Obama's America

Millennials Need to Stand Up and Be Counted

Morley Winograd and Michael D. Hais — Wed, 27 Jan 2010 23:37:39 -0500

As the campaign to ensure a complete and accurate count of every American in this year’s census gets off the ground, a new survey of American attitudes toward participating in the census shows that young Americans, members of the Millennial Generation, born 1982-2003, may prove least likely to stand up and be counted. The Pew Research Center for the People and the Press found that roughly one-third of 18-29 year olds hadn’t heard of the census, and even after having the process described to them, 17 percent were still unaware of just what the census involved. This lack of knowledge translated directly into this key demographic segment’s unwillingness to participate, with only 36 percent of 18-29 year olds indicating that they “definitely” would respond to the form when it arrives, compared to large majorities in all other age segments who said they would do so.

The Census Bureau has a plan to address this lack of knowledge, but it’s not clear yet if its approach will successfully reach, let alone motivate, this generation. This month the Bureau launched the first ad about the census as part of an overall $340 million public awareness campaign, $133 million of which will be spent on television advertising.

The new ad features one of Hollywood’s best-known environmentalists, Ed Begley, Jr. in another of his satirical roles portraying a clueless corporate executive. In the Census Bureau ads he plays a Hollywood director pitching the idea of taking a literal snapshot of everyone in American all at once, even as others in the spot point out that the Census Bureau already has a plan to “get the shot.” All the actors in this humorous spot are white Baby Boomers, two generations older than Millennials and not exactly the demographic most needing to be educated about the census. Maybe even more serious, broadcast television is not the Millennials’ favorite way to absorb information.

More promising is the allocation of much of the rest of the awareness campaign’s budget for social networking and appearances at major crowd events like the Super Bowl and Daytona 500. In addition, information on the need to respond to the census will be translated into 27 different languages, which will help with the very multi-ethnic Millennial generation as well as Latinos and Asian of all ages. Still, the campaign needs to go beyond awareness if it wants to convince Millennials to participate.

Those who know what the census is used for, and that participation is required by law, are much more likely to say they will definitely participate. But the survey found that only 15 percent of Millennials knew that the law requires their participation. Only about half knew that the final count will be used to allocate government money to their community and determine its level of representation in Congress. They also represented the smallest group to know that the census will not be used to locate illegal immigrants. Millennials are more than willing to participate in civic activities and follow social rules, but right now they are dangerously uninformed about why they need to be a part of the nation’s most important decennial civic undertaking.

Millennials continually share information with each other to reach a group consensus on what they should do next. Someone other than those with strictly Boomer sensibilities needs to engage the generation in a conversation about the census. If that happens, America will have gone a long way toward ensuring a complete and accurate snapshot of its increasingly diverse, and youthful, population.

Morley Winograd and Michael D. Hais are fellows of the New Democrat Network and the New Policy Institute and co-authors of Millennial Makeover: MySpace, YouTube, and the Future of American Politics (Rutgers University Press: 2008), named one of the 10 favorite books by the New York Times in 2008.

Photo: Travelin' Librarian

The Death Of Gentry Liberalism

Joel Kotkin — Tue, 26 Jan 2010 00:23:50 -0500

Gentry liberalism, so hot just a year ago, is now in full retreat, a victim of its hypocrisy and fundamental contradictions. Its collapse threatens the coherence of President Barack Obama's message as he prepares for his State of the Union speech on Wednesday.

Gentry liberalism combines four basic elements: faith in postindustrial "creative" financial capitalism, cultural liberalism, Gore-ite environmentalism and the backing of the nation's arguably best-organized political force, public employee unions. Obama rose to power on the back of all these forces and, until now, has governed as their tribune.

Obama's problems stem primarily from gentry liberalism's class contradictions. Focused on ultra-affluent greens, the media, Wall Street and the public sector, gentry liberalism generally gives short shrift to upward mobility, the basic aspiration of the middle class.

Scott Brown's shocking victory in Massachusetts--like earlier GOP triumphs in Virginia and New Jersey--can be explained best by class. Analysis by demographer Wendell Cox, among others, shows that Brown won his margin in largely middle- and working-class suburbs, where many backed Obama in 2008. He lost by almost 2-to-1 among poor voters and also among those earning over $85,000 a year. He also won a slight margin among union members--remarkable given the lockstep support of their organizations for Brown's Democratic opponent, Martha Coakley.

Geography played a role, of course, but class proved the divider. Coakley did well in the wealthiest suburbs largely north and northwest of Boston. But Brown's edge in the more middle- and working-class suburbs proved insurmountable.

Obama, a genius at handling race, has always had problems with class. His early primary victories in 2008 resulted not only from superior organization but the preponderance of students and upper-income professionals in early primary states. Once Hillary Clinton morphed, just a bit late, into Harry Truman in a pants suit, she proved unstoppable, rolling over Obama in critical states like Pennsylvania, Texas, California, Florida, Michigan and throughout Appalachia.

In the general election Obama succeeded in winning over a significant portion of these voters. Long-simmering disgust with the Bush administration and the Republican Congress, combined with a catastrophic economic collapse, undermined the GOP's hold on middle-class suburbanites.

Now that the ball is in his court, the president and his party must abandon their gentry-liberal game plan. The emphasis on bailing out Wall Street and public employees, supporting social welfare and manufacturing "green" jobs appealed to the core gentry coalition but left many voters, including lifelong Democrats, wondering what was in it for them and their families.

In the next few elections there's an even greater threat of alienation among millennial voters, who in 2008 accounted for much of the president's margin of victory. Generational researchers Morley Winograd and Mike Hais note that millennials are starting to enter the workforce in big numbers. Right now their prospects are not pretty. The unemployment rate for those under 25 stands at 19%. Even for college graduates, wages are declining even as opportunities dry up.

The greatest political danger is not so much a millennial switch to the GOP but a loss of enthusiasm that will diminish the youth vote. Winograd and Hais estimate only about one-third of those who voted in 2008 in Massachusetts voted in this last special Senate election. "Republicans will keep on celebrating victories until Democrats turn their attention to young voters and get them as excited as Obama did in 2008," Winograd warns.

Ever deepening disillusionment--not only among millennials--is inevitable unless Obama changes course and starts building a broad-based recovery. The president's economic team is as pro-big-bank as any conjured up by the most rock-ribbed Republican. Its motto could be a reworking of that old notion by onetime GM CEO and Eisenhower Defense Secretary Charles Wilson: "What's good for General Motors is good for the USA"--just substitute Wall Street for GM.

But where GM brought jobs and prosperity to millions, the current Wall Street focus has forged a recovery that works for the gentry but fails to promote upward mobility. Bailed out from their disastrous risky bets and then provided with easy access to cheap credit, the financiers have had themselves a fine party while the rest of the private sector economy suffered. The partygoers have become so rarified that they are unable to lift even the New York City economy, whose unemployment rate now surpasses the national average.

This spectacle has forced Obama to try locating his hidden populist, but dangers lurk in this shift. If he attacks Wall Street with any real ferocity, the only linchpin of the current weak recovery could crumple. An administration that has focused on finance as the essence of the economy may prove poorly suited to skewer its primary object of affection.

Yet it may not be too late for the president to recover some of his economic mojo. Although his financial tax plan represents little more than petty cash at today's absurd Wall Street rates, Obama's endorsement of Paul Volcker's more muscular reform agenda could rally Democrats while forcing Republicans into a doctrinal crisis. Some, like Sen. John McCain, may favor a policy to downsize the megabanks and limit their activities. But many others who hold up the holy grail of free markets über alles will expose themselves again as mindless corporate lackeys.

But badmouthing the financial aristocracy is not enough. Obama also must jettison some of the lamer parts of the gentry agenda. Cap and trade, a gentry favorite that satisfies both green piety and Wall Street's greedy desire for yet another speculative market, needs to be scrapped as a potential job-killer for many industries. Similarly, the administration needs to delay measures to impose draconian limits of greenhouse gas emissions through the Environmental Protection Agency, which could devastate large sectors of the economy, including manufacturing, agriculture and construction.

Obama, particularly after the Copenhagen fiasco, needs to shift to more practical, job-creating conservation measures like tree-planting and reducing traffic congestion--notably by promoting telecommuting--while continuing research and development of all kinds of cleaner fuels. Measures that make America more energy-efficient and self-sufficient--without ruining the economy with ruinously high prices--would be far more saleable to the public than the current quasi-religious obsession with wind and solar.

Obama also needs to stop his naive promotion of the chimera of "green jobs" as his signature answer to the country's mounting employment woes. There is no way a few thousand, mostly heavily subsidized, jobs creating ever more expensive energy can turn around any economy. Just look at the economic carnage in Spain--where youth unemployment has now reached a remarkable 44%--which has bet much of its resources targeting "green" energy.

More than anything the president needs to make the case that government can help the productive economy. This requires a scaling down of regulatory measures that are now scaring off entrepreneurs--including some aspects of health care reform--and beginning to demonstrate a direct concern for basic industries like manufacturing, agriculture and trade.

Pivoting away from gentry liberalism will no doubt offend some of the president's core constituencies. But if he does not do this soon, and decisively, he will find that the middle-class anger seen in Massachusetts will spread throughout the country. As a result Barack Obama, a man who would be Franklin Roosevelt and could settle on being the next Bill Clinton, will end up looking more like that sad sack of Democratic presidents, James Earl Carter.

This article originally appeared at Forbes.com.

Joel Kotkin is executive editor of NewGeography.com and is a distinguished presidential fellow in urban futures at Chapman University. He is author of The City: A Global History. His next book, The Next Hundred Million: America in 2050, will be published by Penguin Press February 4th, 2010.

The Kids Will Be Alright

Joel Kotkin — Sat, 23 Jan 2010 11:18:46 -0500

America's population growth makes it a notable outlier among the advanced industrialized countries. The country boasts a fertility rate 50% higher than that of Russia, Germany or Japan and well above that of China, Italy, Singapore, North Korea and virtually all of eastern Europe. Add to that the even greater impact of continued large-scale immigration to America from around the world. By the year 2050, the U.S. population will swell by roughly 100 million, and the country's demographic vitality will drive its economic resilience in the coming decades.

This places the U.S. in a radically different position from that of its historic competitors, particularly Europe and Japan, whose populations are stagnant. The contrast between the U.S. and Russia, America's onetime primary rival for world power, is particularly dramatic. Some 30 years ago, Russia constituted the core of a vast Soviet empire that was considerably more populous than the U.S. Today, even with its energy riches, Russia's low birth and high mortality rates suggest that its population will drop to less than one-third that of the U.S. by 2050. Russian Prime Minister Vladimir Putin has spoken of "the serious threat of turning into a decaying nation."

An equally dramatic and perhaps more critical demographic shift is taking place in East Asia. Over the past few decades a rapid expansion of their work force fueled the rise of the "East Asian tigers," the great economic success stories of the late-20th and early-21st centuries. Yet that epoch is coming to an end, not only in Japan and Korea but also in China, where the one-child policy has set the stage for a rapidly aging population by mid-century.

Within the next four decades, most of the developed countries in both Europe and East Asia will become veritable old-age homes: A third or more of their populations will be over 65, compared with only a fifth in America. Like the rest of the developed world, the U.S. will certainly have to cope with an aging population and lower population growth, but in relative terms the county will boast a youthful, dynamic demographic.

As many other advanced countries become dominated by the elderly, the U.S. will have the benefit of a millennial baby boom as the "echo boomers" start having offspring in large numbers later in this decade. This next surge in growth may be delayed if tough economic times continue, but over time the rise in births will add to the work force, boost consumer spending and allow for new creative inputs.

The differing demographic trajectories create a diverse set of issues for 21st-century America than those facing its rivals. The key challenges the European Union, Japan and Korea will contend with in the coming decades involve coping with a rapidly aging population, filling labor shortages and finding ways to invest in growing economies. In contrast, the U.S.'s greatest priority will be to create opportunities for its ever-expanding population. The New America Foundation estimates the country needs to add more than 125,000 jobs a month simply to keep pace with population growth in 2010. What the U.S. does with its "demographic dividend"—that is, its relatively young working-age population—will largely depend on whether the private sector can generate the incomes among the young to meet the needs of a larger aging population.

Entrepreneurialism and America's flexible business culture—including the harnessing of entrepreneurial skills of aging boomers—will prove critical to meeting this challenge. Many of the individuals starting new firms will be those who have recently left or been laid off by bigger companies, particularly during a severe economic downturn. Whether they form a new bank, energy company or design firm, they will do it more efficiently—with less overhead, more efficient use of the Internet and less emphasis on pretentious office settings.

"People are watching their companies go under. Therefore you get three vice presidents who get laid off but know their business," says Texas entrepreneur Charlie Wilson. "They start a new company somewhere cheap that is more efficient and streamlined. These are the new companies that will survive and grow the next economy."

It is here—at the grassroots level—that you can best glimpse the essential sources of American resiliency. American society draws most of its adaptive power not from its elite precincts but through the efforts of communities, churches, entrepreneurs and families.

You can see this in the resurgence of once-declining Great Plains cities like Fargo, N.D., where high-tech now joins agriculture and manufacturing to form one of the country's strongest local economies. Or you can visit the emerging immigrant hotbeds, such as the San Gabriel Valley east of Los Angeles or the Sugarland area, just west of Houston, with their plethora of new churches, temples, companies and ethnic shopping malls.

Immigrants represent a critical component of our next wave of new dynamism. Between 1990 and 2005, immigrants started one quarter of all venture-backed public companies. Large American firms are also increasingly led by people with roots in foreign countries, including 14 of the CEOs of the 2007 Fortune 100.

But much of the energy will come from more obscure enterprises. Recent newcomers have already distinguished themselves as entrepreneurs, forming businesses from street-level bodegas to the most sophisticated technology start-ups.

What drives immigrants is their optimism in America's future. California developer Dr. Alethea Hsu, in explaining why she opened a new Asian-oriented shopping center in Orange County, cited the entrepreneurial energy of both affluent and working class immigrants which, she said, will allow them to thrive through the recession and beyond. "We are leased up, and we think the supply of shopping still is not enough," Ms. Hsu said in early 2009. "We feel great trust in the future."

This entrepreneurial urge also extends beyond the immigrant community. In 2008, 28% of Americans said they had considered starting a business, more than twice the rate for French or Germans. Self-employment, particularly among younger workers, has been growing at twice the rate as in the mid-1990s. In the most recent Legatum Prosperity Index, the U.S. ranked at the top among all countries in terms of entrepreneurship and innovation.

Most important of all will likely be the rise of the millennial generation—a group of Americans who will start reaching their prime earning years late in the next decade. Surveys identify them as strongly family- and community-oriented. The millennials will be America's new entrepreneurs, workers and consumers in the coming decades. They will provide the kind of resource our major competitors are destined to run short on.

The millennials also will help shape an increasingly culturally diverse America which by 2050 will be roughly half made up of ethnic minorities. This emerging post-ethnic future contrasts dramatically with the ethnic politics common among the nation's chief global rivals. Even famously politically correct nations as Sweden, Denmark and the Netherlands have turned against immigration. Switzerland just banned the construction of minarets, while France is considering banning some forms of Islamic garb.

Our prime Asian rivals—China, Japan, and Korea—remain even more culturally resistant to diversity. Chinese xenophobia, in particular, is deeply entrenched, notes Martin Jacques, author of "When China Rules the World." A Chinese world superpower would be both racially homogenous and far from tolerant of newcomers. Recently the appearance of a mixed-race Shanghai girl on a national talent show sparked a surge of racist invective.

The very diversity of the emerging America makes many wonder what will hold the country together. Ultimately, this unique society will find its binding principle in the notions that have long differentiated it from the rest of world: a common belief system, a sense of a shared destiny and an aspirational culture.

As the British writer G. K. Chesterton once put it, the U.S. is "the only nation...that is founded on a creed." This faith is not, and was not initially meant to be, explicitly religious; rather, it is a fundamentally spiritual idea of a national raison d'être.

Of course, this optimistic scenario depends on intelligent and energetic actions by central and local governments, as well as community organizations. But the road to the American future will be primarily laid not by the central state but by families, individuals and communities. During the industrial age Ralph Waldo Emerson once observed, "The age has an engine, but no engineer." Much the same may be said in the coming decades.

This article first appeared at The Wall Street Journal.

Photo: jcolman

Stop Coddling Wall Street!

Joel Kotkin — Fri, 15 Jan 2010 00:16:21 -0500

By all historical logic and tradition, Wall Street’s outrageous bonuses—almost $20 billion to Goldman Sachs alone—should be setting a populist wildfire across the precincts of the Democratic Party. Yet right now, the Democrats in both the White House and Congress seem content to confront such outrageous fortune with little more than hearings and mild legislative remedies—like a proposed new bank tax, which, over the next decade, seeks to collect $90 to $100 billion. This amounts, on an annual basis, to about half of this year’s bonus for Goldman’s gold diggers alone. It’s speaking loudly and carrying a stick made of paper mache.

But this should come as no surprise, really. Postmodern Democrats are generally more concerned about the fate of the polar bears than real people on Main Street.

One reason may be that Democrats increasingly collect the bulk of contributions from the very financial sector that they have bailed out and coddled since taking office. However, more substantially, the Democrats—including many “progressives”—seem more comfortable with big business and high finance than their erstwhile working- and middle-class constituencies. For this, we need the Democratic Party?

Somewhere outside Nashville, the shade of Andrew Jackson, the founder of the modern Democratic Party, is stirring uncomfortably. So, too, are the remains of Harry Truman and Franklin Roosevelt, Jackson’s heirs to the leadership of the Party of the People.

Faced with highway robbers like those at Goldman Sachs, Jackson would have threatened to seize their assets and, if they protested, hang them from the highest tree. Franklin Roosevelt would have made political mince meat out of these outrageous “economic royalists.” Harry Truman would have uttered an earthy expletive and sought to cut them down to size. Truman hated phonies and elitists; today’s Democrats Party is lousy with them.

Now we see the very abandonment of the idea of the Democratic Party opposing concentrations of power. Historically, Democrats took on the largest and most powerful institutions of society. Jackson made his critical battle against the government-run Bank of the United States, which he considered a means “ to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful.”

In his time, Franklin Roosevelt battled big business, which largely hated him, by seeking to create a more equal distribution of wealth. He tried to save homeowners and farmers from the banks; speculators wiped out in 1929 did not enjoy banner years for a long time to come. Truman fought not for big banks and major companies, but for programs that spread capital to the middle class, whether for college loans or mortgages.

Now we have the postmodern Democratic Party of Barack Obama. The new party has little use for populism of any kind—it prefers to legislate from on high, whether on financial reform, climate change or land-use policy, from what it considers its superior knowledge. If your factory or business is shut down as a result, it’s you who better learn to evolve.

We will see this same mind-set in action with the administration’s proposal for a cap-and-trade program. It may end up doing little for the environment, but a lot of traders, well-connected corporate CEOs, and academic consultants will be made even richer. Draconian “green” policies that boost subsidies and energy prices may not be what Americans want—climate change ranks near the bottom of popular concerns—but such an approach fits neatly the agendas of Harvard faculty, Wall Street, and the mainstream media. That is, those who matter.

The rotten economy remains detestable but the stimulus program is working fine for their key constituencies. Stocks are up, many hedge funds are doing well, university research coffers are bulging. Meanwhile, taxpayers are employing ever-more unionized public employees, whose often-insane pensions are consuming many local government budgets.

Many Americans who work for themselves are enraged, but they lack a credible channel for expressing it. The Republicans are largely discredited by their disgraceful performance over the last decade, up to and including the initial Bush-Paulson bailout. The Republicans presided as easily as the Democrats over the disastrous financialization of the economy; by the mid-2000s, finance accounted for some 41 percent of all American profits—three times the percentage in the 1970s.

But for now, populists are in retreat in Washington. Last week, Byron Dorgan of North Dakota announced his retirement from the Senate. Dorgan, friends tell me, was disgusted with Obama’s focus on health care and climate change at a time when the economy was unraveling and Americans were losing their jobs. He also knew that the president’s mounting unpopularity in Middle America posed a profound threat to his own reelection prospects.

Dorgan will be missed. His voice would have been set against the coddling of Wall Street. He supported reinstating the 1933 Glass-Steagall Act, which put a barrier between banks and investment houses. He also opposed “too big to fail” policies and was ready to attack the administration’s “cap-and-trade” scheme, which he considered a large giveaway to Wall Street traders.

Dorgan’s departure leaves only a handful of genuine populists in Congress, including Jon Tester from Montana, James Webb of Virginia, as well as our resident socialist, Vermont's Bernie Sanders. They may well be at last willing to take on the battles that Jackson, Roosevelt, and Truman would have fought against “interests.”

Right now for every populist, there are several gentry Democrats—epitomized by the likes of New York Senator Charles Schumer and his sidekick, Kirsten Gillibrand—who will do Wall Street’s bidding on the Hill. Erstwhile populists may find some allies among independent-minded Republicans but, for the most part, the GOP is too blinded by ideology or too well bought to curb the big investment houses.

So in the end, another crop of 35-year-old Wharton and Harvard MBAs gets to spend their multimillion-dollar windfalls. Maybe if you live in New York, perhaps a few shekels might fall your way. After all, these people have kids to nanny, dogs to walk, apartments to decorate, and toenails to be painted.

These bonuses simply remind us of our outrage. Jackson, Roosevelt, and Truman would have understood the opportunity for the Democratic Party presented by this egregious, undeserved windfall. Truman in particular would have detested the academically oriented “progressives” who explain away excess and look for new ways to harry independent smaller businesses. As he once quipped, “There should be a real liberal party in this country, and I don't mean a crackpot professional one."

Yet that’s exactly the kind of Democratic Party we have now: one that shames the legacy of Truman, Roosevelt, and Jackson and looks the other way while the Treasury is raided and the economy works mainly for the benefit of the least deserving.

This article first appeared at TheDailyBeast.com

Obama's Elite Power Base

Joel Kotkin — Sat, 02 Jan 2010 20:54:14 -0500

Looking back at President Obama’s first year in office, this much is clear: Obama first enraged the right wing by seeming to veer far left, then turned off the left by seeming to abandon them. Even as Fox News fundamentalists rail against “socialism,” self-styled progressives like Naomi Klein scream about a “blown” opportunity to lead the nation from the swamp of darkest capitalism.

Both right- and left-wing critics fail to consider the fundamental nature of the Obama regime. This presidency represents not a traditional ideology but a new politics that mirrors the rise of a new, and potentially hegemonic class, one for which Obama is a near-perfect representative.

Every president and political movement, of course, brings to power an often-hoary group of grasping interest groups. Under the conservatives and George W. Bush, the favored classes included standbys like the fossil-fuel energy companies, Big Agriculture, suburban homebuilders, and the defense industry.

Rather than the “good old boys,” Obama’s core group hails from what may be best described as the “creative class” – the cognitive elite, or, to borrow from Daniel Bell’s The Coming of Postindustrial Society, the “hierophants of the new society.” They come not from traditional productive industry, but the self-conscious “knowledge” sectors – such as financial services, the software industry, and academia.

From early on, Barack Obama attracted big-money people like George Soros, Warren Buffett, and JP Morgan’s Jamie Dimon far more effectively than his opponents in either party. As The New York Times' Andrew Sorkin put it back in April, "Mr. Obama might be struggling with the blue-collar vote in Pennsylvania, but he has nailed the hedge-fund vote.”

Other bastions of support could be found in Silicon Valley, where Google Chairman Eric Schmidt and venture capitalist John Doerr were all early backers. Obama, the former law school professor, also did exceedingly well with academics, and many of his pivotal wins in the Midwest rested heavily on both votes and volunteers from college constituencies.

Finally Obama gained the early support of public-sector unions, now arguably the dominant power within the Democratic Party. Together, these groups now enjoy the lion’s share of influence inside the administration.

In contrast, the representatives of traditional Democratic sectors such as industrial labor unions, Latinos, or even many African Americans were slow to join the Obama bandwagon. Even after they joined his electoral coalition, they have received little in the way of succor from the president and the administration.

Indeed, for most of these voters, the past year has been an awful one. Unemployment for Latinos, blacks, and blue-collar workers has skyrocketed, particularly among males. For them, Obama’s economic plan has done very little – unsurprising given its primary focus on sustaining public-sector employment and large financial institutions.

In contrast, the core Obama constituencies appear to have ridden out the recession in fine shape. Mega-patron George Soros, for example, has boasted openly about how he was having “a very good crisis.” Much the same can be said of the largely pro-Obama hedge funds and investment bankers, for whom Paulson to Bernanke to Geithner has provided a double-play combination for the ages.

Academia has also emerged as a big winner. This administration is crammed with professors from Science Adviser John Holdren and Energy Secretary Steven Chu to former Harvard President Larry Summers, the director of the National Economic Council. More broadly, academics have reaped massive windfalls from the stimulus, both in terms of direct support for universities and funding for research projects.

One place where the priorities and class interests of the cognitive elite coalesce most has been on “climate change.” In contrast to manufacturers, farmers, or fossil-fuel firms, investment bankers, software companies, and university professors have little to fear from the rash of “green” policy initiatives.

In fact, for these groups, “climate change” often means a once-in-a-lifetime bonanza. Wall Street sees the administration’s “cap and trade” proposals as opening a whole new frontier to enjoy yet more profit. University researchers – particularly those with the right spin on the climate issue – have been big winners in the tens of billions of dollars being handed out by the Chu-led Energy Department and other federal agencies.

Overall, subsidized “alternative energy” – largely excluding both nuclear power and natural gas – also provides Silicon Valley with federal backing for ventures in everything from luxury electric cars and dodgy geothermal developments to “smart” energy grids. And, of course, all this increased federal spending also plays into the public-sector unions, for whom an ever-expanding government represents the ultimate growth industry.

In the short term, Obama’s loyalties have gained him political credit even in hard times. Support from Wall Street and Silicon Valley assures access to big-money sources and influences the upper echelons of the establishment press, particularly in New York. Meanwhile, the academy and the public bureaucracy provide a cadre of political shock troops who may be needed to rouse an increasingly disaffected Democratic base in the 2010 elections.

But Obama’s class strategy also poses considerable longer-term risks. The cognitive elites – clustered in places like Washington, New York, Boston, or Silicon Valley – tend to only talk to and listen to each other. This often makes them slow to recognize shifts in grassroots opinion on such issues as the health plan or global warming.

That risks continued erosion of support from many hard-pressed middle-class voters around the country more concerned with economic growth and holding onto their home than saving the planet. These are precisely the voters, not the tea party activists or their leftist analogues, who likely will determine the political winners in 2010 and beyond.

Official White House Photo by Pete Souza.

This article originally appeared at The Daily Beast.

The Crisis Next Time: Public Finance

Michael Harrington — Wed, 30 Dec 2009 00:44:46 -0500

The financial crisis of 2008 paved the way for the employment crisis of 2009, which has now paved the way for the upcoming public finance crisis of 2010. Most federal, state and municipal budgets are strained to the breaking point while the economy still has not found its footing. Meanwhile our national politics is obsessed with expensive overhauls of environmental policy and healthcare reform. Our latest policy strategy is an attempt to borrow and spend our way to prosperity, ala Japan of the past twenty years.

It’s tempting to point to a few simple causes of these economic misfortunes, such as mortgage subsidies, loose credit standards, or excess financial leverage, but the truth is that we are experiencing the fallout of a failed policy paradigm.

This paradigm was rooted in the past century with the creation of the Federal Reserve in 1913, the Employment Act of 1946 and the Humphrey-Hawkins Full Employment and Stabilization Act of 1978. It’s a paradigm dependent on many admittedly useful policy tools, including both Keynesian demand stimulus and the Austrian school’s theory of money and credit, the monetarism of Friedman, as well as the supply-siders of the 1980s.

So, in what ways have these approaches failed?

The policy goals are clearly stated: stable GDP growth and full employment. But the economic results have been decidedly mixed: the growth of real incomes laden with an exploding entitlement state, structural budget crises, widening wealth disparities, a catastrophe-prone banking system, and volatile asset markets. We’ve heard the term “systemic risk” bandied about the recent financial crisis, but this report card captures the true risks of the system we’ve created.

Politically and socially, Americans clearly want a society where a growing middle class thrives, opportunity exists for individual success and advancement, and a prosperous elite accepts the responsibilities of power not to exploit the weak and disadvantaged. Instead, our political economy is hollowing out the middle class, creating more dependency among the poor, and fostering a culture of corruption and irresponsibility among the elites. Elsewhere I’ve characterized this current state of affairs as Casino Capitalism and Crapshoot Politics.

Second question: why has our democratic politics failed to deliver? The short answer: Our government is doing too much of what it shouldn’t be doing and not enough of what it should.

Free market economies are very good at producing wealth by harnessing the incentives of market participants. Market prices are valuable information signals that tell everyone how much of each good to produce. Governments, however, no matter how enlightened, cannot attain this efficiency. But, due to the political imperative to “do something” in response to countless demands, they feel compelled to try. Thus the focus on “growing the economy” and “creating jobs.”

Unfortunately, these goals often demand incompatible policies, highlighting the differences between the private and public sectors. Private firms earn profits (i.e., create wealth) by increasing productivity, often by reducing labor costs. However, the public sector follows no profit criteria, so the government increases employment without attention to productivity. Thus, with more public sector jobs we create more employment while producing less. At the same time, the growth of the public sector empowers a politically powerful public union interest in its continued expansion. This is no way for a nation to grow rich.

When we peel away the logic we find the true goal of public sector job creation: political redistribution of the economy’s wealth-creating capacity in order to mitigate the effects of markets. This is not an unworthy societal goal, but our public policies adopt counterproductive means to achieve it.

To be fair, the political problem arises because private markets are agnostic towards the distributional effects of their success. Inequality, poverty, pollution, environmental degradation, the concentration of economic and political power – all these are unfavorable distributional effects of markets that give rise to political demands. The question is over how government should meet these demands.

The 20th century attempt to tax and redistribute wealth has landed the modern welfare state in a cul-de-sac of exploding budgets, rising costs of living, slower economic growth and structural unemployment. We’re robbing Peter to pay Paul and neither – except for a relative handful of bureaucrats and rent-seeking capitalists – is better off for it. This adds up to less opportunity all around. Again, the problem is with our failed paradigm. We need to align our policies with behavioral incentives without surrendering our policy goals to an agnostic market mechanism.

To construct a new paradigm we might do best to return to first principles of what Americans want: freedom, opportunity and justice. In order to enjoy these principles, citizens need to be empowered with choice, autonomy, and protection from unmanageable risks. Only functioning free and competitive markets can provide the necessary resources.

So, what should be the proper role for government?

The maldistribution of resources can be mitigated if citizens participate in the wealth creating process as more than an input labor cost. Public policy should cease deficit spending to promote employment and instead look to creating the necessary environment for private risk-taking, saving, investment, and production. This includes insuring market competition and mitigating the effects of economic risk and uncertainty. Tax and regulatory policies should promote the widespread accumulation, diversification, and access to capital to empower individuals and families with the necessary resources to build wealth and insure themselves against uncertainty. Where private insurance markets are incomplete, there is a role for limited social insurance to fill the gap.

Numerous specific policies flow from this general paradigm shift, for example, we can stop penalizing savings through overly loose credit and onerous tax policies on interest and dividend income. There is no reason not to have a tax-free threshold for capital income that reflects the desired savings level of the median annual income household.

Why have we stuck with a failed policy paradigm? Part of the answer is the Kuhnian nature of scientific revolutions, but the pursuit of power and influence by narrow interests is certainly a determinant factor. Economically and socially, we know where we need to go. Getting there politically is another matter. Our present political leadership (of both parties) certainly is not taking us in that direction.

Michael Harrington is a policy analyst and writer with a multidisciplinary background in economics, finance and political science. His specialties are international capital markets, trade, and social insurance. He has taught political science at UCLA and conducted economic research for The Reason Foundation, The Milken Institute and the US Chamber of Commerce. His published writings and opinions have appeared in numerous business journals, including the Wall Street Journal, Barron’s, BusinessWeek, the Economist, the Christian Science Monitor and the Los Angeles Times.

Don't Give Up On The U.S.

Joel Kotkin — Tue, 29 Dec 2009 00:25:34 -0500

If the U.S. were a stock, it would be trading at historic lows. The budget deficit is out of control, the economy is anemic and the political system is controlled by academic ideologues and Chicago hacks. Opposing them is a force largely comprised of know-nothings--to call them Neanderthals would be too complimentary.

Not surprisingly, many Americans have become pessimistic. Two in three adults now fear their children will be worse off than they are. Nearly 40% think China will become the world's dominant power in the next 20 years, as indicated by a recent survey.

Yet, in spite of everything, I would still place my long-term bets on the U.S. Here's why:

1. The U.S. is the only advanced country in the world with viable demographics. By 2030, all our major rivals, save India, will be declining, with ever-larger numbers of retirees and a shrinking labor force. By 2050 Germany, Japan and South Korea could approach having twice as many people over 65 per capita as the U.S. By then, the U.S. will have 400 million people, which may be more than the entire EU and three times the population of our former archrival Russia.

2. In terms of energy resources, the U.S., combined with Canada, is the second richest region in the world after the Middle East. The country possesses vast resources of natural gas, about 90 years' worth, as well as strong areas for wind power. Given America's past profligacy, the country could derive considerable savings with even modest conservation efforts.

3. America remains the world's agricultural superpower, with the most arable land on the planet. With another 3 billion people expected on the planet by 2050, the U.S. should enjoy a continuing boom in food exports.

4. Military power matters now and in the future. We are not living in a Star Trek future of earthly harmony. The U.S. leads in military technology and, yes, our martial spirit remains a positive factor, despite the portrayals from Hollywood. For all its missteps, the U.S. military has achieved its strictly war-fighting missions--in Iraq and Afghanistan, as well as a host of smaller conflicts--over the past 20 years. Meanwhile, Europe and Japan have taken themselves out of the military game, and it will be decades before China will be ready for a head-to-head challenge.

5. There is no large country that comes close to the U.S. as an entrepreneurial hotbed (Taiwan, Israel and Hong Kong come close but are far smaller). The recent Legatum Prosperity Index showed the U.S. remains by far the largest generator of new ideas and companies on the planet.

Of course, all these critical advantages could be squandered by fecklessness. The empowered American left--in sharp contrast to the tradition that runs from Franklin Roosevelt and Harry Truman all the way to Bill Clinton--often envisions the U.S. as a country headed into the dustbin of history, and deservedly so.

Leftist historian Immanuel Wallerstein, for example, asserts that the U.S. has been "a fading global power" since the 1970s. The only question now, he suggests, is "whether the United States can devise a way to descend gradually, with minimum damage to the world, and to itself." Another leading liberal analyst, Parag Khanna, envisions a "shrunken" America that is lucky to eke out a meager existence between a "triumphant China" and a "retooled Europe."

The traditionally pro-American right increasingly shares this pessimism, albeit for different reasons. With Obama and the Democrats in power, many conservatives, including such keen observers as Charles Krauthammer and Victor Davis Hanson, believe the country has hit the historical skids.

Yet declinism is often overstated. Today, only someone delusional would suggest that once widely feared Japan, soon to fall to third place (behind China) as an economic power, constitutes a serious threat to American preeminence. However, the fantasy of a European resurgence remains deeply embedded among American policy wonks and academics. It is a firmly held belief despite the continent's decades of slow growth, demilitarization, disastrous demographics and mounting budget woes, particularly on its southern and eastern fringes.

On the other hand, China and India represent true ascendant economies of the next decade and beyond. China's rise has led one writer, the Guardian's Martin Jacques, author of When China Rules the World, to suggest that America must "learn to bow" before the great power of the 21st century.

Yet for all their impressive growth, neither China nor India possesses either the institutional strengths or natural resources of the U.S. China's current boom has much to do with an orgy of money-printing that would make Barack Obama blush. Real estate in some places is turning bubblish. There are reports of vacancy rates as high as 50% in Shanghai's commercial market.

India, as anyone who has spent time there knows, remains a highly fragmented and largely impoverished country. It will be a great power of the future, but a very poor one, which will take many decades, even a century, to approach even a decent fraction of America's current per capita income.

Often overlooked as well is America's unique advantage as an inclusive multiracial society. Over the past decade America has produced two African-American Secretaries of State and one President. America remains unique in its ability to absorb different races, religions and cultures, an increasingly critical factor in maintaining global preeminence.

What Americans need most now is to develop policies that build on our essential strengths. Some tech enthusiasts and members of the Obama Administration claim that "the age of infrastructure is over." However, in reality there is no way to assure a decent future for the next 100 million Americans without a major investment in everything from roads and broadband to transmission lines, water systems and basic skills training

Some conservatives may oppose such a domestic surge, but the investment reflects a strong American tradition. The critical issue will be to make sure a commitment to infrastructure does not morph into a Washington-led industrial policy that would inevitably reward the well connected and stunt our innovative edge.

In the end, Americans must remain true to our individualist traditions. Compared with Europeans, who instinctively look to government for guidance, the vast majority of Americans still believe that hard work is the key to self-improvement. Our primary economic asset continues to lie with entrepreneurial spirit and adaptability.

In the coming decade, American success will require precisely this blend of public support and private initiative. If the U.S. stays true to its unique traditions, it will remain the world's best investment for decades to come.

This article originally appeared at Forbes.com.

What To Look For In Healthcare Reform: Location, Location, Location

Georganne Chapin — Mon, 14 Dec 2009 00:28:24 -0500

A Reuters article that was widely picked up around the globe recently raised the question, Are Doctors What Ails US Healthcare? Comparing the New York suburb of White Plains to Bakersfield, California, the article uses the evergreen two-Americas paradigm to discuss disparities in health care. Drawing heavily on the Dartmouth Atlas of Healthcare, it highlights a sad but inescapable fact: doctors want to live in some places and not in others, giving the “have” populations more intensive medical care which they might or might not need, while have-nots, who tend to be older, sicker and poorer, get health care to match. The article asserts that there’s nothing in current health care reform legislation that will do anything to address the disparities.

I agree. But then, what should we expect? The legislation, which I find marginally more desirable than doing nothing at all, is largely about insurance, not about health care. This is what happens when we emphasize how we pay for something, rather than what we are paying for. Are doctors what ails U.S. health care? Only in the sense that they are operating on the same basis as everyone else in the health care market: every man for himself.

You don’t have to make bi-coastal comparisons to find the disparities highlighted in the Reuters article. My own Hudson Valley not-for-profit insurance company faces them every day. We cover the Medicaid populations from the aforementioned White Plains, NY, to the South, to the blighted economies of the Catskills to the North and West. The distance involved is only about 150 miles, but day in, day out it might as well be 1500. And socially, it might as well be 150 years. Sullivan County is still organized geographically the way it developed in the eighteenth and nineteenth centuries — farms, woods, and mills, only without the mill jobs.

There was a brief shining moment (well, half a century) when urban Jews and other vacationers formed the basis of a thriving tourist trade in the “Borscht Belt” resorts of Monticello, Sullivan County’s hot spot. When they closed, they provided ideal settings for residential drug and alcohol rehab for poor people from New York City, but those aren’t exactly the foundation for high-quality community health care. When we initially started offering state-sponsored insurance to the poor of Sullivan County, the historical dearth of specialists made it a laboratory for what a free market looks like when there’s no competition. (Do I hear the words “strong public option”?) Because New York State requires us to have a decent network of contracted doctors for our enrollees, the sole cosmetic surgeon – for example – could extract pretty much any fee he wanted from us in exchange for seeing a patient who needed emergency reconstructive surgery.

Your tax dollars meet supply and demand and a mandate to pay within a private market.

I don’t blame the specialists. They are highly trained and skilled, and have paid their dues. If I blame anyone, it’s the system that sets the dues so high, in the form of college and medical school loans and years of fellowships that leave well-meaning doctors feeling that they deserve all that money, just like corporate farmers and hedge fund managers.

It’s also not the doctors’ fault that they want good schools and cultural amenities. I haven’t seen much of Bakersfield, but I know that schools in and around White Plains have good reputations and are just twenty miles from Broadway and the Metropolitan Museum (and ten miles from my Tarrytown office). Maybe we can fix schools and reinvigorate the National Endowment for the Arts to make every remote locale more like Westchester, but that would be socialism.

Dartmouth Atlas data is easily available online, and well worth spending some time with. You can use it to create all kinds of two-America scenarios that provide instant object lessons in our health care inequities. My personal favorite is that health care spending in Miami, Florida for Medicare patients in the last two years of life (highest in the nation) is exactly twice that in Portland, Oregon (lowest of the regions studied), with commensurate volumes of appointments, referrals, tests and hospitalizations, and no better outcomes. Here we see the same dynamics that make pawnshops spring up around gambling casinos and candy stores near public schools. Doctors go where the customers are, and once they arrive they maximize their revenues and measure success by volume, not outcomes.

Why should we expect anything different, when reform legislation is captive to the same kind of have/have not dichotomy that shapes health care delivery itself? Senators Max Baucus of Montana and Kent Conrad of North Dakota are two of the pillars of the anti-public option caucus. They come from states with small populations, and both take barrels of money from the health insurance industry because they can’t raise it locally. If they play their cards right, who knows? They could leave Congress and become haves themselves, like Billy Tauzin, who is now Big Pharma’s man in Washington, having engineered the passage of Medicare Part D, or Tom Daschle, once a champion of single payer, who now plays both sides of the street with special interest money.

Are Doctors What Ails US Healthcare? quotes David Goodman, Director of Health Policy Research at the Dartmouth Institute for Health Policy and Clinical Practice, who says there's an "irrational distribution" of the most valuable and expensive U.S. health care resources. I would say that the distribution is entirely rational given the insanity of the larger situation.

If we’re ever going to find our way out of this mess, we’re going to have to do for these health care backwaters, both rural and urban, what we used to do when private capital wouldn’t do the job. Set goals and build the infrastructure to serve them, because the market won’t do it. Want to electrify Appalachia? You need the TVA. Want to make the desert bloom? Build dams and aqueducts. Want to open up the interior of the country? Build an Interstate Highway system. Want doctors to practice in unattractive markets? Create an MD Bill for doctors like the old GI Bill for veterans, so that doctors emerge from training feeling more like public servants and less like indentured servants.

I attended a discussion of health care reform not long ago at the Yale School of Public Health. The representative of the private health insurance industry put the issues in a compelling perspective, although not, perhaps, for the reasons he cited.

His arguments were three: First, we require automobile owners to carry insurance, so requiring everyone to carry health insurance shouldn’t be a problem (I know that President Obama made this point, too, and I hated him for it). Second, do you want a health care system that runs like the Post Office, or one that runs like Federal Express? And third, the health insurance industry is really a jobs program, and do we really want to put all those people out of work?

These are shallow arguments. Car insurance? There’s no law that says you have to own a car, but everyone needs health care. A health insurance mandate is more like forcing every American to buy a new car and giving them a choice between Ford or GM. Post Office and FedEx? A company that can’t send a package overnight from suburban Tarrytown into New York City without round-trip flights to Memphis and back is no model for health care delivery, and besides, I’d like to see what FedEx can do for the price of first class postage. Jobs? A dynamic economy finds ways of redeploying redundant workers in more significant jobs. Wouldn’t those actuaries make good math teachers?

The arguments were so hollow that no one bothered to argue, and the insurance rep was undoubtedly relieved. A fellow panelist who practices medicine in Cambridge, Dr. David Himmelstein of Harvard, said simply, “My practice would have no trouble making money on Medicare, single-payer reimbursement rates if we didn’t have to pay so many people to argue with insurance companies.”

Unfortunately, the larger discussion is still stuck on insurance, and as long as it is, the two health care Americas will never become one.

Georganne Chapin is President and CEO of Hudson Health Plan, a not-for-profit Medicaid managed care organization, and the Hudson Center for Health Equity & Quality, an independent not-for-profit that promotes universal access and quality in health care through streamlining. Both organizations are based in Tarrytown, New York.

The European Model Gets A Makeover

Shane Leavy — Sat, 05 Dec 2009 23:38:19 -0500

Does the United States finally have its first European President in Barack Obama? Does he truly want to Europeanise the American health system and impose European-style socialism on the US? RealClearPolitics.com assures us that ‘his policies on government spending, taxation, health care and carbon emissions would all tend to bring America in line with European norms.’

It is a powerful message – or it would be were the US not already in line with European norms in nearly every way that matters. In terms of social welfare expenditure, working hours, socialized health and even military spending, the US slips snugly in place among its European counterparts.

So why the constant comparisons between the US and Europe? It’s all rather simple: people who refer to ‘Europe’ as an alternative to the United States rarely specify which European countries they mean. Europe is a continent consisting of around 50 countries (its borders are debatable) of which only 27 are in the EU and 26 in NATO. These countries run from Liechtenstein, with the highest GDP per capita in the world, to Kosovo, which is poorer than Nigeria. The idea that one common European policy or culture could exist in such a diverse environment is absurd.

Europe, as a single economic system with a single culture simply doesn’t exist. It is a myth, pushed by some on the left as an egalitarian liberal alternative to the US, and by some on the right as an example of a socialist failure – neither side ever defining what Europe actually is.

Perhaps this is all a little pedantic. After all, we know that when people talk about European socialism they mean France, Germany and Sweden, not the irrelevant, piddling little states like Ireland, Latvia and, eh, Russia. By far Europe’s largest and most populous country, with more than three quarters of its population living on the European side of the Urals, Russia is rarely counted as European at all. Commentators often ponder ‘Europe’s response to Russia,’ a nonsensical statement unless ‘Europe’ is clearly defined as the EU, or the European NATO members, or whoever.

When Europe is left undefined in this way, it becomes a convenient catch-all tag to mislead, reinforce prejudices and polarise debates. Look no further than the present debate about health care in the US, where Obama has been criticized for wanting to Europeanise American health care, the implication being that there is a single European socialist alternative to the US. Glenn Beck pounced on this idea last July:

America’s health care is much better than Europe’s…. Americans have a better survival rate for 13 of the 16 most common cancers than Europe. Take prostate cancer: 91.9 percent of men live through it, versus 73.7 percent in France and just 51.1 percent in Britain.

These are shocking statistics, but puzzling. France and Britain are just two of Europe’s 50 countries, so why are they picked to represent the rest? In fact there is massive variation in cancer survival rates across Europe. Poland managed to save only 37.1% of prostate cancer victims. But Austria, with its heavily socialized health system, had a survival rate of 86.1%.

Just days ago a study by the Israeli Health Ministry showed that the US has a total female survival rate of all cancers of 66%, with Finland managing 67%. Glenn Beck could avoid the fact that Finland’s socialized health care is a bit better at saving women from cancer than the American system, because he simply generalized about the entire European continent and cherry-picked two convenient statistics from it.

This October, former Italian prime minister Romano Prodi told an audience at Brown University that the US should follow Europe’s lead in recognizing health care as a right. As a left-wing Italian, it’s understandable why Prodi would say this: in 2006, government expenditure on health made up 77.2% of total health spending in Italy, compared with only 45.8% in the US. The European region as a whole averaged at 75.6%, much higher than the US.

Yet government health expenditure in Italy’s neighbour Albania made up only 37.3% of the total health spending. Cyprus was 44.8%. Switzerland 59.1%. Moldova 46.9%. Georgia was only 21.5%. Prodi seems to have ignored these countries because they were inconvenient for his generalization, yet they are crucial to the debate. If Obama is trying to ‘Europeanise’ the American health system, does it mean he wants to cut government expenditure to Albanian levels or increase it to Iceland’s?

As it happens, the US government under Bush spent more on health as a percentage of GDP than most European countries: 7% in 2005 compared with only 4.3% in Poland, 5.3% in Slovakia and 5.8% in ‘socialist’ Norway.

Nobody would judge American policies – for example, its social protection or welfare programs -- by averaging out policies in Cuba, Costa Rica, Canada, Nicaragua and any other countries that happen to share the continent with it, but this happens with Europe all the time. Donald Rumsfeld seemed to realize it was silly when, in 2003, he dismissed Germany and France as ‘old Europe’, pointing to NATO’s centre of gravity shift into eastern Europe. Rumsfeld had a point: many of the former Communist countries have distinctly different economic situations to some of those in ‘old Europe’.

In 2005 the EU countries with the highest expenditure on social protection as a percentage of GDP were Sweden (32%), France (31.5%), Denmark (30.1%), Belgium (29.7%) and Germany (29.4%), all ‘old Europe’ nations. OECD statistics for 2005 show the US has a much lower expenditure on social protection, only 15.9%.

How about new Europe? Latvia spent only 12.4% of its GDP on social protection in 2005. Estonia spent 12.5%, Ireland spent 18.2% and Romania spent 14.2%.

Perhaps the strangest reference to Europe in recent times came after Obama won the Nobel Peace Prize. The Wall Street Journal had this to say:

George W. Bush may have retired from American public life, but the Europeans want the Yanks to know they never want to see his likes again…. On one level, all of this represents the parochial European foreign policy agenda…. The Europeans are applauding that at long last there is an American President willing to let himself and his country mingle as equals with this amorphous global “majority.”

The Nobel Peace Prize Laureate is chosen by five Norwegian committee members, who are, in turn, elected by the 169 members of the Norwegian parliament. Norway is not a member of the European Union.

Yet somehow the Wall Street Journal managed to convince itself that five Scandinavians in a small non-EU country represent well over 700 million people and all fifty European countries’ foreign policies. This makes as much sense as phoning up Fidel Castro, Hugo Chavez and Evo Morales and dubbing their opinions as representative of ‘American foreign policy’.

Let’s be clear. It’s not that there aren’t trends among European countries, especially among the ‘old’, wealthy, West European countries. But in terms of most socio-political indicators, the US sits quite comfortably inside the European group, rather than standing apart as a radical alternative to it. The US isn't even the highest in military spending as a percentage of GDP: Turkey, Bosnia and Herzegovina and Greece all spend more.

It would take little effort for journalists to point out what exactly they mean by Europe: EU members, NATO members, Western Europeans, etc. So let’s not talk about this non-existent Europe anymore. At best it is lazy and inaccurate; at worst it is misleading and divisive.

Shane Leavy is a freelance journalist for hire. Born and raised in Ireland, he has lived on three continents and been published on four, made an award-winning radio documentary on the banned Chinese religious movement Falun Gong, and written about science, religion, travel, culture, politics, environment and business.

For Millennials, It’s the Economy Stupid

Morley Winograd and Michael D. Hais — Mon, 30 Nov 2009 01:36:55 -0500

This month’s off year elections sent one message to Washington that has been heard loud and clear. Voters expect Congress to focus on the economy, especially employment, and take decisive and affirmative steps to deal with both the causes and ravages of the greatest economic downturn in the U.S. since the Great Depression. As the Obama administration considers a variety of new proposals to help bring down the unemployment rate, one key constituency is raising its voice and asking for a return on the investment it made in his presidency.

Members of the Millennial generation, born between 1982-2003, who were eligible to vote in 2008 went for Barack Obama over John McCain by a 2:1 margin and made up over 80% of the President’s winning margin. They continue to support his presidency and identify as Democrats by similar margins. A late October Pew survey indicates that Millennials identify as Democrats over Republicans by almost 20 percentage points (52% vs. 34%), well above the 8-point Democratic advantage among older generations. In the latest Research 2000 weekly tracking survey conducted for Daily Kos, 80% of Millennials had a favorable opinion of the president; only 14% of everyone in this generation viewed him unfavorably. This compares with a 55% vs. 39% favorable/unfavorable ratio among the entire electorate in both the Research 2000 survey and in a series of November surveys conducted by organizations ranging from ABC News and the Washington Post to Fox, although some other polls put the President’s job performance ratings closer to 50%.

But despite the clearly stronger support the President has among their generation, Millennials are increasingly restive about the lack of action in Congress to address the economic problems they face – both now and in the future.

Recent Pew research studies underline the major impact that the recession has had on individual Americans and their families. Thirteen percent of parents with grown children told Pew researchers that one of their adult sons or daughters had moved back home in the past year. Pew found that of all grown children living with their parents, 2 in 10 were full-time students, one-quarter were unemployed and about one-third had lived on their own before returning home. According to the census, 56 percent of men 18 to 24 years old and 48 percent of women were either still under the same roof as their parents or had moved back home.

The lack of jobs was particularly acute among adult members of the Millennial Generation (18-27 year olds), 61% of whom said that they or someone close to them was jobless recently. A clear plurality (46%) says that the “job situation” rather than rising prices (27%), problems in the financial markets (14%) and declining real estate values (7%) is their major economic worry.

As a result, the number one concern among Millennials is the state of the economy and the need for jobs, but they have a unique perspective on how to deal with this issue.

Millennials believe there is a clear link between education and employment and are increasingly concerned that the pathway through the educational system into the world of work is becoming increasingly more difficult and expensive to navigate. Last week, about one hundred of the nation’s top private sector and government leaders gathered for the Wall Street Journal’s CEO Council also identified education as the nation’s top economic priority.

For Millennials, the problem is personal. A smaller share of 16-to-24-year-olds – 46 percent – is currently employed than at any time since the government began collecting that data in 1948. A job market with Depression-level youth unemployment (18.5%) and a wrenching transformation in the types of jobs America needs and produces makes the implicit bargain of education in return for future economic success harder for Millennials to believe in every day.

Recently Matt Segal, Executive Director of the Student Association for Voter Empowerment (SAVE) and Founder and National Co-Chair of the “80 Million Strong for Young Americans Job Coalition” presented some ideas to the House Education and Labor Committee on what Congress could do to address this challenge. He advocated increased entrepreneurial resources be made available to youth; more access to public service careers through internships and loan forgiveness programs; and the creation of “mission critical” jobs in such fields as health care, cyber-security and the environment that would tap the unique talents of this generation. Since two-thirds of Millennials who graduate from a four-year college do so with over $20,000 in debt, debt, his testimony also urged immediate Senate approval of the student debt reform bill recently passed by the House.

There is more that can be done beyond these excellent recommendations. This summer, the President's Council of Economic Advisors released a report outlining the importance of community colleges in making America's workforce more competitive in the global economy. "We believe it's time to reform our community colleges so that they provide Americans of all ages a chance to learn the skills and knowledge necessary to compete for the jobs of the future." The report urged Congress to pass House Democratic Caucus Chairman John Larsen’s bill, The Community College Technology Access Act of 2009, in order to help meet President Obama’s goal of graduating five million more Americans from community colleges by 2020.

Millennials, like their GI Generation great grandparents in the 1930s, are facing economic challenges that caught them by surprise and for which no one prepared them. But Millennials aren’t looking for a handout or sympathy. Instead, in the “can do” spirit of their generation, they are organizing to overcome the challenges created for them by their elders. It’s time for the Democrats who control Congress to recognize these concerns and to act decisively on their behalf.