Source: Jeff Parker, Florida Today
Source: Jeff Parker, Florida Today
Governor Pat McCrory (R—NC) released his first budget proposal this morning, outlining spending recommendations for 2014 and 2015.
Left-leaning North Carolinians braced themselves for the announcement, fearful of the influence of McCrory’s budget director, the ultra-conservative Art Pope. The good news is the news isn’t all bad. The budget calls for increasing infrastructure development, state savings and new teacher hires, and it allows for a 1% bump in compensation for teachers, state employees and retirees. This reinforces the idea that the new governor is at least more moderate than the NC legislature.
The bad news is that most state agencies will face cuts. Most notably, the University of North Carolina system will face funding reductions of $143 million. At the same time, McCrory calls for repealing the Estate Tax, which would deprive the state of $54 million per year and would only benefit the richest sliver of the population. And of course this is only a proposal — and an early one at that. With the Republicans holding a supermajority, it’s hard to imagine the budget moving anywhere but further right.
We all know that newspapers are struggling; still, reading the data behind the decline is shocking, and looking at the charts is frightening. Newspapers as an industry have posted advertising losses for 25 consecutive quarters. The readership now prefers the Internet, so papers publish extensively online. While content translates well to digital, advertising does not. Ads command far less than they do in print. Since 2007, for every dollar newspapers have gained in digital ads, they’ve lost $55 in print ads. Hence, total revenue has dropped by about 75% since 2000.
The loss of revenue has caused major contractions — staff cuts, consolidations and less frequent publishing — leading to the worry that we have less information about the world around us. National issues will always be covered, but not necessarily the unsexy local issues that, when added up drip by drip, have a tremendous impact.
How much information are we actually being deprived of? The contemporary United States is a society saturated with more text and Media than we can sort through without the assistance of aggregators and compilers. The fall of professional journalism has coincided with a revolution in self-publishing, whether from citizen journalists filing reports, influential figures disseminating comments or regular people sharing their miscellaneous images, videos and thoughts.
Our population, with recording and publishing technology constantly in its pockets, has undoubtedly plugged some of the informational gaps that newspapers have left. But while we have eyes everywhere, we have few that are trained. The death of the newspaper industry isn’t the same as the death of journalism as a practice, but if there are no resources to train and fund reporters, it could be the end of professional journalism.
Why We Worry / Raleigh-Durham Bureau
The Sequester cuts may be small relative to the overall national budget, but if Congress does not prevent them, they will be coming in the context of prolonged economic stagnation, as well as recent significant cuts and severe budget shortfalls on the state level.
For North Carolina, new cuts would be particularly painful. The state’s economic recovery has trailed the nation’s, with official unemployment at 9.2% and official poverty at 17.5%. The impoverished are already threatened by the Republican supermajority that has slashed unemployment benefits and is attempting to shift the tax burden from the wealthy to the workers.
According to The White House, the Sequester would cause cuts to education ($41.8 million) and an array of public services in NC. The military sector, of huge importance in the state, would lose $140 million, and 22,000 of its employees would be furloughed.
Key points from The White House memo on Sequester cuts in NC:
It’s incomplete to call what we’re experiencing in the US an “unemployment” crisis. The problem is not just that there aren’t enough jobs available but that the existing jobs are low quality. New jobs put the unemployed to work, but these jobs are being created in a climate where workers have weak leverage, so they offer lower wages, decreased benefits and tenuous security. College students fight for unpaid internships until they graduate and fight for paid internships with no benefits. Though the worker today is more educated and more productive, his labor and his time earn him less. His economic interests are under constant attack from half of the political establishment, and in the other half he finds a fair-weather friend. Unless he’s one of a rare few, he does not enjoy the backing of a union.
These conditions have interlocking roots and together describe the larger crisis: the Labor Crisis.
Media reporting tends inexplicably to focus on national poll numbers, when the race will ultimately be decided by state-level votes in a half dozen or so battlegrounds. The national numbers are useful only for assessing a candidate’s general level of support, which might maybe possibly help predict how toss-up contests will end. In terms of this general support, President Obama has a lead of a few points and the sense is that he’s likelier to win – a sense strengthened in the last few weeks.
Considering the current state-by-state polls, Obama’s chances look even better. If we assume Obama will win every state where he’s up by at least 7%, he’s at 247 Electoral Votes. If we assume Obama will win every state where he’s up by at least 4%, he passes the 270 Electoral Vote threshold. How it adds up for Obama:
Solid / Very Likely: 201
Up by at least 7%: 247 (MI, PA, WI)
Up by at least 4%: 278 (OH, VA)
Leading: 332 (CO, FL, IA, NH, NV)
Based on these numbers, the contests in Ohio and Virginia look particularly crucial. If Obama extends his lead in these states, he will almost certainly win. How it adds up for Romney:
Solid / Very Likely: 150
Up by at least 7%: 191 (AZ, IN, MO, SC)
Up by at least 4%: 191
Leading: 206 (NC)
After favoring Republican presidential candidates for seven consecutive elections, North Carolina – in a surprise result – voted for President Obama in 2008. He won by less than 14,000 votes.
But Mitt Romney is currently leading the polls in this battleground state. Though Obama’s deficit has been low (generally within the margin of error), it has been consistent since May.
On May 8, in a 61-39% vote, N.C. passed Amendment 1, banning same-sex marriage. The very next day, for the first time, Obama publicly endorsed same-sex marriage. And his campaign expressed disappointment with the results in N.C. Since then, he has been losing state polls.
Amendment 1 aside, N.C. was hit especially hard by the recession. Construction, a major economic sector in the state, was knocked down when the housing bubble burst. The state’s unemployment rate shot from 5% to 11.4%. Since then, unemployment has declined but has stayed above the national average and currently sits at a severe 9.6% (17.5% by the U6 “underemployment rate”). Unionization rates here are the lowest in the nation. Not surprisingly, incomes are low, too.
Considering this, it’s curious that N.C. is in contention for Obama. Nevertheless, polls in the last two and a half weeks have shown the president trending upward, with some actually putting him slightly ahead of Romney. Partly it may be due to the attention lavished on the state by the president himself, who vacations in Asheville, publicly praises the UNC basketball team and makes regular campaign stops here. The Democrats also recently held their nominating convention in Charlotte.
A stronger factor is probably the demographic change within N.C. While gloomy economic conditions have slowed the tide, migration to the state is still voluminous. Whether coming from Northern urban areas or from south of the national border, these migrants are more likely to support President Obama. Then there’s the African-American demographic, which composes 21.5% of the state population. This highly-religious group may have voted for Amendment 1, but it’s a certainty they will unify behind Obama.
Regardless, N.C. is unlikely to tip the election. In a Romney win, it would be essential. In an Obama win, it would be a feather in the cap. Longer term, the state’s status as a battleground for the second straight election and its morphing demographics suggest a period of transition. If the two parties each continue appealing to the same constituencies that they currently are, it’s only a question of time before N.C. links with the coastal states in the North East and Mid-Atlantic and becomes solid blue.
For at least the last four or five years (longer if you’re a natural pessimist or a good prognosticator), the most important question in America has been What Went Wrong? People felt like they understood what their deal in life was, what the rules of the game were: You’re a citizen of the richest, most powerful country in the world. That country is generally a good place to live (it helps if you’re white and not too poor) and better times are there for the taking. Then, the Recession happened. It wasn’t just that people lost their jobs, their homes, or their retirement savings, it’s that they lost them and couldn’t see how they were going to get them back. Worse, Americans couldn’t, and often still can’t, see how their kids are going to get what their parents once had.
The current sense in the media is that things are getting better. Statistics like a declining unemployment rate seem to support this. Perhaps we never agreed on What Went Wrong? (though not for lack of theories), but maybe whatever it was has been fixed. If it was some deadly combination of greedy financiers, cheap houses, industrious Asians, and lax regulators, have we gotten a handle on it now? I’d say no. GDP may grow for awhile, but Americans should still be worried about the jobs and social safety net available to their children.
Part of the problem is that while it took the financial crisis and recession for many people to realize it, the American Dream of self-determined success has been more myth than fact since way before 2007. Wages have been stagnant for 40 years among everyone by the richest few. This steady erosion points to deeper-set issues than a housing bubble or unrestrained banks. Deeper, I would argue, then even the rise of China or growing income inequality. If one digs deep enough to uncover the tangled roots of America’s declining promise, one will find an erosion of our basic societal institutions. By “societal institutions” I mean the framework, whether created by government or outside of it, that enabled and encouraged people to lead productive lives.
As an example, let’s take our public school system from start through high school. As it developed in the late 19th and early 20th centuries, public education in America became a way to transform rural farmers and newly-arrived immigrants into industrial workers. It did so quite successfully and by the 1950s had created, in barely 100 years, one of the greatest economic powerhouses in history as well as a large middle class. Today, the end product of that system, a U.S. high-school graduate, can barely make enough money to support a family. Clearly, the institution of American education has deteriorated significantly over the past half-century.
Education is not the only institution that is lagging far behind its promise. There are deep problems with our health care, public safety and moral/religious structures, as well. Perhaps most distressing, however, is the pervasive dysfunction of our political institutions. The instruments we created to execute the will of the people no longer can or even want to do so. Any legislation designed to fundamentally correct the problems facing our country is stymied or watered-down to the point of ineffectiveness. The whole process of selecting, grooming and electing political figures is controlled by a homogeneous minority of citizens and greased with cash.
To finally answer What Went Wrong we must look first at the failure of our institutions. Once they can again provide the necessary structure for Americans to lead productive, successful lives, our Dream will truly be revived.
Daniel H. works in renewable energy development in the Houston area. He studied at Rice University and researched energy policy in Denmark as a Fulbright Scholar.
Mitt Romney holds a commanding position in the GOP primary, despite acerbic opposition among Republican activists to his centrist record and near-universal distaste for his character among anyone who’s ever seen him or heard him speak. It often seems that Romney – who, with $250 million in personal worth, is easily the richest in the field – is attempting to buy the American presidency outright. So far he’s succeeding. This strategy can flop, as the Romney of 2008 can confirm, but his current advantage and the relaxation of campaign funding rules via Citizens United lead to the question: Does spending more money confer a significant electoral advantage?
A wide-angled view of the data suggests it does. In the past three national election cycles, the candidate who spent the most won 81% of the time in Senate races and 91% of the time in House races.
However, this doesn’t cement the case. In a famous argument, the Freakonomics team takes the correlation between money and electoral victory and flips it. “People who win political campaigns usually outspend their opponents by a lot,” concedes Stephen Dubner, the dark-haired, bespectacled half of the Freakonomics duo. “It’s not that money wins the elections. It’s that the candidate who is much more attractive from the outset raises more money.”
This argument appealed to my contrarian instincts, but, simultaneously, it threatened to invert my political understanding in a displeasing way. I was keen to poke holes in their case and pleased when I found hollow spots in key areas.
The foundation of their theory, a paper by the other half, Steven Levitt, examines thousands of elections where the same candidates competed against each multiple times. He chose this data set to control for candidate quality and other confounding factors (region, impact of presidential popularity, etc.). He found that, in these cases, election spending had very little effect on the outcomes. “According to my estimates, an extra $100,000 (in 1990 dollars) in campaign spending garners a candidate less than 0.33 percent of the vote.”
Early on, Levitt reports that previous studies overwhelmingly show campaign spending is less effective for incumbents than for challengers. Incumbents have previous campaigns and previous records that are difficult to alter through messaging. Having established this, Levitt then curiously chooses to study elections where the candidates are repeat candidates – and often incumbents. The problem, naturally, is that repeat candidates are known to the public, too, and they face the same diminishing returns on campaign spending. Therefore, money having little effect in these elections is a result that’s expected. And of questionable relevance.
A second serious flaw comes from trying to define the ‘intrinsic vote-getting ability’ of a candidate. Most pressingly, a candidate’s appeal may well result from a successful investment in public relations at the outset. (Tangentially, it’s important to note that in many races a candidate can’t even viably compete without reaching a prohibitively-high funding threshold. In this sense, money has already bounded the playing field.) This seems especially true of larger races (senatorial, gubernatorial, presidential), where candidates with shoestring budgets struggle to achieve exposure or even ballot access and therefore appear unworthy of the donors’ money. I don’t doubt that a victorious campaign has a self-fulfilling momentum, as the Freakonomics guys claim, but I think money is required to give it forward motion.
Lastly, even if we can establish a sound definition for the attractiveness of a candidate – one that doesn’t depend on superior initial funding – there’s no reason to accept Levitt’s assumption that “an individual candidate’s quality is constant over time.” Contradicting examples abound, from Nixon (219 electoral votes in 1960, 301 in 1968) to Carter (297 electoral votes in 1976, 44 in 1980) and beyond.
A realistic picture of election funding is not simply one of a straight line from spending to victory. Dubner and Levitt explore important complicating factors concerning incumbents/challengers, electoral momentum and candidate quality. But, while the common conception of campaign spending is both simplified and exaggerated, there’s still strong evidence for a major effect on electoral outcomes. I think this election will show, in contradiction to Levitt’s claims, that the influence of PACs is insidious and that public financing of elections is desirable.
Students graduating college last year owed a record amount in loans. Compared to five years ago, borrowing has increased 20% to an average bill of $25,250. The rise in borrowing is unsurprising considering that, while American wages have generally stagnated, tuition has swelled. For instance, under the most optimistic projection, the University of California system will have increased tuition 300% between 2006 and 2016.
That record debt level would be OK if it financed degrees of record value. Instead, recent graduates face an unemployment rate of 9.1%, and even those who can secure jobs earn about 10% less than their pre-recession counterparts.
So what happens when students owe a record amount in college loans at the exact moment when their financial prospects are the worst they’ve been since The Great Depression? Consider not just the individual consequences, which are severe, but the consequences for our society. This problem has stunning breadth as well as depth: two-thirds of graduates take out loans, and their combined debt now totals $1 trillion.
The answer hasn’t fully revealed itself, but we can already detect important contours. In the 91% increase in student loan defaults in the last five years. In the youth-led Occupy branches in hundreds of U.S. cities. In the malaise and pessimism among members of a possible ‘Lost Generation.’ Then, of course, there’s the cautionary memory of the housing bubble. If these phenomena are any guide, we should avoid finding out what happens when we mix high unemployment and high student debt.
With long-term economic prospects frightfully dim, the massive debt burden can only grow. Education has become severely over-priced, and the debt required to finance it will suppress demand for decades. This situation desperately needs to be addressed by something other than market faith. Borrowers need bankruptcy protection, which they are currently denied, and, very likely, they need significant debt forgiveness.
Opponents of debt forgiveness say that, morally, borrowers must take responsibility for the loans they’ve assumed, and, more personally, they say that they avoided debt or they slaved to pay back what they owed, so why should other borrowers get a free pass? These arguments are certainly understandable. But regarding loan contracts as sacrosanct and vindictively insisting on personal responsibility, while briefly satisfying, does nothing to address the economic nightmare that $1 trillion in unserviceable debt promises to usher in. If their response to this incipient crisis is to hold the line, then it’s clear where the real irresponsibility lies.