Naming the crisis

Why We Worry / Economics Desk

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.

Adding Obama’s Electoral Votes

Why We Worry / Prognostications Desk

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)



Can Obama win North Carolina?

Why We Worry / Raleigh-Durham Bureau

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.

See below.


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.

Greased with cash and covered by paint

By Daniel H.
Why We Worry / Middle America Bureau

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.

Does funding make candidates win, or do winning candidates get the funding?

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.

The next bubble: student loan debt

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.

tumblr_lw59booL2P1ql6jblo1_400The 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.

Green on green crime

Green on Green

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.

If you were driving from L.A. to Phoenix, and you happened to look left a few minutes after driving through Barstow, C.A., you would see an open expanse of Mojave Desert. In fact, you will see an open expanse of desert pretty much any time you look out of the window between L.A. and Phoenix. Thirty seven miles east of Barstow, though, just north of I-40, that desert would be the proposed location of the Calico Solar Project.

“Proposed” is the operative word here, and has been since at least 2005 when Calico’s former owner signed an agreement to sell the power to a Southern California utility company. There’s a litany of reasons why, almost seven years later, the project site remains empty. The proposed technology (Sterling Energy System’s SunCatchers) was flawed and is no longer cost competitive compared to photovoltaic panels. The project’s financial backer was a renewable energy investment firm from Ireland, a country that recently ran out of money. And, perhaps surprisingly, the project has been sued, repeatedly, by organizations that are usually strong advocates of renewable energy: the Sierra Club, Natural Resources Defense Council, and Defenders of Wildlife. The groups want the project moved to a location that isn’t one of the few remaining habitats for the desert tortoise, burrowing owl and bighorn sheep.

Broke investors and too-good-to-be-true technology are risks in any industry, including the nascent renewables business. But should companies trying to build solar or wind farms need to worry about opposition from the same groups that push for laws mandating a certain percentage of electricity from renewable sources, or a national tax on carbon?

The major fault line that seems to lead an organization like the Sierra Club to sue a solar plant owner is a difference in each group’s vision of a renewables-rich future. In the environmental NGO picture, most renewable energy comes from distributed sources, like rooftop solar panels or small facilities located in previously-disturbed areas. Developers and their close cousins, utility companies, prefer large-scale, remote facilities that generate more cheaply and offer more return on investment for their owners. There’s an argument that the resulting tension is a good thing: NGO lawsuits keep developers away from the most sensitive areas, and utility cost concerns keep us from breaking the bank to meet renewable energy targets. The truth is, however, that we don’t need a narrow middle ground, we need all of the above. If we have any hope at all of reigning in our greenhouse gas emissions before it’s too late, we need pricey rooftop panels and the habitat-encroaching Calico Solar Project. There is no doubt in my mind that, compared to either renewables future, unchecked climate change will be worse.


Photo by lorenzemlicka


Before I begin, I want you to know that I hate these types of posts. You know, the ones where bloggers talk about why they haven’t been blogging, but I feel I owe you folks an explanation.

I’m burned out on politics!

The issues I’ve revisited time and time again on this blog – war, torture, civil liberties, and economic inequality – aren’t going away. Hell, they’re not even inching toward improvement.

War: Instead of ending the wars in Afghanistan and Iraq, we’ve doubled down and opened up a new war in Libya.

Torture: In the opening weeks of Obama’s presidency, he made an official move to ban torture, but apparently it didn’t stick. In the last few months, with Obama’s full knowledge, our government has been torturing whistleblower Bradley Manning.

Civil liberties: Obama, in the Bush/Cheney tradition, asserts the rights we’d associate with autocrats. He can indefinitely detain prisoners without trial and assassinate untried American citizens. This week will likely see Congress renew the Patriot Act with bipartisan support.

Economic inequality: Wall Street bankers still haven’t paid for dive bombing the world economy in 2008, their punishment was billions of dollars funneled from taxpayers to their wallets. Unemployment remains ridiculously high, and yet the debate in Washington is not about the best ways to create jobs, but over whether to further gut the safety net to pave the way for continued low taxes for the rich.

The conclusion I’ve come to is that America’s ruling class is just too disconnected from reality outside of Washington and their elite circles. They don’t see people devastated by their wars or economic policies.  Instead, they’re surrounded by people whose biggest problem is a half a percent increase in capital gains taxes. Their acquaintances, friends and family are all doing fine. No wonder they don’t think we need any fundamental changes.

Ultimately, I think I’ve written all I can about these problems, at least for now. I’m starting to feel like I’m an album stuck on repeat. And that’s no fun for me, and it can’t be much fun for you. So, until I get a chance to recharge, I won’t be posting anymore.

Whatever happens, I want to thank you for your years of loyal readership. Your time is valuable, and I sincerely thank you for spending a little of it on my writing.


Class warfare

Republicans put their heads together and decided the biggest problem facing America is …

… Drumroll please …

Rich people don’t have enough money!:

The [the House Republican budget] plan would condemn millions to the ranks of the uninsured, raise health costs for seniors and renege on the obligation to keep poor children fed. It envisions lower taxes for the wealthy than even George W. Bush imagined: a permanent extension for his tax cuts, plus large permanent estate-tax cuts, a new business tax cut and a lower top income tax rate for the richest taxpayers.

Compared to current projections, spending on government programs would be cut by $4.3 trillion over 10 years, while tax revenues would go down by $4.2 trillion. So spending would be eviscerated, mainly to make room for continued tax cuts.

Under the new GOP plan, people that might need Medicare, Medicaid or Social Security should stop complaining and just die already.

“Defense” Department

From Twitter via John Cole:

It’s amusing that it’s okay to say “war on drugs” and “war on poverty” but once the military is involved it sure can’t be a war.