Obama Pledges Push to Lift Economy for Middle Class

Barack ObamaPresident Barack Obama, seeking to put the prosperity and promise of the middle class at the heart of his second-term agenda, called on Congress on Tuesday night to raise federal minimum wage to $9 an hour, saying would lift millions out of poverty and energize economy. In an assertive State of the Union address that fleshed out populist themes of his inauguration speech, Mr. Obama declared it was “our generation’s task” to “reignite the true engine of America’s economic growth, a rising, thriving middle class.” “Every day”, “we should ask ourselves 3 questions as a nation: How do we attract more jobs to our shores? How do we equip our people with the skills to get those jobs? How do we make sure that hard work leads to a decent living?” Increase in the minimum wage, from $7.25 an hour now, was most tangible of a raft of initiatives laid out by president, from education and energy to public works projects. Taken together, Mr. Obama said, these investments would accelerate the nation’s recovery by helping those in the broad middle class. Raising minimum wage holds particular political appeal for younger Americans, struggling workers, labor groups, all of which were important to Mr. Obama’s re-election. His proposal drew one of loudest ovations of the evening from Democrats in the House chamber. Speaking to a divided Congress, with many Republicans still smarting from his November victory, Mr. Obama declared, “Together, we have cleared away the rubble of crisis, we can say with renewed confidence that the state of our union is stronger.” Urged lawmakers to act on immigration, climate change, budget negotiations, above all, on gun violence, delivering an emotional appeal for stricter controls that drew on recent tragedies like the schoolhouse massacre in Newtown. “They deserve a vote,” Obama declared over and over, gesturing to victims of various shootings, who were scattered through the audience. Mr. Obama took the podium after a rousing welcome from lawmakers and other dignitaries. But the millions of TV viewers, not to mention people glancing at their smartphones inside the chamber, were distracted by a manhunt across the country, where police in California were tracking a suspect in killing of officers and others. News coverage concentrated on the search almost up to the point the president entered the chamber, immediately after he finished, networks cut away to continue the reporting on the events in California. Republicans quickly rejected Obama’s activist approach, saying it would inevitably translate into higher taxes, an overweening government role, strangling economic growth and deepening the nation’s fiscal hole (…..)

Link: http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

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56 Responses to Obama Pledges Push to Lift Economy for Middle Class

  1. Professor Uziel Nogueira says: “Let me repeat: Nothing I’m proposing tonight should increase our deficit by a single dime,” he said. “It’s not a bigger government we need, but a SMARTER government that sets priorities and invests in broad-based growth.” Pres Obama’s public policy goal mentioned above makes sense. However, it raises two questions. First, proposing a smarter government from now on, can we infer an existing dumber government ? Second, how do we transform a dumber government into a smarter one?

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  2. Duncan Lennox: Yes, the Larry , Moe & Curly show that is the GOP needs to be upgraded to the 21st century.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  3. amanda: The answers are: First, Yes. Second, only by removing from power the people who supported the features of the dumber government we have now.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  4. nymom: Looking at some of the negative comments here, I think a lot of folks are stuck on an idea of the US, that started with Henry Ford – whose philosophy of paying a decent wage built our middle class, and ended 20 years post WWII, when we truly were a nation of fresh ideas and innovation. Since then, folks have been grasping onto that fleeting moment of greatness. It is like we stuck a stake in the ground in 1955, and have tried to stay put. Which is, of course, impossible. I travel often to Europe, and have noticed more and more over the past 20 years, how they seem to be simply passing us by. They have become the innovators in solar, wind, hydro, geothermal…renewable energy, while we are still bickering over oil drilling, blasting for coal and fracking for limited sources…all unrenewable energy. Yet because the most of our politicians are owned by the CEOs of those unrenewable resources, they in turn brainwash their constituents to ‘look at the birdie’, and fight over non-issues like birth certificates, what the poor people are getting, or a relatively minor event in Benghazi. Nations moving forward have energy technology which has surpassed ours. Their public transport has surpassed ours. Their public education has surpassed ours. Their social policy on gay marriage has surpassed ours. All you have to do is listen to Rubio’s rebuttal last night to find out how and why we have been surpassed, and are no longer deserve to be the proud nation we once were.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  5. Montague: Don’t worry – it’s not “a lot of folks” writing negative comments. It’s the ever-smaller group of right-wing loonies taking their marching orders directly from Rush Limbaugh and others of his ilk. They do not think for themselves, and they do not read the New York Times unless there is an opportunity to comment with something imflammatory about Obama.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  6. jcb: nymom, I spend a ton of time in Europe also. Our best friends live in Barcelona. What planet do you live on? In Spain my friends three children, all University graduates, couldn’t find a job if their life depended on it. They’re all in the US with jobs now, the Spanish youth unemployment rate is above 28%, in France nearly the same. If you fly over this country as I do often, we have “wind farms” everywhere, and they are not that efficient, and that is a fact, they also kill millions of birds yearly. Yes, Spain has nice highways, but they are often to nowhere, which has bankrupted that nation along with the vast majority of European countries. Yes, they are more enlightened concerning gay marriage, but Americans are slowly moving toward acceptance, not fast enough for me, but it is changing. But in Europe they treat 18 year olds like adults, because they are adults, no like here where we baby 20 year olds. There are plenty of great things about Europe but their debt situation is going to crush them, like what will happen here, if they don’t stop spending more than they take in. If you think the “economy” of Europe is in good shape, I’ve got some land west of Miami for sale. “relatively minor event in Benghazi”, yeah right nyMOM, tell that to the families of those 4 dead Americans, and please explain to their wives and children what a minor event that was.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  7. Professor Uziel Nogueira says: Your point about the US political system being sequestered by the oil-coal business is a fact. US foreign policy and wars of the last 50 years have been oil driven. However. one should ask why the same process did not occur in the European political system. After all, Europe is even more dependent on imported oil than the US. Energy policy is just one area in which the US has been surpassed by other countries. Ideology, perhaps, explains why the US has been surpassed by other countries.


    America’s elite believes the US economic-political system — very successful in the 20th century — continues to be superior to the rest of the world.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  8. Ken Camarro: What is quite amazing is how many folks overlook the phenomenon of Franklin Rooevelt who mobilized the country and got our factories streaming out planes and tanks and then Truman and Eisenhower who helped direct this great plant and momentum into the last half of the twentieth century when we did radar, air traffic control, the Iterstate, the 1969 moon shot, the 747, deregulation of telecommunications, auto safety rules, safe food and water and the list goes on. All of those silos and fighter planes built whole towns and cities. It was a Congress and R&D and businesses working together and a Marshll Plan which built America. We are only trying now to dig back through the old cookbook and reuse the old recipe.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  9. sharinlite: Then you have seen the loss of economics in those countries, the multiculturism creating huge problems, particularly in France, their inability to continue the “dole” and the healthcare, when you know the truth, a real nightmare. Who do you suppose has paid for their security the past 70 years? The USA…..As for Rubio, the truth is a hard task master which Rubio understands and your kind cannot.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  10. jimbo: Not a lot of fundamentalist nut cakes in Europe, nor morbidly obese. Europeans are not obsessed with guns, greed, and Gaw-wud.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  11. fg: I blame the Republican party for stalemating every proposal put forward by the Obama administration. I am even more frightened that any Republican can do better. Rubio being a classic example of what is in the wings! Another indicater was Boehner sitting behind Obama and never smiling, clappiing, etc. Bravo on “nymom’s” input.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  12. Tristan: Ambassador Stevens was the sixth US ambassador killed in the line of duty since 1968, and two others died in plane crashes. I remember that first tragedy, in Guatemala, and Republicans did not try to exploit it for political gain. Republicans recently tried to cut embassy security funds prior to the deaths in Libya. Global warming and money related to ameliorating it — clearly not enough — are not germane to this discussion.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  13. bonnidel: A far simpler solution to all of the myriad of public programs is comprehensive daycare and schooling. If we pooled the food programs, social services programs (child protective services), head start and medicaid – we could have a school environment where students can attend early morning, normal school days and participate in after school programs (with all of the programs currently available to high income school districts) while their parents worked. Within the program they have healthy meals, on-site social worker support and on-site medical care. While the cost per child would go up in terms of school budget, the reduction in food stamp programs would decline, head start funding would be eliminated, medicaid and hospital emergency room costs would decline immediately (a child who is treated for an ear infection same day vs. a parent waiting until it is so bad an emergency room visit is far less costly and they are less likely to get other children sick). On-site counseling and social work allows for a more efficient process than any of the family services operating today, and you get the added benefit of early intervention by having familiarity with children to see when their families are in trouble – again cheaper to deal with early and far more humane. Just look at the success of the Harlem Children’s Zone – this works and is scalable – it just takes guts.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  14. Professor Uziel Nogueira says: It makes economic sense but not political sense. The reason is simple. What happens to thousands of redundant jobs eliminated of the various existing social programs? after all, they belong to members of the support base of the Democrat Party.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  15. Jonathan: These programs cost $25K per child per year. By the time they reach the 7th grade, there is no measurable difference in school achievement between children who attended these programs and children who did not.

    http://www.nytimes.com/2013/02/13/us/politics/obama-delivers-state-of-the-union-address.html

  16. THE bright blue tie worn by President Obama to his State of the Union address on Tuesday evening was an accurate barometer of the weather. This was the most Democratic State of the Union in some time, not just in the range of government initiatives he proposed — the annual speech is usually a long laundry list — but because it set a new tone. Mr. Obama was looser than he has been in these previous annual messages to Congress — and unapologetic about his belief in government as an instrument to improve people’s lives. Newt Gingrich, the former House speaker, might have been right when he snorted, in the blur of televised commentary that followed, that it was the most liberal speech by a president to Congress since Lyndon B. Johnson’s administration. Though it was his birthday, Lincoln went unmentioned (as did Mardi Gras). The only bit of history in the speech was at the opening, when Mr. Obama took us back to President John F. Kennedy’s second State of the Union address, in 1962 — the start of an eventful year that would include the peaceful resolution of the Cuban Missile Crisis, the integration of Ole Miss, a strong White House response to price-gouging in the steel industry and the rapid expansion of NASA. Unapologetic governance was key to all of the above, and to a host of smaller initiatives — on the environment, public health, consumer protection and civil rights — that would later flower into Johnson’s Great Society. That was a moment — the “liberal hour,” as a 2008 book by Robert Weisbrot and G. Calvin Mackenzie styled it — when the federal government earnestly reached out to citizens in every walk of life, with no consciousness that this outreach might ever be considered unpopular. Four months after his re-election, President Obama appears to feel increasingly the same way, and it was refreshing to hear him be himself. While there were words about compromise at the front of the speech, a gauntlet was thrown down by the president — newly empowered by his victory and an electorate that daily tilts in his direction. He was right to abandon a strategy of outreach to Republicans that was not working. Four years after he took office, the Republican party appears to finally accept that Mr. Obama is the president. So now we can get down to the real business of fighting for America’s future, one bill at a time. A century ago, in 1913, Woodrow Wilson started the modern tradition of delivering the State of the Union address in person. (Previous presidents, except the first two, had sent written messages to Congress.) Listening to Mr. Obama’s speech, you could hear much of the 20th century in between the lines. Certainly the New Deal was in there. Mr. Obama’s second Inaugural Address, on Jan. 21, voiced a refurbished faith in the social contract binding Americans to each other, and the State of the Union address on Tuesday put some flesh on the bones of that idealistic speech (…..)


    This was an important State of the Union, a declaration of principles as President Obama begins his next term. The 21-month period between now and the midterm elections in 2014 is, history suggests, the period in which he is most likely to cement his legacy. All fifth-year State of the Union speeches are ambitious; but not all are successful. (Recall President George W. Bush’s attempt to privatize Social Security, announced in 2005.) But this was the time to put the cards on the table, and Mr. Obama did just that. The state of our union might not be strong, but it is becoming more realistic, and by extension, encouraging.

    http://www.nytimes.com/2013/02/13/opinion/from-obama-a-proudly-liberal-message.html

  17. (NYT GOLDEN PICK) Professor Uziel Nogueira says: Obama is the best president possible during a difficult transition in American history. The golden years of enough money to finance an advanced welfare state and, simultaneously, pay for the most costly military in the world are long gone. From now on, difficult political decisions on guns versus butter type must be taken by Congress. His call in the State of Union for smarter government goes along those tough political decisions ahead.

    http://www.nytimes.com/2013/02/13/opinion/from-obama-a-proudly-liberal-message.html

  18. At times like these, I wish I wasn’t a policy wonk. Or at least not one who can’t help asking if the reality of a president’ proposals come close to the rhetoric they’re couched in. I want to believe. I thought the president looked great up there. It’s exciting to see man in full enjoying his moment. I’m inspired by a vision of America in which every child has access to high quality preschool, hard work earns a living wage, and manufacturing jobs come roaring back. I loved the “they deserve a vote” refrain on gun reform. And who couldn’t love that 102 year old woman who’d waited hours on her aching feet to vote? What better symbol could you find of the need for change? And yet. People say when they read a story in the newspapers that they actually know something about, they can’t believe how wrong the papers get it. Watching a State of the Union is a little like that for wonks. Obama’s framework was exactly right: “How do we attract more jobs to our shores? How do we equip our people with the skills needed to do those jobs? And how do we make sure that hard work leads to a decent living?” But when you look at the details the White House put out on the president’s proposals, it’s less clear that he’s offering real answers. Take the minimum wage. I ought to be thrilled. My column last week argued that a minimum wage hike should be part of Obama’s State of the Union, and there it was! It doesn’t get much better than that for a columnist, to feel like you’re a small part of the stream of argument helping nudge policy in the right direction. And yet, Obama wants to take the minimum from $7.25 to $9, “in phases.” If he gets it – a big “if,” because of senseless Republican opposition – it would mean that when our community-organizer president leaves office, the minimum wage would be worth 15% less in real terms than it was in 1968. Would it be a life-enhancing boost for millions of Americans? For sure. Is it what a decent minimum in America ought to be? No (…..) I know governance is hard. I believe Obama and his team are pushing the edge of American consensus as they see it. I know if the president has his way many people would be better off. And divided government makes even modest progress hard to achieve. Still, taking a longer view, it’s hard not to think something is deeply awry. Even if Obama’s agenda becomes law, after eight years of the most progressive president in memory, America will still be a country in which work is less well-rewarded, college is far costlier, and poor children’s life chances more limited by accident of birth than in virtually every other wealthy nation. American exceptionalism indeed. If this is what two terms of a “socialist” president ends up producing, what will progressives do for an encore?

    http://www.washingtonpost.com/opinions/matt-miller-obamas-hollow-speech/2013/02/13/d928c944-75a5-11e2-95e4-6148e45d7adb_story.html

  19. President Obama’s State of the Union address presented an expanded vision of smart government to create jobs and revive the economy. Yet he lowered his sights on the single policy that would both jump-start the economy in the short term and create the conditions for long-term growth: infrastructure spending. Having tried several times to propose infrastructure bills of around $50 billion — or just 0.3 percent of gross domestic product (GDP) — the president further scaled back, proposing a “fix-it-first” plan that repairs 70,000 bridges falling down nationwide. This would apply a band-aid on America’s growing cancer of failing infrastructure. A 2009 study of all U.S. infrastructure by the American Society of Civil Engineers concluded that $2.2 trillion should be spent over five years to bring the nation’s roads, bridges, railway tracks, airports and associated systems up to grade. Here are three crucial facts. First, this is the big bang: It would be the most effective way to create good jobs. Private investment in commercial and residential real estate is still well below the historic norm. Unemployment in the construction industry is among the nation’s highest, hovering above 16 percent. Second, it’s cheap: The federal government’s borrowing costs are lower than they are likely to ever be again. If you have to fix your decaying boiler, deferring maintenance is not fiscally prudent: The bill will be larger after the boiler explodes. Third, this is an area where the federal government has a big role, one that Republicans have long embraced. In 1930, even as Herbert Hoover was trying to balance the federal budget, he urged large-scale expenditures on infrastructure (…..)

    http://www.washingtonpost.com/opinions/fareed-zakaria-obama-aims-small-on-infrastructure/2013/02/13/eec92d70-7613-11e2-aa12-e6cf1d31106b_story.html

  20. Both Chancellor Angela Merkel and British Prime Minister David Cameron have long favored a potential trans-Atlantic free trade agreement. Though US President Barack Obama backed the idea in his State of the Union address on Tuesday evening, wrangling over the details could prove problematic (…..) “The question is whether independent US authorities will accept European standards, and vice versa,” says Daniel Gros from the Center for European Policy Studies in Brussels. In previous efforts to reach agreement, officials from the two sides couldn’t even agree on a joint model for crash-test dummies. Furthermore, US Congress must ultimately approve a free-trade agreement, whatever the final result might be. Many conservative lawmakers, however, have little faith in European unity, noting for example that French President François Hollande does not share the enthusiasm for expanded free trade exhibited by Merkel and Cameron. The applause for Obama’s free-trade comments during his State of the Union address was notably unenthusiastic. Still, the timing of his push is propitious. Hope for a worldwide free-trade agreement, first proposed in the Doha Round a decade ago, has essentially evaporated. At the same time, both Europeans and Americans know that their economies badly need stimulus, yet neither side has money for a far-reaching program. Growth through the reduction of trade barriers is an attractive prospect. Furthermore, promoting a trans-Atlantic agreement would allow Obama — on the eve of his planned visit to Berlin in June — to address European concerns that the US has turned away from the Continent in favor of Asia. “A trans-Atlantic agreement would be a signal that America and Europe want to mutually strengthen their economic capabilities and thus gain renewed political momentum,” says Constanze Stelzenmüller from the German Marshall Fund in Berlin. But in his Tuesday evening speech, Obama still lauded the benefits of a trans-Pacific trade agreement with Australia and Asian countries before he mentioned the trans-Atlantic deal.


    From the European perspective, an “economic NATO” would be a sign of European unity and would open up the possibility for cooperation from countries with similar market philosophies from other regions, says Kristen Silverberg, the former US ambassador to the European Union. Skeptics, on the other hand, see the possibility of a trans-Atlantic agreement as little more than a defense against the new economic superpower of China and an attempt to cement “Western values.”

    http://www.spiegel.de/international/world/us-president-obama-backs-trans-atlantic-free-trade-agreement-with-eu-a-883104.html

  21. La unión es fuerte. Lo dijo Obama en la frase obligada del rito presidencial que exige anualmente el repaso ante los congresistas del estado en que se encuentra el país. La crisis ha pasado, aunque el crecimiento siga siendo débil. Hay que crear empleo, tarea en la que el Gobierno, mal les pese a los republicanos, tiene mucho que decir y que hacer. La voluntad política cuenta. La reducción del déficit por sí sola no es un plan económico. Hay que alcanzar compromisos razonables y situar los intereses del todo sobre los intereses de las partes. El secuestro presupuestario, un nuevo plazo perentorio que significaría el recorte automático del gasto por 1,2 billones de dólares, tanto en defensa como en bienestar social, acecha para el 1 de marzo. Pero ahí está la obstinación presidencial para impedirlo. Exactamente lo contrario de lo que sucede al otro lado del Atlántico. En efecto, cuanto más fuerte es esta unión tan bien explicada por el narrador en jefe que es Obama, más débil es el estado de la unión de los europeos, que inevitablemente debemos leer en las expresiones de voluntarismo político y en la exaltación de los estímulos al crecimiento y a la creación de puestos de trabajo que hace el presidente las políticas antitéticas que reflejan los presupuestos plurianuales aprobados por el Consejo de la Unión Europea apenas tres días antes. El secuestro presupuestario, como ha sucedido con el abismo fiscal que EEUU salvó el 1 de enero, ya se ha producido en la UE. La suma de dos voluntades de hierro, de distinta intención ideológica pero de similares efectos, han conducido por primera vez en la historia a unas perspectivas financieras para los próximos siete años, hasta 2021, que recortan el dinero disponible para hacer Europa. Obama ha subido el listón en todos los capítulos de su programa y exhibido su propósito de aplicarlo. En la restricción de las armas de fuego, en las políticas de inmigración, en medio ambiente y, por supuesto, a la hora de defender su reforma sanitaria y las inversiones públicas para estimular la demanda.


    Los líderes europeos, si se puede llamar así a quienes han dejado a Europa en tantos momentos a la deriva, lo han bajado en nombre de los intereses nacionales (eufemismo para los intereses electorales), las partes que conforman la UE, a las que hay que dar satisfacción particular aunque sea en detrimento del interés general de todos. En Washington, voluntad y compromiso. En Bruselas, desgana y suma de egoísmos nacionales.

    Ante todo conservar lo que hay: la política agraria y las ayudas regionales. Pero inmediatamente, dar satisfacción a la política de austeridad de la señora Merkel y al descompromiso europeo de Cameron. Evitar la unión de transferencias temidas desde el norte y aflojar al máximo los lazos que conduzcan a la unión política que rechazan los euroescépticos. Contentar de paso, para evitar coaliciones adversas, a los principales jugadores para que no regresen a casa sin triunfo alguno que exhibir ante la clientela. Francia salva la política agraria. España seguirá siendo receptor neto de fondos. Aunque Europa pierda, porque habrá menos presupuesto en una década de recesión, nada importa mientras yo no pierda o pueda defender la imagen de que no pierdo (…..)

    http://internacional.elpais.com/internacional/2013/02/13/actualidad/1360783759_220350.html

  22. The day after President Obama charted an expansive new view of the government’s role in society, it seemed less and less likely that many of his proposals would survive the political riptide on Capitol Hill. On Wednesday, as Mr. Obama took to the road and visited a Canadian engine-parts factory near here to sell his vision, Republicans and even some Democrats expressed doubt about whether plans to raise the minimum wage or provide universal access to prekindergarten would ever be enacted — especially on top of ambitious White House efforts on gun violence and immigration. Mr. Obama chose a politically friendly corner of Republican-leaning North Carolina to promote the resurgence of American manufacturing, one of the central messages of a State of the Union speech that also included initiatives on education and energy. “What’s happening here is happening all around the country,” Mr. Obama said against a backdrop of three hulking engine blocks. “Just as it’s becoming more and more expensive to do business in places like China, America is getting more competitive.” The far-reaching nature of the president’s agenda took lawmakers from both parties by surprise, even though it built on his assertive Inaugural Address. Republicans, whose policies are focused on deficit reduction, reacted incredulously. “It’s not like we’ve solved all of the problems we’re working on now so we have to be looking for other things,” said Senator Roy Blunt, Republican of Missouri. “The federal government taking over prekindergarten programs in America? The federal government deciding Washington, D.C., is the best place to administer elections? I don’t see it.” Some Democrats counseled that the presidential wish list laid out Tuesday night should not be taken literally in a suspicious Capitol. “You can disagree with the president, but you cannot say he has no vision, no dreams or aspirations for this country, and that’s what he was laying out,” said Representative Joseph Crowley, Democrat of New York. Asheville was the first of three stops in a campaign-style swing that has become a tradition after the State of the Union speech (…..)

    http://www.nytimes.com/2013/02/14/us/politics/obama-takes-second-term-agenda-on-the-road.html

  23. Professor Uziel Nogueira says: There is no free lunch in economics. The fundamental macro economic variable to sustain employment in a vigorous manufacturing sector is the exchange rate. In the case of the US a post industrial economy, it requires a weak/devalued dollar, low or negative interest rates and restrained fiscal policy. In this macro context, manufacturing jobs win over retiree savers and investors.

    http://www.nytimes.com/2013/02/14/us/politics/obama-takes-second-term-agenda-on-the-road.html

  24. The European Union and United States say they will soon begin negotiations to create the world’s largest free-trade zone. German editorialists argue a deal is necessary if the West wants to help shape global politics and address the challenge of a rising China (…..) Talks are expected to begin on the margins of the next G-8 summit in Britain on June 18, German newspapers are reporting on Thursday. Initially, Washington had expressed a lack of interest over a possible deal, but Germany’s Merkel has gently nudged two successive administrations since 2007 and it is believed that a personal telephone call prior to Obama’s State of the Union address helped remove remaining concerns. Conservative British Prime Minister David Cameron has also pushed for a deal. The trade agreement aims to go far beyond just trade and services, and negotiations will also strive for common regulations and standards on issues like product safety and intellectual property. A widely cited example are differing automobile safety standards that require a company like Audi to produce different versions of its cars for the American market. On Thursday, editorialists at leading German newspapers praise the effort, with one financial daily even describing a “United States of the West” (…..)

    http://www.spiegel.de/international/europe/german-media-commentators-on-the-trans-atlantic-trade-agreement-a-883410.html

  25. Center-left Süddeutsche Zeitung writes: “The project is extremely ambitious, with some Atlanticists already speaking of an ‘economic NATO’. That term isn’t totally out of place either. The NATO military alliance was once established to protect against the threat of the Soviet Union. The idea of a new economic alliance also has found so many supporters because the old industrialized nations fear that they are falling behind the emerging economic power of China. The fact that negotiations are even taking place is a success for German Chancellor Merkel, who has been pushing the project for years despite an initial lack of interest in Washington. Obama’s economics team also held off for a long time because his advisors felt the initiative would be too complex.”

    http://www.spiegel.de/international/europe/german-media-commentators-on-the-trans-atlantic-trade-agreement-a-883410.html

  26. “THE NATURAL-GAS boom has led to cleaner power and greater energy independence,” President Obama declared in his State of the Union addressTuesday night. “That’s why my administration will keep cutting red tape and speeding up new oil and gas permits.” New York Gov. Andrew M. Cuomo (D), Maryland Democrats and other friends of Mr. Obama should listen up. The president is right. The United States sits atop seas of natural gas, a fuel that drives electric turbines, warms homes, heats water and even powers some big trucks. Much of this gas is in unconventional deposits that drillers have only begun to tap. Now that they have, the price of the fuel has plummeted and the United States has gone from a gas importer to a potential exporter, with decades of supply left. Natural gas also burns cleaner than coal, which had been the dominant fuel used in electricity generation until the vast new gas fields opened up. Burning gas produces substantially less carbon dioxide, the main driver of global warming, than does coal, and it doesn’t pollute the air with coal’s toxic cocktail of particulates and gases. Turning off coal-fired power plants while ramping up gas-burning facilities is one of the trends behind the recent drop in U.S. carbon emissions — the Environmental Protection Agency (EPA) just announced that power-plant emissions dropped 4.6 percent in 2011 alone. The country can’t use natural gas forever, because it still produces some carbon dioxide. But gas can, for a time, serve as a low-cost alternative to dirtier fossil fuels in a program to steadily green the economy. Particularly when combined with a smart climate policy, such as a carbon tax, the availability of lots of natural gas is a national blessing. But extracting unconventional gas is controversial, in part because it involves “fracking” — pumping a mixture of water and other substances deep underground to fracture rock formations, freeing trapped gas. Environmentalists have mobilized against the practice, despite its potential to help reduce carbon emissions. So, whereas Mr. Obama is promising to fast-track development, many of his fellow Democrats are dragging their feet. Mr. Cuomo’s administration, for example, said Tuesday that, after years of consideration, it would miss another deadline to write new fracking rules, which could trigger another lengthy delay in the development of New York’s large gas reserves. Maryland Gov. Martin O’Malley (D) in 2011 halted permitting in his state pending a study, but the legislature failed to fund the research. Now Del. Heather R. Mizeur (D-Montgomery) wants to establish a formal moratorium, and the O’Malley administration is saying that, even if the study is done by an August 2014 deadline, the state might have to complete more studies. The president’s approach is better. While praising the energy boom for all its benefits, he has also concluded that reasonable new regulations could make extracting gas much cleaner, and his administration has gone about writing them. One of them, from the EPA, would require that drillers prevent pollutants from escaping into the air during extraction, addressing one of the activists’ primary criticisms. More Democrats should take after their leader. (source: Editorial Board – The Washington Post – 15/02/2013)

  27. The State of the Union address was not, I’m sorry to say, very interesting. True, the president offered many good ideas. But we already know that almost none of those ideas will make it past a hostile House of Representatives. On the other hand, the G.O.P. reply, delivered by Senator Marco Rubio of Florida, was both interesting and revelatory. And I mean that in the worst way. For Mr. Rubio is a rising star, to such an extent that Time magazine put him on its cover, calling him “The Republican Savior.” What we learned Tuesday, however, was that zombie economic ideas have eaten his brain. In case you’re wondering, a zombie idea is a proposition that has been thoroughly refuted by analysis and evidence, and should be dead — but won’t stay dead because it serves a political purpose, appeals to prejudices, or both. The classic zombie idea in U.S. political discourse is the notion that tax cuts for the wealthy pay for themselves, but there are many more. And, as I said, when it comes to economics it appears that Mr. Rubio’s mind is zombie-infested. Start with the big question: How did we get into the mess we’re in? The financial crisis of 2008 and its painful aftermath, which we’re still dealing with, were a huge slap in the face for free-market fundamentalists. Circa 2005, the usual suspects — conservative publications, analysts at right-wing think tanks like the American Enterprise Institute and the Cato Institute, and so on — insisted that deregulated financial markets were doing just fine, and dismissed warnings about a housing bubble as liberal whining. Then the nonexistent bubble burst, and the financial system proved dangerously fragile; only huge government bailouts prevented a total collapse. Instead of learning from this experience, however, many on the right have chosen to rewrite history. Back then, they thought things were great, and their only complaint was that the government was getting in the way of even more mortgage lending; now they claim that government policies, somehow dictated by liberals even though the G.O.P. controlled both Congress and the White House, were promoting excessive borrowing and causing all the problems (…..) In fairness to Mr. Rubio, what he’s saying isn’t any different from what everyone else in his party is saying. But that, of course, is what’s so scary. For here we are, more than five years into the worst economic slump since the Great Depression, and one of our two great political parties has seen its economic doctrine crash and burn twice: first in the run-up to crisis, then again in the aftermath. Yet that party has learned nothing; it apparently believes that all will be well if it just keeps repeating the old slogans, but louder. It’s a disturbing picture, and one that bodes ill for our nation’s future.

    http://www.nytimes.com/2013/02/15/opinion/krugman-rubio-and-the-zombies.html

  28. Professor Uziel Nogueira says: The deep seated economic and social crises is a litmus test for the bi-party US political system. What is the score so far? The Democratic Party has adapted and taken a pragmatic position to answer the challenges presented by the new environment. The reelection of Pres Obama is proof of his party new thinking for a new era. The majority of the electorate approves. The Republican Party did not adapt and became a bastion of radical, right wing thinking of the past.


    Mitt Romney’s presidential election defeat shows how far his party has deviated from mainstream politics. Ideologically, the GOP became the Likud Party of America, representing a vocal but diminished electorate. Politics is survival of the fittest. Either the Grand Old Party adapts to the new century reality or the Democratic Party remains the sole winner of presidential elections.

    http://www.nytimes.com/2013/02/15/opinion/krugman-rubio-and-the-zombies.html

  29. Someone somewhere from America: Marco Rubio is a certified idiot and imbecile. If that is the best the GOP has for its future, Republicans might as well fold and retire to pasture.

  30. President Obama laid out a number of good ideas in his State of the Union address. Unfortunately, almost all of them would require spending money — and given Republican control of the House of Representatives, it’s hard to imagine that happening. One major proposal, however, wouldn’t involve budget outlays: the president’s call for a rise in the minimum wage from $7.25 an hour to $9, with subsequent increases in line with inflation. The question we need to ask is: Would this be good policy? And the answer, perhaps surprisingly, is a clear yes. Why “surprisingly”? Well, Economics 101 tells us to be very cautious about attempts to legislate market outcomes. Every textbook — mine included — lays out the unintended consequences that flow from policies like rent controls or agricultural price supports. And even most liberal economists would, I suspect, agree that setting a minimum wage of, say, $20 an hour would create a lot of problems. But that’s not what’s on the table. And there are strong reasons to believe that the kind of minimum wage increase the president is proposing would have overwhelmingly positive effects. First of all, the current level of the minimum wage is very low by any reasonable standard. For about four decades, increases in the minimum wage have consistently fallen behind inflation, so that in real terms the minimum wage is substantially lower than it was in the 1960s. Meanwhile, worker productivity has doubled. Isn’t it time for a raise? Now, you might argue that even if the current minimum wage seems low, raising it would cost jobs. But there’s evidence on that question — lots and lots of evidence, because the minimum wage is one of the most studied issues in all of economics. U.S. experience, it turns out, offers many “natural experiments” here, in which one state raises its minimum wage while others do not. And while there are dissenters, as there always are, the great preponderance of the evidence from these natural experiments points to little if any negative effect of minimum wage increases on employment (…..)

    http://www.nytimes.com/2013/02/18/opinion/krugman-raise-that-wage.html

  31. Professor Uziel Nogueira says: Prof PK arguments to raise the minimum wage are based on a fundamental tenet. The market mechanisms to determine the minimum wage are no longer operating properly in the US. According to Prof PK reasoning, the economic game became biased against labor in favor of capital.


    In other words, the US economy is operating similarly to third world countries in which owners of capital (the 1% crowd) take most of the wealth generated in detriment of labor (the 99%).

    Obama administration in favor of a higher minimum wage is a valid mechanism to level the playing field. It is called income distribution policy in the jargon of economists of emerging economies. Despite being in the opposite aisle of Prof PK in US macroeconomic policy, I do agree with him in the minimum wage question. After all, I am a Brazilian trained economist. I have a lot of experience in income inequality, social injustice and poverty to share with my American colleagues.

    http://www.nytimes.com/2013/02/18/opinion/krugman-raise-that-wage.html

  32. A plan by President Obama for an overhaul of the immigration system would put illegal immigrants on a path to citizenship that could begin after about eight years and would require them to go to the back of the line behind legal applicants, according to a draft of the legislation that the White House has circulated in the administration. The draft plan says none of the 11 million illegal immigrants currently in the country would be granted permanent resident status and given a document known as a green card until the earlier of two dates: either eight years after the bill is enacted or 30 days after visas have been given to everyone who applied legally. The plan includes a shortened path to citizenship for young illegal immigrants who came to the United States as children, said an administration official who agreed to discuss the details only on the condition of anonymity. In many cases, those young people could apply for green cards as soon as two years after the law was passed. The disclosure of the document’s existence, by USA Today on Saturday, set off a series of political recriminations and questions on Sunday about Mr. Obama’s promise to allow bipartisan Congressional talks to take precedence. The furor also offered new evidence that Republicans could use the president’s direct involvement as a reason to reject a potential compromise. The White House on Wednesday sent copies of the draft to officials in government agencies that deal with immigration and border security, the administration official said. In the face of the sharp Republican criticism, the administration insisted this weekend that no decision had been made and that nothing had changed. White House aides reached out to lawmakers in both parties on Saturday night to reassure them, officials said. Denis McDonough, the president’s top White House aide, said on Sunday that Mr. Obama remained committed to staying on the sidelines while a group of Republican and Democratic senators tries to reach an immigration agreement by the spring. In his first appearances on Sunday talk shows as chief of staff, Mr. McDonough said the administration was preparing draft legislation only as a backup. “We’ve not proposed anything to Capitol Hill yet,” he said on the ABC program “This Week.” “We’re going to be ready. We have developed each of these proposals so we have them in a position so that we can succeed.” His comments came after Republicans quickly condemned the reports of a new administration plan, calling it “dead on arrival” and “very counterproductive” (…..)

    http://www.nytimes.com/2013/02/18/us/politics/white-house-continues-work-on-its-own-immigration-bill.html

  33. Professor Uziel Nogueira says:


    Pres Obama is making sure that 11 millions of Latin votes will not go wasted. Immigration reform is another collateral damage for the GOP after the last presidential election. Politics US style is survival of the fittest, take no prisioners.

    http://www.nytimes.com/2013/02/18/us/politics/white-house-continues-work-on-its-own-immigration-bill.html

  34. Economists are not very good at predicting crises, but the problem is generally an absence of warnings. It’s not easy to anticipate which low-probability catastrophe will end up happening. That clearly won’t be the problem if the United States has a debt crisis. Here we have the opposite phenomenon: a possible crisis that economists love to predict. The chart below, from a paper presented Friday morning at the U.S. Monetary Policy Forum in New York, shows one such warning. The green line, labeled CBO Projections, shows the relatively sanguine expectation of the Congressional Budget Office about the average interest rate that investors will demand on federal debt as the debt rises in coming decades. The purple, upwardly mobile line shows the average interest rate that the authors project that investors will demand. Suffice it to say that such an outcome is unsustainable. The authors, two professors and two market economists, compared interest rates on the sovereign debt of 20 developed nations with the size of those debts in comparison to their gross domestic product, and with each nation’s current-account surpluses or deficits (…..) Where is the line? “Countries with debt above 80 percent of G.D.P. and persistent current-account deficits are vulnerable to a rapid fiscal deterioration as a result of these tipping-point dynamics,” write David Greenlaw, an economist at Morgan Stanley; James D. Hamilton, a professor at the University of California, San Diego; Peter Hooper, an economist at Deutsche Bank Securities; and Frederic S. Mishkin, a professor at Columbia University. The paper was presented at a conference convened by the University of Chicago Booth School of Business. This is bad news for the United States because, as it happens, the national debt is 80 percent of annual economic output, the nation has a persistent current-account deficit, and it is planning to significantly increase the scale of borrowing, relative to output, in coming decades. A host of other studies have reached similar conclusions. The estimated thresholds range from about 60 percent to 120 percent, but the bottom line is always the same: the federal debt cannot continue to grow relative to the size of the economy, or else investors will start demanding much higher interest rates and the United States will fall into crisis. “We should be scared,” said Professor Mishkin, a former Federal Reserve governor. “Something needs to be done,” he added, although he acknowledged there was no sign of crisis just yet. This is undoubtedly true in an absolute sense. But there are reasons to doubt the basic premise that the history of other nations can tell us how close we are to the cliff. The problem with every attempt to look for debt limit thresholds has a name, and that name is Japan, a country that is able to borrow at one of the lowest average interest rates of any developed country despite a debt burden that is the largest, relative to its economic output, of any developed country. Nor is this an ephemeral anomaly. It has been true for years. Japan’s debts total about 230 percent of its annual output, and so far, investors don’t mind (…..)

    http://economix.blogs.nytimes.com/2013/02/22/predicting-a-crisis-repeatedly/

  35. Professor Uziel Nogueira says: But even today in his NYT column, Professor Paul Krugman — Nobel Prize winner for his academic contribution on trade theory — is authoritative about the federal debt and the fiscal deficit. Quoting: ” The right policy would be to forget about the whole thing (fiscal deficit-federal debt). America doesn’t face a deficit crisis, nor will it face such a crisis anytime soon. ” The question is: Who is right and who is wrong. Prof PK or mainstream economists working for the FED?

    http://economix.blogs.nytimes.com/2013/02/22/predicting-a-crisis-repeatedly/

  36. Erik: The fact is that Dr. Krugman’s predictions have been correct while the “serious“predictions have turned out to be as accurate as those about the end of the Mayan calendar. It seems that the Chicago School is turning into a cult where faith trumps reality. While there is a shortage of demand in the private sector, the public sector needs to fill that void or there is a recession. Econ 101

    http://economix.blogs.nytimes.com/2013/02/22/predicting-a-crisis-repeatedly/

  37. As the sequester looms, it’s worth noting that there’s no significant federal spending category that a majority of Americans wants to cut: (…..) That chart comes from a Pew Research Center poll conducted Feb. 13-18. In every category except for “aid to world’s needy,” more than half of the respondents wanted either to keep spending levels the same or to increase them. In the “aid to world’s needy” category, less than half wanted to cut spending. This is part of the problem with heeding any public concerns about getting the budget under control. According to Pew, 70 percent of Americans say it is essential for Washington to pass major legislation to reduce the federal budget deficit this year. But they can’t identify anything worth axing, and it’s not as if tax increases are so terribly popular, either. By the way, Pew asked similar questions about what categories of government spending to cut in 2011. There has been little change since then, with the exception of attitudes toward military spending. In the most recent poll, 24 percent said the government should cut spending for the military, compared to 30 percent two years ago. Note that the military would bear a major share of the sequestration-related spending cuts, and as a result much has been written in the last few months about the scary consequences that such cuts would cause. So it’s possible public attitudes have shifted in response to greater coverage of this spending category.

    http://economix.blogs.nytimes.com/2013/02/22/americans-want-to-cut-spending-they-just-dont-know-what-to-cut/

  38. Professor Uziel Nogueira says: The sequestration debate marks an inflection point in US economic policy. It demonstrates that, at the margin, fiscal policy and federal debt have reached their limits of sustainability. Tough political decisions on spending and cut of federal programs will be tackled by Congress during the next few years. The era of prosperity in which the economic system produced more winners than losers is over. A new era of austerity in public spending is just beginning. The political debate will confront two opposite sides a.i., the civilian (doves) versus the military (hawks). It is fiscally impossible to sustain the most costly military apparatus in the world and, simultaneously, reconstruct the country’s infrastructure and preserve social programs intact. The gun versus butter debate of Paul Samuelson of the 60s is alive and well in 2013. Let the game begins in the arena of the US Congress in Washington DC!

    http://economix.blogs.nytimes.com/2013/02/22/americans-want-to-cut-spending-they-just-dont-know-what-to-cut/

  39. Paul Mathis: “Fiscal policy and federal debt have reached their limits of sustainability.” Really? How do you know that? With interest rates on 10 yr Treasury bonds at 2% (lower than inflation) and the ability to print dollars by the trillion, the opposite would seem to be true. Why should we worry about the Federal debt when we can print dollars to pay it off at any time?

    http://economix.blogs.nytimes.com/2013/02/22/americans-want-to-cut-spending-they-just-dont-know-what-to-cut/

  40. Professor Uziel Nogueira says: Yes, the US can print dollars by the trillions and interest rates on 10 yr Treasury bonds are the lowest in decades. The main reason for that is the privilege of having the US dollar as the world currency. This problem will eventually be dealt with by the global financial system. But why to worry about the federal debt? well, except for an academic figure such as Paul Krugman, mainstream economists and policy makers holding position of responsibility in government think otherwise. For example, the last Pentagon report declared the U.S. national debt is the TOP national security issue facing the country today. Lawrence Summers had the best line on the federal debt when he posed a rhetorical question: How long does the largest debtor nation in the world can continue to be the only military superpower in the world?

    http://economix.blogs.nytimes.com/2013/02/22/americans-want-to-cut-spending-they-just-dont-know-what-to-cut/

  41. Paul Mathis: “US dollar as the world currency. This problem will eventually be dealt with by the global financial system.” Oh Really? How will the “global financial system” deal with it? Back to the gold standard? Why is the U.S. dollar the reserve currency now? Explain that one. “U.S. national debt is the TOP national security issue facing the country today.” Why is that? The U.S. can easily pay its debt service and every country in the world is happy to buy our debt. The U.S. has been in debt continuously since 1933 and in that time we have become the only super power of the world with the world’s strongest economy. Our debt is no problem at all and NOBODY can explain why it is a problem. Investors around the world agree with me no matter what your “experts” say.

    http://economix.blogs.nytimes.com/2013/02/22/americans-want-to-cut-spending-they-just-dont-know-what-to-cut/

  42. toom: At present the biggest problem is unemployment. If that decreased to less than5% the deficit would not be very large. So the entire discussion about NOW is wrong. You are correct that in the long term the deficit needs to be decreased. But not at this moment. Politically the GOP are weak since they did nto object to large deficits in the 2001-2008 period.

    http://economix.blogs.nytimes.com/2013/02/22/americans-want-to-cut-spending-they-just-dont-know-what-to-cut/

  43. sj: Yes, one does have to agree that austerity is not working out very well for Spain and Ireland…all countries affected by the global sub-prime lending crisis should have let the financiers go bankrupt and join the labor market to compete with all the rest of us in this sorry economy, like Iceland, which is doing quite nicely now, and is researching how to export their natural energy power source.

    http://economix.blogs.nytimes.com/2013/02/22/americans-want-to-cut-spending-they-just-dont-know-what-to-cut/

  44. President Obama’s political team is fanning out across the country in pursuit of an ambitious goal: raising $50 million to convert his re-election campaign into a powerhouse national advocacy network, a sum that would rank the new group as one of Washington’s biggest lobbying operations. But the rebooted campaign, known as Organizing for Action, has plunged the president and his aides into a campaign finance limbo with few clear rules, ample potential for influence-peddling, and no real precedent in national politics. In private meetings and phone calls, Mr. Obama’s aides have made clear that the new organization will rely heavily on a small number of deep-pocketed donors, not unlike the “super PACs” whose influence on political campaigns Mr. Obama once deplored. At least half of the group’s budget will come from a select group of donors who will each contribute or raise $500,000 or more, according to donors and strategists involved in the effort. Unlike a presidential campaign, Organizing for Action has been set up as a tax-exempt “social welfare group.” That means it is not bound by federal contribution limits, laws that bar White House officials from soliciting contributions, or the stringent reporting requirements for campaigns. In their place, the new group will self-regulate. Officials said it would voluntarily disclose the names of large donors every few months and would not ask administration personnel to solicit money, though Obama aides will probably appear at some events. The money will pay for salaries, rent and advertising, and will also be used to maintain the expensive voter database and technological infrastructure that knits together Mr. Obama’s 2 million volunteers, 17 million e-mail subscribers and 22 million Twitter followers. The goal is to harness those resources in support of Mr. Obama’s second-term policy priorities, including efforts to curb gun violence and climate change and overhaul immigration procedures. Those efforts began Friday, when thousands of Obama supporters were deployed through more than 80 Congressional districts around the country to rally outside lawmakers’ offices, hold vigils and bombard Congress with e-mails and phone calls urging members to support stricter background checks for gun buyers (…..)

    http://www.nytimes.com/2013/02/23/us/politics/obamas-backers-seek-deep-pockets-to-press-agenda.html

  45. Professor Uziel Nogueira says: I am sure Pres Obama won’t have any problem in raising such small amount of money. Obviously, not much money should be expected from the middle class, the 99%. However, the 1% crowd is doing extremely well and can cough up chicken feed $ 50 million to support their guy at the White House.

    http://www.nytimes.com/2013/02/23/us/politics/obamas-backers-seek-deep-pockets-to-press-agenda.html

  46. How big is the national debt? You’d think this would be an easy question. Surely we know how much the government owes. Unfortunately, it’s not that simple. The true national debt could be triple the conventional estimate, anywhere from $11 trillion to $31 trillion by my reckoning. The differences mostly reflect explicit and implicit “off-budget” federal loan guarantees. In another economic downturn, these could result in large losses that would be brought “on budget” and worsen already huge deficits. That’s the danger. My purpose is not to scare or sensationalize. It’s simply to illuminate the problem. Broadly conceived, the national debt covers all debts for which the federal government assumes final responsibility. For politicians, the appeal of “off-budget” programs is that they allow the pleasure of spending without the pain of taxing. But they also create massive exposure for government. Let’s see why. Below are five estimates of the national debt. I compare each with our national income (gross domestic product), which is the economic base to service debts. In fiscal 2012, GDP was $15.5 trillion. Some economists say a debt ratio exceeding 90 percent slows economic growth. The United States already exceeds this threshold on four of my five measures (…..)

    http://www.washingtonpost.com/opinions/robert-samuelson-the-true-national-debt/2013/02/24/1a133c78-7eac-11e2-a350-49866afab584_story.html

  47. The arbitrary budget cuts known as the sequester will exact a toll on not only domestic programs but military spending as well. Hence the howls in Washington from the Pentagon chieftains and their ardent Congressional supporters. But the truth is that the military budget not only can be cut, but should be cut, though not with this kind of political machete and not in the way the service chiefs say they plan to wield it. If and when the sequester comes into play on March 1, it will force cuts totaling $85 billion in discretionary government spending over the next seven months. This includes $43 billion from defense programs, or 8 percent. Over the next 10 years, defense cuts are supposed to total $500 billion (…..) If the Pentagon is ill prepared to deal with the sequester, it is to some extent a self-inflicted wound. Military leaders assumed the sequester would never happen and refused to mitigate its effects in advance. The Pentagon also does itself no favor by continuing to throw money at troubled weapons. As for the sequester’s impact on defense contractors, experts say the contractors have long known military spending was on the decline and built that into their projections. Production backlogs resulting from past contracts are also expected to cushion the effect. After 9/11, the Pentagon was handed a virtual blank check and its base budget soared from $397 billion in 2001 to $557 billion in 2013. Spending is expected to decline in real terms this year, but after that it will rise slightly, even if the sequester takes effect, experts say. By some calculations, President Obama will still spend more on defense than most postwar presidents. The Pentagon needs to focus on shaping the force for new threats. Now that the wars in Afghanistan and Iraq are ending, it also needs to make reforms and rein in spending. Flexible reductions would obviously be preferable to the abrupt and mandated cuts of a sequester. But the Pentagon can absorb even that with prudence and good management.

    http://www.nytimes.com/2013/02/25/opinion/defense-and-the-sequester.html

  48. Professor Uziel Nogueira says: Lawrence Summers once was quoted as saying: how long does the largest debtor nation in the world can remain the only military superpower? sequestration is the political answer to address the conundrum.

    http://www.nytimes.com/2013/02/25/opinion/defense-and-the-sequester.html

  49. William O. Beeman: Yes indeed. The military needs severe financial cuts, but short of the sequester, who is going to do it? The “military-industrial complex” (to quote Eisenhower) has cleverly taken root in virtually every Congressional district. Even utterly useless and dysfunctional military equipment is protected from cuts because of this geographically-based protection scheme. A member of Congress who can’t protect his or her district’s big military operation will have serious troubles at the polls. Military contracting is one of the most lucrative businesses in the United States. Everything is overcharged, bloated and locked in for long terms. Once specialized equipment is manufactured by single concerns, they have a sinecure. Lobbying prevents cancellations and uprooting. So again, who is going to do the surgical cuts that are necessary? The minute someone takes out a financial scalpel, there are ten people poised to knock it out of his or her hand.

    http://www.nytimes.com/2013/02/25/opinion/defense-and-the-sequester.html

  50. Professor Uziel Nogueira says: Pres Obama could summon the military leadership –and their civilian business associates — and use the same lines of Churchill: ‘Gentlemen, We Have Run Out Of Money; Now We Have to Think.’

    http://www.nytimes.com/2013/02/25/opinion/defense-and-the-sequester.html

  51. Look Ahead: Speaking of long term lock-ins, I was surprised to learn that DoD funds the pensions of defense contractor employees. I am all for pensions, but can’t see government funding of private company pensions, including addition of more money to make up for market losses.

    http://www.nytimes.com/2013/02/25/opinion/defense-and-the-sequester.html

  52. In Friday’s column, I wrote that the Obama administration has no plan to avoid the sequester save raising taxes on the rich. That was unfair. The White House approach is not what I would like, but it is more balanced than I described. Humiliation is a good teacher. So, I’ve been trying to think through my dissatisfaction — and clarify what I think the administration should do. First, I don’t believe that President Obama should become a Bill Clinton-style centrist. The Clinton policies were fine for their time. But, since then, we’ve had two decades in which inequality has gotten worse, the structural problems that slow growth have accumulated and debt levels have exploded. We simply need more robust policies than anything modeled in that era of centrism. Second, I don’t think it’s in Obama’s interest to be the liberal Reagan. This is more or less the mode he has fallen into so far in his second term. The Republicans attack government, so the Democrats defend government. The Republicans champion the individual, so the Democrats champion the collective. This allows Obama to stay within the confines of Democratic orthodoxy. He can make gestures toward balance but doesn’t really crusade for anything that fundamentally challenges his electoral coalition. The problem is that this approach locks us into the same debate framework we’ve been stuck in since 1980, which has produced so much gridlock. If politics is framed in this way, then the country divides and policy stagnates. We will keep having these endless budget squabbles. The dysfunction will metastasize. My main complaint with Obama is that he promised to move us beyond these stale debates, but he’s, instead, become a participant in them. My dream Obama would take advantage of the fact that only the president can fundamentally shift the terms. He’d take advantage of George Santayana’s observation that Americans don’t solve their problems; they leave them behind.


    My dream Obama would abandon the big government versus small government argument. He’d point out that in a mature, aging society, government isn’t going anywhere. The issue is not size but sclerosis. The future has no lobby, so there are inexorable pressures favoring present consumption over future investment. The crucial point is not whether a dollar is spent publicly or privately, it’s whether it is spent on the present or future. The task today is to reform institutions and rearrange spending so we look like a young nation and not a comfort-seeking, declining one (…..)

    My dream Obama wouldn’t be just one gladiator in the zero-sum budget wars. He’d transform the sequester fight by changing the categories that undergird it. He’d possess the primary ingredient of political greatness: imagination. The great presidents, like Teddy Roosevelt, see situations differently. They ask different questions. History pivots around their terms.

    http://www.nytimes.com/2013/02/26/opinion/brooks-our-second-adolescence.html

  53. “Cities change from the bottom up, block by block,” said Roberta Gratz, as we drove down Magazine Street, on our way to the Lower Ninth Ward here. The author of “The Battle for Gotham: New York in the Shadow of Robert Moses and Jane Jacobs,” Gratz, like her friend and mentor Jacobs, is a student of what she calls “urban regeneration.” Since 2007, she has owned a home in New Orleans, and she was giving me what amounted to a tutorial on her next book subject: the rebuilding of the city post-Katrina. “Look at this,” she said, gesturing to storefronts. “This is one of the longest shopping streets in the country. There are residential and commercial buildings, and local stores and chain stores. Very little was done for streets like this because the big money went to the tourism districts,” she said. “This grew back organically.” Which, she believes, is the way it always happens. I was already coming around to that point of view. Some months earlier, when I had gone to the Rockaways, a stretch of New York coastal towns that had been pummeled by Hurricane Sandy, I had been struck by the lack of government response. Personnel from the Federal Emergency Management Agency set up offices, where they sipped coffee while waiting for Sandy victims to drop by. The city’s sanitation department did heroic work, but other city agencies were largely invisible. (City officials later complained that they had done much more than I had acknowledged.) Mostly, people helped other people. Churches donated space where victims could get staples. Nonprofit organizations were everywhere. Volunteers went from house to house, helping homeowners clear out debris. I remember wondering at the time if it was always going to be like this. Despite the billions of dollars appropriated by Congress for Sandy recovery, would the rebuilding be as ad hoc, and as volunteer-dependent, as the initial emergency phase? If New Orleans is any indication, the answer is yes (…..)

    http://www.nytimes.com/2013/02/26/opinion/nocera-rebuilding-on-their-own.html

  54. Professor Uziel Nogueira says:


    For a foreigner like myself with experience of studying/living in the US for many years, this piece by Joe Nocera raises the following questions: Has the US government lost its ability to do things right? how come a government/bureaucracy that sent a man to moon in one decade cannot do a decent job to rebuild Rockaways or New Orleans? since when, the US government became stupid?

    http://www.nytimes.com/2013/02/26/opinion/nocera-rebuilding-on-their-own.html

  55. It is tempting to applaud the nonprofit group now spending nearly $100,000 on ads to pressure Republican lawmakers to accept gun-control measures. The group is fighting a well-financed and powerful corporate gun lobby that has never hesitated to spend millions to get its way in Congress. But a closer look at this group shows how disturbing its work really is. Its name is Organizing for Action, and if its initials seem familiar, that’s because the group is the direct descendant of Obama for America, the president’s campaign organization in 2008 and 2012. That organization is now defunct, but its new incarnation has its extremely valuable voter database and many of the same strategists. What it does not have are the campaign’s old limits on who can donate money and how much they can give. In fact, there are no limits, because the group has reorganized as a 501(c)(4), a so-called social welfare group unbound by campaign restrictions. Corporations and billionaires can write checks of any size, aware that they are giving to a group with close ties to the White House, one that is busily promoting President Obama’s agenda. And now that this White House has torn down the last wall between its needs and those of special interests, others in the future will undoubtedly do the same. The organization plans to raise $50 million, Nicholas Confessore of The Times recently reported, at least half of which will come from donors pressured to bring in $500,000 or more. Give or raise that much and you get to be on the group’s “national advisory board,” which will hold quarterly meetings with the president. That is nothing more than a fancy way of setting a price for access to Mr. Obama (…..) If Organizing for Action wants to restore the bracing political spirit that carried Mr. Obama into office in 2008, it can refuse all corporate contributions and limit donations to a few hundred dollars. Otherwise, it will be playing the same sleazy game that its opponents do, made even worse by the assent of the president.

    http://www.nytimes.com/2013/03/03/opinion/sunday/the-white-house-joins-the-cash-grab.html

  56. Professor Uziel Nogueira says: The Organizing for Action is a natural evolution of the US political system, a money- driven democracy. First, you give money to elect your guy. Second, you give money to implement programs important to you. Business as usual in DC except money flows become open and transparent.

    http://www.nytimes.com/2013/03/03/opinion/sunday/the-white-house-joins-the-cash-grab.html

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