When the financial crisis broke in September 2008, it was widely understood – both in policy-making circles and in popular conversation – that problems in the U.S. housing market were central to the unfolding events. But thereafter, the events themselves took center stage: and the problems of the housing sector, though not forgotten, slipped down the political agenda and off the popular radar. That was a mistake. Problems in the U.S. housing market remain central to our continuing difficulties – problems experienced by people wanting to buy houses, and problems experienced by people who already own one. Economically and politically, a resolution of the U.S. housing crisis remains a key requirement for long term prosperity and, more immediately, for the continuation of a Democratic White House.[1]

Economically the current recovery is slow in part because the housing sector remains sluggish. The housing sector remains sluggish because the inventory of unsold houses remains high; and the inventory of unsold houses remains high because the foreclosure crisis refuses to go away. Politically, Obama and the Democrats are losing popular support because unemployment and job insecurity are rife. Unemployment and job insecurity are rife because the economy remains sluggish; and the economy remains sluggish in part because there are still so many foreclosed homes on the market. People are losing their homes in record numbers in contemporary America, and they are doing so now on Obama’s watch, not on Bush’s.

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Reports have circulated widely this week about unease in senior administration and Democratic Party circles – unease about the possibility of Elizabeth Warren heading the new Consumer Financial Protection Agency. Senator Chris Dodd has wondered publicly and aloud about her confirmability by the Senate;[1] and Treasury Secretary Timothy Geitner, when given an opportunity to support her possible nomination, visibly declined to take it. He chose to name instead other suitable candidates.[2] READ FULL POST

You might think, might you not, that policy-makers and those advising them are intelligent and caring human beings? Well, we are beginning to wonder whether in fact they are. We are beginning to wonder whether the intelligent ones really care, or if those who care are really intelligent.

Why?

Because all the talk these days is of deficit reduction: deficit reduction in the middle of the worst recession for more than six decades!

Cutting federal and state budgets is fast becoming the new Holy Grail. Republicans and blue-dog Democrats alike are insisting that budgets in the public sector be cut, as though it was public sector largesse, rather than private sector irresponsibility, that created the current recession.

• They advocate cutting budgets in the public sector when unemployment in the private sector is still stubbornly stuck (officially around the ten percent mark, more likely in reality nearer the twenty percent), and when that cutting is likely to generate a new round of lay-offs – this time among teachers, fire fighters and law enforcement officers.
• They advocate cutting budgets when the evidence is already clear from economies in which sharp deficit reduction is currently underway – the United Kingdom in particular – that a “slash and burn” approach to public spending not only undermines long-term economic growth by hitting key education and training budgets. It also deepens the recession it is supposed to alleviate – to the tune in the UK’s case of an additional 1.3 million jobs to be lost over a five-year period, on the UK Treasury’s own estimates![1]
• And while still advocating the extension of the Bush tax cuts for the wealthiest Americans, the Republican Party leadership has continued to oppose the extension of unemployment insurance to the long-term jobless.[2] Indeed some conservative commentators have even argued that with unemployment insurance “there will be less work and more unemployment”.[3]

Given the scale of involuntary unemployment now before us, and the prevalence of official warnings of only slow economic recovery to come,[4] this way of arguing is madness masquerading as sense.

Actually it is more than madness.

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These are not good times for advocates of comprehensive immigration reform, either here or abroad. Cutting the flow of immigrants is a hot button issue in Holland right now. It is in the UK, even in Spain[1]; and it certainly is here in the United States. With unemployment high and public debt widely seen as out of control, conservative forces on both sides of the Atlantic are finding political mileage in once more playing the immigration card. Voters scared about job loss and house foreclosures don’t need much persuading to believe that unwanted foreigners are a major source of their present difficulties. To get back to full employment and rising wages again, so we are regularly told, public policy should tighten the border, repatriate the undocumented, and reserve local jobs for local workers. It all appears to make such perfect sense.

But appearances are deceptive here. Processes that create two sets of losers are not resolved by one set demonizing the other. They are resolved only by understanding and acting on the forces that are eroding the living standards of both.

Immigration by foreign-born workers, and unemployment among native-born ones, may go together in modern America, but the relationship between them is neither simple nor directly causal. On the contrary, three things at least are very clear in the data on contemporary trends in employment and wages – at least very clear to those not subsumed in Arizona-type hysteria. (1) Immigration, legal or otherwise, is not the main cause of the current recession. (2) The overall impact of immigration on employment, productivity and income in the contemporary US economy is broadly positive; and (3) the very forces triggering migration from the global “south” are the same ones creating unemployment and falling wages in the global “north”.

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The Radical Right is at it again, stoking the flames of anger and fear. This time, not just Tea Party folk but major Republican figures and commentators as well. There are books to sell and votes to win by telling America that the end of the world looms – looms, that is, unless stopped by a revitalized conservatism led by the paranoid. Election season is in full swing, and the Right is telling stories – frightening stories, stories that do real damage, stories that need to be challenged, stories like this one.

The “socialism is coming” story.

“America as we know it,” according to Newt Gingrich, “is now facing a mortal threat.” (Gingrich, To Save America, 2010:2) Having won the cold war, we are apparently poised to lose the warm peace. Why? Because America is being taken over by a shadowy elite of academics, media people, union leaders, trial lawyers, state bureaucrats and liberal Democrats – all determined to take America off in a secular-socialist direction. Stopping that is what Gingrich calls his crusade to save America. READ FULL POST

Parties of the Left that choose to govern in the Center invariably pave the way for the return of government by the Right.

There is an understandable fascination this weekend with all things politically British. From the editorial pages of the liberal press to the comedy program of Stephen Colbert, there seems to be a genuine hunger to know: what are the British up to? Why have the British suddenly gone mad?

What they are up to, of course, is not madness.[i] It is political stalemate. The British political class is suddenly having to do what the German, the Belgian, the Italian, even the French, political class do on a regular basis – make deals with each other in return for power. The sort of prolonged coalition-building that is standard practice in democracies whose electoral systems rely on some form of proportional representation is now underway in London – in the one major political system outside the United States which (like the United States) prefers to rely on a ‘first past the post’ way of deciding who has won power in each individual constituency. First-past-the-post electoral systems do not normally create political stalemates, because in those electoral systems, coming second in a constituency is as bad as coming ninth – worse actually, become if you come second you get lots of votes but no seat. Your voter-waste count tends to be exceptionally high. READ FULL POST

When Arizona’s Republican Governor Jan Brewer signed Senate Bill 1070 into law last week, she presented her signature as a legitimate response to a failure of policy at the federal level. No fan of racial profiling, she described what is now set to become the nation’s toughest  immigration enforcement law as simply “another tool for our state to use as we work to solve a crisis we did not create and the federal government has refused to fix.” The day before, when announcing the new Arizona Border Security Plan, the governor was more explicit still about that federal failure to fix. “Almost from the day I took office,” she told a gathering of local dignitaries and journalists,

I have been asking Washington to fulfill its primary obligation to the citizens of our state:  to secure our southern border; to enhance the rule of law’ … Make no mistake: The responsibility to ensure that we have an orderly, secure border – not just some imaginary line in the dirt or a rickety fence – belongs to the federal government. They have failed.
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Apparently the insurance commissioner of Georgia is currently refusing to comply with Kathleen Sebelius’ request to create a state pool for high-risk insurance plans as required under the health care reform bill signed into law in March. According to The New York Times (April 13, 2010) the commissioner told Sibelius that the legislation is likely to be declared unconstitutional, and that even if it is not, its requirements constitute both an unwarranted expansion of the federal government and a threat to the financial stability of the nation. Visibly, he doesn’t like the act, and is taking his bat home.

What does this tell us?

It tells us that the Obama administration has settled down to the technical business of implementing the legislation while its opponents are gearing up politically to tear it down. Technical conversations from the administration, political campaigning from the Republicans.

It also tells us that however imperfect the legislation may be, those of us who do not want to see a Republican-controlled Congress after November would do well to gear up in a similar fashion.  That is going to be really hard for many of us, because the legislation that passed was not the one that many of us would have chosen – no single-payer, no strong public option, no single national exchange, the Hyde Amendment and worse into law, no Medicare to people under 65. But this is baby and bath water time. Do we stand by and let the Republicans take down the first major extension in health care cover for more than four decades?  I don’t think we should. The trick will be to defend the legislation, however imperfect, in ways that enable us to win support later for its progressive reform. READ FULL POST

(written with Peter Siavelis)

Did anyone even notice?  Last Sunday’s massive immigration rally was supposed to push political leaders towards comprehensive immigration reform.  Unfortunately it was largely overshadowed by the final vote on healthcare reform.  Hunt for coverage of the rally in the national press and you will find it, but you will have to hunt.

Yet Sunday’s vote on healthcare could still be of genuine benefit to immigration reform.  The victory on Sunday evening showed that the president and congress are able to legislate – that tough votes can be fought for and won. And once the real benefits of the healthcare overhaul sink in, much of Obama’s political capital may yet be restored to him.  If Sunday morning is any guide, he will need that capital: the ugly slurs hurled by Tea Party protesters at black lawmakers and the openly homosexual Congressman Barney Frank likely presage more ugliness as the debate on immigration reform moves forward.  Yet most Americans, including a number of leading Republicans,  remain strongly in favor of reform; and the case for it is compelling even in the depth of this recession.

• For rising unemployment has turned off the flow of undocumented workers. Fewer people are coming because there are fewer jobs to be had. The recession is exactly the right time to act, not the time to pause: time to act before the flow begins again.

• The results of present policy are perverse. They are adding to the number of the undocumented rather than bringing that number down. Walls trap people in as well as keep them out. People stay because tighter border patrols and the building of the wall make departure difficult – not simply re-entry more expensive. It is time to say to the Republican base, in language they think they own, that we need to tear down this wall.

• There is no evidence that unemployment is lower among undocumented workers than among those legally here. The reverse is likely the case, given the heavy concentration of such workers in the three industries hit hardest by the recession – construction, hospitality & leisure, and agriculture. The presence of undocumented workers actually hides the true degree of hardship being created by the financial meltdown. Recessions are not solved by shipping them overseas. We need more jobs, not fewer workers.

• Nor is there evidence of any large-scale increase in the desire of unemployed native-born Americans to re-colonize the grunt jobs at the bottom of the economy largely filled before the recession by undocumented workers. There is evidence, however, of diminishing support for half-hearted progressive politics in Washington. Native-born Americans hostile to immigration reform are already lost to the Republicans: so in 2010, as is 2008, the counterweight of the Latino vote will be critical. Democratic politicians need to be reminded that immediate comprehensive immigration reform is in their self-interest as well as in their platform. READ FULL POST

The debt that progressives owe to Jon Stewart and The Daily Show is large and growing. It certainly grew again last Thursday when the program delivered a much needed demolition job on Glenn Beck. The critique delivered that day has been made by others – not least by David Sarota and Adele Stan immediately after the CPAC insanity[i] – but never with quite the sharpness and wit that Stewart brought to the endeavor. Not that Stewart was alone this week in taking Beck to task. Even Peggy Noonan took time out in her weekend defense of the Fox News interview with the President to let her readers know that, to her, ‘Glenn Beck has long appeared to be insane”.[ii]

Good! Calling Glenn Beck to account is essential – essential, but not of itself necessarily enough. For Beck is not only the only sinner here. This is tip-of-iceberg stuff. Remember Michael Savage writing in 2003 of liberalism as “a mental disease…a destructive contagion more deadly than any force this country has ever faced”[iii]: or Rush Limbaugh telling the Heritage Foundation in November 2004 that conservatives “don’t have to compromise with depravity”.[iv] No, this is a well-established tradition – this denigration of liberals in medical or animal terms, this description of them as an infection, a cancer or as vermin who need removing, cutting out, or somehow eradicating. It is a well-established tradition on the extreme of the American Right, and it is one that is getting worse. As the President said at the National Prayer Breakfast in February, what we currently face in Washington DC and beyond is a troubling “erosion of civility”.[v] READ FULL POST