- Welcome to the Rockefeller Center,
and our Post-Election panel
titled Change: The 2008
Elections, Outcomes,
Observations and Next Steps.
This is a bit of a different
format than we're used to,
and hopefully it will work well for us
in that we can hear from 10 scholars
instead of just one or two at a time.
It's my pleasure to welcome you here
to the Rockefeller Center, this is part
of our 25th anniversary celebration,
and our centennial anniversary
of Nelson Rockefeller's birth.
Particularly I'd like to acknowledge
the board of visitors for
the Rockefeller Center,
who is here today as part of
their semi-annual meetings,
with the Rockefeller Center, so thanks
for coming, appreciate it.
The way this is going to work out
is that I'm going to talk
briefly about the outcomes,
and just actually what
happened during the election.
Then we're going to move to look
at institutional perspectives,
so we'll see the impact of this
on the executive branch, on the
congress, and on the courts.
And then we'll move into the policy realm,
and hear from a number of scholars
who have specific expertise
in various areas of public policy.
We're going to try to stick
to a five minute limit
for each of us, now that's a hard task
for academics but we're
going to try to live by that.
So without further ado, I'm going
to talk about the election results,
and a bit of exit poll results
that were posted online
in various outlets.
The obvious numbers that we have,
the outcome being Obama winning
with 52.5% of the vote, and
65 million votes overall.
And up until today we
have 364 electoral votes.
Missouri is still out and undecided.
On the McCain side, we had 46.2%
and 57 million votes,
and 163 electoral votes.
On the congressional side of the ledger,
again as of this morning so we added
the Oregon numbers to this, we've got now
55 democrats, 40
republicans, 2 independents,
and pardon the spelling, Bernie Sanders
and Joe Lieberman still
sitting as independents.
And Joe Lieberman might
be very independent
as of the next couple
days, we'll find out.
(laughter)
In Minnesota, Georgia, and Alaska,
we still have the three
republican incumbents
battling for their seats, and
we'll see what happens there.
On the house side, a net
gain of 20 seats there.
We've basically gone back 20 years,
these are virtually the exact numbers
that George W. Bush had
when he took office in 1989.
So we've seen a long strange trip
that we've taken ourselves
on over the last 20 years,
to get back to a congress that,
although the composition of the congress
looks quite different
than it did 20 years ago,
the numbers are the same but who they are
and where they represent
is quite different.
As we now know, we have
a total blue New England,
with no republicans from
the New England states
in the House of Representatives right now.
Gubernatorial races, we had 11 going on.
Basically status quo, six
of the races were democrats
and they're still held by democrats.
Four were republican, held by republican.
And the one seat that did switch
is Missouri, a republican
was replaced by a democrat.
So we now have 29 democratic governors,
and 21 republican governors.
There were 44 states which held
state legislative elections,
in their houses and senates,
or upper and lower houses.
Of the 4,758 house races,
net gain is 63 seats
for the democrats, and on the senate side
of the 1,700 or so that did battle
there was a net gain of 8 seats.
So pretty much of a status quo election.
Which is interesting when you go back
and look at prior to the 2006 elections,
these numbers were virtually identical.
That is they were
virtually the same number
of democrats and republicans
of the 5,400 seats
that were in play, over the 50 states.
It was virtually tied in the
houses of all the legislatures.
So we saw a big gain in 2006 and 2007.
So the 44 states that had elections
also had elections in '06,
and then the six states
held elections in '07,
we saw a 240 seat swing
in the '06 and '07 cycles,
and only a 63 seat swing
here in the 2008 cycle.
So the way it began
earlier at the state level,
then we saw at the national level.
Some of the propositions,
the ban on gay rights,
the ban on gay marriage,
was on in three states,
and it lost in all three states.
That is the gay rights side lost,
that is, the bans were upheld
in Arizona, California,
and Florida, and in Arkansas they passed
an initiative that bans gay couples
from adopting children,
and that passed with 57%.
There were two affirmative
action initiatives,
or amendments, on the ballot.
And the Colorado one is still undecided,
and the Nebraska one actually
was passed, 58 to 42.
Limits on abortion rights,
those all went down to defeat.
In California, Proposition
4, in South Dakota,
and Colorado was basically a language that
basically said human life begins
at the moment of conception,
and that was voted down,
rejected by 73% of the voters out there.
So, what happened?
The exit poll results, to this point,
haven't been terribly challenged
as they were last time around,
so there's a sense that there's
some credibility of data
that was available out there.
I've highlighted some of the things
that are rather interesting.
It's obviously not an exhaustive
list of what happened,
but just some of the key areas.
When you look at males,
it was basically a draw.
They represented 47% of the respondents
in the electorate, if they weighted it.
Women, obviously the
gender gap was there again.
The interesting thing is
looking at married females,
versus unmarried females, I
mean that's just startling.
To see those numbers
(laughter)
how different.
Interestingly, married
overall men and women
was 52 to 47 in favor of McCain.
And when you look at married mothers,
so the overall married figure for women
was 48 to 51 in favor of McCain.
Married mothers were
51-47 in favor of Obama,
so you know some rather
interesting things.
Then when you look at the white vote
versus the non-white vote, again,
it's startling the difference there.
Where McCain won by 12
points among white voters,
and Obama received 80%
of the non-white vote.
I highlighted the African-American votes,
since that was the most clearly
defined constituency for Obama.
Among Asian-Americans it was roughly 66%,
and among Hispanics it was also
in the mid-60's in favor of Obama.
So overall it was at 80%.
And then when we look at the age factor,
again, 18% of the electorate
was under the age of 30,
and they voted 66 to 32 in favor of Obama.
A huge gain for him.
I simply split the income at $50,000.
If you made under $50,000,
60 to 38 in favor of Obama.
A virtual tie when you looked at those
that made over $50,000 a year.
By party, no one would have found
any trouble with those kinds of numbers.
89 to 10, and 89 to 9, in favor
of republicans and democrats
but the independents
broke in favor of Obama,
and they constituted
29% of the electorate.
And then touching on a
theme that we pursued here
at the Rockefeller Center back in June,
moderate voters were the
telling of the tale here.
Where liberals went 89 to 10, or 88 to 10
in favor of Obama, interestingly enough
20% of conservatives voted for Obama,
but 60% of moderates to 39% favored Obama.
First time voters, another key block
for the Obama campaign,
those were 68% for Obama
and only 31% for McCain,
virtually a dead heat
when you took those out of the equation.
So that's what happened, that was
some quick explanations as to what
went on in the elections,
and now we're going
to move onto the presidential,
so I'll jump ahead a couple slides here.
To professor Dean Lacy,
who's going to talk
about the presidency,
so we're going to hear
first about the presidency
and the executive branch
and what's going to be going on there
in the next weeks and
months, then we'll hear
about congress from Linda Fowler,
and then Sonu Bedi will talk about
the impact on the federal courts, so Dean.
- Thanks.
Well thanks, Ron, and thank
all of you for attending
and especially thank you to all the voters
who turned out in this historic election.
Barack Obama and the democrats
do not, as most presidents don't,
have mandate from the election.
The only mandate from this election
was the repudiation of the
republican administration,
and a desire for change.
Obama and the democrats
must forge a mandate early,
by appealing to the center,
focusing on problem solving,
and avoiding the mistakes
of past presidents.
Three mistakes to avoid early
in the administration are,
first of all, satisfying the base
before satisfying the center.
Both Clinton in '93 and Bush in 2001
sought to satisfy their base
before reaching to the center.
For Clinton, this ended in a disaster
in 1994 in the midterm elections.
The same may have happened to Bush
in 2002 had it not been for the boost
in approval he got after 9/11.
The second mistake to avoid is failing
to coordinate with one's own party.
Barack Obama enters with many of the same
congressional resources that
Jimmy Carter had in 1977.
Carter failed to talk with and coordinate
with his own leadership in
the House of Representatives
and the Senate, and as a
result stalled his transition,
couldn't get his policy
agenda off the ground.
Obama would be well-advised
to avoid Carter's mistake.
The third mistake to avoid
is planning too long.
Bill Clinton entered office in 1993,
hoping to institute
broad healthcare reform.
He studied the issue
for three, four months
before getting any bill before congress.
And if you miss that first
100 days of opportunity,
then chances are you're not going
to be able to get your most
important initiatives passed.
Despite the fact that Barack Obama
enters office with the worst hand
dealt to a US President since 1932,
when Franklin Roosevelt
faced the Great Depression,
and the prospects of
Fascism rising in Europe.
Obama has several opportunities
not afforded recent presidents.
First of all he won a clear majority
of the popular vote, which doesn't happen
much in American presidential elections.
Over one third of our presidents
have entered office without a
majority of the popular vote.
Second, his opposition is
fractured, very fractured
if you're paying attention to the news.
And third, he has a high role,
he has a roll of high-quality
democratic candidates
for executive positions, who served
in previous democratic administrations,
yet left office with
high approval ratings.
In filling his White House and cabinet,
he can choose from some experienced
veterans from the Clinton administration,
perhaps even the Carter administration,
and some new faces.
Obama's already named Clinton strategist
and member of congress Rahm Emmanuel
as his Chief of Staff.
Forget the cries in the media that this
demonstrates that Obama is not
going to reach out to republicans.
The Chief of Staff
position is not typically
a position where one expects a PR machine,
rather it's an organizational
and strategic office.
And in that sense Emmanuel
was a very good choice.
Also having served in
part with the Israeli army
in 1991, he was rust proofing breaks
on Israeli army equipment,
satisfies some concerns
that maybe the Israeli
government had about Obama.
And also has some foreign
policy experience.
So Emmanuel in that sense is a good pick.
Now I can only speculate
about what's going to happen
with some of the high-level
secretarial positions.
For Secretary of Treasury,
there's a possibility
we'll have a Dartmouth
grad, Timothy Geithner,
an '83, imagine a second Dartmouth grad
at that treasury in such a short time.
Unfortunately the
circumstances could be better,
but that would still be nice to have
another Dartmouth grad in the office.
Others who are mentioned
are Lauren Summers,
who served in the Clinton administration,
and was president of Harvard.
Jon Corzine who's governor of New Jersey.
And former federal reserve
chair, Paul Volcker,
who was appointed by Jimmy Carter
and served under Ronald Reagan.
All four of those would
make excellent appointments.
For Secretary of State, maybe John Kerry
is at the top of the
list, though I suspect
that Bill Richardson will be Obama's pick.
And that's because Bill
Richardson endorsed Obama early,
and also would be a Latino in the cabinet,
and the Latino vote was very
important for Obama's election.
For Secretary of Defense, look for Obama
maybe to pick a republican,
continue with Robert Gates
or maybe pick former member
of congress Chuck Hagel.
For Attorney General, the
favorite right now is Eric Holder,
who was a deputy attorney general
under the Clinton administration
and would be an
African-American appointee.
The only group that Obama could not
have afforded to lose in the 2008 election
and still capture the electoral college
was the African-American vote.
Without the latino vote,
without the youth vote,
without married or unmarried women,
Obama would still have
won the electoral college.
But without the African-American vote,
Obama would not have won
the electoral college.
So expect his cabinet to be centrist,
pragmatic, problem solving oriented,
and maybe include a republican or two.
And I've heard recently
for Secretary of Education,
perhaps Colin Powell's
name is in consideration
and he'd like that post.
I'll turn the floor over now
to Frank Reagan professor
of policy studies, Linda
Fowler, to talk about congress.
(applause)
- Okay, well I think to understand
what's going on between the
new president and congress,
you have to start with figuring out
whether the seats that were picked up
in the house and senate, had anything
to do with Obama's election.
And I think the answer is no, basically,
the same national ties
that lifted Obama's vote
also lifted the congressional vote.
And certainly last spring before
Obama even had the nomination,
it was pretty clear to those of us
who follow congressional elections,
that the democrats were going to pick up
at least 20 seats, maybe more.
And we were all predicting
five senate seats,
and it could end up being more than that.
So, there are a couple
of people in the senate
who probably owe their election to Obama.
And that would probably be
Kay Hagan in North Carolina.
- [woman] Excuse me, could
you please use the microphone?
People in the back of
the room can't hear you.
- Oh, I'm so sorry, well
did they hear anything?
Shall I start over?
- [woman] Yes, please.
- Okay, well now I have to cut my time.
At any rate, we were talking about
whether the members of congress
owe their election to Obama,
and the argument I was making
was that that's not the case.
What was really driving
the congressional outcome
was the fact that there were so many
vacant republican seats,
in the house there were
a lot of strategic retirements,
and the same was true in the senate.
So the reason why people thought that
the democrats would do so well,
is that it's always
easier to win an open seat
than to defeat an incumbent.
And there were just a lot of vulnerable,
a lot of open seats that
fostered these opportunities.
It's also the case that doners who give
to the congressional
campaign committee funds,
had pretty much decided
that this was going to be
a democratic year and they were giving
their money to the
democratic congressional
campaign committee and the
senatorial campaign committee.
And the republicans, for the
first time in a long, long time
had a huge financial
deficit in both races.
And what that meant was that at the end
of the campaign season, when candidates
like Kay Hagen in North Carolina started
to look like she was coming on,
the democrats were able to go
and dump a million dollars in her state
in the last two weeks.
And the republicans couldn't do that.
So, the reason why that's important
is that they're not a lot of democrats
sitting in congress who think they owe
either their majority
or their individual seat
to Barack Obama.
And many of them have been there,
they lived through an
enormously frustrating period
in the minority, their
two years in the majority
were a time of extraordinary frustration
because they had only a
51-49 vote in the senate.
And that meant that the
initiatives that they were
passing in the house were
floundering in the senate
because of the filibuster.
So there's a lot of pent
up energy in the senate,
and you couple that with the fact
that the congress, generally, went through
a period of extraordinary quiescence
as a policy making body, and I think
there's a sense that congress is ready
to reassert itself after
basically being prone
for the last eight years.
So this is going to be a
scrappy, feisty congress.
And I don't think Obama has any illusions
about the fact that he's going to be
hailed as the conquering hero
when he gets to
Washington, I think you see
that recognition in the
appointment of Emmanuel.
So the question is, what are the democrats
going to do with their majority?
And will they make the mistake
of thinking that they have a mandate
for progressive policy making?
I think Dean has already suggested
that that's not the case
and I agree with that.
That the democrats were
given an invitation.
Come in here and see if
you can fix this mess.
That's not the same thing as a mandate
for a particular set of
progressive policies.
And the complex interactions of health,
and energy, and the economy,
coupled with huge deficits.
That are going to get worse
as the recession deepens.
Means that the kind of
jocking of whose priorities
are going to be at the top of the list
is going to be quite aggressive, I think.
So the question, I think, is really
how can the new president work effectively
with this congress.
I think both Carter and Clinton
made the mistake of not understanding
the kind of political pressures
that members of congress end up under.
I remember Louise Slaugther, who's now
Chair of the Rules committee
telling me this story
of the first couple of
months of Bill Clinton's
first term, and she said
to me "we've been BTU'd."
I said what does that mean?
She said well we had to
take this really hard vote
on the floor of the congress
to raise energy taxes
in order to cut the budget deficit
and promote conservation,
and after we'd voted for it
Bill Clinton basically
caved into the senate.
So we'd taken this really
hard, costly vote to us
and then in the end it
didn't mean anything.
So the most important thing
presidents have to remember
is don't push members to do
things that are hard for them,
unless you really are prepared to fight
for those kind of
initiatives and make sure
that that hard vote was successful.
Another vote in the first
year of the Clinton,
was on the balance budget resolution.
Marjorie Medvillas, I can't
even remember her last name.
Yeah, first year, freshman
from Pennsylvania.
She cast the tie-breaking
vote on the budget resolution,
and as she walked back
from casting her votes
the republicans said, "bye, bye Marjorie."
And in truth, she was defeated in '92.
So that's the kind of
thing that presidents
have to be very careful about.
In terms of husbanding not only
their own political
capital, but not squandering
the votes of their supporters.
And lastly I think that there's going
to be a real challenge,
the center of gravity
in the republican party
has shifted to the right.
Because of the departure of
people like Smith from Oregon.
And so there are going to
be very few republicans
for a democratic president to work with.
I just did an interview right
now, a couple minutes ago,
with a reporter from Lewiston.
It's Susan Collins, Olympia
Snowe, Arlen Specter,
and then after that you
start to run out of names.
(laughter)
And so what that means
is that the democrats
are going to have to
pass their legislation
pretty much on their own.
There aren't a lot of people
they can reach out to.
And I think that means that
the blue dog democrats,
the democrats who are from
conservative districts,
that were elected in
2006 and again in 2008,
are going to have a very strong influence
on what actually gets passed.
Now that might be good, because Dean
has just told you that this president
is going to need to
govern from the center.
Before he starts pleasing the base.
And the blue dog democrats may
make sure that he does that.
So let me turn this over to Sonu,
(applause)
and you are there.
- Great, thanks Linda, and thanks Dean.
So if you sort of think about it,
Dean discussed Article
2, the executive branch.
Linda, Article 1, and so
I'll be discussing Article 3.
One thing to note is that
unlike those other two branches,
those that serve under,
judges, the Article 3
serve for life, so change
in the federal judiciary
is a glacial, it's not so quick.
And so there are three
levels of federal courts.
District levels, circuit
levels, and of course
the United States Supreme Court.
Barack Obama with the now majority
of the democratic senate
will appoint judges
to all those three levels.
Currently, sort of to give you a sense
of what the current state
of the federal judiciary is,
60% of all sitting federal judges,
that's at all three of the levels,
were appointed by republicans.
And so 40% appointed
by democrat presidents.
And so this percentage
also holds in the circuits,
in the 13th circuits, in
fact in the 13 circuits
in the United States, and these circuits
are scattered geographically
throughout the United States,
most lean republican.
Most lean republican, in fact, George W.
in the last eight years has appointed
about one third of all
sitting federal judges.
So while Obama will get to appoint
new federal judges at all these levels
it is not an understatement to say
that ideologically, most
of the federal judiciary
will stay where it is for a while.
Let me then sort of talk about
the Supreme Court, obviously that's what
most people think about when they think
of the federal courts.
And here too, I'm
suggesting that there won't
be immediate ideological change.
The two justices that are the oldest,
Justice Stevens and Justice Ginsburg,
those are the two that
are most likely to retire.
And so Justice Souter,
actually, he's not the oldest
but would like to come
back to New Hampshire
and so has sort of expressed
intentions to retire.
And so, if Obama in his first term
gets to appoint, let's
say, three new judges
those three new judges would all be
on the liberal side, so it's not really
going to change the makeup of the court.
And so, hence, there's
not really going to be
an immediate ideological
change to the left.
So, what does that mean?
Decisions such as abortion,
decisions such as affirmative action,
that are all 5 to 4 decisions,
upholding those two practices
will stay the same.
Now there is an issue when Obama does
select these judges, is he
just going to appoint liberals
or is he really going to
appoint crusading liberals?
Sort of in the mold of Chief
Justice Warren, Marshall,
and Brennan, and so there's evidence
to suggest he's praised those
crusading liberal justices.
But also he's applauded, for example,
the recent Heller second amendment case
that struck down DC's handgun regulation.
And he's criticized the
court in invalidating
the death penalty for child rapists.
So it's unclear whether he is going to
select crusading liberals
or just liberals.
It should be noted that in his own right,
Obama is a constitutional scholar,
he taught constitutional law
at the University of Chicago,
so it's the first time in a long while
that we have a president
that he himself actually
would have been someone
that could sit on the court.
Second then let me talk about
who he's likely to appoint
to the Supreme Court, whom
he's likely to appoint.
And here I'd like to say that
his first two appointments
will probably be a woman and/or a Latino.
And so as we heard from
Dean, and as you know
from the sort of
demographics of the election,
Latinos especially in that southwest area
of the United States are a particularly
important demographic.
19% of all federal judges are women,
only one obviously sits
on the supreme court.
And 5% of all federal judges are latino,
and none sit currently
on the supreme court.
And so let me just give you a quote
that Obama made to the Planned Parenthood
conference last year in
July, suggesting whom
he thinks should sit on the court.
He said, "we need somebody
who's got the heart,
the empathy to recognize what it's like
to be a young teenage mom. The empathy
to understand what it's like to be poor
or African-American, or
gay, or disabled, or old.
And that's the criteria by which
I'm going to be selecting my judges."
We do know he voted
against Roberts and Alito
in their confirmation hearings.
And so look, you know,
people always speculate
who are the people that
he's going to nominate.
And so it's always a dicey business
to suggest who it could be.
We don't really know, but let me sort of
hand out some possible contenders
that have been floated.
In terms of sort of appointing a woman
and a Latina, the two
names that come to mind
are Sonia Sotomayor,
on the second circuit,
a very well respected jurist there.
Kim Wardlaw, who's on the ninth circuit.
There's also Diane Wood,
that's one the seventh circuit.
And also Elena Kagan, who's currently
Dean of Harvard Law School.
It should be pointed
out that Wood and Kagan
actually worked alongside Obama
when he taught at the University
of Chicago Law School.
So that could be something
that may be relevant.
Anyway, I will leave it at
that and it's my pleasure
to call up Denise Anthony
from the Sociology Department
to talk about healthcare.
(applause)
- Thanks, Sonu, and thank you to Andrew
and the Rockefeller Center,
it's my pleasure to be here.
When we talk about healthcare,
there are three big issues:
access, quality, and cost.
And I'm going to talk
just about access today.
But we often interchangeably
start talking about access,
and we really want to talk about quality.
So, anyway, I just want
to make that distinction.
So Obama has said that
some of the key elements
in his proposal for healthcare
is to expand coverage, expand
insurance coverage in the US.
And he has a couple of different
policy ideas for doing that.
One is to mandate insurance
coverage for children,
so the parents would be responsible
for having insurance for the children.
In many ways this is a smart idea,
Howard Dean actually had
this as part of his platform
a number of years ago
when he ran for president.
Children, I think everyone can agree,
that they don't, they
shouldn't necessarily
be subject to the choice
to, if you believe
that healthcare is a
choice, they shouldn't be
exposed to that choice.
Children are also
relatively cheap to cover,
because they are healthy, they don't use
that much healthcare,
and there's a big payoff.
Because getting them preventative care,
getting them immunized and vaccinated
and preventative care has a big payoff.
Because that prevents a lot
of disease among children.
So that's a smart move, and would expand
coverage pretty dramatically because
many of the people who
don't have insurance
in the United States
are, in fact, children.
The second way that Obama is proposing
to expand insurance
coverage is what he calls
the pay or play for employers.
You either play by
offering insurance coverage
to your employees, or you have to pay
into a fund that is really number three,
the national health
plan, to offer insurance
or make insurance available to those
who can't access insurance
through their employer.
So if you're a small business
and it's too expensive,
or you decide that it's too expensive
to offer an insurance
plan to your employees,
then you have to pay a fee or a tax
into a plan, into a pool that will then
go toward supporting
a national health plan
for the uninsured, for people who work
in small businesses and don't
have access to insurance
through their employer.
The national health plan, then,
is a way to set up a plan that would
be available to anyone who doesn't have
access to insurance, and this is a way
to try to capture those adults
who fall outside of the mandate
for the children and get everyone covered.
The goal is universal coverage,
for all Americans, without the mandate
and so Obama is trying to sort of
finesse that political
problem a little bit.
By mandating for children, and then
offering a plan for those adults
who currently don't have insurance.
One more element to the
plan for expanding coverage
is to create a reinsurance program
for high-cost medical cases.
Sometimes for employers
who want to offer insurance
to their employees, especially if they
are relatively small
employer, a small business
with few employees, if
they have one very sick
employee, the insurance
costs for insuring that group
are very high, and so
one person with diabetes
in your small company can mean that
the average premium to everyone
in the company goes way up.
If we had a separate insurance program
that would insure the
high-risk, high-cost cases
that would lower the premiums on average
for everyone else in
these employer groups.
Large employers aren't subject to that
because they're insuring the risk
over a much larger population.
So they aren't as subject to the change
or the high-costs that
come from one sick patient,
or one sick employee,
and so this would help
to reduce the costs of insurance
for those small businesses.
So it might mean that
more small businesses
might be able to offer insurance
to their employees,
thus expanding coverage.
For those who still can't, they
will contribute to this fund
that will establish the
national health plan
to offer insurance at a
relatively low cost to others
who don't get access
through their employer,
or who are self-employed
and the individual
insurance market is too expensive.
So the idea is to get
to universal coverage
without a mandate, but to expand
the opportunities for insurance
for all Americans and the 45 million
who are currently uninsured.
Now the reason this is related to access
is because insurance coverage contributes
to access to care, not
surprising, we all know
that if you don't have insurance coverage,
you are much less likely to be able
to access healthcare in the United States.
So access depends on coverage.
It doesn't depend entirely on coverage,
because even if you don't have coverage
you can get treated in an emergency room.
Thus contributing to the
high-cost of healthcare
in the United States, so
ultimately there may be
a way to address cost issues
by addressing coverage
in order to get more
people access to care.
However, the last bullet is
something to keep in mind
when we talk about
coverage, insurance coverage
in the United States,
coverage does not mean
access to care, coverage
may be a necessary
condition to get access to care,
but coverage alone is not access to care.
And there are a lot of
other aspects of healthcare
that need to be addressed to provide
full access to high-quality,
affordable care.
Coverage is one of those steps.
Coverage allows the Obama team,
and maybe the United States, to begin
to address quality and cost issues.
But coverage is just one piece
of that puzzle, and won't
alone increase access.
But it'll get us much
further along that path
to access to high-quality care
at a lower, affordable price
than we currently are
with 45 million Americans.
Thank you.
(applause)
I'm happy to introduce
economics professor Doug Irwin.
- I want to put trade policy in context.
First of all, this is not a high-priority,
top of the agenda issue.
The economy is not doing well,
financial system is very weak,
we have a major fiscal deficit,
these are important priorities
for economic policy.
Trade policy is a medium
to longer term issue.
In fact, I suspect the Obama team
would like to do nothing on trade policy,
and have a complete time
out on trade agreements.
And that's for several reasons,
first of all the democratic party
is completed divided over the issue,
it's domestically very sensitive,
there's no political payoff to pushing
trade liberalization at this point,
and the economic payoff
to trade liberalization
is years down the road.
And finally, there's only economic grief
if you succumb to protectionism.
So the status quo, doing nothing,
is certainly an option.
That said, the issue is to
some extent unavoidable.
Congress has to make a decision
about pending free trade agreements
with Columbia and South Korea.
And that's why I've put
up this slide about NAFTA.
Because this happened 15 years ago,
many of the undergraduates were about
three or four years old at that time,
but we are still having a
national debate about NAFTA.
When Obama went to Ohio he said
that he would want to renegotiate NAFTA.
Hillary Clinton in Ohio
said NAFTA was a mistake,
and I'm sure that's not the first time
she's said that to her husband.
(laughter)
But Bill Clinton, pardon
me, Barack Obama's position
is actually formally a bit
more nuanced than that.
He says that he's in favor
of these trade agreements,
but he wants stronger environmental
and labor provisions in them.
And so we really don't know what exactly
the administrational policy will be.
In fact I see both the administration
and the congress as being divided,
between the internationalists
and the labor movement.
And a lot depends upon
who wins that battle
in terms of what sort of
trade policy we'll see.
The internationalists will say
that we ought to continue to pursue
these free trade agreements,
perhaps have a few
more qualifications in them
unlike the Bush administration.
But it is a worthwhile
endeavor to try to open up
world markets and expand
the demand for US exports.
The labor movement, however,
sees these agreements
very differently, they
seem them as a pro-business
type of policy that harms
workers in the United States,
reduces wages and what have you,
and I think they would
put up a very strong stand
against further trade agreements,
and perhaps even try to
renegotiate old agreements
or enact new legislation
that makes it easier
for import-competing
industries to impose tariffs
against foreign countries.
So if the internationalists
are to win this battle,
within the administration
and within the congress,
I think we might see small
incremental progress.
In terms of moving trade policy forward.
If the labor movement wins, I
think we'll see a dead stop,
and possible legislation that
might even restrict or raise
the possibility of restricting
imports in the future.
Now the mood among congressional democrats
is that they don't want to
touch these things at all.
And so I think that's another reason why
we just may not see
anything going on here.
Two other issues regarding
trade policy that will come up.
One is what to do with the WTO,
the World Trade Organization.
There have been talks
going on for seven years,
they could easily go
on another seven years.
There's no urgency, no rush in terms
of that at the particular moment.
The last one would be China trade,
and I think think really hinges upon
whether there are demands domestically
for relief from imports from China.
We have not seen that recently,
the dollar's been relatively weak.
And that's promoted exports, in fact,
exports have been sort of keeping
the economy above sort of the zero
growth level for some time, it obviously
is not going to continue to do that.
But the question is what
should the administration
policy be towards China, and I think
they'll have to be largely
reactive there and not proactive.
And with that I'll turn it over
to talk about energy policy and Lee Lynd.
(applause)
- So, energy, Doug began his comments
saying that this might
not be a high priority.
I think it's fair to say that
more than has been the case
in probably ever in the presidency
and likely the congress,
this now is a high priority.
So I thought I'd look at three things,
just observe that in spite of the economy
the statement has been made several times
in the press that in an
Obama administration,
building the new energy economy
will be the top priority.
I don't think that a president-elect
has ever said that
before, to my knowledge.
What does this mean as a practical matter?
And what will be different
in an Obama administration?
And the funny thing,
just a story on myself,
when I originally wrote
that I was sort of thinking
versus the McCain administration,
and I realized you know
what, you're a little bit
too enmeshed in the election.
Because what really matters is compared
to what's happened in the past,
not compared to what would have been.
So, I would just comment on item one here,
that in my view this
emphasis is very appropriate
and indeed it's about time.
I will save you the long sermon,
but I think a very good case could be made
that energy is a dominant determinant
of some basic prerequisites
for healthy human society.
Like peace, prosperity,
and sustainability.
And that not only that, but
that is not true just now.
It's always been true and
likely always will be.
We do at our point in history, though,
have an especially critical
set of considerations
relative to energy that makes this
arguably the defining
challenge of our time.
As far as what is, depending
on how you look at it,
either needed or likely to happen,
I think that--not sure
who's view I'm recommending.
Either my view or the
Obama administration,
which I think align pretty
well on the needed side.
In any case, one of them is
accelerated technology creation
through enhanced supportive R&D,
the Obama administration,
president-elect Obama
is speaking of an Apollo
project in energy R&D.
And although at times
there hasn't been anything
remotely close to that ever, except maybe
in the Carter administration when
the Solar Energy Research
Institute was founded
and energy R&D dollars
did go up dramatically.
Since then the trend has been declining
in both public and private sector funding
for energy R&D for the
last quarter century.
Accelerated technology deployment,
which is somewhat different,
once something's created
getting it out into the marketplace.
Placing a value on
carbon, I think is likely
to happen in this administration.
In my opinion, and people frankly
who are more deeply versed
in energy policy than I am,
it would have been likely to have occured
in a McCain administration.
I think it's certain that
energy would have gotten
more attention in a McCain administration
compared to a Bush administration.
Frankly if the term
limits had been repealed,
and president Bush would
have been reelected,
we would have had more
attention on energy.
It's just that it's this
rising tide of concern.
But then the fourth
component is increased energy
utilization efficiency,
one can show fairly quickly
on the back of an
envelope that the world's
energy challenges cannot be provided
on the supply side alone.
What will be different in
an Obama administration
compared to what we've seen?
Number one, a higher overall priority
given to energy, but as I mentioned,
I don't think that's just reflecting
this administration's priorities.
I think it's reflecting the time in which
this administration is taking office.
I think it's fair to
say a greater openness
to public sector investment,
and indeed regulation
in the energy economy than we have seen.
And then finally I speak
here on this last bullet
about energy capital versus energy income.
By energy capital, I mean fossil
fuels and uranium basically
these are things that we
can potentially run out of.
I think we will see a greater
emphasis on energy income
in an Obama administration
than we have seen,
and in this case than we would have seen
in a McCain administration.
Keep in mind, we're coming
from an administration
whose vice president, to
some extent the point person
on energy said, and I think
I can summon this quote,
that while conservation
may be a personal virtue
it is no substitute for an energy policy.
I think we're going to
see more of an emphasis
in an Obama administration
on not only the supply side,
but also increased energy
utilization efficiency.
And with that, it's my pleasure to hand
the podium and and
microphone to Annelise Orleck
from the history department to talk
about social welfare and poverty.
(applause)
- I wanted to start by saying that
when I was challenged to think about
how I could talk about
this policy in five minutes
it began to become clear to me
that Obama is feeling very much
the same kinds of pressures.
I fully agree with Dean
that he is interested
in moving quickly, by all accounts
his transition team is, the
words that I read in one account
are scouring histories
of FDR's first 100 days.
Because of his concern
about this lack of mandate,
and because Nancy Pelosi has already said
they plan to govern from the center,
I would suggest that what Obama
is going to try to do immediately
is build on existing legal
and social welfare frameworks.
Both from the New Deal and
later from The Great Society.
Now Obama has been very pleased of course
with all the discussion
of the New New Deal,
and then comparisons
to Franklin Roosevelt.
He has not commented on
it, but it has come out
in a rather positive fashion.
Comparisons to Lyndon Johnson, of course,
and The Great Society, are ones that
he is less likely to respond
positively to publicly.
However, what I wanted to begin by saying
is that despite the negative press
that The Great Society has gotten
for the past thirty years, if not forty,
if not, you know, from the moment
that the war on poverty
was announced in 1964.
Most or many of the programs
that were established
are still in place in one form or another.
They've been changed,
allocation strategies
and systems have been reorganized
during the presidencies that
followed Lyndon Johnson,
but many of these programs
are still on the books.
And so that allows Obama to work
on a variety of issues that
I'll talk about in a moment,
through the budget negotiation process.
Rather than through the
very difficult, and painful,
and dangerous politically,
the dangerous process
of attempting to pass new legislation.
The other issue that I want to raise
is that you can't really talk about
poverty and social welfare
without talking about jobs policy.
I'm not going to talk
about that very much,
except to say that both FDR
and Martin Luther King, Jr.
are both quoted as saying
that a strong labor movement
and strong unions are the
best anti-poverty policy.
Obama has referred to those quotes
in his sponsorship of the
Employee Free Choice Act.
Which I suspect we will see again
on the floor of congress as an attempt
to allow workers greater opportunity
to form and join unions
in today's workplace.
I also think that Obama
is going to look toward
job creation and this gets
back to Lee's comments earlier
he has promised this,
I've heard him call it
an Apollo project and a Manhattan project.
For alternative energy,
he's talking about 5 million
jobs that they expect to create somehow
with government intervention.
The specifics are fuzzy,
but just this afternoon
he in his speech about the kinds of things
he's going to do, very
quickly, on the economy
he commented that if there is aid
to the ailing auto
companies, and I suspect
this discussion took place this afternoon
with his economic advisers, who included
the governor of Michigan
Katherine Granholm,
that that aid would come in the form
of incentives to create
more fuel efficient cars
and build them here in the United States.
Something that he's talked about
extensively in the campaign.
Obviously with estimates last night
that the collapse of
one of the major three
American car companies could affect
as many as 3.3 million
jobs in the United States,
this is going to be a priority
and something that he's going
to speak about very quickly.
The other job creation program
that he has talked about,
is really very much
out of the New Deal Model, and that is
a job creation program to
rebuild crumbling infrastructure
in the United States and he has talked
about creating jobs to rebuild roads,
bridges, dams, and schools, in particular
that would require there is no longer
a New Deal program of
that kind on the books.
However I think allusions to the New Deal
made carefully and strategically
might create enough
positive political good will
to pass such a program.
Obviously in this moment
of tremendous deficit
and collapse in economy, that
could well be a hard sell.
But you're already hearing from economists
including Paul Krugman in
The New York Times today.
That increasing the deficit slightly
during this time of tremendous
economic despair and collapse,
that may be an okay strategy to pursue.
Next off, in building on
the New Deal policies,
he has promised to
protect social security.
If there has ever been a moment
when the dangers of
investing social security
even voluntarily on the stock market,
have been clear this is it.
He also is likely to remind Americans
that social security reduced poverty
among the single longest
lasting impoverished group
in the American population
and during the time
before Franklin Roosevelt's presidency,
the largest poor group, the elderly.
And that's not a road
we want to go back down.
Nor will the American
Association of Retired Persons,
and other well-organized senior lobbies,
allow that to happen I don't think.
He has already called for ending
the taxation of seniors
who make under $50,000.
And he has reiterated that promise.
Just this afternoon he also turned back
to another of the New Deal
social safety net mainstays,
unemployment benefits, and called for
expanding and extending the period.
Exapanding the benefits and extending
the period during which
workers can claim them.
I would argue that, again,
as someone who seems
to be somewhat of a student of history,
he is aware that the high foreclosure rate
in certain parts of the country,
the loss of over a million jobs I think
as of today, in this year, could result
in the kinds of scenes, perhaps,
that were seen during the depression.
And certainly all he needs to do, I think,
is evoke those images to
create some support for that.
And finally he's talking about
a National Service Program, which evokes
both I think the New
Deal and the Kennedy era,
and early Johnson Great Society eras.
But he's tying this
national service program
to money for college, so all of these
are dimensions I think
of the poverty policy.
The second piece that he intends to do,
I think will perhaps be less public.
And that is to build on existing
war on poverty programs.
Robert Rector, the Heritage
Foundation welfare analyst,
said rather wistfully during
the 2005-06 budget negotiations
that there were only 12
republicans in congress
who would vote to get rid of all of
the remaining war on poverty programs.
Indeed, during budget negotiations
in those years, attempts by President Bush
to zero out funding for
social services block grants
and community development block grants
was met with strong
opposition from his own party.
Some of those moderates,
as you've pointed out,
are no longer there
including Norm Coleman,
of Minnesota, well he may
be there we don't know.
But who was one of the leading opponents
of this attempt to get rid
of community development
block grants and indeed
the republican senators
from the state of Maine pointed out
that in contrast to this image
of these block grants
going to all of those
undesirables, you know code
word for people of color
in urban centers, in fact,
community development
block grants were doing things like
providing potable water
in rural places in Maine.
So I think what we will see is
an attempt to expand funding
for community development
and social service block grants.
He knows already from
his time in the senate
that there is some support in
the republican party for that.
A more dangerous political move
would be to return to the
war on poverty mandate
for maximum feasible participation
by the poor themselves.
The much-maligned line in
the Economic Opportunity Act
of 1964 that local politicians
and local governments
ran from because it tended to organize
the poor in protest against
those very governments.
Nevertheless, some of the articles today
talking about the "community
organizer in Chief"
suggest that there is still an interest
in local grassroots network building
in the Obama administration.
He's also keenly aware
that those networks exist.
Because they were mobilized all across
the country in an unbelievably
get out the vote machine.
And I think that that
get out the vote machine,
along with his labor get
out the vote machines
will remain groups that he is
to some extent beholden to.
We'll see if that happens.
I would argue that there will be
some call for expanding the
community health center program,
which was cut about 25% in
the Reagan and Bush years.
It's literally extended life expectancy
in many poor communities
across the country.
There's a good deal of evidence
for its strengths, and I also have heard
some discussion of tying that
to an expanded public health
service medical school
loan forgiveness program.
We'll see if any of this happens,
but it's certainly a possibility.
Head Start, the controversial program
that provides daycare and job training,
day care for poor children in a way
that's supposed to improve results
once they reach kindergarten
and elementary school,
has been on the chopping
block for many years.
Again I would predict that it's a program
that has staying power,
and that you will see
in the budget some
expansion of this program
or attempts to expand the program.
Because it does also
provide low paying jobs,
but jobs for poor women in the communities
where Head Start centers are located.
I would argue that they'll be an expansion
of both nutrition and
prenatal/postnatal care
dimensions of the women
and infant children
nutrition program, which has been
extremely successful in
cutting what is still
a shameful infant mortality
rate in this country.
And having very positive
effects on child health.
I think you'll see greater
funding for food stamps
and school lunch and breakfast programs.
Although the latter is a
politically safe thing to do,
the former is tagged with a
negative image of welfare.
And so we'll see whether
it's possible to do it.
But staving off hunger at this moment
of economic collapse and foreclosure,
I predict will be a priority.
Okay, one last quick line, one more line.
I believe that some of
the policies overseas
in creating microfinance loans
for small businesses, particularly
for women and children, will come home.
And you'll see public-private
partnerships around that.
And with that,
(applause)
I introduce Daryl Press of
the department of government
to talk about foreign defense.
(applause)
- I called Ron Shaiko yesterday,
and asked him for just a
little bit more clarification
about what he wanted today,
and he said it's simple.
He said describe for us the most serious
national security problems
facing the United States,
and what the solution to it is,
and you have five minutes.
(laughter)
So here we go, but I'll do it by speaking
in somewhat broad terms,
but I'm happy to speak
more in specifics in question and answer.
I guess what I would
say is that in my view
the overarching problem for
US national security policy
is a broad mismatch between
the societal resources
we have available for
national security problems,
and the missions and the obligations
that we've decided to take on.
That mismatch is the big problem.
The problem is exacerbated by the too long
and very difficult wars
we're currently fighting.
But those wars are not
the root of the problem.
The root of the problem
is much deeper than that.
And let me try to explain, in order to get
a sense of the magnitude of the problem,
let me just try to describe to you
using a couple different lenses,
the scope of US military
policy around the world.
So let me start with a geographic lens,
and say imagine the parts of the world,
the parts of the globe,
where the US military
is asked to be prepared for what might
be potentially demanding missions.
And the answer is,
that's the entire world.
It's asked to be prepared
for demanding missions
in the periphery of Europe,
on the Korean peninsula,
in the Taiwan straight,
patrolling the world's oceans,
and protecting access
to oil, and protecting
against instability in
major oil producing areas.
Now switch lenses for a second,
and ask what are the types of operations
that the US military is asked
to prepare for at any given time.
The possibility of
counter-proliferation attacks,
for example against Iran, the possibility
of large-scale stability
operations, for example,
in case the North Korean
government collapses.
Humanitarian interventions
wherever they might occur.
Anti-terror operations around the world.
Operations to prevent
attacks on oil producers,
or oil flows, particularly
in the Persian Gulf.
And many, many more.
The bottom line is the
obligations and the missions
we've set out for ourselves,
that we've decided
are very, very important to
the United States, are massive.
They're truly massive.
That's point number one.
Point number two, the
strains that that definition
of interest, that definition of priorities
is placing on the US government,
and the US military in particular,
are not likely to go away any time soon.
Even if we can scale back US
military operations in Iraq,
Afghanistan isn't going
away any time soon.
Both, well I guess I don't have to say
both candidates anymore,
president-elect Obama
has made it very clear that he is still
deeply committed to pursing, and in fact,
intensifying US efforts in Afghanistan.
Furthermore, there's a
whole separate problem
which was to a large part, the weapons
that US military forces have
been using in these wars
are the weapons that were procured
in the 1980's and the 1990's.
It was the last round of major
procurement from the Cold War
those weapons are getting old,
they're also wearing out,
partly because of these wars,
and as you probably can guess,
replacing them and
especially replacing with
their more modern counterparts
is going to be a very,
very expensive undertaking.
And then lastly in this environment
there are suggestions for new
obligations and new missions.
For example, there are suggestions
to undertake a major military intervention
in the Darfur region,
there are suggestions
that the United States should
support NATO expansion eastward.
And so when I look at
all this, I have to say,
I don't want to be flip
but part of me thinks
that the way we're thinking
about military policy
and foreign policy these
days is a little bit
like the way we've been thinking
about our economic policy.
In the sense that we're
taking on obligations
without asking questions
about our ability to pay.
You know, to carry the
analogy one step further,
some of these alliance
commitments we're issuing
feel a little bit like
credit default swaps.
Which I have to admit, I knew
nothing about four weeks ago,
and unfortunately many of us now know
a little bit too much about them.
But in the following sense, is you issue
these alliance commitments, you issue
these credit default swaps, and they don't
feel costly when you issue them.
Because it actually
doesn't cost you anything
on that year's, you know, bottom line.
And they might not cost
anything for the next year,
or the next year, but
suddenly if something
comes out very badly in the world,
you're left holding the bag and the cost
to you can be enormous and
difficult to contain afterwards.
That's the danger of extending
alliance commitments,
and it's something we should be weighing
every time we're considering this.
So problem number two is I don't see
the strains that we're
placing on ourselves,
on our military, as
declining any time soon.
Point number three is I don't think
there's a simple solution of throwing
lots and lots and lots of new
resources at this problem.
Because I don't think
those resources exist.
As all of you know the federal budget
is in a state of substantial deficit.
And there are also lots of additional
claims on the US treasury that are coming
right down the pike, there's
the healthcare program
that it seems most
Americans are in favor of,
there's actually meeting the commitments
to current and future
recipients of social security
and medicare, there's now
possible an Apollo program
for energy, or maybe
it's a Manhattan program
for energy, or both, and so the point is
is that I don't think that the gap
that exists between the resources required
by this current strategy
and the strategy itself
is going to be solved by just throwing,
increasing the defense budget by 50%.
Point four is I think that the solution
to the extent that there is one,
is basically trying to rethink
the commitments, rethink the obligations,
and rebalance US foreign policy,
and place less emphasis
on the military tool
and more emphasis on other tools.
Acknowledging, acknowledging openly,
that there are some things in this world
that we'd like to have
happen that we won't
be able to get to have happen.
And there are some things in this world
that we'd like to prevent that we won't
be able to prevent, but nevertheless
reblancing US foreign policy.
And let me give you five semi-specifics.
Number one is phasing out some
of the anachronistic alliances
that are holdovers from the Cold War.
So we didn't do a lot of hard thinking
at the end of the Cold War about which
of our Cold War alliances
will continue to make sense
and which ones no longer make sense.
That hard thinking is due, and I think
if we do that thinking
we'll come up with a list
of some of those alliances which once
made perfect sense,
which now are obligations
that don't have a lot of
payoff for the United States.
Number one.
Number two, powerfully resist
new defense obligations.
People will always come to you
with a new mission that sounds appealing
on its merits, you know, just like
in these tough economic
times you might really want
a new big screen TV or a new suit.
The bar ought to be very, very high
as to the importance of the mission
before you take on any new additional
foreign policy and defense commitments.
Number three, take a non-military approach
to humanitarianism,
and what I mean by this
is most people, myself included,
believe that US values should play
a big role, not an exclusive role,
but a big role in US foreign policy.
But it is almost always a mistake
to think that the most efficient,
let alone the cheapest tool,
of promoting our values
and advancing humanitarian
causes is with military power.
Military power is good for some things,
but in terms of advancing
our values around the world
and promoting humanitarianism,
it's almost always inefficient,
and it's always a very
expensive way of doing that.
And we can usually get
more bang for the buck
in terms of promoting our
values through other tools.
Number four, return to what was actually
both a Reagan and a Carter era approach
to the Persian Gulf, basically focusing
on an over the horizon,
offshore military presence.
To protect the most important things to us
in the Persian Gulf, but not to be
so deeply embedded in the politics
and the strife in that
rather war torn region.
And the last piece of the puzzle
is to give US intelligence organizations,
rather than the US military, the lead
in what people are calling
the Global War on Terror.
Let me conclude by saying
this basically means,
it's not a call for pacifism,
it's not a call for isolationism,
it's a call for a much
more discriminate approach
to the use of military
power, more discriminate
than the previous George
W. Bush administration.
Frankly, more discriminate than
the Clinton administration.
And then the good news, and there are not
many people these days saying that they're
going to talk about US
national security policy
and that they have good news,
but the good news and
I believe this is true,
is that I actually think
that in the long run
this approach would not only save us
some money and help us close the gap,
and allow us to spend
money on the Apollo program
or the Manhattan program,
but I honestly think
it'll actually in the long
term leave us more safe.
Let me leave it with
that, and I will introduce
our next speaker, which is
professor Andrew Samwick
who is a professor in
the economics department
and also director of
the Rockefeller Center.
(applause)
- Okay, I'd like to thank all
my fellow faculty panelists
for their concise
statements, the over-under
for when I would start
talking was eight o'clock.
(laughter)
So I get the enviable job of talking
about fiscal policy, and this is something
where there was a lot of rhetoric
but not a lot of
understanding in the campaign.
The thing you heard most about
was making the so-called
2001, 2003 tax cuts permanent.
And most of that discussion focused
on the top marginal tax
rates on ordinary income.
Which, under Obama's plans would,
those reductions would
be allowed to lapse,
and the top rates of 36 and
39.6 would be reinstated.
Senator McCain was campaigning that those
like the rates for lower incomes,
those tax rates should be
kept at their lower levels.
They both were going to
reinstate the estate tax,
to smooth out that little blip.
And Obama would do it
with the lower exemption
and a higher rate above the exemption.
McCain would have done it with
a somewhat higher exemption
and a much lower rate above the exemption.
There were also some differences
about the capital gains tax rate.
Obama proposed a fairly small increase
for higher income
workers, McCain would have
kept it where it is or tried to lower it.
It's very important to
note that Senator McCain,
as president, would have gotten
approximately none of that.
When confronting a democratically
controlled congress,
he probably would have been able
to do some horse trading,
one because you can always
do horse trading, and two he really liked
to do horse trading when he was a senator.
There are some problems
common to both candidates
approaches, namely that
over the last several years,
the congress has been working in collusion
with the White House to make permanent
the set of tax rate reductions
on everybody but the highest income folks.
And so, as a society, we have
to confront this question.
Why in 2008, 2009, 2010,
should the tax rates
for a given amount of income be lower
for middle class people
than they were 10 years ago?
That's a question we'll have to answer
in the days coming ahead.
Because the government,
given what it wants
to spend money on, has
dramatically less in resources.
The second point I'd like to make,
is what about those below-the-radar things
that candidates talk about seeing
if they'll drum up any interest.
There was one that candidate Obama,
now president-elect
Obama was talking about.
It's called the Making Work Pay credit.
It was a refundable credit
of 6.2% of earnings,
up to a maximum earnings
of $8,100 per worker.
What is that 6.2 number?
That is half the social
security payroll tax.
Obama, in the campaign, made no secret
of the fact that he thought
that was a regressive tax
and he would be willing
to see other sources
of funding come in and replace that.
And I think, in the spirit
of some of the other things
that were talked about in the campaign,
he might be leaning
toward a green tax swap.
What's the green tax swap?
Well you have gasoline,
something that we all know
that we need to conserve on.
And you have a tax that
you currently apply to it.
What if you raised the tax on gasoline,
and to demonstrate that
you are not doing this
to plug the hole in the federal budget
that was created through a
rather sordid set of activities,
you got rid of the revenue
by lowering the payroll tax
at the margin by a couple
of percentage points.
That is the so-called green tax swap,
and I think it's a winner
because you tax more
the thing you want to discourage,
and you tax less the thing
you want to encourage.
So if I had any optimism about
what we might see, I
would place a small bet
on the green tax swap.
A lot of the healthcare
proposals are very interesting,
but I thought professor Anthony
went through thatin good detail.
The big question on everybody's mind
is whether the financial market meltdown
has put all of this on
hold, and you will see
if you know that I am kind
of a right-of-center person,
how I get to outflank a lefty on this one.
So it's going to make me feel good.
Here is a quote from one
of president-elect Obama's
more left-leaning economic advisers.
"We can't tackle healthcare until we get
the economy working,
if the economy is weak,
how can you make good on
the promises you made?"
Well I don't actually see
why that's a question at all.
Suppose we had already had a program,
which accomplished some
of the increasing coverage
that professor Anthony was describing.
Suppose miracles upon miracles,
that that program had been implemented
in the last year, we'll just say
it had been implemented last year.
And now we come upon
our economic hard times.
Do we really think that a President Obama
would look through the
massive federal budget
and say you know which program
I want to get rid of, I want to get rid
of that program that expands coverage
for low income and
difficult to insure people.
That would be ridiculous,
he would get laughed
out of his own cabinet meeting.
So why is it that the
fact that that program
was not a priority to his predecessor,
should determine whether it's a priority
that he pursues in his first
weeks or months in office?
I mean, that's ridiculous,
that's what elections are for.
It's to help you determine what
your priorities are going to be.
So I think that would
be a colossal mistake.
And so I get to outflank somebody
on his economic team.
(laughter)
What should we be looking for,
to know whether we're on track?
Well, as Joe Biden's dad used to say,
show me your budget and I'll
show you what you value.
There was a nice article by Bruce Barlett
this past week, he's a
conservative columnist
who got thrown out of his think tank
for being critical of
the Bush administration.
The first budget a president submits
show us a lot about the
president's priorities.
And this is a mad scramble,
Bruce did us the favor
of going back in time and giving us
the release dates of new
presidents' first budgets,
and the title that they put on the cover.
So Ronald Reagan, February 18th, 1981,
America's New Beginning.
George H.W. Bush, February 9th, 1989,
see his was a little
earlier, because he was
sort of already in place,
Building a Better America.
Bill Clinton, A Vision
for Change for America,
February 17th, 1993.
And George W. Bush, A
Blueprint for New Beginnings,
February 28th, 2001,
you see he wasn't able
to hit the ground running there.
So sometime around the middle of February,
we're going to see that budget.
And we're going to get
a lot of information
about what's in the
budget, that will tell us
whether President Obama is on track
to deliver on campaign promises.
I would just close with two other remarks.
So this looming recession, what's looming
is only the formal declaration of it,
is going to induce many more
so-called stimulus packages.
I confess I've been confused,
and I've done this publicly,
on radio and in op-eds, it seems to me
that the word stimulus now means
I'm going to issue debt to finance
the purchase of things that
people don't really need
just to be able to say
that I'm spending money.
(laughter)
And in fact it's not even their money,
it's their kids money, I think
that's a bad habit to be in.
Not everything that you
would spend money on
has no benefits for your kids,
and so it's encouraging to see
things like attention to a
new energy infrastructure.
Something that we heard
about at our panel yesterday.
Or the crumbling infrastructure,
that anyone who drives, or flies,
or many other activities, can see.
It would be very nice to see
the next stimulus package
be one in which we're making investments
rather than just trying
to prop up the consumption
of the American consumer.
And lastly, we haven't
heard much about it,
because it has been the third rail,
it still is the third rail,
but entitlement problems.
Medicare, medicaid, and social security
continue to be a very
politically challenging activity.
That does not mean that they
have magically resolved themselves,
while we were busy not talking about them.
The demographic change that's
underway in the country,
every year brings one more cohort
of our more senior workers
across this threshold,
which is at or near retirement.
And thus, in a sense,
exempted from sharing
in the fiscal burden of
putting these programs
on a more sound footing.
Everyone who works at Dartmouth got,
over the last couple of weeks, the news
that the cost of health insurance
has gone up for us at a rate that
is more than the rate of inflation.
Those problems about the costs
of providing healthcare,
those affect medicare
like they affect healthcare
elsewhere in the economy.
And so that's a problem,
and in order to know
whether we're on track,
we're going to have to
resume those discussions, perhaps
with a very different tone
on them but we're going to have
to resolve them in short order.
Or at least begin to
have those conversations.
And with that I will end,
I will extend my thanks
to my faculty panelists,
and we will open up
the floor for questions.
Since we're recording this, please wait
for the microphone to get to you.
And then ask your question
of any of the panelists.
I'll ask the panelists to come up here,
so it's easy to do that.
(applause)
Thanks very much.
- [Woman] Please step up to the microphone
when you answer a question, okay?
- Okay, we'll see how this part works.
(laughter)
- [Monitor] First question?
- [Man] Can you hear me okay?
I was sort of anxiously awaiting
any discussion of housing, housing played
obviously a key element in getting
us into the situation we have.
And there was a lot of discussion
that seemed to peter
out on how you, quote,
solve the problem and I just wondered
if any of you think that will be
an important ingredient in either
a stimulus package or a
new legislation proposal
from the administration, and if so,
how are they going to structure it?
- I guess that was me.
Yeah I don't think that there's been
enough progress made in the thinking
of either campaign or anybody
inside the beltway or out,
as to what single thing
the government could do
that would avoid the
heavy transactions costs
of renegotiating all of these mortgages
if they are not to go into foreclosure.
And so I don't know that the election
tells us much about that, we will continue
to see declines in house prices.
And we will continue to see more pressure
on financial institutions to now become
owners as opposed to financiers.
I don't think there is an answer
that would could affirmatively state.
This is what's coming, I think
we're going to continue learning.
- [Man] At the risk of coming back
to the same question I
asked you the last time.
I didn't think that was the right forum,
but we're clearly getting evidence
that there's a flight from the dollar.
You're clearly getting
evidence that long rates,
both investment grade bonds
and the government bonds themselves,
are increasing in rate,
mortgage rates have increased.
There's clearly a great
fear about inflation.
I know the last time you felt that
was something that short rates
and some of the other indicators
said was not going to be a problem.
But the short rates are really
a reflection of the flight of fear.
Everybody running at the treasury bills.
Can you give me another
holler on this subject?
I don't see how you spend all this money,
print all this money, and we still stay
away from a real inflation danger.
- Yeah, as I recall our last conversation,
what we could assert was
that by the Fed's actions
in pushing the fed funds rate so low,
it was clear that they were not
particularly worried about inflation.
I think at that time I shared my fear
that this is eventually, you know,
the last straw in any country trying
to get a hold of it's
financial problems of this sort
is to simply monetize its debt.
And I don't think we're
out of the woods on that.
I just don't really have a glide path
to describe what will happen between now
and the moment that that could begin.
That would tell you whether we're
on the track to see that.
I think inflation does
remain that sort of a risk.
I'd like to see what the
decline in oil prices
is going to mean, whether
that could be sustained
over the course of a year, that'd be
the next indicator I'd look at.
- [Man] I'm wondering about how easy
it might be for Obama
to get his initiatives
passed in congress and
whether 60 really would
make a huge difference, or regardless,
whether it's 56, 57 democrats, 58,
will congress give him
a really large window,
not a large window, but a window at least
in the beginning to sort
of pass his initiatives
to see if they work.
- That one sounds like it's for me.
I think we're all conditioned
to think about the 100 days.
And Annelise's references to Roosevelt
simply accentuate that.
Many people who think
that the 100 days mantra
is a trap for presidents,
and the most important thing
for Obama is to have a few priorities
and follow through on them, so I think
the important thing for him to do
is to consult with congress.
And anticipate, of these three priorities,
which one has the greatest likelihood
of passing easily and quickly?
So a lot of whether congress
gives him what he wants
depends on whether he's
able to frame priorities
in a way that congress wants to go along.
A famous presidential scholar said
the power of the presidency
is the power to persuade.
And what presidents are really doing
is engaging in extensive bargaining
about what the priorities of
the government are going to be.
So it's not, we came to
think of the relationship
between congress and the presidency,
during the Bush years, as a rubber stamp.
President comes up with something,
he goes to Capital Hill,
he actually doesn't go
to Capital Hill, he brings
Capital Hill, a few people,
up to him and says here's
what we're doing, stamp it.
Congress isn't going to go for that.
Even though they've got the majority,
and they want to support their president,
but as I indicated in my opening remarks
there are a lot of
people who are frustrated
who want to exercise power they want
to reclaim some of the prerogative.
So Obama will get what
he wants from congress,
if he frames it in a way that his interest
and their interest coincide.
- In the United States auto industry,
among other places, I think that
it will happen in academia, it will happen
in national labs, it will happen in large
and maybe, perhaps
especially small companies.
Just going back to the auto case,
in the Clinton administration,
who actually was rather ineffectual
at moving forward aggressive energy R&D,
they did have a several
hundred million dollar program
entitled the partnership for,
it was alternately called
next or new generation vehicles,
which targeted making a
Ford Taurus equivalent
that got 70 miles per gallon,
that program was promptly
scuttled at the end of the
Clinton administration.
And one can only wonder
how much better off
the auto industry would
be had it continued.
So I think that the
research infrastructure
with respect to R&D specifically,
and all of its components, can absorb
something of the size
that's being proposed.
And that size may be diminished somewhat
from imagination to implementation.
Which will make the absorption easier.
- [Man] I'd like to ask a question,
this might require two
professors to answer.
One possibly being you again, so anyway.
I'm really curious to know about how long
it would take to implement
and get fully working
a system of cabin trade on emissions.
This is something that
both possible presidents
McCain and Obama endorsed,
and it is something
that we literally cannot
wait much longer on
if we are to avoid the largest
consequences of climate change.
That said, I'd like to consider
the economic principle as well,
that we would effectively if
we just restrained ourselves
in our country we would
export our pollution
to China and India where they won't
have the the same cabin trade standards.
So how do we made this economically viable
on the international sense,
and how do we implement it
how would you see Obama
doing that, quickly?
- Yikes!
(laughter)
The equity issues and extent
of international obligations
that are going to be necessary
to be negotiated are
extremely challenging.
And that's one thing going back
to your how long question,
I think there's going
to be, I would guess,
18 months worth of very
difficult negotiation
with an uncertain outcome.
On the other hand, John Holdren
who was on campus briefly
about a year and a half ago,
and is about as knowledgeable
a person as they come
on this question, expressed the opinion
that when the United States
indicates sincere willingness
to act, that they want to be
part of this sort of thing.
And it was his opinion
that the recalcitrance
of the US to this has
been the limiting factor
and so we will see, to some extent,
the release of a dam.
What becomes the limiting factor then,
and how well we will do, my crystal ball
is frankly not clear
and good enough to say.
I recognize the challenges
implicit in your question.
I think everybody recognizes,
and nobody knows quite how
it's going to come out.
But for those who hope
to see the mechanisms
to give an economic value to carbon,
I think the thought that there will be
a more universal perception of urgency
is what they're banking on.
- [Man] If all of the 700
or 750 billion dollars
in the bailout package
haven't been committed
by January 20th, can we expect
to see any change in how the
balance will be expended?
- That's a good question, I think that
there were not a lot of supporters
of the troubled asset relief program
as it was originally presented
by the treasury secretary
among the democrats.
I think they were reluctantly going along
because that's what had
been proposed to them.
And not going along was the worst thing
that the leadership could
have done in that case.
When the UK decided that they would make
direct capital injections
into their banks,
then it became pretty clear that we
would do the same thing here, and that met
with more approval up and
down the electoral spectrum.
So I suspect that if there
are any of those purchases
of troubled assets directly
off the balance sheet
that are still going to be done even
in these last couple of
months, that those will stop.
And to the extent that any money
is being invested, it will be in the form
of these preferred equity shares.
Hopefully with more restrictions
on payments to common equity holders.
And hopefully at some slightly
higher rates of interest.
So it doesn't have to be such a subsidy.
- [Man] On the issue of US foreign policy,
it seems that the international community
is much more enthused
about a President Obama
than a President McCain,
and I was wondering
to what extent, if any, that would affect
the Obama administration's ability
to achieve its foreign policy objectives.
Because it seems to me that
the Obama and McCain campaigns
differed more on means than on ends
when it came to US
foreign policy objectives.
- It's a good question, Brian.
My sense is that the differences
between the Obama administration
and the Bush administration,
in their willingness
and their desire for
cooperation with allies
is a degree of magnitude rather than,
it's not a dichotomous
issue, it's not that
the Bush administration was disinterested
in having alliance support
and having allies sign on
to missions, it was that
on a series of issues
the Bush administration was so certain
about what they wanted to achieve
that they would rather
do it with the support
and assistance of allies and were willing
to do it without it when necessary.
My sense is the same is true
of the Obama administration,
that the difference is not that as much
as the fact that Obama administration
probably has fewer
objectives that will run
squarely against the interests
and desires of the allies.
So, when issues come up and principally
I'm thinking about Iran,
where the Obama administration
might have to make very,
very difficult decisions
about what to do if they
finally come to the conclusion
that negotiations with
the Europeans and Iran,
if it is the case that those
come to no useful fruition,
the Obama administration is going to come
to a conclusion about what it wants to do.
And it's made some tough
talk in the campaign
about and Iranian nuclear
program being unacceptable.
At other times people
who might have positions
in the Obama administration
have taken a position
which, frankly, I support, which says that
a nuclear-armed Iran is highly undesirable
but acceptable because we can deter them.
That's a position I support,
I ultimately don't know
because you've heard both things
from people who are likely to be close
to this administration,
what they will decide.
If they decide to use military force,
I wouldn't be surprised if they have
a very small coalition of the willing.
So at the end of the day I'd say,
I think the difference in
how both administrations
are likely to approach allies
is a little bit smaller
than it's actually often portrayed to be.
Because both would love to have allies
sign on to make missions they want to do.
There still will be some
issues where we might,
we the Obama administration, not me,
the Obama administration
might differ strongly
from the preferences of allies.
And I think in those circumstances,
the Obama administration will
do what they pledged to do,
which was to put their perceptions
of US national interest and
US national security first.
And that might lead to some of the same
divisions that you see.
- [Moderator] We'll
take one more question.
- [Woman] A comment and a question
for professor Lynd, you indicated that
auto companies might well be worked into
an Apollo program on energy,
and I just wanted to comment
that during World War
II, automobile companies
switched to making airplanes
and they did it very fast too.
But also I wondered why
have US automobile companies
been so reluctant to make any increases,
mandatory increases,
in MPG when they should
shoot for something much bigger.
I mean, they've been so
teensy and so incremental
since 2000 I've been driving a car
that gets 50, 60, 70 miles per gallon.
And they've known how to make these cars
for many, many years, now why don't they
mandate a big change?
- Were you asking at the end why don't
the automakers mandate a big change?
- Why doesn't our congress
mandate a big change?
- Well this has been a battleground issue
for about 20 years, and I saw it up close
when I served on a
policy advisory committee
to the Clinton administration
in '94 and '95.
We had 30 stakeholders,
including 5 car companies.
We thought we were going to get somewhere
after a yearlong process, and at the end
the five car companies
went out of the room.
They caucused, they came
back in and they said
we probably haven't made
our position clear enough.
Any policy that has the four
consecutive capital letters
CAFE, or any functional
equivalent attached
to a numerical value of
greenhouse gas emissions,
even it's in an appendix,
we will not sign.
Whereupon the environmentalists
walked out of the room.
Literally, and so all I'm
saying is that this is,
goes long and deep, the auto industry's
traditional arguments have been twofold.
One has been based on customer demand.
That they have, this is not
their chief argument anymore,
but as far as how they got here.
Has been that they don't see that they,
they believed they could maintain demand
for larger, less fuel-efficient vehicles.
And the second one has been
based on competitiveness.
They basically said look, our market share
is going to be in the less
fuel-efficient vehicles.
Now recently none other than the chairmain
of General Motors said the trend towards
more efficient, smaller
vehicles is, quote, permanent.
So I don't think there is this
element of denying reality.
There's also a lot of
desperate circumstances
in the auto industry that
have nothing do with,
at least nothing
immediately to do with this.
They have to deal with
other considerations.
So there is the obviously potential
for some form of federal
assistance with strings attached.
How that will play out is not quite clear,
but I mean, the US auto industry
has never seen it, has
really clearly perceived it
to not be in their competitive interest
to see mileage standards
aggressively raised.
And they know that's
where the world's going,
I think they'd like to get
some help to get there.
(applause)