa caucuses, Romney’s prospects are indeed on the rise, but for reasons distinct from the ideology/electability choice. To put it simply, the long conservative search for a clear alternative to Romney seems to be terminally failing.

It’s now well-documented that the latest non-Romney to enjoy a surge in the polls, Newt Gingrich, is in deep trouble in Iowa. This is not necessarily a function of a national decline in support for the former Speaker—he continues to run ahead of or even with Romney among Republicans nationally–or (to cite one common CW theory) of some decision by the “Republican Establishment” to deep-six Gingrich on electability grounds. More prosaically, Newt is being savaged in Iowa by heavy negative advertising by Ron Paul and by a “super-PAC” supporting Romney, and he has neither the money nor the organization in the state to fight back. And far from focusing on electability, the anti-Gingrich ads aim at Gingrich’s conservative support by depicting him as an unprincipled flip-flopper and conventional Washington pol.

At the same time, Iowa conservatives appear incapable of uniting around any other candidate. Rick Perry is investing heavily in Iowa in time and money, but is showing relatively little movement in the polls. Both Michele Bachmann and Rick Santorum are moving up a bit in Iowa polls, but are aiming at largely the same evangelical conservative constituency. Two of the most prominent Iowa Christian Right leaders, Bob Vander Plaats and Chuck Hurley, have just endorsed Santorum, but could not convince the board of their own organization, FAMiLY Leader, to make an endorsement, reflecting deep ambivalence in their ranks.

At the moment, the odds are probably better than even that either Romney or Ron Paul will win Iowa. With Romney maintaining a big lead in New Hampshire polls, and also beginning to break the apparent 25 percent cap on his national support, an Iowa win, particularly if Paul finishes second and no other candidate appears to be consolidating conservative support, could give him unstoppable momentum. A Paul victory with Romney second could be nearly as good for Mitt, given Paul’s unpopularity with both rank-and-file conservatives and elites and the vast ammunition his record and radical utterances will provide for future negative ads.

A rebound by Gingrich in Iowa, or a last-minute surge by Perry or Santorum, could upset this scenario, but the fact that all three of these candidates have some grounds for optimism illustrates the problem facing conservatives determined to stop Romney.

If Romney wins, in other words, it won’t be because conservatives worried about November have chosen to elevate electability over ideology, but because the large field of candidates available to them has serially imploded, and time has run out for anything other than a desperate anybody-but-Romney rearguard action. At the same time, Romney himself has made just enough concessions to the rightward drift of his party to remain acceptable to all but bitter-enders and Mormon-haters.

Crazy things have been known to happen in Iowa in the last days before the caucuses, although the intercession of the Christmas holidays makes big changes in support levels unlikely. In any event, the invisible primary is finally coming to an end, and with it will expire the hopes of all but a very few candidates.

Photo Credit: Austen Hufford

Will Marshall on Republican Obstructionism

Posted on by The Progressive Policy Institute

PoliticoPPI President Will Marshall discussed how House Republicans continue to obstruct extension of payroll tax cuts and unemployment benefits in Politico’s Arena:

“‘Tis the season, apparently, for House Republicans to deck the halls of Congress with meanspirited obstructionism. In blocking extension of the payroll tax cut and unemployment benefits, they’ve delivered a loud “Bah, Humbug” to working Americans.”

Read the full post here.

Crowd Control: The Need for a Spectrum Management Mitigation Fund

Posted on by The Progressive Policy Institute

Whether it’s 4G cell phones, light-as-a-feather laptops or the latest tablet, Americans are enjoying a wireless revolution. In 2010, Americans typed, tapped, texted, and called on an estimated 300 million mobile devices.

But all this increased connectivity is taking a toll on the nation’s increasingly crowded airwaves. The Federal Communications Commission (FCC) warns of a “spectrum crunch” that could hit as early as 2013, given how quickly wireless traffic is growing.

Innovative companies are devising new ways to maximize spectrum efficiency so more users can take up less space. But while these advances deserve strong support, they’re also not cost-free. In some cases, existing “legacy” users must retrofit older and less efficient technologies to adjust to these new uses.

This brief proposes a “spectrum management mitigation fund” to help legacy users defray the inadvertent costs of adapting to innovations in the marketplace. This fund would involve no new federal money and instead would be financed from a portion of revenues from “voluntary incentive auctions”—a mechanism endorsed by the FCC to encourage more efficient spectrum allocation between current and prospective licensees.

Creating the fund would reconcile two goals: it would both encourage much-needed innovation while also acknowledging the legitimate concerns of users with older technologies. Moreover, it would obviate the politicization of spectrum management issues currently occurring in part due to the absence of a mitigation mechanism. For example, this fund could help re-solve the current controversy between the legacy GPS community and the wireless broadband start-up LightSquared—it could partially compensate legacy GPS users for the cost of retrofitting existing devices, thereby clearing the path for LightSquared to deploy its network.

With the benefits of spectrum innovation too great pass up, this fund could be an important next step to ensure Americans enjoy the next generation and beyond of new wireless technologies.

Read the entire report.