In these 16 states, home prices are down an average of 16 percent since October 2008—from a median of $160,596 to a median of $131,191 in December 2011.
The states included in the PPI analysis are among those hardest-hit by the housing crisis: Nevada, New Mexico, Arizona, Virginia, Ohio, Wisconsin, Michigan, Iowa, New Hampshire, Indiana, Colorado, Florida, Missouri, North Carolina and Pennsylvania.
PPI’s analysis is based on data derived from Zillow and the U.S. Census Bureau. The overall median home value for the battleground states is a weighted average based on the proportion of housing units in that state.
China may look like an unstoppable economic juggernaut, but it is increasingly beset at home by worker protests and strikes. Last June, for example, security officials in Zengcheng, a manufacturing city in southern China, fired tear gas at hundreds of migrant workers who smashed windows and overturned police cars after hearing the rumor that authorities had pushed a pregnant migrant street vendor to the ground.
Spreading labor unrest in China has large economic as well as political implications for Sino-American relations. Put simply, stronger rights for Chinese workers is good for America’s bottom line. By explaining our economic interest in empowering China’s workers, U.S. leaders could galvanize broad public support behind a more insistent push for individual and civil liberties in China. Too often, however, they fail to make that connection. They may deplore the way China arbitrarily limits speech and imprisons lawyers,
human rights watchdogs, religious leaders, and worker advocates. But they rarely note that empowering China’s workers would likely lead to higher wages and benefits, and therefore a shrinking labor cost advantage over U.S. competitors.
In this paper, I explore the vital link between the rights of Chinese workers and the competitive health of the American economy. If a nation has lax labor laws, or has good ones but doesn’t enforce them, local employers can keep wages down and produce goods at much cheaper cost. Moreover, if workers are unable to strike or effectively petition their employers because the legal system doesn’t guarantee freedom of speech and association, then their country is essentially subsidizing its companies, giving them an unfair advantage in the global economy.
Indeed, inconsistent labor law enforcement, inattention to workplace safety, and violations of binding legal contracts (such as wage agreements) have enabled Chinese manufacturers to hold down the price of Chinese labor. The labor cost differential, of course, is the main reason Chinese goods are significantly cheaper, even after they have been shipped to the United States. Raising labor standards in China will inevitably lead to raising the price of Chinese-produced goods, making goods produced by U.S. workers more competitive. That’s why strong U.S. support for the rights of China’s workers should be an integral part of Washington’s strategy of constructive engagement with Beijing. Not only is it the right thing to do from a human rights standpoint, it is also clearly in America’s economic interests as we seek a more balanced commercial relationship
with China.
More specifically, let me offer seven recommendations for U.S. policymakers:
Put human and worker rights at the center of U.S. diplomacy toward China.
Raise public awareness of the link between workers’ rights in China, and economic benefits for Americans.
Work closely with other liberal democracies to demand China’s adherence to its own labor laws and international standards.
Expand bilateral working groups on labor rights, so that these issues come up routinely in Sino-American relations.
Fund civil society groups that promote and defend workers’ rights.
Use trade as leverage to achieve progress on workers’ rights.
Ratify two key International Labour Organization protocols: the Freedom of Association and Protection of the Right to Organise Convention (1948), and the Right to Organise and Collective Bargaining Convention (1949). In advocating rights and liberties around the world, the U.S. must also lead by example.
PPI Chief Economic Strategist Michael Mandel, explains in The Atlantic how innovative developments in the App Economy provide important lessons for the whole economy:
“Android, apps, iPhones, Angry Birds, iPads, FarmVille, data contracts: It’s a bit jarring to realize that these terms, so familiar today, only date back five years. The introduction of the iPhone in 2007, and the initial distribution of Android the same year, marked the birth of the App Economy.
“But the App Economy didn’t just mean more fun games and more ways to do work on the go — it meant more jobs as well. Based on research I did for Technet, the association of high-tech innovative companies, the App Economy has generated nearly 500,000 jobs since 2007. This is an impressive total, especially during the worst labor market downturn since the Great Depression. It’s also an indication of the growing macroeconomic impact of the App Economy.
“We can draw three lessons from the success of the App economy to help us understand how we can drive prosperity forward.”
A February 2012 paper by PPI Chief Economic Strategist Michael Mandel estimated that the App Economy has generated almost 500,000 new jobs since 2007. Mandel wrote:
“The incredibly rapid rise of smartphones, tablets, and social media, and the applications—‘apps’—that run on them, is perhaps the biggest economic and technological phenomenon today…On an economic level, each app represents jobs—for programmers, for user interface designers, for marketers, for managers, for support staff….
…App Economy employment also includes app-related jobs at large companies such as Electronic Arts, Amazon, and AT&T, as well as app ‘infrastructure’ jobs at core firms such as Google, Apple, and Facebook. In addition, the App Economy total includes employment spillovers to the rest of the economy.”
The growth of App Economy employment is a bright spot in an otherwise sluggish labor market, showing how innovation is still the best job creator.
So how then can Washington best encourage the continued growth of the App Economy? The absolutely essential ingredient for the App Economy is spectrum. By spectrum, we are referring to the radio frequencies which carry the streams of data to our smartphones and tablets. And as apps get more and more sophisticated and indispensable, our mobile data needs grow rapidly, and we face the danger of a spectrum crunch.
That means there’s a great need for the Government, which controls spectrum licenses, to free up additional spectrum if App Economy employment – and future mobile service innovation – is to grow. Last week, Congress authorized the Federal Communications Commission (FCC) to organize a “voluntary incentive auction” for unused, or underused, spectrum. The FCC is working with TV broadcasters to sell their unused and underused spectrum in an auction format to commercial wireless broadband providers that need more spectrum for wireless network and capacity extension. The winning bidders are likely to be mobile service providers and the current broadcast license owners will receive a share of the selling price. This auction is part of a plan by the Obama Administration to sell 500 megahertz of spectrum over the next 10 years.
However, as part of last week’s legislation, Congress also gave the FCC the authority to establish general applicability rules for the auction regarding the amount of spectrum any one company can hold. In other words, the FCC has the ability to restrict which companies can participate in the auction, if the participant owns more spectrum than the FCC deems eligible. Unfortunately, the FCC appears to be working under the assumption that only the larger mobile service providers will obtain spectrum at auction, out-bidding smaller rivals.
But at a time when the App Economy is creating jobs at a rapid pace, the FCC should not try to dictate who should or should not be allowed to buy spectrum. The key to making the voluntary auction a success is ensuring that spectrum is awarded to the companies who can get it to consumers as quickly and efficiently as possible, who have the resources now to invest in new innovations, creating jobs and boosting the economy in the process. And the economic potential of spectrum innovation is great. A recent study by Robert Shapiro and Kevin Hassett calculates that over 1.5 million jobs were created over 2007-2011 from wireless providers’ switch from 2G to 3G.
Which companies are best suited to get spectrum innovations to market quickly and effectively? A December 2011 policy brief from PPI, “Scale and Innovation in Today’s Economy,” shows that larger companies with a national reach may be the best placed to quickly move innovations through development into the hands of consumers. Larger companies have the resources readily available and the platforms needed to implement large-scale innovations to a national wireless network. What’s more, smaller carriers increasingly depend on the ability of larger companies to effectively move wireless network innovations to scale to provide their customers with better service.
It may be at least a year or more before the FCC implements the new legislation, and many more years before an auction takes place. Until then, mobile service providers will be forced to work within their existing spectrum, and hopefully will continue to find new ways to make spectrum more efficient. Indeed, mobile providers have already invested billions to increase the data-carrying capacity of existing spectrum. For example, in 2011, AT&T introduced 4G, the fourth generation of high-speed wireless communication, to its mobile services which is 50 percent more efficient than its 3G predecessor.
While such efficiency-boosting advancements are very important to the future of spectrum, and to the future of the App Economy, the only long-term solution is to get as much spectrum to market as possible, as quickly as possible. And given the clear importance of the App Economy for driving growth, making sure the FCC conducts spectrum auctions the right way – by not restricting eligible participants – is critical for creating tomorrow’s jobs and ensuring a strong economic recovery.
The GOP nomination contest has entered its most critical two-week period yet, with primaries in Michigan and Arizona on February 28; the Washington caucuses on March 3, and then the eleven-state extravaganza of Super Tuesday, March 6.
With Rick Santorum now holding a steady lead over Mitt Romney in national polls of Republicans, it is crucial for Romney that he win his native state of Michigan to regain momentum, reassure party elites, and replenish his diminished financial coffers.
Romney and his Super-PAC are reportedly outspending Santorum’s forces in Michigan by about a 3-1 margin, and are fielding a mix of positive and negative ads. An early PPP poll showing Santorum sprinting out to a 15-point lead in Michigan now looks to be an outlier; PPP’s latest survey in the state shows Santorum only up by three points, and at least one other poll shows Romney regaining a small lead. Everyone agrees the contest is very close, with support patterns indicating Santorum holding his customary leads among evangelicals and “very conservative” voters, and Romney doing well with “moderates” and Tea Party skeptics. Polling of Arizona (where Romney benefits from a sizable LDS vote) is also becoming available, uniformly giving Romney a single-digit lead. A wild-card in Arizona is that Newt Gingrich is doing relatively well there (unlike Michigan, where he’s running fourth behind Ron Paul); one theory is that his supporters could break to Santorum on primary day.
All of these dynamics make tonight’s CNN candidate debate in Arizona very important. It could, in fact, be the last televised debate of the entire contest. One possibility is that both panelists and the other candidates could gang up on Santorum, who’s been under attack as a “fiscal liberal” by his rivals, and as an erratic religious extremist by many news media observers. (In a potentially significant, and certainly unprecedented development, two conservative opinion-leaders considered supportive of Romney, Matt Drudge and Washington Post blogger Jennifer Rubin, have suddenly begun attacking Santorum’s religion-based views on cultural issues). Santorum, who’s been a relatively strong debater, could try to duplicate Gingrich’s successful tactic of turning attacks on his tormenters. And of course Gingrich himself, not to mention Ron Paul (who’s shown recent interest in going after Santorum) will be factors as well. It would be a particularly poor moment for any candidate to commit a gaffe.
If February 28 produces anything less than a dual Romney win in Michigan and Arizona, Super Tuesday could become dicey for Mitt (it is generally assumed Santorum is likely to win the March 3 caucuses in Washington). He’s beginning to experience money troubles thanks to his heavy spending and his lack of an ideologically-driven small donor base. Romney does have some Super Tuesday advantages: his home state of Massachusetts votes then, and he and Ron Paul are the only candidates on the ballot in Virginia.
The most alarming threat to Romney would be a divide-and-conquer strategy where Santorum concentrates on the biggest prize, Ohio, while Gingrich’s Super-PAC spends the fresh $10 million it has reportedly received from casino mogul, Sheldon Adelson, to focus on Georgia, Tennessee and perhaps Oklahoma. Additionally, Paul is expected to concentrate on small-state caucuses where he could do additional damage to Romney’s delegate count.
There are also new rumblings of discontent from elite Republican circles where a Santorum (or Gingrich) nomination is considered potentially catastrophic, while Romney’s perpetual inability to win over conservative voters or show much appeal to independents is perpetually troubling. One “prominent Republican senator” informed a reporter last week that if Romney loses Michigan, he will go public with a call for a draft of Jeb Bush. While there’s zero evidence Republican voters are interested in a late entry or a “brokered convention,” or that any particular “white knight” could avoid the pitfalls that have snared the actual candidates, it is obvious Romney would suffer from major defections of elite party support, if only among his funding sources.
All in all, it would be very prudent for Romney to win Arizona and Michigan next Tuesday. If he loses both, the craziness will really intensify and almost anything could happen. Alas, it just keeps getting better and better for President Obama.
PPI’s executive director and former DNC finance director, Lindsay Lewis proposes that the best way to reform campaign financing might be to repeal the McCain-Feingold campaign finance reform law. As Lindsay argues, McCain-Feingold inadvertently led to the creation and now dominance of super PACs.
PRESIDENT OBAMA’s recent endorsement of a Democratic “super PAC” — Priorities USA — that will support his re-election campaign makes one thing clear: money will dominate this year’s election like no other in history. Already, Restore Our Future, the super PAC supporting Mitt Romney, has hauled in over $17 million from just 60 donors.
Big money has always played a role in politics, but the advent of super PACs means that America’s presidential candidates have effectively outsourced their campaigns to the megarich. The wealthy turn over big bucks to super PACs, which in turn make whatever arguments they want, often much dirtier than anything a candidate would want to attach his or her name to.
The Republican presidential nominating contest continues to produce endless surprises.
A week ago, the key question was whether victories in two low-turnout caucuses and a “beauty contest” primary would vault Rick Santorum past Newt Gingrich as the latest aspirant to the conservative-alternative-to-Romney mantle. Now, cascading evidence from polls suggest Santorum has become a serious threat to Romney’s status as front-runner, and is a couple more primary wins away from becoming what might be called an existential threat to Mitt’s candidacy.
National polls are now consistently showing Santorum leading, or essentially tied with, Romney among Republican voters. More alarmingly for Romney, the three latest polls taken in Michigan—whose primary will be held on February 28—show Santorum leading there, too, despite a longstanding assumption that Mitt would romp to an easy win in his native state.
While there has been no recent public polling in Arizona, which also holds its primary on February 28, the Santorum Surge has clearly spread to the Super Tuesday (March 6) states. A Quinnipiac poll, for instance, now shows him leading in that day’s biggest state, Ohio, and another survey indicates he’s threatening Newt Gingrich in his own home state of Georgia. An especially dangerous development for Romney is that Santorum is now running ahead of Mitt in at least one major general election poll, calling his longstanding “electability” advantage into question.
All the polls indicate that a key ingredient of the Santorum Surge is relatively high favorable/unfavorable ratios, reflecting his ability to escape significant questioning while Romney and Gingrich (and their super PACs) have pounded each other with negative ads. That is very likely to change, even though conservative opinion-leaders are far more protective of Santorum than of either Romney or Gingrich, and most will not join the fun the way they so often have with the other candidates.
Just today, reports have come out suggesting that Team Romney might execute a multi-state air war against Santorum, attacking him from the Right for votes in the Senate favoring No Child Left Behind and Medicare Rx Drugs. Despite the fact that both were Bush administration initiatives, supported by many Republicans at the time, these programs have now become symbols of big-spending heresy. That line of attack, however, is not all that’s on the horizon. There’s also at least one report that Gingrich’s main super PAC donor, casino mogul Sheldon Adelson, is on the brink of reopening his check book to finance attacks on Santorum, apparently in part because Adelson wouldn’t mind helping Mitt as well as Newt.
All this warlike activity on the GOP side is clearly good news to Democrats. It also comes at an opportune time, just as better economic news and a sharper Obama message has emerged to lift the incumbent’s re-election prospects notably. Obama has led Romney in eight consecutive major general election polls by at least five points. Even more significantly, according to an analysis yesterday by Ron Brownstein based on the latest Pew survey, Obama is now matching his 2008 performance very closely among nearly every key demographic category.
Obama’s stretch of good luck is also extending into individual controversies with the GOP. So far, at least, he seems to have regained an advantage in the battle with Republican politicians and the U.S. Conference of Catholic Bishops over a proposed employer insurance mandate for contraception coverage. A relatively small modification of the original mandate to require insurers rather than religiously-affiliated institutional employers won the administration praise from an array of Catholic hospital, social-services, and higher-education leaders, frustrating the efforts of the Bishops to speak for Catholic institutions in demanding a complete repeal of the mandate.
And while polling on the subject has varied significantly according to the timing and wording of surveys, it’s reasonably clear Catholic voters’ attitudes on the subject closely track public opinion generally. Meanwhile, as the controversy beings to focus less on broad claims of endangered “religious liberty” and more on attitudes towards the more specific issues of health insurance coverage, Republicans are running the risk of identifying themselves too closely with the Catholic hierarchy’s very unpopular views on contraception.
The current prominence of a presidential candidate, Rick Santorum, who has not been shy about proclaiming his own hostility to contraception, probably does not help – well, at least not the Republicans.
In 2010, the Supreme Court’s landmark decision in Citizens United v. Federal Election Commission forever changed the landscape of political spending.
The Court’s ruling to allow virtually unlimited contributions to outside political groups1 unleashed a record $290 million in outside spending in 2010 (not counting spending by party committees).2 According to the Center for Responsive Politics, total outside spending in 2010 on congressional races was more than four times the total outside spending in the last mid-term elections in 2006. And as the torrents of super PAC spending in the GOP presidential primaries attest, outside spending in 2012 is on track to break all records.
But does outside spending really “work” to put a favored candidate in power? With the jury still out on 2012, this memo looks to the Senate races in 2010 for some clues.
The answer? Maybe.
Because 2010 was a “wave” election that rode on Tea Party rage, it’s almost impossible to disaggregate the impact of outside spending from prevailing electoral trends. In addition, many other factors—such as the strength of a particular candidate’s appeal and organization—cloud the picture.
Nevertheless, in some campaigns, a big unmatched advantage in outside spending seemed to help tip the balance in a candidate’s favor. In 2010, this worked to the advantage of Republicans—conservative outside groups spent about twice as much on Senate races as liberal groups. Even though conservative groups spent millions of dollars more on losing races than on winning ones (e.g., in Nevada and Colorado), the sheer volume of conservative outside spending meant that their overall “batting average” was nearly twice that of liberal outside groups.
Given this mixed record, there’s only one real certainty about the impact of outside money on Senate races in 2010: Running for Senate is a lot more expensive than it used to be.
PPI President Will Marshall, explains the dire need to free American hostages being held in Cairo over at CNN’s Global Public Square:
“With deadly soccer riots, popular unrest and a tricky political transition to manage, you’d think that Egypt’s military rulers would have enough on their hands without provoking a confrontation with the United States. Evidently not.
“Everyone knows the generals call the shots in Egypt, but they profess to be powerless to stop Egypt’s courts for trying 19 Americans on trumped up charges of funneling “foreign funding” to anti-government protesters. This outrage demands a calm but resolute response from President Obama. While avoiding public statements that further inflame Egyptian nationalism, Obama should quietly make it clear to the Supreme Military Council that persisting in this folly will lead to a cut-off of U.S. aid.
America’s long nuclear energy drought is officially over. For the first time in 33 years, the Nuclear Regulatory Commission (NRC) has approved a construction and operating license for a new nuclear reactor in the United States – actually two of them to expand Southern Company’s Plant Vogtle generating facility in Georgia.
This is good news for U.S. electricity consumers, companies, and workers. Since 1979, the last time NRC approved a construction permit, U.S. electricity use has risen more than 80 percent. An expansion of nuclear power – which has provided about 20 percent of the nation’s electricity for decades – shows that the United States is serious about meeting growing energy demand without pumping more carbon into the atmosphere. At a time when political support for some kind of carbon cap or tax has seemingly collapsed, that’s an important sign that Americans aren’t giving up on protecting the Earth’s climate.
The two reactors will generate thousands of badly needed construction and operating jobs. Their larger significance, however, may lie in symbolizing America’s commitment to rebuilding its productive base. In effect, the NRC’s action puts America back in the nuclear energy business, and not a moment too soon. Around the world, some 160 new nuclear reactors have either been ordered or are planned to be operational by 2030, according to the World Nuclear Organization. We need to rebuild our nuclear industrial infrastructure to be able to compete in the fast-growing global market for nuclear energy.
The NRC’s decision comes on the heels of another important development which bodes well for America’s “nuclear renaissance.” Last month, President Obama’s Blue Ribbon Commission on America’s Nuclear Future (BRC) issued its final report. It offers a new strategy for breaking the impasse on nuclear waste disposal, which has tied politicians in knots over the proposed Yucca Mountain facility for decades. Headed by Democrat Lee Hamilton and Republican Brent Scowcroft, the BRC calls for a resumption of the search for a second geological storage site, which it says we will need regardless of Yucca’s fate.
Nuclear energy still faces significant hurdles, especially the enormous upfront costs of siting and building a generating plant. But if the NRC can follow today’s action with a commitment to speeding up the approval process, some of those costs could be mitigated. In any case, it’s critical for the United States to recapture its technological leadership in energy, which includes the civilian nuclear power industry that was first invented here.
Four contests in the last week have done little to resolve the Republican presidential nominating contest.
As long expected, Mitt Romney followed up his Florida victory by comfortably winning the Nevada caucuses, registering (if narrowly) his first majority showing. Turnout was low, the process was marred by errors, and Romney’s margin was undoubtedly padded by the unusually large level of participation by Mitt’s fellow Mormons (about a fourth of the caucus turnout, giving Romney near-unanimous support). But it gave Romney the right to boast of victory in three very different states (New Hampshire, Florida and Nevada), and continued the bad news for Newt Gingrich, who couldn’t even hold onto an apparent Donald Trump endorsement for a few hours.
But then came the three February 7 events: a non-binding (and arguably meaningless) primary in Missouri, and caucuses in Minnesota and Colorado. And all three were won by Rick Santorum, who had all but been forgotten by national media during the Romney-Gingrich slugfest in Florida and Nevada. The sting to Romney was enhanced by comparisons to his performance in 2008, when he won the Minnesota and Colorado caucuses decisively. Gingrich was not on the ballot in Missouri, and finished a poor third in Colorado and a poor fourth (behind Santorum, Romney, and second-place finisher Ron Paul) in Minnesota.
The Santorum Sweep was a product of other candidates ignoring Missouri, and then an effective grassroots campaign in the other two states. Low turnout also helped accentuate Santorum’s bedrock support among social conservatives (the same constituency that gained him his Iowa win). For all the hype about his big night, his candidacy remains a largely Midwestern phenomenon, and he’s yet to show strength in the southern states where he’s suspected of being a Big Government Conservative, and Gingrich has served as the anti-Romney conservative threat.
The contest now hits a lull until February 28, when Michigan and Arizona hold primaries. Michigan is Romney’s native state, and Arizona has a relatively large LDS population, so he is favored in both despite yesterday’s setbacks. Then comes Super Tuesday (March 6), with its assortment of relatively expensive primaries (Ohio, Virginia, Georgia, Massachusetts) and a bunch of widely scattered caucuses (where Ron Paul is expected to make a strong appearance). Everything about this landscape favors the vastly better-financed Romney, unless his opponents manage to split up the states and beat him piecemeal.
More to the immediate point, the lull will provide Santorum’s opponents with a fine opportunity to take him down several notches with negative ads focusing on his Washington “insider” background and the occasional heresies in his record that trouble conservatives. Meanwhile, Santorum’s status as an international symbol of right-wing bigotry (mostly based on the vast Google-based campaign to taunt him for anti-gay sentiments, but also extending to his very extreme positions on abortion and contraception) will hound him in the broader media environment. It’s not clear he will be able to emulate Gingrich’s success in converting “persecution” by the “liberal media” into primary votes, but the inevitable mockery he will receive is very likely to drive down his general-election trial heat numbers.
Democrats, of course, are richly enjoying Romney’s difficulty in nailing down the nomination, particularly now that it is beginning to affect his own general-election numbers. As it happens, Mitt’s problems are coinciding with a modest increase in the president’s job approval ratings and gradually improved economic indicators. Last week’s surprisingly positive jobs report drew a lot of attention across the political spectrum.
But Obama’s general election standing remains questionable. During the last week, there was a major brouhaha over the Catholic Bishops’ intense reaction to an administration decision to require contraceptive services coverage for employee health plans sponsored by religiously affiliated hospitals and charities (direct church employees were exempted via a “conscience” exception). Several prominent Catholic Democrats expressed fears the decision would be disastrous politically, but then polling showed Catholic voters largely unmoved or supportive of Obama, even as the administration signaled it wanted to compromise.
In what appears likely to be a very close general election, the variables remain unstable. It’s clear Obama needs to win back moderate voters estranged by factors ranging from the general condition of the economy to conservative-media-fed narratives of his alleged hyper-liberalism. How to do that, while setting out realistic goals for a second term and exploiting a Republican nominating contest being constantly driven to the Right, is the obvious challenge for Team Obama.
In a new study published by TechNet, PPI Chief Economic Strategist, Michael Mandel, explains America’s prospering “App Economy”:
“TechNet, the bipartisan policy and political network of technology CEOs that promotes the growth of the innovation economy, today released a new study showing that there are now roughly 466,000 jobs in the “App Economy” in the United States, up from zero in 2007.
“The study … also found that App Economy jobs are spread throughout the nation. The top metro area for App Economy jobs is New York City and its surrounding suburban counties, although together San Francisco and San Jose together substantially exceed New York. And while California tops the list of App Economy states with nearly one in four jobs, states such as Georgia, Florida, and Illinois get their share as well.
“According to our analysis, the App Economy has created roughly 466,000 jobs since the iPhone was introduced in 2007. How big can the App Economy get? That depends in many ways on the future of wireless and social networks. If wireless and social network platforms continue to grow, then we can expect the AppEconomy to grow along with them.”
CONTACT:
Steven Chlapecka – schlapecka@ppionline.org, T: 202.525.3931
WASHINGTON—The Progressive Policy Institute (PPI) today unveiled a new “Battleground Home Values Index” showing how home prices in 16 potentially key states have failed to recover since the last presidential election in 2008.
In these 16 states, home prices are down an average of 16 percent since October 2008—from a median of $160,596 to a median of $131,191 in December 2011.
“This most important thing to stop the fall in home prices and that seems to have happened,” said PPI Senior Fellow Jason Gold, who co-authored the index with colleague Anne Kim, PPI’s managing director for policy and strategy. According to Gold, battleground home values have stayed flat for the last three months, in contrast to a steady decline since 2008.
“Housing will be a pivotal election year issue,” said Kim. “If home values are rising, people feel wealthier and more confident in the direction of the economy. Home values are as important to voters as the jobless rate.
The states included in the PPI analysis are among those hardest-hit by the housing crisis: Nevada, New Mexico, Arizona, Virginia, Ohio, Wisconsin, Michigan, Iowa, New Hampshire, Indiana, Colorado, Florida, Missouri, North Carolina and Pennsylvania.
PPI’s analysis is based on data derived from Zillow and the U.S. Census Bureau. The overall median home value for the battleground states is a weighted average based on the proportion of housing units in that state.
Republican presidential candidate Mitt Romney has taken a beating over the past few weeks regarding his long tenure at the private equity firm, Bain Capital. After distinguishing himself from President Obama as someone who truly knows how to create jobs, Romney likely did not expect to have his business credentials challenged—let alone by his Republican rivals. Among other things, Bain has been accused of “looting” companies and destroying jobs and lives along the way.
Some have sprung to Romney’s defense, often relying on the idea “creative destruction,” a term coined by economist Joseph Schumpeter several decades ago to describe the persistent process by which entrepreneurs challenge existing companies, often leading to the latter’s demise. Such creative destruction reached new levels in the 1980s, precisely the period now under scrutiny in the Bain recriminations.
Not surprisingly, this controversial issue isn’t new: liberals and conservatives have been quarreling over the economic lessons of the 1980s for twenty years. Wall Street Journal columnist Daniel Henninger argues that, in contrast to the narrative presented in movies like Wall Street, firms such as Bain “saved” the U.S. economy: “This was a historic and necessary cleansing of the Augean stables of the American economy. … It led directly to the 1990s boom years.”
The debate, however, glosses over the long-term economic trends in America that should be of very real concern. Many people have pointed out that the decade from 2000 to 2009 was the weakest in terms of job creation since World War Two. Even leaving aside the recessionary years of 2008 and 2009, the expansion from 2002 to 2007 was the weakest in postwar history—a hedge fund manager interviewed in Michael Lewis’ recent book, Boomerang, describes it as a “false boom.”
What connects the argument over the 1980s with today’s economic challenges? See this chart:
Gross Job Flows
Economists at the Census Bureau and elsewhere have laboriously compiled a detailed breakdown of labor market “flows” over the past three decades. While the United States maintains a relatively high level of job churn, with millions of people changing jobs each quarter (for better or worse), overall job creation has slowed markedly.
There are many reasons for this. One is the falling job contribution of new and young companies, a trend that began prior to the Great Recession. My Kauffman Foundation colleagues, E.J. Reedy and Robert Litan, have documented what they call a trend of companies “starting smaller, staying smaller.”
The fact that new companies start with fewer employees today than they did several years ago probably won’t surprise too many people—technological advances likely account for some of this. Likewise, sectoral shifts in the types of new companies have probably also played a role: construction firms tend to be smaller than manufacturing companies, and many more of the former were started over the past decade. More worrisome is the second part of the research by Reedy and Litan: namely, that young companies are growing more slowly than their predecessors in the 1980s and 1990s.
How can we account for this phenomenon?
For one, demographic trends may be at work: labor force participation has fallen over the past several years and so slower job creation could reflect lower availability of workers, as strange as that sounds at a time when we have millions of unemployed workers. Second, the productivity revolution that began in the mid-1990s has meant lower levels of job creation. Finally, lower job churn doesn’t necessarily reflect poorer labor market outcomes. Some researchers have argued that job tenure among women remains higher than men because of women’s later large-scale entry into the workforce and, since women now account for a much larger share of the workforce, this could suppress turnover.
Whatever the reason, it is clear that an accusatory debate over Mitt Romney and private equity does little to advance our understanding of deeper economic trends and what might be done about them. Given the complex interaction of these larger trends above, we need a far broader dialogue that matches the scale of our economic challenges.
As the 2012 election gets underway, President Obama is still waiting to see who his opponent will be. Candidates and campaigns matter hugely, of course, but we should also pay attention to the field on which the match will be played—and at first glance, the lay of the political land doesn’t look so favorable to Obama and his party.
The lingering economic slump has demoralized voters and tilted the electorate rightward. With idle workers, underwater homeowners, exploding deficits and debts, growing inequality, and a bitter, broken political system, objective reality isn’t exactly working in incumbents’ favor. Upon closer inspection, however, the electoral landscape may not be as forbidding for progressives as it first appears.
For one thing, the recovery finally seems to be gaining momentum, complicating Republican attempts to cast Obama as a “failed president” who doesn’t have a clue about how the economy works. For another, Republicans are incumbents too, and their intransigence and obstructionism throughout 2011 will make many swing voters reluctant to entrust them with undivided control of the federal government. Finally, the fractious battle for the GOP nomination reveals a party at war with itself, while conservatives’ venomous attacks on Obama push Democrats toward unity.
But no matter whom the Republicans pick as their standard bearer, the tricky political terrain confronts Obama with three strategic imperatives: 1) roll up a big majority of moderate voters; 2) win back a good chunk of the in-dependents who deserted his party in 2010; and 3) fashion a stronger economic message that combines jobs and fiscal responsibility.
As the recent events in Florida demonstrate, a week is still a lifetime in politics.
Coming out of the South Carolina primary, Mitt Romney’s campaign was in significant disarray; Newt Gingrich seemed to have emerged as the long-awaited “conservative alternative to Romney,” with a path to the nomination, a positive and negative message that seemed to be resonating with Tea Party activists, and the Super-PAC money to compete in an expensive state like Florida. “Establishment” Republicans, including some key conservative opinion-leaders, were beginning to panic.
Now, the day after Florida, Romney is back in charge of the race, and while Gingrich, Santorum and Paul are all still campaigning avidly, it’s difficult to see a clear path to victory for any of them.
Romney, who fell immediately and badly behind in Florida polls after the South Carolina results were in, recovered last week and won the state by a 46-32 margin over Gingrich (Santorum, who won 13 percent, and Paul, who took 7 percent, conceded the state and spent little time there).
There were four main factors in the Florida turn-around: money, debates, opinion-leaders, and demographics.
On the money front, Romney and his Super-PAC outspent Gingrich and his Super-PAC by nearly a 5-1 margin – precisely, $15.7 million to $3.3. million, contradicting initial reports that Newt’s Super-PAC would buy $6 million in Florida media. Additionally, Romney began running ads before South Carolina, which enabled him to “bank” a significant lead among early voters (about 30% of total votes). Romney’s ads were heavily negative, and focused particularly on Gingrich’s Freddie Mac consulting contract, a powerful issue in a state hit very hard by the collapse of the housing market.
The two candidate debates were Gingrich’s big opportunity to establish momentum and excite conservatives, as he did so effectively in South Carolina. Yet Newt basically bombed, particularly in the final 1/26 event, where he let Romney get to his right on immigration policy and seemed defensive and nervous.
Opinion-leaders, in Florida and nationally, took a major toll on Gingrich and undermined his ideological bona fides. In-state, he was sharply criticized by the state’s most popular Republican, Sen. Marco Rubio, for ads calling Romney “anti-immigrant.” Even more importantly, key leaders in Miami’s Cuban-American community, most notably the Diaz-Balart brothers and Rep. Ileana Ros-Lehtinen, endorsed Romney and worked hard for him. Meanwhile, national Republicans, including credible conservatives like the editors of National Review, labeled Gingrich erratic and unelectable, and flatly denied his claims of being an important contributor to the Reagan legacy.
And finally, Florida was a much better state for Romney demographically than South Carolina: less “southern” culturally, with more relative moderates, fewer evangelicals, and a sizable Hispanic population dominated by Cuban-Americans and Puerto Ricans, who were unmoved by Gingrich’s efforts to attack Romney as hostile to immigrants. In the end, Gingrich won several of the same demographic categories he won in South Carolina —evangelicals, “very” conservative voters, and strong Tea Party supporters—but they simply represented a much smaller percentage of the electorate.
By election eve, Gingrich was clearly flailing. He resorted to very harsh attacks on Romney as a tool of the “Republican Establishment,” over-the-top appeals to Christian Right audiences, and such strange tactics as a robocall targeting Jews (only 1% of the Republican electorate in Florida) with claims that Romney had cut off funding for kosher food at Massachusetts nursing homes.
On primary day, Gingrich even pledged to keep the competition with Romney going for “six or eight months”. This was a rather interesting remark as it would extend his candidacy well past the Republican Convention. In the end, though, the main thrust of his concession speech was to demand that Rick Santorum get out of the race. Santorum, in turn, reciprocated by saying Gingrich had lost his “shot”.
The most important question for Gingrich now is whether he can convince his main Super-PAC donor, Las Vegas casino mogul Sheldon Adelson, to keep sending checks. The next contest is a caucus in Nevada which Romney has long been favored to win. Next Tuesday, Missouri also holds a non-binding primary in which Gingrich is not even on the ballot, along with caucuses, in Colorado, where Santorum is hoping to make a splash. After that comes Minnesota, another state where Romney is favored.
To make matters worse for Gingrich, Romney will remain difficult to beat as February comes to a close. On February 28th, Romney is heavily favored in his native state of Michigan, and will also be able to count on a sizable Mormon vote in Arizona. The road ahead is thus difficult and expensive for Gingrich until Super Tuesday, March 6, when the Speaker will have the chance to compete in his home state of Georgia . That being said, however, Gingrich will surely lose Massachusetts to Romney. He is also unlikely to win Ohio, and once again is not even on the ballot in Virginia.
All in all, while the wild gyrations of this nomination contest so far make it difficult to say it’s over, Romney has the money, momentum, and the strategy to win fairly easily if he does not make mistakes. If Adelson cuts off Gingrich’s money, it could happen sooner rather than later. The longer it goes on, of course, the more permanent damage Romney could sustain to his favorability among the non-Republicans, those who are watching him bob and weave and try to outflank his opponents to the right.
A February 2012 
The GOP nomination contest has entered its most critical two-week period yet, with primaries in Michigan and Arizona on February 28; the Washington caucuses on March 3, and then the eleven-state extravaganza of Super Tuesday, March 6.
The Republican presidential nominating contest continues to produce endless surprises.
PPI President Will Marshall, explains the dire need to free American hostages being held in Cairo over at 
As the recent events in Florida demonstrate, a week is still a lifetime in politics.