Immigration

American Presidents, Andrus, Basketball, Christie, Economy, FDR, Federal Budget, Immigration, Obama, Stimulus

Is 2010 Really 1938?

Posted on by christian

Getting an Economic Consensus

There are no perfect historical parallels. Nothing is ever precisely like it was in another time. At best, history can help illuminate the present and should, if we’re paying attention, help us avoid making the same mistakes over and over again. Take 1938, for example.

But, alas we are Americans. We can’t get agreement on how to crown a national college football champion, how can we possibly get consensus on what to do with the economy?

President Obama went to Cleveland this week to roll out a plan for more stimulus spending on infrastructure and small buisness tax cuts as a way to get people back to work. He was greeted by reactions ranging from ridicule to yawning. Meanwhile, House Speaker-in-Waiting John Boehner, developing economic policy while he measures the drapes, started dropping hints about what a Republican Congress would do with spending (cut it, including unspent stimulus dollars), the economy (grow it) and taxes (leave the Bush cuts in place). All the while leaving room for a few well placed subpoenas.

These two versions of economic policy couldn’t be more at odds. It does sound a good deal like 1937 and 1938.

As Franklin Roosevelt’s Democrats faced the mid-terms in his sixth year in office, the Great Depression was in its eighth year. Wall Street was restive. Labor unions were sitting down on the job. Democrats were frantic and the president’s counselors were divided. Should FDR double down on spending and fiscal policy aimed at reducing unemployment or should the administration send a message to the markets and business that it was determined to get a ballooning budget under control?

Confronted with what historian David Kennedy has described as, “repeated budget deficits, escalating regulatory burdens, threats of higher taxes, mounting labor costs, and, most important, persistent anxiety about what further provocations to business the New Deal had in store,” business confidence was sapped. “Capital,” Kennedy said, “was hibernating.” Sounds familiar, eh?

At a pivotal Cabinet meeting late in 1937, FDR fumed about his advisers constantly telling him about the sorry state of the economy, but “nobody suggests what I should do.” His economic and political advisers eventually won the debate. The president’s Treasury Secretary, Henry Morgenthau, a balanced budget advocate, put it succinctly.

“What business wants to know is: Are we headed toward state Socialism or are we going to continue on a capitalistic basis?”

FDR’s chief political lieutenant, Jim Farley, chimed in. “That’s what they want to know,” that the administration would reduce spending and balance the budget to reassure business and the markets.

“All right, Jim; I will turn on the old record,” Roosevelt responded. A new fiscal policy aimed at reducing spending and balancing the budget was ordered.

The New York Times’ Paul Krugman argues that FDR’s decision brought on the “Roosevelt Recession” of 1938, caused unemployment to top out at 20% and contributed to stunning Democratic losses – six Senate seats and 71 seats in the House – in the 1938 mid-terms. What’s more, Krugman asserts – and he’s critical of Obama from the left for being too timid with his stimulus efforts – the public in the late 1930’s took exactly the wrong lesson from FDR’s shift in policy. Americans became convinced that stimulus spending and job creation efforts hadn’t worked and wouldn’t work. That debate, check the morning paper, still rages.

I keep thinking there must be some middle ground somewhere in the current debate, but I’ve been wrong before. Couldn’t we get something approaching national consensus around two or three major issues?

One, Wall Street and investment banking excesses must be brought under control. Does anyone really think that what happened in the run up to the financial collapse shouldn’t be avoided in the future if at all possible? Regulating greed and excess is not a partisan issue.

Two, spending on well-conceived public works (OK, infrastructure) is both a good long-term investment and good short-term job stabilizer and, one hopes, job creator. The non-partisan Congressional Budget Office said recently that the stimulus has – big surprise – increased the deficit and reduced unemployment.

And, three, the deficit needs to come down, but maybe in a planned, systematic way. Maybe the timing on the expiration of those Bush-era tax cuts is really not very conducive to getting capital out of hibernation. Perhaps a compromise is in order?

Someone, the president or John Boehner or the ghost of Henry Morgenthau needs to find a way to knit all the pieces together into a 2010 whole cloth of economic growth, job creation and fiscal sanity. Not holding your breath? I understand.

There is a poem entitled “Nineteen-Thirty-Eight” by Andrea Hollander Budy. It’s about a young woman who lies about not graduating from high school in 1938:

yanked out
when her father lost his job.

Now it was her turn
to make herself useful, he told her.

Nineteen-Thirty-Eight was not a particularly good year and not one to repeat. That much history tells us very clearly.

Eisenhower, Federal Budget, Idaho Statehouse, Immigration

A Cross of Iron

Posted on by christian

IkeA Debate About Everything Except What Matters

President Obama spoke to the nation from the Oval Office this week about the end of combat operations in Iraq. His advisers said to everyone who would listen that it was time to “turn the page” in the eighth year of the war – a longer period than U.S. involvement in World War I and II combined – and focus on the real threats to U.S. security in Afghanistan and to the need to rebuild the economy at home.

It was only the second time during his increasingly troubled presidency that Obama has used the Oval Office stage to talk directly to the nation and the world. We’ll see soon enough if the message got through. One certainty that is obvious, even given the withdrawal of thousands of U.S. troops from Iraq, is that our military men and women are going to be deployed in the region for most of the rest of our lifetimes.

The consequences – budgetary and otherwise – of these open-ended deployments are hardly debated in the broad sweep of American politics, but make no mistake they are intimately connected to the roaring and constant debate in Washington, D.C. over budgets, deficits and tax cuts.

I’ve only been in the Oval Office once. Bill Clinton was president, but the real presence in that relatively small room was the ghost of everyone who has ever had the awesome and lonely responsibility that goes with sitting at that big desk in that historic house. During Obama’s speech this week my thoughts turned to the last general to sit there – Ike.

Dwight David Eisenhower had the good timing – or luck or whatever – to occupy “the Oval” during the 1950’s. The 1950’s, as David Halberstam wrote in his masterful study of the decade, was a time “captured in black and white, most often by still photographers…not surprisingly, in retrospect the pace of the fifties seemed slower, almost languid.”

Eisenhower, a great general who mastered the logistics and planning of modern warfare, is often remembered for a laissez faire approach to the presidency. True enough in some respects. Eisenhower was slow off the mark on civil rights and his silence for too long on the excesses of Joe McCarthy have appropriately earned him low makes from historians. However, with respect to foreign affairs and the projection of American military power, Eisenhower was anything but slow off the mark or disengaged. The common sense the general/president applied to what he famously called “the military-industrial complex” is sorely missing today.

As Obama attempts to shift American attention and resources from what some have called the three trillion dollar war in Iraq to the challenge of mounting an effective counter insurgency strategy in Afghanistan, the nation’s attention is fixed firmly on other concerns. Most Americans are much more concerned about the still stumbling economy and the rising deficit than the cost and consequences of never ending war. Yet those two issues – a hugely costly war and palpable worry about the economy and debt – can’t help but be related.

Perhaps because we don’t like to confront the cause and effect of ultra-expensive wars and the mountain of debt we face, we struggle with the cognitive dissonance of holding two conflicting thoughts in our political minds at the same time. We seem to think, and few in Congress seem willing to debate the truth of the thought, that we can pursue trillion dollar wars and contain the budget and growing debt at the same time.

The details of the federal budget – so often commented upon, but so seldom understood – can bring on the MEGO effect – My Eyes Glaze Over, but the numbers do matter. An excellent recent piece in Commonweal magazine lays it out in grim detail.

Ronald Osborn, a Bannerman Fellow with the Program in Politics and International Relations at the University of Southern California, wrote the Commonweal piece. Here is part of the context Osborn provides on how military spending and the cost of ours wars is helping drive us into fiscal quick sand.

“The federal budget for 2010 is about $3.5 trillion,” Osborn writes. “Of this amount, $2.2 trillion consists of ‘nondiscretionary’ spending, or items that must be paid for by prior law, including Social Security ($695 billion), Medicare and Medicaid ($743 billion), and interest on the national debt ($164 billion). These costs are all expected to rise exponentially in the coming years as the baby-boom generation enters retirement. The remaining $1.3 trillion of the federal budget is not mandated by prior law but disbursed according to our elected officials’ priorities. This is the government’s ‘discretionary spending.’ Of this amount, about $534 billion will be given in 2010 to the Department of Defense and another $55 billion to Veterans Affairs. Defense spending does not include, however, the costs of the wars in Iraq and Afghanistan, counted as separate items in the budget under the category of ‘contingency operations.’ In 2010 alone, the wars are slated to cost taxpayers an additional $205 billion, including $76 billion in supplemental spending for 2009 expenses. And the 2011 budget, which increases the DOD’s base budget by $20 billion and the budget for the wars by another $30 billion, already includes a $33 billion supplemental request to cover 2010 war costs.”

Eyes glazed over yet? There is more.

“Even excluding ‘black operations,’ whose budgets are kept secret from the public but nearly doubled in the Bush years to an estimated $32 billion, as well as other programs with strong military overlays (such as NASA and the Department of Homeland Security, whose annual budget has grown to $43 billion), and leaving out the supplemental war spending this year that will appear only on next year’s books, military related spending in 2010 will total well over $700 billion – approximately 55 percent of all discretionary spending. The United States will spend nearly as much this year on its military as the rest of the world combined; and America together with its NATO allies will account for about 70 percent of global military spending.”

Osborn next points out the obvious, but regularly neglected fact that most of that spending is financed by debt. And it is not the debt of my parent’s generation. Mom and Dad bought war bonds. We borrow from China and Japan.

If you believe, as most rational folks do, including the co-chairs of the bi-partisan Presidential Commission on Fiscal Responsibility and Reform, that spending must be cut and revenues (make that taxes) increased if we are to begin to bring the deficit under control, then it just doesn’t compute to leave the costs of the endless wars floating out in budget never-never land, untouched and essentially ignored.

Ike, the old general, knew something about military spending. After all, he planned and executed the two most impressive – and costly – Allied initiatives of World War II – the North Africa invasion in 1942 and the Normandy landings in 1944. Yet Eisenhower would argue in the first year of his presidency, 1953, that a permanent war economy “is not a way of life at all, in any true sense,” but, “humanity hanging from a cross of iron.”

One of Eisenhower’s better biographers, Michael Korda, has noted the irony of Ike’s famous farewell warning about America becoming a “garrison state” as a result of what he saw, even in 1960, as the growing influence of “the military-industrial complex.” After all, Eisenhower had spent the vast majority of his adult life as part of the vast complex that he had played such a pivotal role in mobilizing to win a war.

“Yet as early as 1945,” Korda writes, “when he had argued against using the atomic bomb on the Japanese, (Eisenhower) was beginning to have doubts about the immense influence of defense contracting and new weapons systems over American politics and policies…the day after his (farewell) speech he complained about the proliferation of advertisements in the pages of American magazines showing Atlas and Titan rockets, as if they were the only things Americans knew how to make.”

The next time you hear a political leader – Republican or Democrat – lament the cost of “entitlements” like Social Security or Medicare, while arguing for further or continuing tax cuts, ask yourself whether we can ever get the nation’s fiscal house in order without addressing the real elephant in the budget room, what the last general to sit in the Oval Office called America’s permanent war economy.

Hats, Immigration

Immigration Politics

Posted on by christian

immigrationA Short-term Bounce, Bad Long-term Politics

No matter your feelings regarding the merits of a single state – Arizona – taking action on immigration, there can be no doubt that what the state legislature and governor have done in the land of the Grand Canyon has set off another raging national debate. Boycotts are threatened. Lawsuits are planned.

Makes you wonder, as Linda Greenhouse wrote, what the ol’ libertarian Barry Goldwater would have thought about a bill that requires police to ask a person they only suspect of immigration violations for their papers.

The Arizona law has also, I suspect, firmly cemented the partisanship of immigration politics to the long-term detriment of the GOP.

Arizona Gov. Jan Brewer, who signed the controversial legislation, had hardly gotten her pen back in her pocket before some of the more strategic thinkers in the Republican Party – Jeb Bush a Floridian and Karl Rove a Texan – declared Arizona’s sweeping immigration legislation a big political mistake. The GOP’s U.S. Senate hope in Florida almost immediately put distant between the Arizona action and his candidacy. With a name like Marco Rubio that may not really be a big surprise, but it does signal a Republican problem.

Here’s why these Republican luminaries are worried. The demographics of America continue to change – and rapidly. According to the Pew Center’s profile of the nation’s Hispanic population, Hispanics now comprise at least 10% of the population in Idaho, Oregon, Washington and Utah. In Nevada, Hispanics make up 26% of the population. In Arizona, the number is 30% and in California its 37%. No wonder Meg Whitman, the California GOP gubernatorial candidate, immediately said there are better ways to address the issue than the Arizona approach.

The median age of the Hispanic population in Idaho is 22 and other states are slightly above or below that number. The median age of native born Hispanics in Idaho is 15. Ninety percent of young Hispanics in Arizona are U.S. citizens. Do the political math. The Hispanic population is growing. These are young families and in a decade or so they will be voting in much larger numbers than today.

The immigration legislation in Arizona may crystallize what is potentially a very tight race between Brewer and state Attorney General Terry Goddard, a Democrat. Depending upon the poll and the day, the lead in race is in constant flux. The debate in the great Southwest could also sharpen the partisan divide nationally as Democrats generally oppose the Arizona effort. By contrast, the GOP is all over the map.

For a long time the conventional political wisdom about this issue has held that the only real risk for a candidate was being too soft on immigration and that may hold for a while, but it is hard to argue with the numbers and the trends. If Democrats want a comeback strategy in a place like ruby red Idaho, they best start with understanding the demographics and aspirations of the growing Hispanic population. These Americans – and a generation of new voters – are up for grabs and Republicans, in Arizona at least, have sent a message – they’re not interested.

Democrats best get out the clip boards and start walking the neighborhood. Arizona just handed them an opportunity to organize, organize and organize. They don’t need to be in favor of anything except fairness and equal opportunity, old American values that will appeal to the fastest growing group of Americans.

The courts will eventually decide whether Arizona’s law is, as Rove suggested, fraught with Constitutional problems. The court of Hispanic public opinion may already be set to render a verdict that is fraught with real long-term political problems for Republicans.