Category: Uncategorized

Drop Taxes, Not Calls

Posted on by The Progressive Policy Institute

Have you checked your wireless bill lately? You’ll see a hefty set of extra taxes on mobile service—taxes that are not imposed on any other good or service. These excise taxes represent a toll that state and local governments impose on their population of phone users. It is very tempting, at this time of tight budgets, to keep raising and raising the excise tax on wireless. After all, no one really wants to give up using their iPhone.

It is time to remove that temptation.

Congress is finally considering a bill that makes good economic and social sense – the Wireless Tax Fairness Act (WTFA). The WTFA will prohibit state and local governments from imposing any new discriminatory tax on or with respect to mobile services, mobile service providers, or mobile service property for five years from the date of its enactment. Currently, wireless tax rates average 16.3 percent nationally, two times the national sales tax rate, according to Scott Mackey, an economist who works on wireless tax policy. These taxes are paid by us, 300 million everyday consumers, and each of us pays an average $7.84 a month in wireless taxes, fees, and government surcharges.

Wireless taxes are a perfect example of how excise taxes can lead to distortions in the market, hurting consumers. In fact, wireless taxes are more distortionary than other taxes, because of how narrow they are in scope, explicitly targeting wireless services (and therefore explicitly targeting the people who rely on wireless services). Further, demand for wireless services have been found to be rather sensitive to price, causing consumers to drop service as wireless taxes creep ever higher. This means that as taxes on wireless services increase, people will consume less – less of a service integral to everyday activities.

Worse, the market distortion caused by wireless taxes is particularly hard on poor and middle-income families. Studies by the Pew Foundation show wireless taxes are “regressive” in that they negatively affect poor and middle-income families more than the wealthy, as poorer families rely more heavily on wireless services for internet and phone access. So, not only do wireless taxes impose distortions on the entire population of wireless users, but they more negatively affect the people who struggle the most to pay for it.

Wireless taxes, unlike other “sin” taxes on alcohol and cigarettes, are simply a means for states and local governments to collect money for general funds with no other intended purpose. In other words, states and local governments are not imposing wireless taxes as a way to encourage less wireless use. Yet that is exactly what wireless taxes do.

Dissenters say states and local governments won’t be able to pay for basic public goods and services if the WFTA goes into effect. They argue states need all the money they can get in these tough economic times. But state and local government budget gaps should not be resolved at the cost of people’s ability to access wireless services. The idea of taxing people’s connection to the information economy, which allows people to be more productive and make larger economic contributions to society, makes no sense. It is in these tough economic times Congress should implement policies that encourage more wireless use, and more participation in the information economy of the future, not less.

Photo Credit: Jonathon Moreau

Democracy in Crisis

Posted on by The Progressive Policy Institute

US Capitol Public attitudes toward politics and government today resemble a game of limbo: how low can you go? Just when you think Americans’ confidence in their government has hit rock bottom, it sinks even further.

Consider these eye-opening findings from Gallup’s newly released governance survey:

  • 57 percent of Americans lack confidence in the federal government’s ability to solve domestic problems.
  • 69 percent have no confidence in Congress, an all-time high.
  • The public thinks Washington wastes 51 cents of every tax dollar.
  • Nearly half believe “the federal government has become so large and powerful that it poses an immediate threat to the rights and freedoms of ordinary citizens.”

These numbers point to a fundamental breach of trust that goes far beyond Americans’ habitual grousing about government. The public is losing faith in their political system’s basic capacity to forge consensus and grapple effectively with national problems. We’re experiencing a crisis in democracy that eclipses all the other big challenges we face.

And it poses a particular problem for President Obama and his party, who believe in government’s ability to do good. How can they convince a jaundiced public that government isn’t the problem, but part of the solution?

For the kind of liberals who watch MSNBC and take ocean cruises with the staff of The Nation, the answer is obvious: offer an unapologetic, full-throated defense of government as the peoples’ instrument in their perennial struggles against the powerful. But the left’s blind defense of government is just as ideologically blinkered as the right’s demonizing of government as the insatiable usurper of our liberties.

Most voters, being pragmatic types, don’t have a dog in this fight; they just want some reassurance that government can be made to work again, and at a reasonable cost. For progressives, regaining the public’s trust begins with an acknowledgement of the validity of some of their complaints about government. Only then will progressives be heard when they make the positive case for new public initiatives.

No one understood this better than President Bill Clinton. He made government reform (“reinventing government” in New Dem-speak) an integral part of his progressive modernizing agenda. Clinton actually shrank the federal establishment, balanced the budget, injected choice and competition into the delivery of public services, and worked to devolve decisions from centralized bureaucracies to individuals and communities.

President Obama would be wise to follow Clinton’s example. Americans who believe the federal establishment has grown too big are not wrong; Obama should empanel a high-profile commission charged with dramatically overhauling a constellation of bureaucracies created on the industrial model to solve industrial era problems.

Americans who believe government spends too much aren’t wrong either, which is why Obama embrace his own Fiscal Commission’s grand bargain for debt reduction. Since the public already shares his view that the rich should pay higher taxes to solve the fiscal crisis, the stage is set for a deal that marries tax and entitlement reform.

And while Obama has made noises about regulatory reform, he has yet to offer a plausible way of systematically scaling back government rules that impede economic innovation and business creation. He could embrace, for example PPI’s proposal for a Regulatory Improvement Commission – a base-closing style commission that would periodically prune old and superfluous regulations.

The key point is that President Obama and progressives need to make reforming and disciplining government as integral to their message as their ideas for launching new public initiatives to solve common problems. This will show the public they understand that public activism is a tool for achieving progressive ends, not the end itself.

Photo credit: Shawn Clover

Taxing Rich is No Fiscal Panacea

Posted on by The Progressive Policy Institute

Class WarfarePresident Obama’s tax offensive may be aimed at energizing his despondent base, but it’s also touching a nerve with the broader public. A new Gallup poll finds that Americans overwhelmingly (66 percent) back the president’s call to raise taxes on families making more than $250,000 and individuals making more than $200,000.

Evidently, you don’t have to be a European-style social democrat to believe that the rich should chip in more to help get federal deficits under control. Grover Norquist take note: We are all class warriors now.

Official statistics on incomes explain why. According to the Congressional Budget Office (CBO), the top 10 percent of earners on average have seen their income grow a whopping 106 percent since 1979. Over the same period, those in the middle and lowest quintile have experienced meager income growth of just 15 percent and 6 percent, respectively.

Moreover, IRS data show that the top 10 percent have received 42 percent of the total share of adjusted gross income earned between 1986 and 2008. Conservatives lament that high earners are also paying a higher share of their earnings in taxes. That’s true, but their income is growing faster than their tax burden. The share of income taxes paid by the top 10 percent increased by 28 percent from 1986 to 2008. (IRS tables)

In short, income gains over the past generation have been dramatically concentrated at the top. Modest increases in the tax burden borne by the top 1 or 2 percent of Americans will still leave them very well off compared to the rest of us. As President Obama has said, this isn’t class warfare so much as math.

But the math doesn’t tell us the best way to raise more revenue from the most affluent Americans. In thinking about this, progressives should keep two imperatives in mind. One is the need to make the tax code more pro-growth as well as more fair. The other is to make sure that tax reform advances the cause of debt reduction.

President Obama proposed on Sept. 19 to raise $1.5 trillion in new revenue as part of his plan to cut deficits by $3.3 trillion (not including the Iraq and Afghanistan draw down) over the next 10 years. His tax initiative has two main parts. First, it would cap the benefit from itemized deductions from 35 percent, the top marginal tax rate, to 28 percent for families with income of over $250,000 (200,000 for single-filers). This is not exactly a crushing new burden on the hapless rich. In fact, it would take us back to President Reagan’s 1986 tax reform, which dropped the top rate to 28 percent. The White House says limiting deductions in this way would raise $410 billion for closing federal deficits.

Second, the President’s plan would raise an additional $866 billion by allowing the Bush tax cuts to expire for high earners at the end of the year, while preserving them for middle class and low income families.

Both ideas are defensible on fairness grounds. But it’s not so clear that increasing income tax rates is the best place to look right now for more revenue. Politically, increases in marginal rates are probably a non-starter with most Congressional Republicans, who still genuflect to the supply side shrine. Even some Democrats, however, are leery about raising personal income tax rates in the midst of the current jobs crisis.

The alternative is the road taken by President Obama’s own Fiscal Commission. Its “modified zero plan” (analysed by Paul Weinstein and Marc Goldwein here) would raise $1.1 trillion over 10 years by eliminating or reducing tax expenditures. That’s a smaller number than the President’s. But most economists believe these backdoor spending programs introduce enormous complexity and distortions into the tax code. Curtailing them would promote economic efficiency and growth.

What’s more, the Commission’s plan uses the revenue to “buy down” both corporate and personal income tax rates, and to cut deficits. These rate cuts were crucial to attracting Republican support for a bipartisan compromise that combined tax reform and entitlement reform to reduce the debt by $4.2 trillion over 10 years.

This approach, also endorsed by the Senate’s Gang of Six, has one huge advantage over other tax reform schemes – it’s attracted bipartisan support. The President’s tax plan, on the other hand, seems calculated to embarrass Republicans rather than draw them toward a “grand bargain” on debt reduction.

In any case, the fiscal commission’s plan doesn’t just pinch the rich, although they benefit disproportionately from tax expenditures and loopholes. It also hits many middle class recipients of tax subsidies like the mortgage interest deduction and the exclusion for employer-paid health plans. As appealing as it is to insist that the rich pony up more to solve the debt crisis, there are practical limits from how much we can squeeze from high earners. In truth, our fiscal chasm is so deep that middle class taxpayers will have to up their contribution as well. Otherwise, we will have to make unacceptably deep cuts in domestic and entitlement spending to get the debt under control.

So by all means, let’s ask the wealthy to chip in more. But let’s also keep in mind that soaking the rich, by itself, won’t restore fiscal responsibility in Washington.

Photo credit: outtacontext

Wingnut Watch: Perry Struggles and Republicans Continue Searching for Savior

Posted on by The Progressive Policy Institute

It’s been a fairly introspective week in Wingnut World. Remarkably little right-wing blood was spilled over the continuing appropriations resolution fight and denouement; no thundering emanated from talk radio or the blogs about the necessity of fighting to the last ditch and shutting down government.

Instead, most of the gabbing has been over the demolition derby of “P5,” last week’s series of presidential candidate events in Orlando, Florida. As I predicted might happen in the last WW, Rick Perry had a terrible 48 hours (actually, a few less than that, since he abruptly left Orlando for Michigan on Saturday morning, letting a surrogate give his speech prior to the state party’s straw poll) in the Sunshine State. By all accounts, he performed poorly in the September 22 Fox/Google candidates’ debate, failing to add much to prior weak defenses of his positions on Social Security and immigration, and stumbling and mumbling his way through a botched attack on Mitt Romney’s record of flip-flops. He didn’t make much of a mark in the September 23 CPAC event, but more importantly, he got trounced in the September 24 straw poll after his campaign made a big deal out of its significance and apparently spent some serious money working the delegates before they assembled.

Since Mitt Romney and Michele Bachmann conspicuously gave the straw poll a pass well in advance, and it wasn’t the kind of open event Ron Paul could pack with his supporters, Perry was expected to romp. But instead, the big winner was Herman Cain, who made a favorable impression with a smooth and upbeat performance in the candidate debate, and fiery versions of his well-worn stock speech both at CPAC and just prior to the straw poll.

Cain, you may remember, was written off by most observers after an initial splash among Tea Party supporters, mainly because he was not spending enough time in Iowa or New Hampshire to convince even his own staff that he was serious about competing. But in the intimate context of P5, where money and organization mattered less than the immediate impression made by the candidate, Cain’s charisma was enough, particularly among Floridians annoyed at Rick Perry for sleepwalking through the debate, insulting them as “heartless” for their misgivings about his stance on immigration, and then getting out of town as quickly as he could.

There’s only been one big national poll taken since last week’s events, by CNN, and it didn’t show much in the way of movement among the candidates, though both Cain and the perennial debate star Newt Gingrich did better, and Michele Bachmann continued her ignominious slide in national popularity. Measurements of Republican elite opinion, however, indicated a distinct shift from Perry to Mitt Romney, who didn’t do that much better than his rival in Florida, but had lower expectations to meet and didn’t make major mistakes.

But perhaps the most significant symptom of renewed Republican unhappiness with the party’s presidential field has been the intense pressure on New Jersey Gov. Chris Christie to make a late entry into the race, despite his constant disclaimers that he’s not interested and not ready for the presidency. In a Q&A session after a well-received speech at the Ronald Reagan presidential library last night, Christie seemed to open the door to something like a draft to run. You can expect a period of intense speculation over Christie’s plans to ensue, along with a serious effort by his rivals to expose restless conservative voters to his record of heretical positions on immigration, guns, “Shariah Law,” and other topics.

But time is running short for Christie to get into the race, if that’s what he decides to do. As the actual candidates camped out in Florida last week, a commission set up by the legislature to choose a 2012 primary date by the national party’s October 1 deadline was beginning to meet. One of the pols that appointed the commission, House Speaker Dean Cannon, is now publicly predicting they will move the primary to January 31, which would all but destroy the RNC’s plans to prevent excessive “front-loading” of the calendar and likely set off a chain reaction among the “early states” that would push Iowa at least to early January and perhaps even back into 2011. If the initial blitz of events that so often determines the nomination is to begin in just over three months, it’s getting a little late for candidates to test the wind and ask to be begged to run.

EVENT: New Solutions for America’s Housing Crisis

Posted on by The Progressive Policy Institute

Progressive Policy Institutee21

Date
October 4, 2011
 8:30 a.m. – 2:30 p.m.

Location
The Liaison Hotel
 415 New Jersey Avenue NW
Washington, DC 20001

Join the Progressive Policy Institute, e21 and some of the nation’s best thinkers and leaders on housing policy for a daylong conference aimed at new ideas to restore America’s housing market and jumpstart the economy.

Register for the event.

Marshall in The Hill: Obama Reduced to Tactical Maneuvering

Posted on by The Progressive Policy Institute

PPI President Will Marshall has an opinion piece in The Hill today. Check it out here:

President Obama’s plan to raise taxes on the rich has liberals brimming with excitement. Finally, a Democrat who fights back against the plutocracy!

Given the steady erosion of his personal approval rating this year, it’s little wonder that Obama’s tax initiative is having a tonic effect on his demoralized base. Substantively, it’s a frontal assault on the GOP’s anti-tax fundamentalism, which unquestionably has become the chief obstacle to solving the nation’s fiscal crisis.

Such merits aside, however, Obama’s gambit is distressingly tactical. While his new deficit-reduction plan advances boldly on the revenue front, it retreats on entitlement reforms the president has previously endorsed. It thus falls short of the “grand bargain” every serious observer knows will have to be struck to control the debt.

What’s more, the populist mantle sits on Obama like an ill-fitting suit — it just doesn’t jibe with his essentially rational and equable persona.

Unlike the Washington commentariat, the public isn’t all that interested in Obama’s repositioning(s) along the political spectrum. Against monolithic GOP opposition, it doesn’t matter whether Obama shifts to the center or feints to the left. What Americans want is the man a solid majority of them voted for — a leader who can rise above today’s polarization and rally the country behind a convincing vision for solving the nation’s structural problems and recapturing America’s economic mojo.

Read the rest of it by clicking here.

Photo credit: Justin Sloan

Progressive Policy Institute Expands Economic Team

Posted on by The Progressive Policy Institute

NEWS RELEASE 
FOR IMMEDIATE RELEASE

CONTACT:
Steven Chlapecka – schlapecka@ppionline.org, T: 202.525.3931

WASHINGTON, D.C. – The Progressive Policy Institute (PPI) announced today the addition of three new members to its growing economic policy team.

Diana Carew, Jason Gold and Anne Kim are the latest to join PPI’s roster of experts, which includes Chief Economic Strategist Michael Mandel, Economic and Domestic Policy Director Scott Thomasson and Senior Fellow Paul Weinstein.

Economist Diana Carew most recently served as a policy analyst at the Export-Import Bank of the U.S., where she analyzed the relationship between exports and U.S. jobs. Carew’s work at PPI will focus on globalization and innovation policy issues for the Production Economy Project.

Senior Fellow Jason Gold joins PPI from Third Way, where he was a senior fellow for housing and financial services policy. A 17-year industry veteran, Gold will be directing PPI’s “Rethinking U.S. Housing Policy Project,” a new initiative focused on the intersection of housing policy and the broader economy, housing finance reform and post-crash housing policy.

Senior Fellow Anne Kim, a PPI veteran, is returning to the organization after serving as Deputy Chief of Staff and Legislative Director to Rep. Jim Cooper (D-Tenn.) and as the Director of the Economic and Domestic Policy Programs for five years at the centrist D.C. think tank Third Way. In her prior work at PPI, she directed the Work, Family and Community Project.

“Diana, Jason and Anne bring a wealth of knowledge, expertise and policy experience to our extraordinarily talented economic team,” said PPI President Will Marshall. “I am delighted to have them join PPI, as we work to frame a new growth strategy for progressives during this critical economic time.”

Confirming Ford sends Syria warning

Posted on by The Progressive Policy Institute

In POLITICO, Senior Fellow Josh Block explains why the Senate should renew U.S. Ambassador Robert Ford’s appointment to Syria:

At a time when the Syrian regime continues to brutally murder its own citizens clamoring for democracy and an end to the Assad regime’s terrorist-sponsoring police state, perhaps the last thing Congress should be considering is forfeiting one of the few tools we have on the ground supporting the Syrian people.

After several months of regrettable delay, Robert Ford, President Obama’s ambassador to Syria, has spent recent weeks launching one creative campaign after another. A talented diplomat with years of experience in the Arab world, he has put himself in harm’s way, making trips to some of Syria’s most dangerous war zones to highlight the regime’s crimes and to show support for its victims — defying the regime’s travel restrictions, gathering information, listening to protesters and garnering positive headlines. In a region of the world in which American diplomats have been kidnapped by Syrian proxies and tortured for literally years, his actions are not just effective but brave.

Despite all this, Ambassador Ford’s tenure may soon come to an abrupt and unnecessary end. While the Syrian regime has yet to throw him out of the country, the United States Senate may be responsible for his expulsion by refusing to extend his term.

Read the entire editorial.

U.S. Outs Pakistan

Posted on by The Progressive Policy Institute

Adm. Mike MullenTop U.S. officials this week accused Pakistan of abetting a terrorist group responsible for attacks on U.S. forces in Afghanistan. The bombshell here isn’t Pakistani duplicity—that’s old news—but the Obama administration’s decision to go public. It means Washington finally has run out of patience with our supposed “ally.”

The U.S. complaint centers on the Haqqani network, an Afghan terrorist group holed up in Pakistan’s North Waziristan region. Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, told Congress that the network is “a veritable arm of Pakistan’s Inter-Services Intelligence agency.” He said the ISI helped Haqqani operatives carry out a truck bomb attack that wounded more than 70 U.S. and NATO troops on Sept. 11, as well as a suicide assault on the U.S. Embassy in Kabul.

The ISI’s ties to Haqqani network date back to the anti-Soviet jihad and subsequent Taliban takeover of Afghanistan. Apparently, the ISI sees no reason to sever those ties just because the Haqqanis are now killing U.S. and NATO forces instead of Russians. As Mullen explained, the ISI sees the network as a valuable “proxy” that can give Pakistan leverage in Afghanistan, especially after U.S. forces have gone home. There’s another somewhat more sinister explanation: many in the ISI and army hierarchy share an ideological affinity with Islamic terror groups that target both Afghanistan and India.

So is Pakistan really an enemy masquerading as a friend? The situation is complicated because Pakistan has cooperated with the United States in targeting al Qaeda and the Taliban, even as its army rebuffs our pleas to expel the Haqqanis from North Waziristan.

The blunt testimony by Mullen and Defense Secretary Leon Panetta signals the end of several years of “quiet diplomacy” aimed at getting Pakistan to make a clean break with jihadi terrorism. Outing the ISI may put more pressure on a weak civilian government. However, the Pakistani government is not only looking over its shoulder at the powerful security branches, but also at a public strongly opposed to U.S. infringements of Pakistani sovereignty.

On the other hand, Americans are entitled to ask what we have to show for the $20 billion in U.S. aid sent to Pakistan over the last decade. Last year, Congress approved $1.7 billion for economic aid for Pakistan, and $2.7 billion in security aid. At a minimum, we ought to stop trying to bribe a government that is playing us for fools.

With two wars on its hands, maybe the United States can’t afford a total rupture with Pakistan. But we can’t achieve any kind of lasting success in Afghanistan as long as Pakistan provides a safe refuge to the Haqqanis and other insurgents. That’s a genuine dilemma, but at least U.S. leaders have begun to grapple with it honestly.

Wingnut Watch: Texan troubles in the Sunshine State

Posted on by The Progressive Policy Institute

In February, the “invisible primary” for the 2012 Republican presidential nomination was kicked off in Washington by the American Conservative Union’s annual Conservative Political Action Conference. On Friday, a second CPAC event will be held in Orlando in deliberate proximity to tomorrow’s Fox/Google candidates’ debate and Saturday’s Florida GOP presidential straw poll (CPAC will not feature its own straw poll). As in Washington in February, the event will revolve around a cattle call of speeches by presidential candidates and conservative celebrities. The smell of red meat will hang heavy in the air, and speakers can and will be expected to forswear all ideological heresy and smite both Democrat Socialists and RINOs.

But it’s instructive to note how the presidential contest has changed in those seven months between CPAC-DC and CPAC-FL. In February, the intrepid conservative-watcher Dave Weigel of Slate ranked in order of general impressiveness the CPAC appearances of no less than twelve candidates, quasi-candidates, and possible candidates: (1) Ron Paul (who won, for the second straight year, the annual straw poll); (2) Gary Johnson; (3) Mitch Daniels; (4) Haley Barbour; (5) John Bolton; (6) Donald Trump; (7) Mitt Romney; (8) Newt Gingrich; (9) Herman Cain; (10) Tim Pawlenty; (11) Rick Santorum; (12) John Thune. You will note that five of these worthies wound up never running president. A sixth, T-Paw, has dropped out. A seventh, Gingrich, is no longer being taken seriously as a candidate, while an eighth (Cain) and ninth (Santorum) are barely clinging to relevance, and a tenth (Johnson) can’t get an invitation to a debate. Meanwhile, Weigel did not even mention Rick Perry or Michele Bachmann, both of whom actually did speak at CPAC, or Jon Huntsman, who at this point was still Barack Obama’s ambassador to China. Interesting, eh?

With four or five months (depending on decisions pending in the states on the date of the starting gun in Iowa) still to go before actual voters begin to participate in the nomination process, how much more is likely to change? A lot could depend on what happens in Florida late this week, particularly to insta-front-runner Rick Perry.

The Texan’s somewhat shaky performance in the CNN-Tea Party Express debate on September 12 (also in Florida) may embolden his rivals to go after him again tomorrow night in Orlando. His areas of vulnerability could again include immigration policy (Cuban-Americans–the Hispanic voting group most active in Florida Republican politics–are not terribly sympathetic to undocumented workers from Mexico). It’s unlikely Michele Bachmann will again bring up Perry’s unsuccessful efforts to immunize Texas schoolgirls against the HPV virus, since her handling of the issue backfired on her in the intervening days. But if she wants to pursue the “crony capitalism” rap on Perry in a way that undermines his Tea Party support, there’s rich ground available in his futile and unpopular campaign to build a giant system of privately operated toll roads—the Trans-Texas Corridor—that might have enriched some of Perry’s friends and supporters at the expense of local landowners, and that reminded some hard-core conservatives of shadowy rumors about a “NAFTA Superhighway” designed to encourage illegal immigration and threaten U.S. sovereignty. The whole issue looks tailor-made for Bachmann.

Perry’s apparently dovish feelings about overseas troop deployments could be another target, given the very hawkish tendencies of Florida Republicans (and especially Cuban-Americans, who went heavily for John McCain, then campaigning mainly on the Iraq “surge,” in the 2008 Republican primary).

But without question, Romney, Bachmann, and perhaps others will keep up the pressure on Perry about Social Security in a state where about one-third of Republican primary participants are over the age of 65. The most recent polling in Florida, by Insider Advantage, showed Romney with a healthy lead over Perry among likely primary voters 65 and older, despite Perry’s overall nine-point lead. Since Social Security is also central to Team Romney’s “electability” argument against Perry, alarming Florida seniors generally about the Texan’s expressed disdain for the New Deal program as an unconstitutional “failure” will be a priority. Republicans have reason to be anxious about the Sunshine State: the last Republican to win the White House without winning Florida was Calvin Coolidge in 1924.

Regardless of exactly how he does in the debate, or in his CPAC-FL speech, Perry has long planned to cap the week with a smashing victory in the Saturday state party straw poll (which goes by the rather self-important name of “P5” to indicate that it is the fifth such event in Florida). But Romney and Bachmann have undermined the significance of the event by declining to appear in the pre-straw-poll cattle call, or actively compete in the straw poll. The pre-ordained nature of the Perry victory, and thus its relative lack of newsworthiness, is reinforced by this straw poll’s unusual nature: voting participants were selected months ago by county GOP organizations. So Ron Paul won’t be able to win this one by any last-minute packing of the room with his youthful supporters.

P5 might, on the other hand, draw attention to Perry’s support among Florida GOP power-brokers, including several key legislative leaders, and reportedly (though he remain officially neutral), the controversial right-wing Gov. Rick Scott. But the even bigger dogs in Florida Republican politics are another matter. Sen. Marco Rubio, who is the presumptive favorite for the second spot on the ticket no matter who wins the first spot, has little reason to endorse anybody. And his political patron, former Gov. Jeb Bush, is assumed to share his clan’s general antipathy towards Perry. If Romney can build doubts about Perry’s electability and specifically his appeal to seniors, and also secure open or covert backing from Jeb Bush, this difficult week in Florida could be just the beginning of the front-running Texan’s troubles in the Sunshine State.

Behind Abbas’s UN Gambit

Posted on by The Progressive Policy Institute

President of Palestinian National Authority Addresses General AssemblyPalestinian Authority (PA) President Mahmoud Abbas will ask the United Nations tomorrow to welcome Palestine as its 194th member and newest state. As Abbas well knows, that’s not going to happen. So why are Palestinians devoting their diplomatic energies to scoring purely symbolic points at Turtle Bay?

In essence, Palestinians are engaging in a kind of forum shopping. Historically, the U.N. has been sympathetic to their plight, and notoriously hostile to Israel. Abbas comes to New York seeking statehood on terms more favorable than the Palestinians have been able to get from nearly two decades of peace processing with Israel. It’s part of an all-too-familiar pattern in which Palestinian leaders expect the international community to spare them from making the unpopular concessions that peace with Israel demands.

Abbas claims his hand has been forced by Israeli intransigence. There’s something to that: The right-listing government of Prime Minister Benjamin Netanyahu has been obdurate and prickly in its dealings with everyone, from the PA to Washington. It has failed to offer imaginative proposals for rekindling stalled peace talks, to confront a settler movement that threatens to hijack Israel’s domestic politics, and to counter effectively a spreading campaign to isolate and delegitimate the Jewish state.

Nonetheless, it was Abbas, not Netanyahu, who walked away from bilateral talks last year in a dispute over Israeli settlements. Now Abbas is pulling an end run around the peace process—and putting Washington on the spot—by asking the Security Council to grant Palestine full U.N. membership. The Obama administration has vowed to veto any such resolution, even though it supports a Palestinian state in principle. The White House rightly insists that the Palestinians can earn statehood only by making peace with Israel.

Abbas won’t return home to Ramallah with the grand prize of statehood. So why raise expectations that he knows will be dashed?

Here we wade into the multilayered subtleties of Middle East politics. One obvious motive is to dramatize Israel’s growing isolation in the region, as Turkey turns on its erstwhile ally and anti-Israel sentiment flares next door in post-Mubarak Egypt. Another is to split Europe and the United States and stoke anger at America in the Arab street, thereby racheting up pressure on Washington to extract concessions from Israel.

Many observers believe that Abbas is desperate to head off Arab spring-style demonstrations against the PA, which has been losing popularity in recent years to Hamas. If this reading is correct, then Abbas’s U.N. gambit has more to do with perpetuating the PA’s lease on power in the West Bank than winning recognition of a Palestinian state.

Finally, even if statehood is out of reach the Palestinians could win a booby prize if the U.N. General Assembly upgrades their status to that of a “non-member state.” This would allow Palestine to join various international bodies and possibly to press claims against Israel in the International Criminal Court.

Whatever his motives, Abbas’s U.N. caper carries immense risks. The PA has called for massive, non-violent demonstrations in the West Bank today to drum up support for the statehood bid. If these get out of hand, and provoke a violent confrontation with Israel, it will break a fragile peace and undo progress toward handing over security responsibilities in the West Bank to Palestinian forces.

Unilateral assertions of “sovereignty” could also prove costly for the Palestinians in other ways. Israel, for example, could withhold custom duties it collects that help to pay PA salaries. Both Houses of Congress likewise have passed resolutions threatening to cut off U.S. aid—$600 million a year—to the PA.

Such punitive measures, however, raise the specter that many observers fear most—the PA’s collapse. If as seems likely Abbas’s gambit fails to change conditions on the ground, it could engender massive disillusionment with the PA and Fatah. The winner would not be Israel but Hamas, which has no interest in a Palestinian state that does not include the whole of what is now the state of Israel. Barring another intifida and outbreak of terrorism, Israel and Washington ought to keep cool and keep funding the PA.

The United States nonetheless should stand firm against premature demands for Palestinian statehood. If it were created today, the new entity would lack two prerequisites for international recognition as an independent state: political unity and an unambiguous commitment to peaceful cooexistence with Israel.

In fact, it is the PA-Hamas split, not Israel, that poses the greatest obstacle to Palestinian aspirations to dignity, justice and independence. The blunt truth is, that until the Palestinians resolve their internal conflict—in favor of a negotiated peace and a two-state solution—they don’t deserve to have one of their own.

Photo credit: United Nations Photo

Policy Brief: How an Afghanistan-Pakistan Study Group Could Help

Posted on by The Progressive Policy Institute

In June 2011, the House Appropriations Committee unanimously approved an amendment introduced by U.S. Representative Frank Wolf (R-Va.) that would provide $1 million for the establishment of an independent Afghanistan-Pakistan Study Group. The blue-ribbon panel’s charge would be to assess U.S. policy in Afghanistan and Pakistan and offer recommendations within 120 days.

Could an Afghanistan-Pakistan Commission actually accomplish anything? Although the popular perception is that commission reports achieve little beyond giving publicity to the graybeards that serve on them, my research on over 50 blue-ribbon panels shows that under the right circumstances they can catalyze important policy changes.

At first blush, an Afghanistan-Pakistan Study Group might seem pointless, since President Obama has already decided to implement a gradual withdrawal of U.S. troops from Afghanistan. But beyond the withdrawal of our surge forces much of our policy remains uncertain or undecided.

In particular, it remains unclear how large of a troop presence we will maintain in Afghanistan beyond 2012, how we will seek a negotiated settlement in Afghanistan and deal with the Taliban if they gain ground as we pull out, and, as relations with Pakistan remain tumultuous in the wake of the Bin Laden assassination, how the U.S. will craft a comprehensive, stable policy toward Islamabad that best serves national interests over the long term.

Read the entire brief.

 

Wingnut Watch: The Rise of Fearless Republicans

Posted on by The Progressive Policy Institute

President ObamaThere are still some observers in Washington who believe congressional Republicans will be forced by President Obama’s jobs speech and proposal to cooperate with Democrats on some sort of emergency economic legislation. But that’s not the perception, and certainly is not the inclination, of the citizens of Wingnut World, who greeted the president’s speech with a combo platter of ideological hostility and mocking indifference.

Almost universally, conservative opinion-leaders insist on calling the proposal a “stimulus” rather than a “jobs” bill. Given their equally universal claim that the 2009 economic stimulus legislation did not create any real jobs (viz. Rick Perry’s claim during the Florida candidates’ debate), this indicates its dead-on-arrival nature among conservative leaders and probably the House. Once the White House made it clear it proposed to “pay” for the jobs proposal with measures that include a limitation on itemized tax deductions by high earners, conservative condemnation solidified even more.

The bigger picture, of course, is that conservatives have long settled on a message and policy agenda that insists nothing other than business tax cuts, federal spending cuts, and aggressive deregulation can possibly be considered as helpful to the current and future U.S. economy. Public investments? That’s just a code word for more spending or worse yet, pork. Temporary relief for the unemployed or the under-employed? That’s just more stimulus, reflecting the failed ideas of John Maynard Keynes. During the long GOP presidential debate on September 12, no concept beyond disabling government was mentioned by any of the candidates with respect to reviving the economy.

But aside from hostility to the specifics of Obama’s proposal, another note is steadily creeping into conservative messaging on the economic and other debates in Washington: contempt for the president’s political influence. Here’s National Review’s Victor Davis Hanson on the jobs proposal:

In truth, Obama is out of arrows. His quiver is bare, because he came into office as a rhetorical president without much experience or any ideas other than growing even bigger a tired big government. And now the public realizes that both the speeches and the big spending do not work. The result is that we collectively know what the president cannot any longer say — and it proves far greater than what he can say. He is well past the point of Jerry Ford’s WIN buttons or Jimmy Carter’s fist-pounding malaise speech.

This sense that Republicans have nothing to fear any longer from Obama (in the same piece quoted above, Hanson compared Obama today to George W. Bush towards the end of his second term) is increasingly pervasive, and will almost certainly be intensified by hype over the Republican victory in the special election to fill Anthony Wiener’s House seat in New York. If New York Jews are abandoning Obama, many conservatives are undoubtedly saying to themselves, how can he possibly win in 2012?

If, as has been convincingly argued, Obama’s jobs speech represented a definitive effort to force Republicans into a choice between cooperation and a damaging display of indifference to the country’s economic suffering, conservatives show every indication that they will happily risk the latter. This in turn could have an effect on the tone of the GOP presidential contest, where a very confident party with fewer fears about electability could indulge itself in a base-pleasing competition tilting very far right.

The CNN-Tea Party Express debate in Florida certainly showed signs of that dynamic. A lot of headlines about this and the previous candidates’ debate focused on criticisms of Rick Perry’s harsh rhetoric on Social Security, suggesting that there was in fact a limit to how far right the primary electorate would choose to let a potential nominee go. But the fact that uber-conservative Michele Bachmann has joyfully joined in the bashing of Perry for disrespecting the very existence of Social Security shows that this may be less a matter of sensitivity to mainstream public opinion and more a matter of recognizing the strong popularity of federal retirement programs among conservative base voters—who are on average relatively old. Meanwhile, Perry’s right flank was meaningfully exposed during the debate in exchanges on immigration and his aborted effort to inoculate Texas schoolgirls against the HPV virus. He’s in some danger of looking like he feels more compassion towards illegal aliens and sexually active teenagers than towards the conservative seniors who belief they have earned every nickel of their Social Security and Medicare benefits.

The skirmishing between Perry and other candidates in the debate may have helped obscure the virtual unanimity of the candidates in support of policy positions that would have been considered wingnutty as recently as the last presidential cycle. (The shouts from the audience of “Yes!” when moderator Wolf Blitzer asked if a hypothetical person with no health insurance who is suffering from a fatal disease should be allowed to die was representative of the gulf between the conservative GOP base and the rest of the country). One interesting exception was foreign policy, where first Jon Huntsman and then Rick Perry called for an end to the U.S. combat role in Afghanistan without explicit contradiction from other candidates. It will be interesting to see if Perry’s rivals, especially Mitt Romney, choose to go after Perry from the right on this subject in a direct appeal to what used to be called one leg in the three-legged- stool of American conservatism: “national security conservatives.”

Policy Brief: Another Kick in the Teeth: Loan Limits and the Housing Market

Posted on by The Progressive Policy Institute

For weeks, August 2—the date on which the U.S. Treasury might have defaulted on its debts—was the deadline that drove policymakers toward a deal on raising the debt ceiling and lowering the nation’s spiraling debt and deficits.

Another pending deadline—October 1—has won far less attention. But it too could have far-reaching impacts on the U.S. economy if Congress allows it to expire.

This date is when the maximum size of a mortgage loan (the “loan limit”) that can be insured by the Federal Housing Administration (FHA) or bought by government-sponsored mortgage giants Fannie Mae and Freddie Mac (the GSE’s) drops significantly. On October 1, these loan limits will fall in 669 counties in 42 states and the District of Columbia, with an average reduction of more than $50,000 and in some cases by more than $100,000. In these areas, many prospective homebuyers once eligible for an FHA loan would no longer qualify, while others may face the prospect of a higher-cost “jumbo” loan.

The result could be the potential sidelining of a key segment of homebuyers, which in turn would further weaken demand, depress home prices and drop another wet blanket on consumer confidence as Americans continue to watch their home equity evaporate. Needless to say, this is the last thing the housing market or the economy needs as it struggles toward recovery.

Without question, government should ultimately pare back its involvement in the housing market and let private capital play the leading role. But this should also happen when the markets are ready, not according to an arbitrary timetable. Unfortunately, the initial conditions that warranted the current loan limits in the first place have not improved substantially. Nor does it seem private sources are ready to jump in if government support were to end.

Read the entire brief.

Do It Yourself: Creating a Producer Society

Posted on by The Progressive Policy Institute

Last month, PPI released a provocative policy brief by Will Marshall, “Labor and the Producer Society,” which argued that the Great Recession and stalled economic recovery mean, “there can be no going back to the old economic model of debt-fueled consumption.” In this, Will is precisely correct. Even as median American income failed to rise over the past two decades, consumption surged because households piled up credit card debt or tapped their home equity. The massive debt deleveraging that typically follows financial crises still has some ways to go, which means that consumption cannot be counted upon to drive economic growth.

The United States, wrote Will, needs to “shift from a consumer society to a producer society.” We need a “new economic strategy that stimulates production rather than consumption; saving rather than borrowing; and exports rather than imports.” While such a shift needs to happen, we need a conception of “producer society” that is somewhat wider than old-line manufacturing, which tends to be the image that comes to mind when talking “production.”

Yet, in some ways, a new producer society is already taking shape all across the country, driven by very real grassroots movements in tinkering, do-it-yourself (DIY) projects, entrepreneurship, and even manufacturing. This is not the producer society of auto assembly or equipment manufacturing. In rural Missouri, a Polish immigrant with a doctorate in physics has founded Open Source Ecology, which creates what it calls the “Global Village Construction Set,” dramatically lowering the barriers to farming, construction, and manufacturing. The idea has clear implications for developing countries, but for a place like the United States, with massive legacy infrastructure and deep pools of engineering talent, the idea of repurposing existing technology for lower cost and better quality is very attractive.

Or take Maker Faire, which bills itself as the “world largest DIY festival.” It is a joyous collection of “makers”: proverbial garage inventors, hobbyists, and people who like to tinker. A Maker Faire held in Detroit several months ago drew 70,000 people! A recent issue of Make magazine, moreover, featured information on how to build your own go-kart. A slightly more formal version of the maker movement is TechShop, which originated in Silicon Valley and has now expanded to Detroit and Raleigh, NC, with additional locations planned. TechShop operates on the subscription model—you pay, say, $100 per month and gain access to cutting-edge equipment such as 3-D printers and laser-cutting machines. Several new companies have already emerged from TechShop. These are the faces of American manufacturing’s future.

But we must expand our notion of “producer” as well. All around the country, thousands of people participate in Startup Weekends throughout the year. This event is exactly what it sounds like: a 54-hour crash-course in pitching ideas, forming teams, building products, and pitching again. Many actual and sustainable companies have emerged from these. To date, most Startup Weekends focus, quite naturally, on software and Web-based businesses. But in the coming months there will be a Startup Weekend focused on 3-D printing and even health services. The idea echoes those of OSE and Maker Faire: rapid learning, lower costs, higher quality.

Startup Weekend participants, moreover, see themselves as builders and creators and, yes, producers. As Marc Andreessen recently emphasized, software is “eating the world,” transforming industries that we previously thought of as far removed from software. If you follow the myriad blogs and opinion pieces in the world of technology entrepreneurship—and if you can look past the persistent claims that we are in a new “tech bubble”—it becomes clear that this is a movement of producers.

Is this enough, however, to save the American economy from a Japanese-style lost decade? Skeptics will rightly assert that these movements of makers and startups are far from sufficient to create jobs for all the unemployed and underemployed. And, the challenges facing the United States in areas like education and health care are deep-seated. We have seen, moreover, that even before the onset of the financial crisis in 2008, new companies were “starting smaller and staying smaller,” a trend that only worsened during the recession.

A full treatment of public policies and private actions that might build on the foregoing movements and fully address the American economic challenges must wait for a future column. We should work, of course, to boost the competitiveness of the “old” producer society, but this will be achieved more through free trade agreements than government-directed investments. But, history teaches that the next economic frontier is born in the depths of recessions. The future being created right now at Maker Faire, in TechShop, and at Startup Weekends is the leading frontier of our next era of economic prosperity.

Photo credit: Laughing Squid

Reflecting on 9/11 from the New York Mayor’s office

Posted on by The Progressive Policy Institute

Mark Ribbing, PPI’s former Director of Policy Development, was a senior speechwriter for New York Mayor Rudy Giuliani on September 11, 2001. Here’s how he remembers that day, over at NewGeography.com:

Up on the sidewalk I kept my eyes on the pavement, lost in my own thoughts. Finally, after a good 70 yards or so, it occurred to me that the street was different today. There were countless people out, as always, but instead of rushing around in their usual morning bustle, they were standing still. Something about this felt weird, displaced, transfixed. It momentarily reminded me of children huddled outside a school during a fire alarm.

Then I looked up. Ahead and to the right, four blocks to the southwest, the Twin Towers were burning. Keeping symmetry even now, each tower had a gash of yellow flame from which black smoke blew upward in tight veils.

City Hall was a whirl of confused, frightened activity. The mayor was not in the building. He had gone to the towers. In the frenzied buzz, reports and rumors flew. Someone said a hijacked plane had hit the State Department; someone else added that another plane had struck the Pentagon; another jet, its intentions unknown, was said to be heading for New York.

Read the rest of Mark’s account here.

Photo credit: NASA Marshall Space Flight Center.