Barack Obama

The Fed vacancies have stirred debate over the future direction of interest-rate policy at the Fed. Given the fragile state of the economic recovery and the high jobless rate, Obama may come under pressure to choose people more inclined to keep interest rates low to spur growth and fight unemployment than to raise them to control inflation.

Yellen served as a top economic adviser to President Bill Clinton. She has had a long history with the Federal Reserve system and has been president of the San Francisco Fed since 2004. Before that she was a member of the Fed's Board of Governors from 1994 to 1997.

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Associated Press writer Jeannine Aversa contributed to this report.

Dorning notes that economic growth is currently stronger than the consensus forecast of economists one year ago.

Since then, monthly job losses have abated, from 779,000 during the month Obama took office to 36,000 last month. Corporate profits have grown; among 491 companies in the S&P 500 that reported fourth-quarter earnings, profits rose 180 percent from a year ago, according to Bloomberg data. Durable goods orders in January were up 9.3 percent from a year earlier. Inflation is tame, and long-term interest rates remain low.

Piece de resistance quote:

"We've had a phenomenal run in asset classes across the board," said Dan Greenhaus, chief economic strategist for Miller Tabak & Co. in New York. "If he was a Republican, we would hear a never-ending drumbeat of news stories about markets voting in favor of the president."

But we don't, for a plethora of reasons, ranging from the comprehensive critique best articulated by Simon Johnson -- who argues convincingly that the failure to meaningfully reduce the size of banks will make the next crisis even worse than the most recent one -- to the raw truth of the state of labor markets right now.

The Labor Department announced today January employment numbers broken down by state.

Bloomberg:

The unemployment rate decreased in nine U.S. states in January and climbed in 30, signaling the thawing of the labor market is not broad-based.

Rising unemployment in 30 states in January translates to more problems with state finances, and more cuts in services. And that, in turn, means that the judgment of people, as opposed to money, is a little less than overwhelmingly positive.

 

All of this underscores a vital point:  the Obama White House is hamstrung by its own embrace of the Bush/Cheney Terrorism template in advocating for its own policies.  The pollsters' Memo stresses, for instance, that the primary justification Obama officials offered in defending their Mirandizing of the attempted Christmas Day bomber -- Bush did it too with Richard Reid -- is ineffective and makes them appear "weak":

Voters resist the argument that the Obama administration simply handled the Christmas bomber in the same way the Bush administration handled the "shoe bomber" case; this sounds political, and produces a weak response.

How can this response be anything other than weak and muddled?  Democrats generally and Obama specifically have spent years telling the country that Bush/Cheney Terrorism policies were lawless, immoral, inept and counter-productive.  Yet the minute there's a controversy over Obama's Terrorism policy, his first justification is:  we're only doing what Bush and Cheney did.  He can't stand on his own two feet and forcefully justify civilian trials or Mirandizing Terrorist suspects; he has to take refuge in the fact that Bush also did it -- as though that proves it's the right thing to do, because Bush/Cheney is the Standard-Bearer of Toughness on Terrorism.  If you're going to embrace the core Bush/Cheney model on Terrorism and point to what they did as though that's the guide for how things should be done -- and if you're going to run to them for refuge and protection -- and if you're going to reverse yourself and capitulate at slightest sign of political pressure (FISA, detainee photos, civilian trials) -- is it really any surprise that people will begin to conclude that Bush and Cheney had things basically right and that Democrats are"weak" (not because of specific policies, but because of their fear of arguing for and sticking with their own positions)?

This is the same point made, albeit in a different form, by Stanley Fish in today's New York Times, who argues that there is a growing nostalgia for George Bush among many media figures and the country generally (which, at least with regard to media elites, I've noted before as well; there's zero evidence it's true of the public generally, and Fish's attempt to prove otherwise is unbelievably lame).  Still, today's poll proves the public is far more receptive than before to arguments coming from the Cheneyite faction, and Fish, persuasively, points to this as a major reason why:

Bush’s policies came to seem less obviously reprehensible as the Obama administration drifted into embracing watered-down versions of many of them. Guantanamo hasn’t been closed. No Child Left Behind is being revised and perhaps improved, but not repealed. The banks are still engaging in their bad practices. Partisanship is worse than ever. Obama seems about to back away from the decision to try 9/11 defendants in civilian courts, a prospect that led the ACLU to run an ad in Sunday’s Times with the subheading “Change or more of the same?” Above that question is a series of photographs that shows Obama morphing into guess who -- yes, that’s right, George W. Bush. 

I wish everyone would read that first, bolded sentence every day.  This is a point I've been trying to make in different ways for many months.  It is obviously impossible to maintain that the Terrorism and other national security policies of George Bush and Dick Cheney were radical, heinous, evil and wrong if the successor administration -- one from "the other party," filled with people who spent years vehemently condemning those policies -- end up adopting most of those same policies and the core approach itself.  Inevitably, that behavior will come to be seen as vindication (now that Obama is in office, he sees those policies are necessary), and worse, converts what had been viewed as extremist, highly controversial right-wing policies into unchallenged bipartisan consensus.  

It's only natural that many people in the country say to themselves:  how bad could George Bush and Dick Cheney really have been in these areas if their core policies are being adopted by Obama?  Apparently, there must not be anything wrong with indefinite detention, military commissions, renditions, state secrets, etc. because Obama has embraced them as well.  And once those conclusions are fostered, it's hardly a surprise that Bush officials such as Dick Cheney will once again be listened to as a credible authority on such matters; if he, after all, had the basic approach right, why deviate from it at all?

Independently, and even more important, think about how rhetorically difficult it is for the Obama administration to defend civilian trials when they themselves are subjecting scores of detainees (in fact, most) to military commissions or indefinite detention.  It's a completely confused, unprincipled, self-negating approach that can only produce muddled, unprincipled and therefore weak defenses.  Nobody in the administration can possibly argue (as Democrats used to vocally argue) that military commissions, indefinite detention and denial of civilian trials are un-American and counter-productive, because the Democratic administration is now doing exactly that.  So if you can't argue that, how can you possibly defend civilian trials, or rebut the GOP claim that accused Terrorists should be placed before military commissions or indefinitely detained?  You can't -- you have no argument -- and that's why Obama is losing this debate.

There's a difference -- a fundamental one -- between (a) being pragmatic in trying to implement one's principles and (b) having no principles at all and and glorifying that unanchored emptiness as "pragmatism."  Once you enter the realm of (b), you are not only guilty of having no principles (a sin in its own right), but you're incapable of finding a way to effectively justify what you're doing, because you have no coherent principles to which you can credibly appeal.   In virtually every realm (health care, financial reform, national security), and especially in Terrorism/civil liberties, that has been the great political failure of the Obama administration. 

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I spoke at NYU School of Law last week, and in the various questions that were asked, these are the issues that were raised repeatedly.  I'll post a couple of the relevant excerpts in just a few minutes.

 

UPDATE:  Here are several 3-5 minute excepts from the NYU Law School event I did last week, moderated by NYU Law Professor Stephen Holmes, that are relevant to this discussion:

On principles v. pragmatism:

 

On civilian v. military tribunals and the "Soft on Terror" attack:

 

On the prospects of winning these debates:

This was a really great event -- virtually all smart and probing questions -- and so I'll try to post the rest of the excerpts elsewhere a bit later today.

 

UPDATE II:  All of the video clips from the NYU event are now posted, here.

There are four main problems with contemporary American immigration policy: Our immigration laws are not adequately enforced; most of the 12 million or more illegal immigrants residing in the U.S. should be allowed to become citizens; guest-worker programs create a two-tier labor market with an ever-expanding category of indentured servants; and emphasis needs to be shifted from unskilled to skilled immigration.  To address these problems, any acceptable immigration reform should include the following four elements:

Strict and effective enforcement of federal immigration laws: There is no point in enacting immigration reform at all if the new provisions are not going to be enforced.

Experts may debate what combination of national I.D. verification, tough penalties for employers of illegal immigrants, local police enforcement of federal immigration laws, border fencing and expedited deportations would replace the rule of scofflaws with the rule of law in this critical aspect of American public policy. But there would be no point to an amnesty for many of the illegal immigrants already here unless, following the end of the amnesty period, the government permanently cracked down on subsequent illegal immigration. Otherwise, what would deter employers from simply firing the newly legalized immigrants and hiring new illegal immigrants?

A rapid path to citizenship for most illegal immigrants: The federal government is not going to arrest and deport more than 12 million illegal immigrants who are already incorporated into American workplaces and communities. Just as unworkable is the "attrition" strategy favored by some on the right -- make life miserable for millions of illegal immigrants until they go home.

Two goals are in tension. On the one hand, we want to replace a huge and harmful black market in labor by incorporating former illegal immigrants into a one-tier labor force consisting of U.S. citizens and legal permanent residents with identical rights, including the right to join unions. That means the quickest possible amnesty.

On the other hand, we do not want to punish immigrants who have not violated U.S. laws and have waited patiently in line, in many cases for years. Amnestied illegal immigrants should go to the end of the line of those awaiting legal permanent resident status (green cards). One solution to this dilemma, which I have proposed elsewhere, is that the naturalization process from getting a green card to obtaining full citizenship be reduced from five years to two years.

The faster the legal-immigrant backlog is reduced, the sooner amnestied illegal immigrants can be naturalized, and the more rapidly we will approach the ideal of a one-tier national labor market where almost all workers share the same economic rights.

Abolishing indentured servitude among immigrants: Adam Smith, who thought little of the morality of business elites, observed that any rational employer, given the opportunity, would prefer slaves to wage workers. Following the abolition of chattel slavery by the 13th Amendment, unscrupulous American employers began to import indentured servants in the form of contract workers or "coolies" from Asia to replace and compete with American workers, including freed slaves.

The first great triumph of the U.S. labor movement -- marred, to be sure, by a strain of xenophobia -- was the outlawing of immigrant contract labor in the late 19th century. Labor and liberals triumphed again in the 1960s, when Democrats abolished the exploitative Bracero Program that brought in Mexican "guest workers" to labor in serf-like conditions on Southwestern ranches and farms.

In recent decades, however, some American industries have tried to replace the free labor of citizen-workers and legal immigrants with indentured servants in the form of so-called guest workers who are brought in to work for a specific employer and must leave the U.S. if they are fired. Needless to say, workers who are dependent on their employers to remain in the U.S. are afraid to assert their rights or protest against abuses.

The main beneficiaries of indentured servitude today are Silicon Valley, which relies heavily on professional guest workers under the H1B and other programs, and some sectors of American agribusiness, which have re-created Bracero-style programs on a small scale.

We need not take seriously the self-serving argument of agribusiness corporations that we will all starve if they are forced to hire Americans to harvest crops for decent wages instead of bringing in serfs from other countries. The tech industry, many of whose entrepreneurs and inventors are foreign-born, makes a legitimate case for admitting more skilled immigrants, including foreign nationals who graduate from U.S. universities.

But those skilled immigrants should be legal permanent residents who are free to quit one job and take another, not information-age coolies indentured to particular companies. Once a point system for skilled immigrants is adopted (see below), guest worker visas should be limited to short-term visitors, such as visiting professors, and abolished entirely in the case of unskilled labor.

Shifting the basis of immigration from nepotism to skills: The single biggest category of U.S. immigrants includes relatives sponsored by U.S. citizens. At the moment this nepotistic policy happens to increase Latin American immigration to the U.S., but in theory it could benefit any group with large families, a characteristic that tends to be associated with premodern social attitudes and lower educational and income levels.

Most other advanced democracies have adopted or are debating a "points system" under which immigrants with high levels of education, desirable skills and competence in the host-country language would be given preference in immigration. Combined with the limitation of family-based immigration to the children and parents of U.S. citizens, an American points system would reduce unskilled immigration at a time when mass unemployment has hit less-educated Americans and legal immigrants particularly hard.

At the same time, a points system would enable the U.S. to compete with its economic rivals in luring skilled immigrants from every part of the world. A points system would not be "anti-Latino," any more than it would be "anti-Filipino." (Mexico and the Philippines are the two biggest sources of immigration to the U.S. today.) On the contrary, it would make immigration to the U.S. easier for Mexican or Filipino scientists, engineers, entrepreneurs and professionals who lack relatives already living in the U.S.

Would admitting more skilled immigrants drive down wages and fees for educated professionals? In some industries, like tech, more talent gathered together may produce greater growth of the industry as a whole. In other areas, like medicine, increased skilled immigration might well reduce average incomes. American doctors make roughly twice as much on average as European doctors. Doubling the number of doctors in the U.S. while cutting their compensation would benefit most Americans.

If we are concerned about polarizing inequality in the U.S., then a shift from unskilled to skilled immigration that leads to lower salaries for college-educated professionals and higher wages for janitors, nursing aides and other less-skilled workers can produce a more equal America without the need for massive after-tax redistribution.

The immigration reform program I have sketched out is in the tradition of the pro-labor, egalitarian, Rooseveltian liberalism that traditionally has viewed immigration as a labor market issue.

The two commissions on immigration reform appointed by Democratic presidents, the Hesburgh Commission (1981) and the Jordan Commission (1997), came up with similar proposals, including crackdowns on employers of illegal immigrants, reductions in unskilled immigration in the interest of America's working poor, curtailment of guest worker programs and greater focus on skilled immigration.

A recent report by former Labor Secretary Ray Marshall and the Economic Policy Institute (EPI) belongs in this venerable pro-labor tradition. Traditionally, business-class conservatives have sought to prevent enforcement of immigration laws and have supported mass immigration in the hope that it would avert tight labor markets that would lead to higher wages and greater bargaining power for American workers. Plutocrats who live off their investments also tend to favor using high levels of immigration to keep wages down, for fear that wage-push inflation might erode the value of their financial assets.

Unfortunately, beginning in the 1980s, some post-New Deal progressives began to view immigration through the lens of anti-racism rather than labor policy. Along with some civil libertarians of the left, they attacked the enforcement of federal immigration laws as inherently racist or authoritarian, at the price of helping unethical businesses evade laws designed to protect American workers.

Some otherworldly academics and pundits even wondered whether discrimination in favor of America's own workers against would-be immigrants is not itself an unjust form of discrimination against the rest of the human species. In their innocence these would-be citizens of the world never asked themselves why the late Robert Bartley, the editor of the Wall Street Journal, regularly called for a one-sentence constitutional amendment: "There shall be open borders."

Most important, many Democratic strategists, having written off the white working class that used to be the party's base, decided to oppose any immigration reform that would incidentally reduce the number of immigrants from Latin America, in the hope that a growing Latino vote, by replacing the lost non-Hispanic white Reagan Democrats, would help create a permanent Democratic majority. Some, but not all, leaders of organized labor have bought into this agenda, abandoning traditional liberal concerns about the effects of unskilled labor and illegal immigration on wages and inequality.

Progressive journals have sacrificed truth to partisanship, refusing to publish articles pointing out harmful economic effects of unskilled immigration (one liberal editor refused to publish a commissioned essay of mine on various factors influencing wage stagnation, saying, "I won't publish anything critical of immigration.") Center-left pundits and scholars have been silent on the contribution of unskilled immigration to poverty in the U.S., even though, according to Gary Burtless of the Brookings Institution (PDF), "All of the increase in the U.S. poverty rate between 1979 and the mid-1990s was due to immigration.  The poverty rate of Americans in non immigrant households remained unchanged."

Among prominent left-of-center opinion leaders, only Paul Krugman has had the courage to break with conformist center-left groupthink on this issue.

The generation-long mutation of the Democrats from a broadly based working-class party dominated by private sector unions into an ethnic patronage party funded by Wall Street explains why in 2007 most congressional Democrats teamed up with George W. Bush and John McCain to support a profoundly illiberal version of "comprehensive immigration reform."

In return for getting a too-punitive version of amnesty, the Democratic leaders of Congress caved in to cheap-labor employers who demanded a new category of several hundred thousand new indentured-servant guest workers a year. Even more Orwellian was the way that Democrats in Congress, including then-Sen. Barack Obama, attacked a proposed skill-based points system. Much to the delight of the plutocratic wing of the Republican Party, the "progressive" position of 2007 was the exact opposite of the liberal position of Barbara Jordan in 1996 and Theodore Hesburgh in 1980.

Most progressive editors and editorial pages supported the monstrous 2007 bill as mindlessly as they support pro-corporate healthcare "reform" today. If Bush, Harry Reid and Nancy Pelosi had succeeded in passing comprehensive immigration reform, then employers in 2010, in a period of mass unemployment, would have been allowed to import several hundred thousand unfree contract workers from abroad a year instead of hiring Americans.

Immigration, like healthcare, is an issue where traditional, principled progressivism devoted to the long-term public interest is at odds with short-term Democratic electoral calculations. If and when Congress does turn to immigration reform, the Democrats who let the insurance industry write healthcare legislation and let the financial lobby write financial reform legislation may come up with a bill as bad for America as the 2007 legislation, stitched together from pay-offs to favored ethnic constituencies and business lobbies.

If so, then the next round of immigration legislation may provide a test of whether there is a principled progressive movement in the United States, or merely a squad of cheerleaders for a lobby-driven political machine in Washington.

The headline on the Newsmax poll story -- "Bill Clinton Bests Former Presidents to Handle Crisis Today" -- concerns the unsurprising discovery that the American public considers the last Democratic president best qualified of all his peers (by far) to cope with the issues that America confronts today. Comissioned by Newsmax, which is run by Christopher Ruddy and owned by him and Richard Mellon Scaife, among others, the poll queried 4,000 people who participate in Zogby's online surveys. 

Among respondents asked the following question -- "Of the current living former presidents, which do you think is best equipped to deal with the problems the country faces today?" -- 41 percent chose Bill Clinton, trailed by George W. Bush with 15 percent, George H.W. Bush with 7 percent, and Jimmy Carter with only 5 percent, while 26 percent chose "none," and 5 percent were "not sure." Those choices may be partly a function of the age of the former presidents, since the elder Bush and Carter are considerably older than the younger Bush and Clinton. But Clinton finished first among all age groups, all races, all religions, and both sexes, with a significantly better showing among women (46 percent) than men (36 percent). 

The most salient question -- given Barack Obama’s dipping numbers and the right-wing ripple of nostalgia for George Bush -- tested them against each other. By a margin of 48 to 38, respondents said they would elect Obama over Bush if they faced that choice. Twelve percent said "other" and 2 percent said "not sure." Newsmax didn’t publish the cross tabs but its story noted that, according to the poll, "Obama still nabs a large proportion of self-described independents, pulling 42 percent of these voters. Only 33 percent said they would opt for Bush."

While those aren't wonderful numbers for Obama, they aren't terrible either -- especially at a moment when the mainstream media depict him as weakened and imperiled.