Comments on the News

In rereading John McCain's June 3 speech in New Orleans, I was struck in particular by one sentence in the prepared text. "Lowering trade barriers to American goods and services," he said, does four things: "creates more and better jobs; keeps inflation under control; keeps interest rates low; and makes more goods affordable to more Americans."

This version of Straight Talk went right over my head. As I see it:

• The first claim is the most defensible. Increased exports would create more and better jobs if the access were real. Lower tariffs are usually touted by "free traders" as the principal gain from "free trade" agreements. But what about the factors that neither the FTAs nor the multilateral rules address: currency misalignment, border tax adjustments, other subsidy practices, unsafe products and processes, etc.? How can the proverbial playing field be said to level if these obstacles to, and distortions of, free trade go uncorrected and even unaddressed? Their impact can be, and often is, far more significant than the barriers that are eliminated. (Border tax adjustments alone create a two-way disadvantage for American producers that averages 15-20 percent. China's undervalued renminbi creates an additional two-way disadvantage that may be as much as double the level of its 17 percent value added tax.) Knowing that I will be branded a protectionist for saying so, the free trade emperor has no clothes. I'm not arguing that free trade is not a worthy goal, only that the much touted FTAs are seriously deficient, sometimes for what they include and in every case for what they ignore.
• Improving market access for US exports does not reduce inflationary pressure in the US. On the contrary, everything else being equal, they increase it. Exports are a "leakage" from the domestic economy that leave more money chasing fewer goods in our market. That's inflationary.
  
• Improving market access for US exports also does not keep interest rates low. Actually, the US has kept its rates low by running trade deficits, shipping dollars abroad to settle our accounts, and then borrowing back what we need to cover the budget deficits of government and households. Massive borrowing from our trading partners in Asia and the Mid East is what accounts for our "success" in this reagrad.
• Improving market access for US exports also does not make more goods affordable to more Americans. On the contrary, they remove goods from the domestic economy, thus making fewer goods available and raising prices, everything else being equal.

What Sen. McCain might have wanted to say, but didn't, was that he seeks to continue the Bush administration's mindless pursuit of FTAs, its dereliction of duty with respect to currency policy, and aiding and abetting of off-shoring. This would be a great issue for the two candidates to hash out with one another in front a national television audience.

Charles Blum

Labels: Presidential Elections, Trade

Not to be finicky, I find John McCain's "invitation" for Obama to join in town hall meetings to be a distinctly second best alternative. Everyone has their own favorite example of media grandstanding in moderated debates, so it's easy to agree that we might do better without them. But would it be better to turn that role over to whichever citizens were to gain access to a town hall debate? Just recall the often dreadful YouTube questioners or the infamous "boxers or briefs" silliness.

If we're going to change the way we campaign -- an idea whose time came long ago -- why not go for a "real reform," as McCain himself might put it? Why not take up the original idea of Newt Gingrich to have a series of unmoderated one-on-one discussions in front of TV cameras? No questioners except the two candidates. No one in the room to react except the two candidates. No one standing between those two and the one hundred million voters who are looking for the best person to lead this country in a new direction.

Why not go all the way to a real change?

Charles Blum

Labels: Presidential Elections

According to a New York Times report on May 12: In a "sign of what could be an extremely unusual fall campaign, the two sides said Saturday that they would be open to holding joint forums or unmoderated debates across the country in front of voters through the summer. Mr. Obama, campaigning in Oregon, said that the proposal, floated by Mr. McCain's advisers, was 'a great idea.'" This is a format supposedly considered by John Kennedy in the reelection race he never got to have against another Arizona senator, Barry Goldwater. It's also similar to what I proposed in an earlier comment, "How 2008 Is Different From 1932."

No credit is due to us, I'm sure, and the two campaigns haven't agreed actually to do anything of the sort. But, if it were to happen, the country should surely benefit. Let the two candidates question, challenge and correct the other -- again, again and again, on one subject after another. Then we'd know which of them had the sounder ideas, which could think on his feet in an unscripted exchange, and which had the power of persuasion needed to lead the nation in a new direction.

I for one can't wait to see this happen.

Labels: Presidential Elections

America is in deeper trouble than I have thought if Hillary Clinton's case for remaining in the Democratic primary race rests on her assessment of her opponent's shortcomings. The junior senator from New York told USA Today (actually the day before yesterday): "Senator Obama's support among working, hard working Americans, white Americans is weakening again."

Take it from this very hard working, very white American that a lot of us are sick of these tactics. Bush at least pretended to be a "uniter, not a divider." When the Clintons act this way, there's no pretense, but the damage is comparable.

Americans overwhelmingly want the country to change direction. They want to see it strong and prosperous again. The special interests and their failed model of economic and financial globalization stand in the way. How can Democrats possibly expect to pull off major changes in the face of such opposition by dividing the country further?

Charles Blum

Labels: Presidential Elections

So, Rush Limbaugh and his thundering herd think they can cause chaos in the Democratic primaries by crossing over and voting for Hillary. Actually, Democrats have a special talent for internal disorder and don't need a lot of help from outsiders.

I don't have a big problem with Republicans participating in Democrat primaries (or vice versa) where that's permitted. The rules are the rules, and overall I think we learn more from open primaries than from closed ones. Remember how Texas Democrats crossed over to vote for Ronald Reagan against Jerry Ford in 1976? There was a message in that, for sure.

If you're offended by Rush's tactics, give him a taste of his own chaos. Call in to his show. If they put you on, denounce him -- that's your right. If they don't put you on -- that's his right -- call again and again.

Or, you can just continue to ignore him. Serious folks have better things to do in this election. Let's do them.

Charles Blum

Labels: Presidential Elections

I won't claim an ounce credit -- certainly not for an idea stolen without a blush from Newt Gingrich -- but I was pleased to read in this morning's Washington Post an item by Perry Bacon Jr. Under the headline "Clinton Wants Debate Without Moderators," he reported that Hillary had challenged Barack at a rally on April 26 to a mano-a-mano, honest debate: "Just the two of us going for 90 minutes asking and answering questions. We'll set whatever rules seem fair."



That's what I had proposed for the fall campaign in one of my earlier posts ("How 2008 is Different from 1932," April 3 ). A one-on-one debate would be a splendid way to test the candidates' ability to sustain a train of thought, to persuade the audience of their substantive depth beyond a command of one-liners, and to convince Americans that they have the toughness and the smarts to defend our country's interests in dealing with foreign leaders. As Newt has argued, after a few such conversations, Americans would know who should get their vote.



Just as important, it would get the media off camera.



Americans would get what they need, and the media what they deserve. Come on, Barack, let's do it!

Labels: Presidential Elections

Yesterday in Ohio, John McCain corrected a questioner who termed NAFTA a “bad four letters.” That earned a laugh for the senator, but no one challenged him when he said: “The answer to our problems is not the siren song of protectionism.” If you want to smear a proposal or an opponent these days, all you have to do is deploy that nine letter version of a four letter word. No need to discuss much after that.

Well, wait a minute. I don’t for a minute subscribe to anything that I consider to be “protectionist.” But I’m not running for president, so I think it’s McCain who needs to be pressed to explain what he means. Why doesn’t the traveling press corps ask the senator what he means? Is it “protectionist” to:

• Enforce the nation’s trade laws as each president swears he will?
• Seek redress whenever US rights under WTO and other international agreements are violated?
• Resist mercantilist practices such as persistent currency undervaluation?
• Seek an end to all trade-distorting subsidy practices, perhaps by tabling a proposal for end game of the Doha negotiations?
• Rejecting further special interest provisions that hide under the mantle of “free trade”?

I’m sure voters everywhere would be interested in some “straight talk” on this subject. Instead of just telling us that lost jobs are not coming back, why not spend a little time and effort to inform the citizenry as to the steps that you would take to ensure that their “second chance” at the American Dream will be more promising than their first one?

I’m with Sen. Sherrod Brown who wrote in an op ed in today’s Wall Street Journal: “Let’s stop accusing one another of being protectionist. And let us agree that U.S. trade policy – writing the rules of globalization to protect our national interests and our communities – is worthy of vigorous national debate.”

Charles Blum

Labels: Presidential Elections, Trade

Three wishes after last night’s wretched “debate.”

First, let the candidates talk to each other and see who can sustain a train of thought. Enough of sound bites and counter-punches.

Second, get the conversation onto the economic crisis that we’re in. Where did it come from? Why is the dollar so weak? Why don’t Americans save and invest? How can we resolve our debt problems without massive inflation? Can the American Dream be successfully pursued by future generations even if the US is no longer that largest economy in the world? Let’s have some straight talk on those issues, issues on which our future does depend.

Third, let Barack Obama, with a justified note of irritation, reject further discussion of Rev. Wright and the flag lapel. These are not issues, but only distractions. He should say: “The freedom to express oneself is the bedrock of our democracy. You have a right to say what you feel, even if sometimes you use inappropriate words or offensive words. Sometimes, people go to rhetorical excess out of bitterness, frustration and anger. We should try to understand why they say what they do and not stop listening if they cause offense. I don’t want to surround myself with people who agree with me; that’s how the Bush administration bumbled its way into a war that should never have happened.”

“And don’t tell me that it is unpatriotic to criticize your country. If you truly love it, if you want it to be the best that it can be, you have a patriotic duty to criticize and to challenge, even at the risk of offending some. That’s the kind of country I want to lead and that’s how I intend to lead it.”

Charles Blum

Labels: Presidential Elections

Barack Obama can stir powerful sentiments with his words. One formulation that he has used in the campaign pits the common interest against special interests. As he said in East Rutherford, New Jersey on the eve of Super Tuesday:

“Change happens from the bottom up. So I believed that if we could get the voices of the American people to join together, people from all walks of life: black, white, Hispanic, Asian, Native American, gay, straight, North, South, East, West, rich, poor, young and old, we could gather our voices to challenge the special interests that have come to dominate Washington.”

How right Obama is about the stranglehold of special interests! But is it really just a matter of “joining our voices”? The super-exorbitant political process we’ve created for this year’s election seems destined to strengthen, not weaken, the domination of special interests. Depressing new evidence of this comes from an interesting report by Brody Mullins in the April 2 Wall Street Journal. He notes that seven major traditionally solidly Republican industries have this year showered more of their largesse on Clinton and/or Obama than on McCain. At the top of this list are executives in finance/insurance/real estate and health care. They’re investing in the status quo, not in change.

So, how can we hope that “voices of the American people” could ever “challenge the special interests”? If our elections are becoming longer and our nation’s attention span shorter, how can we hope for a fundamental change in the direction of this country?

In a previous comment, I suggested that one way was for candidates to seek a mandate for fundamental policy reforms in the course of an election campaign and not to try to define it once the election is won. That idea hasn’t exactly sparked a prairie fire of support.

The more I see of this campaign, however, the more I’m certain that my analysis is right on. John McCain’s economic strategy is essentially to trust the invisible hand of market forces to correct what ails the American economy. Oh, and throw in a little tax relief aimed at the middle class and a specious gasoline tax suspension. This is supposed to bring fundamental change to our economic system?

Hillary’s answer is a mosaic of policy proposals, a mountain of specific measures she will support or – watch her words carefully – “consider.” What is she actually committing to do? And how would her pile of proposals add up to fundamental economic change in this country?

Obama spins beautiful, poetic assurances such as making workers his top priority. What does that mean? What kind of tax policy puts workers first? Or infrastructure policy? Or energy policy?

So, let me go back to the demand side of the political equation. Perhaps candidates don’t offer meaty ideas in campaigns because American voters simply don’t demand it. Eighty-one percent in a recent poll agreed that the country is headed in the wrong direction. What to do about it? Oh, that’s another question, and there has been surprisingly little interest in discussing what to do about it beyond – and this much is guaranteed – electing a president not named George W. Bush.

Perhaps it’s time that we put the demos back in our democracy. One ray of hope was the extraordinary candidate forum sponsored by the Alliance for American Manufacturing in Pittsburgh on April 14, where more than 1,000 participants listened carefully and respectfully challenged two of the candidates – McCain had “other priorities” – to be more specific and more credible. Another hopeful development is the emergence of the Coalition for a Prosperous America (full disclosure: I sit on its board) that is ambitiously trying to create a national grass-roots action coalition of farmers, ranchers, organized labor and manufacturers. By its bootstraps, the CPA is simultaneously studying issues, holding town hall meetings, seeking access to candidates – all with the aim of getting agreement on a comprehensive national strategy to enable American producers in all sectors to have a fair chance of succeeding in global markets. If such a diverse group could agree on a few big changes to serve the national interest, perhaps the candidates will finally take notice and join in with their voices.

Charles Blum

Labels: Presidential Elections

Some Democrat strategists pine for 1932. They see their candidate being swept to victory with a mandate for “change,” transforming the polluted partisan atmosphere to fresh air, and then dispatching the job that he or she was elected to do.

Sorry, folks, but 2008 is not 1932 redux. Here are just a few reasons why not:

• The incumbent is not on the ballot. In 1932, the country rejected Herbert Hoover as much as it chose FDR. The choice this time will not be so stark, unless John McCain is so foolish as to insist on it.
• The issues are infinitely more complex. We are in the midst of a growing worldwide financial and economic disruption – a genuine paradigm shift in the making – despite the array of institutional and policy changes that most of us were taught would preclude another Great Depression. So, the task is not just to set new directions, it is also to dismantle things that don’t work for the country but may have powerful vested interests behind them.
• When FDR rode into town in 1933, he did not face an army of K Street lobbyists ready to derail anything he tried to do and armed with ample cash – the mother’s milk of American politics -- to back up their policy positions.
• FDR could attract the best and the brightest of his generation to Washington without today’s protracted security checks and financial vetting. The next president will be stuck with vacancies reaching high up in many key agencies for many months. Given the conventional wisdom that the window for real reform is limited to the first year or 18 months of a new president’s term, our new leader may have to do a lot of the policy formulation singlehandedly. That’s a job for Superman or Superwoman, not the mere mortals in this race.

If the next president wants a mandate to make big changes in public policy, that mandate must be fashioned in the campaign, not after it. But how to get 300 million Americans away from their 21st Century bread and circuses – American Idol, Survivor, the NCAA Big Dance, fantasy football, and so much more? Why not take up one of Newt Gingrich’s ideas? He has proposed that the two major candidates agree to a fall campaign limited to nine weekly televised conversations. Just the two of them in easy chairs with no moderators or questioners. They would talk together, testing, challenging, explaining. As Gingrich said, after 13 and a half hours of such discussions, every viewer would know whom to vote for. Then, as a nation, we could vote the loser off the island.

If the next president wants a mandate in “change you can believe in,” then he or she will have to do some heavy lifting in explaining in plain language, not just sound bites and slogans, what they propose to do to rebuild America.

Charles Blum

Labels: Presidential Elections