bottom up change

This piece in the Wall Street Journal is a good reminder of how difficult it is going to be to achieve the incredibly ambitious agenda that President Obama laid out in his speech to Congress Tuesday night. Here’s what’s happening:

Industries from health care to agribusiness to mining that stand to lose under President Barack Obama’s policy agenda are ramping up lobbying campaigns to derail or modify his plans.

The day after Mr. Obama formally laid out his policy goals in his first address to Congress, the former chief executive of HCA Inc. unveiled a $20 million campaign to pressure Democrats to enact health-care legislation based on free-market principles.

“What you see is when the government gets involved, you run out of money and health care gets rationed,” former CEO Richard Scott said Wednesday, after announcing the creation of Conservatives for Patients Rights.

Clearly the forces of evil are gearing up in their attempt to derail President Obama’s agenda. Is Organizing for America getting ready to fight back? It has been very quiet lately. During the campaign, I worked with several people who are now staffers at OFA, and they are incredibly talented people. I’m sure a plan is being developed. But still, their website is very undeveloped and a lot of people still don’t know about the organization.

Last night, I attended a Generation Obama reunion event in Boston. One of the organizers from GO told me that he thinks that many people are burned out from the campaign and not quite ready to re-engage seriously in national politics. He may be right. The 2008 campaign was the longest and most exhausting in American history, so it may be that it’s a good thing that OFA is keeping a low profile now until the time is ripe. Plus, there is a lot of work yet to be done–hiring organizers, for instance. But while the American people are resting, the WSJ piece is a reminder that powerful interests aren’t.

Those were a few of the reactions to Gov. Bobby Jindal’s GOP response last night: Keith Olbermann, Rachel Maddow, and Ana Marie Cox, respectively.

The GOP has been searching desperately for its great new hope recently: first it was Sarah Palin, then Michael Steele, and most recently Bobby Jindal. The GOP, in addition to the media and a lot of pundits, desperately wanted Jindal to have a moment comparable to Obama’s 2004 Democratic Convention speech. Unfortunately, the speech left some pundits speechless in their horror:

There was general consensus last night on the blogs that Bobby Jindal’s “Kenneth the Page” performance will be receiving some love from SNL this week.

UPDATE: we now have AMC’s reaction posted on her blog.

You can follow the tweeting of President Obama’s “not-State of the Union” on Twitter at #nSOTU. Right now I’m live-tweeting from my Twitter page.

The pundits are acting like the fate of the economy rests on Obama’s tone. I fear they may be right. This needs to be a good speech. But while I’m watching the fate of the economy being decided, I’ll be drinking a few beers and tweeting along with others, including @anamariecox, who I must confess is much more entertaining.

Oh, and after the president’s speech, I’ll also be tweeting Gov. Bobby Jindal’s response. Is this guy really the GOP’s Obama? We shall see…
UPDATE: Prez was very solid tonight. Historian Michael Beschloss called it a “landmark” speech. Economy will not be hurt as a result of the speech. Gov. Bobby Jindal was…GAH, in the words of @anamariecox.

Caterpillar 793d

I was looking for a reason to get this dump truck on my blog. So in the spirit of all the new spending on infrastructure coming to your state as a result of the stimulus package, voila! And, hey, that’s just a bad-ass dump truck.

Just a few hours before President Obama’s first address to Congress, it’s worth taking a minute to look at the slew of polling that has come out over the past few days. I’m no Nate Silver, far from it, but I’m going to lay out several recent polls so you’ll have them all at once and see if I can find some (IMHO) golden nuggets.

We’re just one month into his term, and Barack Obama is receiving very high marks and broad support on his policies and approach to governing. However, there are some troubling trends in there. Speaking of which, today’s Gallup poll of President Obama’s job approval rating is an insightful one:

Gallup poll 2/24/09

Golden nuggets: This is the first Gallup poll, and the first post-inauguration poll to my knowledge showing President Obama under 60%. The internals of this poll show that the drop in Obama’s support is primarily due to more people being unsure of how Obama is doing. This may not be surprising among Republicans. More worrisome is that independents’ support of Obama in recent days has dropped significantly–down 8 points in the past week.

Next, a NYT/CBS News Poll released today:

Golden nuggets:  56% of people believe that President Obama should be sticking to his campaign promises whereas only 39% believe he should be working with Republicans. Compare: 79% believe Republicans should work in a bipartisan fashion with Obama versus only 17% who believe they should stick to Republican policies. What explains the difference? Also, a worrisome spot for Obama: he earns his highest disapproval rating on the economy at 32%.

And the final poll I’ll feature is my favorite of the recent polls released and it’s by the Washington Post/ABC News. This graphic represents only a tiny bit of information from this extremely comprehensive poll:

Golden nuggets:  all of this chart. It’s full of incredible numbers. Especially that number for perceived bipartisanship. Wow. It looks like President Obama’s strategy of reaching out to Republicans is winning him points with the public even if it is not getting him many Republican votes thus far.

There are a ton of goodies that are not in the above graphic. To start with, 64% of Americans approve of the stimulus and 60% approve of how President Obama is handling the economy. Another thing to notice is the right track/wrong track number: as of 2/22, 67% believe we’re on the wrong track and 31% believe we’re on the right track. If that sounds bad, consider that on 1/16, just before the inauguration, 78% thought we were on the wrong track and 19% thought were were going in the right direction. The wrong track number reached a high of 90% on 10/11/08. Arguably, the economy has gotten worse since then, but the inauguration and presidency of Barack Obama seems to have convinced a lot of people that we are back on the right course. It would be interesting to see the party breakdown on this one, though.

A few more fascinating numbers in this poll: 68% of respondents believe that President Obama is bringing needed change; 50% approve of Congressional Democrats while only 38% approve of  Congressional Republicans; 63% think that more stimulus will be needed in addition to what was just passed (29% think a lot more is needed); and despite all the recent criticism of the President’s plan to help homeowners, 64% support the government spending $75 billion to help homeowners refinance while only 35% oppose this plan.

The Post poll is worth digging into more, but that’s all I’ll do here. The dump truck is out of gas.

N700 Bullet Train Debuts in Japan, July 1, 2007 (Photograph by Ren Zhenglai/Xinhua/WPN)

Apparently the stimulus may make high-speed trains in California a reality, and this is great news. America badly needs an updgrade in its rail system. It’s a national shame that Japan, China, and Europe have high-speed rail but we do not. The N700 bullet train in Japan is pretty amazing, and when you read about it you just have to shake your head in wonder at the fact that don’t have one of these here in the US.

Here are the corridors that have been proposed at the Department of Transportation for high-speed rail:

Dept. of Transportation Designated High-Speed Rail Corridors, January 2002

Unfortunately, this is a very expensive undertaking and it’s unlikely that even the $8 billion will be enough to make it possible in more places than California. In fact, it’s questionable as to whether high-speed rail will really happen in California since that $8 billion will be spread out among competing parts of the country.

High-speed rail obviously has many benefits, including lessening our dependence on foreign oil and protecting the environment. There would be an obvious economic benefit in job creation that the construction of a high-speed rail network would entail. But there’s also a lot of symbolism in undertaking this project. When John F. Kennedy decided to put a man on the moon, his critics thought that he was crazy for spending so much money on a project that didn’t have any clear economic benefit. But President Kennedy knew that the innovations that were involved in the project would boost America’s leadership role in science and technology, giving us an edge over the Soviet Union. It gave rise to many more young people studying science and engineering and it provided the country with a sense of confidence and optimism. In the same way, green cars and high-speed trains are two innovations that could leave President Obama with a legacy of bringing the United States into the 21st century.

In light of the Oscars tonight, there’s this tweet from Mike Madden, who was reporting from a White House dinner for Governors that also took place tonight:

Sign White House
isn’t the Oscars: Social secretary Desiree Rogers, asked who designed
her dress, replies, “I don’t know, actually.”

A sign that the White House was like the Oscars?

There’s an old saying that Washington is Hollywood for ugly people. With the Obamas in the White House, we may have to restrict that statement to Congress. And if you’ve seen her, you know that it is probably unusual that Ms. Rogers didn’t know what she was wearing.

As a patriotic citizen, I’m sure you’re wondering how to spend your extra $8 a week in stimulus tax cuts.  Here are some ideas from economists on how to maximize the multiplier effect and help get our economy back on track. A few of my favorites:

Ethan Harris, Barclays Capital: Get a haircut. It is a
purely domestically produced service with extremely high labor content.
This means no drain in spending power out of the country: it is “Buy
American” without violating any trade agreements. It also has a high
impact on employment due to the high labor content. Finally, an $8
haircut–as opposed to the $100 variety– is probably being done by a low
income person who is likely to spend rather than save the 8 bucks,
ensuring strong second round spending effects. We will groom our way to
recovery…

A haircut for $8? Where? Not in this city.

Tyler Cowen, George Mason University: In my view,
fixing the banking sector is more important than getting the stimulus
right. So if you can afford to lose the money, go to a large bank (more
likely to be insolvent), find their most overpriced service, and buy as
much of it as you can. That way you are doing your part to recapitalize
our banking system.

If you’re stuck for ideas, just keep on using ATM machines, owned by
other banks, so you can pay large fees to take out small sums of money
from your checking account. When you need to, take all of your
withdrawals and deposit them back in the account once again and start
all over with the process.

The only problem with this advice is that using ATMs that are not owned by my bank  and having to pay those fees reflexively causes me to become angry and probably raises my blood pressure. High blood pressure may cause health problems leading to increased health care costs. If you extrapolate from me to the rest of the nation, this probably isn’t the best idea.

Robert Gordon, Northwestern University: Don’t go to
an $8 movie, that won’t create jobs. Save it for three weeks and get a
$24 meal, which will directly help restaurants avoid layoffs and
closures.

Ah, now we’re talking! Who wants to join me at a steakhouse in three weeks?

Ricardo Reis, Columbia University: You should use the
money in the way that is best for you and your family, whether that is
saving or spending, buying this or paying that. Doing what is in your
best interest usually leads to doing what is best for the economy. (And
when it is not, the economic policymakers should have figured that out
when deciding whether to, and how to, give you the $8, so that by
pursuing your best interest you end up doing what is best for all.)

Wait: aren’t laissez-faire economic principles what got us into this mess?

The Tax Policy Center has a nice breakdown of the tax cuts in the stimulus bill. Not great grades, I must admit. The biggest let-down for me is the “Making Work Pay” tax credit, even though the TPC gives it a B+. Personally, I would have preferred a lump-sum check. Now how am I going to justify that smart phone I was thinking about buying? It turns out that the $400 per individual and $800 per family will be allocated by reducing the amount of withholding on each paycheck over an entire year. According to the TPC, the money is more likely to be spent rather than saved as a result, thus adding to the tax cut’s stimulative effect.

I suppose the reasoning is: if you’re not even noticing the extra $15 you’re receiving in your paycheck, you’ll probably spend it without noticing. On the other hand, if you have some credit card debt or you’re concerned about saving money, a check for $400 will definitely not be spent. And, this may indeed have been what the administration was thinking in spreading the $400 out for the whole year. Here’s an interesting analysis from the New Yorker:

You might think that handing people a big chunk of change is a perfect way to get them to spend it. But it isn’t, because people don’t treat all windfalls as found money. Instead, in the words of the behavioral economist Richard Thaler, people put different windfalls in different “mental accounts,” which in turn influences what they do with the money. Where the money comes from can have a big impact on whether people spend it or save it: casino winnings are more likely to be spent than, say, money from an inheritance. The framing of a windfall is important, too: a recent study by the business professors Nicholas Epley and Ayelet Gneezy showed that when a tax rebate was presented as a bonus it was more likely to be spent than when it was presented as a refund. And the size of the windfall matters a lot: the bigger the windfall the more likely it is to be saved.

I was prepared to spend a lump-sum, but maybe most Americans would have saved that money with the economy so shaky and the danger of unemployment in everyone’s mind. It’s a lot harder to be disciplined enough to save an extra $30 a month than it is to save a single check worth $400.

An interesting analysis here that is more insightful than anything I’ve read thus far about the incentives in the stimulus bill for green cars. I know the plug-in neighborhood electric vehicles (aka “golf carts” to Republicans) have gotten a lot of criticism as being pork, but this analysis suggests that the spending on NEVs may have the most immediate impact among all the spending on green cars in the bill.

Recovery.gov launched today as I’m sure you noticed. Nancy Scola has a pretty good summary of the site at techPresident. I think this is a decent start, but the site is pretty empty at this point. What will be worth watching is how much transparency will really exist here. Will they post the bad stories in addition to the good?

One thing that stood out to me was that the same data on investments provided is in two different graph styles: bubbles and bars. I’m more of a bar graph man myself: