OurFuture.org Blogs: Bill Scher

Build, Baby, Build: The Governors' Consensus

Bill Scher — Tue, 02 Dec 2008 16:25:28 -0500

Last month, I suggested that for their political viability, Republican politicians should join with Democrats around a "Build, Baby, Build" strategy of public investment to rebuild and revitalize our infrastructure.

It was likely to happen with or without their support. It would likely join Lincoln's rails and Eisenhower's highways as historic public work successes. And to be on the wrong side of history could be politically devastating.

Apparently, some Republicans have gotten the message.

Following today's National Governors Association meeting, incoming White House chief of staff Rahm Emanuel told reporters that "there was a consensus" across gubernatorial party lines in support of infrastructure investment:

There was a consensus [among] Democratic and Republican governors about the need, given their economic situations, not just in their budgets but their economy, about the need for investments in infrastructure.

Some talked about roads, bridges, sewer systems, new schools. Some talked about what I would call the infrastructure for a 21st century economy: Medical IT, broadband. A lot of the infrastructure was around green technology, some on ... high speed rail, mass transit, that stuff. Consensus around that.

...

Also talked about doing all this infrastructure but with reforms associated with them. ... Governor Schwarzenegger brought up the fact that when they had situations in California some people said it would take two years to rebuild bridges etc. [but] they were able to do it in a shorter period time because they cut through what he described as generically 'red tape.'

The criticism about investment in infrastructure is, 'Can it move fast enough.'

There's a general sense if you put a lot of reforms in, you can move resources that are critical in a fast way if you cut through the normal periods of times and studies, etc.

All of them agreed that they had projects today on the books pre-approved, ready to go whether that was the physical infrastructure of schools, roads, bridges, water systems, as well as other things that I would call 21st century infrastructure, medical IT, broadband ... all of them had kind of a green technology, green infrastructure direction.

There was Democrat, Republican consensus about that.

Now, I suspect Emanuel may be overstating the breadth of the consensus. Governors Rick Perry (Texas) and Mark Sanford (S.C.) took to the Wall Street Journal opinion page to call for "targeted tax relief paid for by cutting spending," which would preclude additional public investment in infrastructure. And Gov. Tim Pawlenty (Minn.), on MSNBC today, mischaracterized the federal government as "broke" and using "Monopoly money" presumably to undermine plans for more public investment.

But it also doesn't make sense for Emanuel to throw around the word "consensus" without any basis. I can only assume he received enough Republican support to feel comfortable making the statement. The public investment bandwagon is filling up.

While the knee-jerk anti-government crowd is becoming increasingly marginalized, left to cooover Fred Thompson videos while the rest of us get to work rebuilding our country.

Here Comes The Fuzzy Math

Bill Scher — Tue, 02 Dec 2008 12:31:28 -0500

As the new Congress and president forge ahead on an economic recovery plan of at least $500 billion, don't be surprised if you hear conservatives wail that it amounts to wasting $280,000 for every job it creates. And don't believe it.

Last week, former Bush administration economic adviser Greg Mankiw scribbled that estimate, taking news reports of a possible $700 billion package and dividing it by Obama's own goal of creating 2.5 million jobs. The number was picked up by the Investors Business Daily editorial board, the neocon Commentary magazine blog and other conservative bloggers.

But that number wrongly presumes every dollar of a recovery plan goes into job creation, when in fact any such plan will be multi-faceted. Tapped's Tim Fernholz explains:

Or it could mean that not all of the stimulus package is focused directly on job creation. Which, in fact, it likely will not be, since most economists I've spoken to and many reports I've read predict that a big chunk of the stimulus -- tens of billions of dollars -- will include increased funding for things like food stamps, TANF [Temporary Assistance to Needy Families], and unemployment insurance. It will likely also include federal aid to states, much of which will be used to make up massive budget shortfalls on programs like medicaidare. While that aid doesn't directly create jobs, without it, states would have been firing public employees to balance their budgets, especially with the bond market as tight as it is.

None of those facets of the stimulus program directly create jobs, but they ease the pain for the millions of people losing jobs, preventing them from falling into deep poverty while the economy returns to course, and stimulate the economy in the aggregate. Subtracting the cost of these kinds of aid from the total cost of the stimulus will probably make the cost-per-job figure seem more reasonable.

Furthermore, today's news reports (flagged in today's Progressive Breakfast) indicate that in addition to the above, a middle-class tax cut will likely be a part of the plan as well, which is also not about direct job creation.

In the NY Times, Gov. Ed Rendell said that $136 billion should go to infrastructure investment and explained that "Every billion dollars spent on infrastructure produces 40,000 new jobs.” That's about 5.4 million new jobs at $25,000 a job. And that's a sensible investment when building items that strengthen our foundation and benefit us all -- such as bridges, broadband, high-speed rail and energy-efficient electrical grids.

In fact, in an update to his own post, Mankiw himself acknowledged various factor he overlooked when coming up with the original estimate, including that "Obama['s] stimulus may take the form of tax cuts rather than spending hike."

But I have yet to see any conservative commentator who used the faulty estimate subsequently offer a correction.

So be aware. Fuzzy math is on the loose.

Progressive Breakfast: Denying The Recession. Dismissing The Solution.

Bill Scher — Tue, 02 Dec 2008 09:50:02 -0500

Progressive Breakfast is the morning roundup of what progressive movement members need to know to start the day.

Feel That? It's Your Economy Shrinking. The National Bureau of Economic Research declared we've been in recession since December 2007. Washington Monthly's Steve Benen observes, "This is the eleventh recession in the post-World War II era, but it is already one of the longest [and] very likely to be the longest since the Great Depression."

The LA Times headlines: "U.S. recession could last into 2010." News agency Bloomberg warns of "Great Recession" and notes "The loss of 1.2 million jobs so far this year was the biggest factor in determining the starting point of the U.S. recession, the NBER said."

FDL's Stirling Newberry: "it is clear what a disaster last year's attempt at stimulus was [primarily based on springtime rebate checks for singles earning less than $75K and couples less than $150K], it basically lurched the economy forward only into June. [The NBER] noted that manufacturing data shows that industrial output is 'substantially' below it's peak - by almost 5%."

New economic recovery proposals would be dramatically different than the last stimulus. The NYT: "House Democrats said Monday that they would try to pass an economic recovery bill costing $400 billion to $500 billion next month...." Reuters: "[A Democratic] aide, who asked not to be identified, said the legislation would include a middle-class tax cut, billions of dollars for road, bridge and mass transit construction, expanded aid to states and investments in renewable energy."

Big Remaining Question: Is that $500B over one year or two? Remember, Joseph Stiglitz just declared we need "at least $600 billion to $1 trillion over two years."

The W. Post: "...governors intend to request about $176 billion of that -- $136 billion for infrastructure projects and $40 billion to bolster Medicaid health programs that serve the poor and disabled."

One of those governors, NJ's Jon Corzine, made the case for public investment in infrastructure last night, telling Rachel Maddow we need to be "investing in things that will both create jobs and provide long-run returns to society."

Conservative denial of economic reality continues. National Review's Kathryn Lopez alerts the die-hards "Fred Thompson has economic cheer to offer," pointing to a new FredPAC video of the Hollywood Conservative sympathizing with the common man swiveling in a leather chair and holding a stogie.

After sarcastically dismissing the "gloom and doom" economic news from the media, as "more" irresponsible "spending" and "borrowing," directly and disingenuously equating government action with reckless Wall Street behavior, deriding job creation as "digging" and "filling holes," and repeating the right-wing lie that public investment didn't help end the Great Depression. Of course, creating real jobs and investing in real infrastructure is a wee bit different than a Ponzi scheme built on mortgage instruments and credit swaps.

Having dismissed the recession as overhyped "gloom and doom," Thompson exempts himself from offering any alternative ideas.

Meanwhile, Tim Duy of Economist's View lambastes conservative columnist Peggy Noonan also for downplaying the recession. She assures, "Everyone is dressed the same. Everyone looks as comfortable as they did three years ago, at the height of prosperity." Duy retorts, "It won’t be a real recession until we are all covered in nothing but rags," and further skewers her logic when criticizing anti-poverty programs: "The safety net has so far prevented economic calamity but will cause an economic calamity if expanded."

Ryan Avent takes down former Bush economist Greg Mankiw for claiming federal government should leave infrastructure investment to the states: "I can think of about ten different ways that this doesn’t stand up to scrutiny. First and most obviously, quality interstate transportation is economically important. Absent federal coordination of infrastructure spending, we would probably see sub-optimal investment in such transport. It doesn’t do a state much good to build a high-speed rail line or new freight capacity up to its border and no further."

Dean Baker writes in the Guardian, "Deficit hawks are still circling," and criticizes the new documentary "IOUSA:" "Economists from across the political spectrum agree that the only way to counteract this loss of consumption demand is through large increases in government spending. If IOUSA viewers manage to persuade their representatives in Congress to balance the budget, then they will be guaranteeing the country another Great Depression."

FLASHBACK: The General Motors CEO Pension Scandal. As the Big 3 automakers prepare to return to Capitol Hill, union-bashing is in high gear. (Balloon Juice's John Cole sizes up "The New Look of Union Busting." And HuffPost's Art Levine reports "New York Times Still Pushing $70-an-hour Autoworker Myth.")

But as attacks on "gold-plated pensions" for workers renew, don't forget what the Wall Street Journal reported two years ago:

GM worker pensions are set aside in an investment fund that earns billions and "offset[s] the pensions' expense," while CEO pensions are "Unfunded to the tune of $1.4 billion, [and] detracts from GM's bottom line each year. Just how much is a mystery, because GM doesn't break out the figure."

Furthermore, WSJ reported: "GM has often said its U.S. pension plans added about $800 to the cost of each car made in the U.S. in 2004. It declines to say how much was due to executive pensions."

David Sirota and Jonathan Tasini blogged it at the time.

Progressive Breakfast: Which Hand Is The Violin In?

Bill Scher — Mon, 01 Dec 2008 09:28:00 -0500

Progressive Breakfast is the morning roundup of what progressive movement members need to know to start the day.

Meet The New Bosses. Obama and Biden to announce new national security team at 10:30 AM ET, expected to feature Sen. Clinton at State, Robert Gates to continue at Defense, Marine Gen. Jim Jones as National Security Adviser and Susan Rice for Amb. to the UN (restored as a Cabinet level position, making John Bolton cry.)

The Times (UK) says the team "delights the hawks," as establishment pundits and Republicans -- including Sens. Lindsey Graham and Richard Lugar -- swooned on the Sunday shows. But (contra Sirota), might Obama be holding the violin in his right hand, but playing with his left?

Sean-Paul Kelley at the Agonist and George Kenney at Electric Politics take the pessimist view, worried the picks foretell Iraq's mistakes repeated in Afghanistan. But CAP's Matthew Yglesias takes the optimist road, noting the team backs shifting major resources away from the military to the diplomatic and aid corps. While FDL's Spencer Ackerman earlier deemed the Gates pick as a "masterstroke," allowing the end of the Iraq war without unsettling the Pentagon brass.

Just In Time. Gov. Janet Napolitano is also expected to be named Sec. of Homeland Security today. Not a minute too soon. Sunday's Boston Globe blares "Homeland Security in disarray, officials warn." Washington Monthly's Steve Benen flags that Obama is looking to revitalize the "beleaguered" FEMA.

Lost: Irony. The Globe quotes the conservative Heritage Foundation complaining about "dysfunctional" congressional oversight of Homeland Security. But no mention of Heritage's Jan. 2001 counsel to incoming Pres. Bush to put blind loyalty over expertise when staffing the executive branch, which may have a little something to do with all that dysfunction. (See OurFuture.org and Open Left's Paul Rosenberg for more.)

They Haven't Finished Trashing the Place. The Sunday NY Times and W. Post updates Bush's last-minute rule gutting, undermining workplace health, reproductive rights, auto safety and the environment. OpenLeft looks at how we can scrub their dirty work.

Sensing a Pattern. Yet another report about a failed Bush administration cabinet department. W. Post headline today: "Labor Dept. Accused of Straying From Enforcement." (Where was this journalism during the last seven years?)

Later This Week: Automaker Rescue Hearings. The Big 3 automakers will return to Congress on the 4th and 5th for a second round of hearings -- making it two more than Citigroup had to do.

UAW president Ron Gettlefinger is fighting back against the scapegoating of workers. Crooks and Liars has video and transcript excerpts from CNN's Late Edition of his beatdown of Mitt Romney: "If we want to throw our retirees our on the street, if that’s what Mitt Romney wants to do, let him do it. We’re not prepared to do that. And it’s hard for us to compete when we subsidize state by state the foreign brands to come in here."

And he turns up the heat on the Big 3 CEOs. Reuters quotes: "'They need to establish that executive compensation is something that they're willing to curtail, as well as bonuses and 'golden parachutes' on exiting the business,' Gettelfinger said. 'They can also give the government an equity stake in the business.'"

Working Life's Jonathan Tasini earlier noted: "And its not UAW pensions that are a problem. Its CEO pensions, for example, that are weighing down the auto companies, particularly GM." Yet the NY Times today quotes a despondent GM worker: "'I know one thing: If I lose my pension, I bet you Rick Wagoner' — the G.M. chief executive — 'and all those guys won’t lose theirs,' said Mr. Hanscom, 56, who plans to retire in 2010."

Getting Keynesy With It. Krugman: "Should the government have a permanent policy of running large budget deficits? Of course not ... in the long run the government, like private individuals, has to match its spending to its income. But right now we have a fundamental shortfall in private spending: consumers are rediscovering the virtues of saving at the same moment that businesses, burned by past excesses and hamstrung by the troubles of the financial system, are cutting back on investment. That gap will eventually close, but until it does, government spending must take up the slack. Otherwise, private investment, and the economy as a whole, will plunge even more."

And Reich: "So the government has to spend big time. The real challenge will be for government to spend it wisely -- avoiding special-interest pleadings and pork projects such as bridges to nowhere. We’ll need a true capital budget that lays out the nation’s priorities rather than the priorities of powerful Washington lobbies."

(Campaign for America's Future calls for long-term capital budgeting to manage major infrastructure investment, in our new report: The Investment Deficit in America.)

UPDATE: Amping up the Keynes party, Sunday's NY Times featured an important oped from economist Joseph Stiglitz: "There is an emerging consensus among economists that a big — very big — stimulus is needed, at least $600 billion to $1 trillion over two years. Mr. Obama’s announced goal of 2.5 million new jobs by 2011 is too modest ... A large stimulus package can always be trimmed later if it’s not needed because the economy returns to health faster than most economists think. But we need to plan for what looks to be a deep and long downturn. By relying heavily on automatic stabilizers — expenditures like increased unemployment benefits and revenue sharing with states — we can dose out the medicine as needed. The deeper and longer the downturn, the greater the spending."

Sugar For Your Cereal...

W. Post: "As Senate Democrats prepare for next year's agenda, they are likely to have a working filibuster-proof majority on a variety of legislative issues that could provide early victories for President-elect Barack Obama."

...And Some Wheat Germ

Effect Measure: Toxic toys: the gift that keeps on giving

Climate Progress: First commercial ship sails through Northwest Passage: “I didn’t see one cube of ice”

Economic Populist: Poverty Moves to the Suburbs

Applying Mitt-o-nomics To The Citigroup Bailout

Bill Scher — Tue, 25 Nov 2008 11:28:46 -0500

As we all know, Mitt Romney is the smartest and greatest businessman that ever graced our land. For some reason, I haven't heard him weigh in on the bailout of Citigroup. But since he already offered a plan for dealing with the struggling auto companies, I imagine we can simply apply the same principles for dealing with General Motors as we do for Citigroup.

Mitt says: We need "new labor agreements to align pay and benefits to match those of workers at competitors."

Citigroup's average salary is $87,000, much more than its competitors JPMorgan Chase ($66,000), Wells Fargo ($56,000) and Bank of America ($43,000).

Citigroup's average salary also is more than the average salary of a GM assembly-line worker ($28/hour, or $58,240 for a full year of work.)

Clearly, those Citigroup contracts need to be re-worked if the firm is going to be viable.

Mitt says: "You don’t have to look far for industries with unions that went down that road. Companies in the 21st century cannot perpetuate the destructive labor relations of the 20th."

Obviously, Citigroup must have kept secret its unionized workforce. Otherwise, how could it be suffering from such outrageous labor costs! These insidious underground unions must be rooted out and destroyed.

Mitt says: "management as is must go."

Citigroup's management failures have been well documented. It would be craaazy to give taxpayer money to same people that got Citigroup -- and the entire global financial system -- into this mess.

Mitt says: "It is not wrong to ask for government help, but the automakers should come up with a win-win proposition."

Just as management has to go, so does the deregulated marketplace that allowed Citigroup management to act so irresponsibly. Surely, no bailout would occur without major strings attached and new rules to ensure the same mistakes won't be repeated.

Fortunately, the same pressure that has been put on the auto industry has been put to bear on the financial industry, ensuring sound judgment, fairness and accountability still reigns in Washington.

Thank you Mitt-o-nomics! Now go shopping.

The Trillion-Dollar Scare Tactic

Bill Scher — Mon, 24 Nov 2008 11:08:47 -0500

Today, the Washington Post casually warns that "the annual federal budget deficit already is spiraling toward $1 trillion -- about 7 percent of the gross domestic product -- a level not seen since the end of World War II," to raise concern about the size of any proposed stimulus package in the next Congress. That prompted economist Dean Baker to ask on the Beat The Press blog, "Where Does the Post Get Its Deficit Numbers?"

It's not clear where this trillion dollar figure came from. It is much higher than the most recent CBO estimate, which is $438 billion. The Post may be including the money for the bank bailout, however this would be misleading. The government is getting assets for this money and will at most lose a fraction of the $700 billion appropriated.

I suspect the Washington Post is keying off of yesterday's Boston Globe article, "Federal deficit could top $1 trillion." But that piece too strikes me as having a dubious basis.

The Boston Globe cryptically sources the figure to "estimates provided to the Globe" by unnamed members of the "Senate Budget Committee and independent analysts."

And the only senator on the Senate Budget Committee quoted backing up that estimate is not anyone from the Senate majority, but the minority ranking member Sen. Judd Gregg, who opposed the previous, smaller stimulus package and would likely oppose any additional one.

So the estimate does not appear to be any sort of official conclusion by the committee as a whole.

Gregg based his concerns in part on the weakening economy:

Gregg said the problem is being compounded by an enormous drop in government tax revenues, which in recent years had been growing as investors cashed in stock market profits. With few people making money in stocks this year, tax revenues will fall sharply, probably by at least $100 billion.

"The economy is a dropping like a rock and the federal government will feel that very quickly on the revenue side," Gregg said in an interview. "I think it is very hard in the context of a trillion-dollar deficit to add new programs to the books."

Yet, as the Globe noted -- in a brief, downplayed aside -- smart public investment can help grow the economy and address that specific problem:

Economists said the goal of the stimulus program would be to create enough growth to eventually offset the cost of the program and, in the long term, reduce the deficit. They said that if the stimulus plan does spur substantial growth, that would help the banks that have borrowed money from the government under the financial bailout plan to repay the loans with interest. That, in turn, would help shrink the deficit if other economic problems are brought under control, the economists said.

Baker makes the point as well:

The [Washington Post] article also asserts that this spending may make it more difficult for the government to pay for Medicare and other programs in future years. This is not clear. If the stimulus boosts the economy it will lead to more tax revenue in future years. More importantly if it makes the economy stronger and prevents a prolonged downturn, it will make it much easier to raise the revenue for Medicare and other obligations in future years.

That's the actual debate.

Not whether additional spending will grow the deficit by its sheer size alone. But whether the items that make up a stimulus package will amount to potent investment that will both expand the tax base and produce cost savings, or wasteful spending that will do little for the economy and leave the budget in tatters.

Flashing a trillion dollar deficit bugaboo is a meaningless scare tactic. Let's have a real debate on the merits of the specific public investments proposed.

The Growing Unemployment Line

Bill Scher — Fri, 21 Nov 2008 10:54:19 -0500

Front page of the Daily Hampshire Gazette here in Northampton, MA offers some stark news. Unemployment lines have more than doubled since last year in the Western MA counties of Hampshire and Franklin, and the state unemployment offices don't have the staff yet to deal with it:

When she lost her job in the local building trades, Sarah McCoy knew she'd have to tune up a resume and scour job listings.

What the single mother of two teenagers didn't expect were the delays she faced in filing her claim for jobless benefits.

"It is what it is, as far as getting laid off," McCoy said Thursday. "But to not be able to apply is a problem. ... Does anybody get how frustrating this is?"

...

In the Valley, she and others have been seeking help from offices run by the Franklin-Hampshire Career Centers.

The line of unemployed people forms early these days outside the Northampton office at 178 Industrial Drive. But because the office has only one unemployment assurance specialist, people face waits for in-person help as well as telephone contact.

This time of year is historically busy for the career centers, as construction firms begin seasonal layoffs. The falling economy has intensified the mismatch between need and staffing, pushing waits up dramatically in the last month.

"We're not dealing with normal times," said Michael Truckey, the Franklin-Hampshire program's executive director.

The career centers in Greenfield and Northampton received visits from 561 new customers in October, a 120 percent increase over the 254 who came for the first time in October 2007.

Many mornings this month, a line has been forming by 8 a.m. outside the Northampton office, half an hour before it opens. ... Though claims can be taken over the state's phone system ... some newly jobless people prefer to have a face-to-face interview. Many have no doubt given up on the telephone delays that hit 1 hour and 47 minutes last week, Truckey said.

State officials told the Gazette that the call centers would get additional staffing this month and next to cut down the phone delays. But Massachusetts, like 40 other states, is facing budget shortfalls. Trying to put the proverbial fire out at its unemployment call centers means less resources to put out other fires.

A new Center for Budget and Policy Priorities report chronicles the stress that state governments are under, and how its hurting our fellow citizens:

* Public health programs: At least 17 states have implemented cuts that will affect low-income children’s or families’ eligibility for health insurance or reduce their access to health care services. For example, Rhode Island eliminated health coverage for 1,000 low-income parents; New Jersey cut funds for charity care in hospitals; and California and Utah are reducing the number of services covered. Additionally, the governor in California has proposed cuts that, when fully phased in, will cause more than 400,000 adults to be denied health coverage.

* Programs for the elderly and disabled: At least 15 states are cutting medical, rehabilitative, home care, or other services needed by low-income people who are elderly or have disabilities, or significantly increasing the cost of these services. For example, Florida has frozen reimbursements to nursing homes and relaxed staffing standards and Rhode Island is requiring low-income elderly people to pay more for adult daycare. Arizona eliminated temporary health insurance for people with serious medical problems.

* K-12 education: At least 16 states are cutting K-12 and early education; For example: Florida, Georgia and South Carolina have each cut school aid by an estimated $95 or more per pupil; Nevada eliminated funds for gifted and talented programs; Rhode Island is eliminating early education funding for 550 children; and Massachusetts is reducing funding for a number of early care programs.

* Colleges and universities: At least 21 states have implemented cuts to public colleges and universities. The result is cuts in faculty and staff and (in more than half of those states) tuition increases of 5 percent to 15 percent. Rhode Island students are facing mid-year tuition hikes on top of tuition increases enacted at the beginning of the academic year.

* State workforce: At least 20 states are reducing their state workforces. Workforce reductions often result in reduced access to services residents need. They also add to states’ woes by contracting the state economy. New Jersey is reducing its workforce by 2,000 employees through early retirement, lay-offs and attrition; Virginia is laying off 567 workers, freezing hiring and delaying a planned state employee salary increase; in Kentucky, the public defender will eliminate 10 percent of positions and decline certain types of cases; hiring freezes have been instituted in Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Kansas, Hawaii, Minnesota, New Hampshire, New Jersey, New Mexico, New York, Ohio, Pennsylvania, Vermont, and Washington.

This is why its imperative that any new economic stimulus package includes direct aid to state and local governments which, as Robert Kuttner noted in his recent Boston Globe column, are not allowed to have annual budget deficits.

Our federal government has that flexibility, for good reason. This indisputably the time to use it, to stave off the pain currently being inflicted at the state and local level, as well to invest in our long-term needs.

Progressive Mandate At Work: Waxman Named House Energy Chair

Bill Scher — Thu, 20 Nov 2008 11:40:14 -0500

Last week, the progressive mandate was felt in the Senate, as right-leaning Democratic Senator Max Baucus proposed legislation to guarantee health care for all.

Today, the progressive mandate was felt in the House, as the Democratic caucus voted 137-122 to remove longtime global warming skeptic Rep. John Dingell as chair of the House energy committee, in favor of environmental champion Rep. Henry Waxman.

The close vote should not be interpreted as a sign of deep ideological division on the environment -- though some differences certainly remain -- but a victory for the public interest in passing strong global warming legislation over the self-interest of protecting an inflexible seniority system for key congressional posts.

Democratic caucus members clearly felt the unmistakable progressive mandate for urgent and bold action, in order to junk House traditions today. With great public demand for ending our dependence on oil, averting a climate crisis and building a clean energy economy, congresspeople recognized that there will be no excuses if they don't get it done.

And most importantly, they rejected the nonsensical argument that you needed a chair who was closer to conservatives and corporations on environmental matters in order to get anything passed.

To get things passed, you need effective legislation that generates strong public backing to overcome special interest-backed obstruction.

Waxman showed his commitment to strong legislation. Dingell constantly needed to be pushed and dragged to do anything remotely helpful, and the caucus recognized that was not going to satisfy the progressive mandate.

Yesterday, the incoming White House Chief of Staff Rahm Emanuel said President-Elect Obama will "throw long and deep" to solve the major crises facing America including energy.

Today, the House named someone who will catch the ball.

UPDATE: I think the blogosphere just exploded.

FireDogLake's Jane Hamsher: "This is a huge defeat for the Blue Dogs, who were hoping to use Dingell as a roadblock to keep any meaningful change from happening with regard to issues under the Committee's jurisdiction -- telecommunications and health care, energy and environmental protection, interstate commerce and consumer protection."

Calitics' David Dayen: "Waxman's Safe Climate Act sets the targets needed to mitigate the worst effects of global warming. It now becomes the working document in the House for anti-global warming legislation. And his constituency doesn't include a major polluting industry."

Washington Independent's Mike Lillis: "...could prove vital to the Obama administration’s energy-policy successes..."

Huffington Post's Pete Cenedella: "Feel the balance of power shifting in the American energy debate? ... It's not a stretch to say that the Big 3's woes, and their woeful appearance yesterday seeking a taxpayer handout, may have loomed large in Democrats' decision today to consign Dingell to the junkyard."

New Republic's Brad Plumer: "Waxman won because Democrats are increasingly focused on global warming and think now is the time to act, to make a decisive break from the do-nothing approach of the Bush administration"

Washington Monthly's Steve Benen: "Just as Daschle and Baucus have made reform of the healthcare system more likely, Waxman's new committee chairmanship makes a meaningful energy bill more likely."

Folo: "Bucket up, kids, we’re going places!"

Beyond Green: "It's a whole new day, folks."

Talking Points Memo's Josh Marshall: "Holy Crap."

Mother Jones' Kevin Drum: "This is change we can believe in."

OpenLeft's Matt Stoller: "Cue conservative whining."

Build, Baby, Build: An Opportunity For Unity

Bill Scher — Tue, 18 Nov 2008 12:17:26 -0500

A safe prediction: Compared with the Bush Administration, the Obama Administration is going to invest more public dollars in rebuilding and modernizing American infrastructure.

There will certainly be debate over how much investment by our government is needed . The new Institute for America's Future report, "The Investment Deficit in America: Yesterday’s Achievements, Today’s Problems, Tomorrow’s Solutions," (PDF file) concludes the amount of investment needed to restore our infrastructure far outweighs what President-Elect Barack Obama proposed during the presidential campaign.

But there will be little serious debate over whether we need public investment. Knee-jerk conservatives will try, but after eight years of conservative policies driving our economy into the ditch, the days of using "government" as a slur is over. (Case in point: Conservatives can't stop making the laughable and easily debunked claim that FDR's New Deal deepened the Depression. Not working, guys, at all.)

Baltimore Sun columnist Michael Dresser sees the future as well:

By the end of next year Americans will likely be sick and tired of hearing the word "infrastructure."

Rebuilding of the nation's highways, mass transit systems and power grids hardly cracked the top hundred issues during the 2008 presidential campaign. But all along, through primary season and the general election, President-elect Barack Obama was a cheerleader for stimulating the economy by spending on tangible public works projects.

You don't need a Ouija board to discern that "infrastructure" is going to be the political buzzword of 2009. All the forces are aligned for a renewed enthusiasm for spending on roads, bridges, transit lines and other projects that will keep yielding benefits for decades to come. Don't count on any more stimulus checks subsidizing purchases of imported flat-screen TVs.

...

One way or another, the mantra of the new administration is likely to be a twist on the chant heard at the Republican National Convention:

Build, baby, build.

If you read our new report, and check out our new Invest in America webpage, the case for increased infrastructure investment is indisputable:

* America has only been spending half of what we used to spend on long-range investments (as a percentage of GDP), while China spends twice what we do.

* Travel on America’s roads increased 41 percent since 1990 while miles of road only increased 4 percent, leading to more congestion, wasted time and gas, increased injury and death and an annual loss of $230 billion.

* Europeans can zip from Paris to Frankfurt in four hours on high-speed rail, relieving much road congestion, while American freight trains suffer multi-day delays at a notorious choke point in Chicago.

* Our creaky electrical grid uses century-old technology over 50-year old power lines, when we could have a energy-efficient, reliable "smart grid" that connects rural wind farms and coastal solar power to urban centers, and allows consumers to sell back power to the grid.

* The United States government helped create the Internet, but now we rank 15th of 30 developed countries in overall broadband penetration.

* Six times as many women with children are in the workforce today compared to 1950, but day-care facilities are understaffed and lack strong educational requirements.

* Deficiencies in one-third of our school facilities interfere with the ability to teach.

* In the last two decades, more than a dozen steam pipes have exploded in New York City.

* More than 1 out of 10 American bridges are "structurally deficient."

* More than 150 levees are at high risk of failing due to poor maintenance.

* 2006 was the worst year in American history for sinkholes. Sinkholes!

But there's one other thing about the report that really struck me.

When we think public works projects, FDR and the New Deal first come to mind. But the biggest public works projects in our history were led by Republicans.

It was President Abraham Lincoln that connected East to West with the passage of the Pacific Railway Act and the authorization of the transcontinental railroad.

And it was President Dwight D. Eisenhower who spearheaded the largest public works program in our history, the half-trillion dollar interstate highway system -- at a time when the annual federal budget was a mere $78 billion.

The need to maintain, upgrade and reform our infrastructure is a public need that historically knows no party.

Conservatism has taken a massive blow in credibility after the last eight years, and Republican politicians are struggling to grapple with it. To get some credibility back, they should strongly consider joining the Obama administration in a "Build, Baby, Build" chant.

I would not suggest that Republicans need to become Democrats in order win elections in the future, as Democratic attempts to sound like Republicans often failed as well. There is always a need for contrasts, for debate, for opposing philosophies to push different ideas.

And sometimes calls for unity are cynical attempts to strong-arm. There was an appropriate call for unity around a military response to Al Qaeda when we were hit, which Americans across the ideological spectrum heeded. But calls for unity around exploiting 9/11 for an attack on Iraq deserved far more pushback than it got.

But there are actual times for unity, and when those moments are missed, it can be searing for one's credibility.

I am sure Obama can get public investment legislation through Congress and avoid a filibuster. Only a few moderate Republican senators from states that Obama won handily would have to cooperate.

But the bulk of the party will likely have to ask itself:

Do we Republicans want to be on record opposing legislation that will rebuild America for the 21st Century? Can't we acknowledge that there some things only government can do without shedding our overall conservative beliefs?

Or do we want our conservative spawn to be carping 75 years from now that public investment didn't create a clean energy economy, didn't establish high-speed rail, didn't renew our schools, and didn't lift our economy out of the ditch?

You can look at the New Deal haters today, see how ridiculous they look and glimpse your future, should you turn away from this moment of opportunity for national unity.

The choice is yours.

Obama: Don't Worry About The Deficit

Bill Scher — Mon, 17 Nov 2008 09:26:12 -0500

Bernie Horn is right that the most immediate fight we face is to prioritize massive public investment to get the economy back on track and de-prioritize short-term deficit reduction.

One thing now is crystal clear: which side the President-Elect is on.

On "60 Minutes" last night, President-Elect Barack Obama squarely planted his flag for robust public investment and against deficit reduction.

STEVE KROFT: Where is all the money going to come from to do all of these things? And is there a point where just going to the Treasury Department and printing more of it ceases to be an option?

PRESIDENT-ELECT BARACK OBAMA: Well, look, I think what's interesting about the time that we're in right now is that you actually have a consensus among conservative Republican-leaning economists and liberal left-leaning economists.

And the consensus is this:

That we have to do whatever it takes to get this economy moving again. That we're gonna have to spend money now to stimulate the economy. And that we shouldn't worry about the deficit next year or even the year after. That, short term, the most important thing is that we avoid a deepening recession.

Bernie is understandably concerned that polls show strong support for "reducing the federal budget deficit.” But I doubt the public holds such a view all that strongly.

Budget deficits sound irresponsible at first blush, so in a vacuum, questions about cutting the deficit will garner gut support. But once a debate is fully engaged, and the actual economic consequences made clear, those numbers can easily flip.

We must make it clear that the fiscally responsible thing to do is robust public investment that will stave off deep recession in the short-term, and pay off big with sustainable jobs, modern infrastructure, clean energy and affordable health care in the long-term.

The fiscally irresponsible thing to do is to myopically slash and burn so the budget numbers line up on paper today but our economic foundation collapses tomorrow.

We must engage this debate, and not remain passive on the sidelines.

Even though we have a progressive mandate, that does not mean we automatically get our way on every issue. We must take on anti-government conservatives and deficit-obsessed Blue Dog Democrats on the merits, and maintain the clear edge we have in public opinion.

But as both Bernie and the President-elect noted, we have the general consensus of economists on our side.

And we have a President-elect who is willing to engage in a substantive debate and make arguments based on the merits.

Not a bad asset to have.