Economy

Former SEC Chairman Shares Insights On The Economy

Francie Grace — Wed, 19 Nov 2008 13:46:33 -0500

The year ahead, says William Donaldson, is likely to be another tough one, but it's also likely that entrepreneurs will find opportunities even in the current economic climate. Speaking at the Maxwell School/Public Agenda Policy Breakfast, the former top boss of both the SEC and the NYSE zeroed in on Wall Street's varied history on regulation as he discussed measures that could be of use today. Donaldson, an advisor on Barack Obama's transition team, cautioned that regulatory reforms, to be meaningful, must be done on a global scale. Click here to read more about his remarks.

Could an Economic Downturn Be the Ticket to Health Care Reform?

Jenny Choi — Tue, 18 Nov 2008 16:25:53 -0500

An analysis in the Los Angeles Times today posits what could prove to be a tipping point for the health care crisis: the current economic slump. Senate Finance Committee Chairman Max Baucus (D-Mont.) announced his proposal last week for a universal health care package, and Senator Ted Kennedy (D-Mass.), a long-time proponent of expanded coverage, says he plans to advance his own universal health care plan next week. But how can we possibly be talking about expanding coverage at the same time that the government has a ballooning deficit?

Health care costs in the current economic climate have no doubt placed an enormous added strain on the uninsured and the newly unemployed, not to mention employers, health care providers and the government. But many believe that health care and the economy are inextricably linked -- that, in essence, health care is an economic problem. Last week, the New America Foundation released a report, "The Cost of Doing Nothing," which argues that waiting to reform the system, while costs continue to skyrocket, comes with a price. By their calculations, the "economic cost of failure," the billions of dollars in lost productivity for those without coverage, is actually less cost-effective than covering every American.

Americans, on the whole, agree that our current health care system has major flaws and is in need of change, but the degree of reform is less unanimous. Public support for a universal health care plan varies based on survey question wording. Two-thirds believe it is the federal government's responsibility to ensure that all American have health coverage, but they are less galvanized about requiring it by law. Still, the consensus is that lowering the cost of health care and extending it to more people are the most important issues for the president and Congress to deal with.

More on public attitudes about various health care issues can be found in our red flags section, and be sure to visit the health care guide in our Citizen's Survival Kit for the bigger picture: key facts and statistics, plus a discussion guide that offers three approaches to the problem, with pros, cons and specific strategies for each.

The View From Here: One Of Wall Street's Own
Looks At Past Mistakes, Present Opportunities

Francie Grace — Tue, 18 Nov 2008 12:13:20 -0500

By Meagan Murray

William H. Donaldson (right), a member of Barack Obama's transition team and former top boss at both the SEC and the NYSE, shares his insights on Wall Street, regulation and the bailout, in a conversation with National Public Radio's Robert Siegel.

The coming year, says William H. Donaldson, is most likely going to be a rough one. "But I have high hopes that we will have pulled ourselves out - that the world will have pulled itself out – of this in four years."

The economic forecast comes from one of Wall Street's own - a former chairman of the Securities and Exchange Commission whose many credentials in finance and government include a stint as president of the New York Stock Exchange and his current status as an economic advisor on President-elect Barack Obama's transition team.

Speaking in New York Nov. 17th at the latest installment of the Maxwell School/Public Agenda Policy Breakfast lecture series, Donaldson shared his misgivings about the strategy of trying to stem the slide on Wall Street by having the government use taxpayer funds to buy the banking industry's most loss-mired portfolios.

"The problem with attempting to buy the ‘so-called' toxic assets is, among other things, how you price them," said Donaldson. "If you pay too much, you are subsidizing the banks. If you pay too little, you may destroy the banking system."

The better option, Donaldson stated, is injecting equity capital into the banks to create the capability for lending again.

Known as a stickler for regulation during his time at the SEC, Donaldson sees now as pertinent a time as ever for the government to play a hand in monitoring the banking industry.

"There is some opaqueness as to what demands the government has made on the banking system for putting the money in," he said. "The banks are sitting on that capital and not investing it, not loaning it. That was not the reason they've been re-liquefied. There is not much sunlight in terms of exactly what is going on."

Donaldson continued to say that arguments for continued deregulation, similar to those the New York Times reports are now being advanced by former Texas Senator Phil Gramm, are destructive toward economic repair. Donaldson also believes Gramm's own deregulatory efforts – specifically the Gramm-Leach-Bliley Act of 1999 that allowed commercial and investment banks to consolidate and obviated the Glass-Steagall Act of 1933 (one of the many regulatory forms of legislation passed by Congress during the Depression era) – "let everybody get into everybody else's business." The fallout, he said, resulted in both the SEC and Federal Reserve being held responsible for monitoring the banking sector, which Donaldson claimed "left huge gaps of unregulated business – the most notorious being the mortgage business."

The problem lies in the differences of responsibilities between the two agencies. The SEC, Donaldson said, serves as a police agency for investor protection by ensuring public disclosure and oversight of issued securities. The Federal Reserve, on the other hand, is in charge of making sure the banking system is functioning strongly. The problem, Donaldson says, is there is no overlap or consideration for either bureau.

"Whose jurisdiction is this?" he asked in reference to the fallout of regulating the banking industry. "The Fed is not concerned about the investor; they're concerned about the impact of that business on the system, whereas the SEC is concerned about the investor information," Donaldson said. "Those are two totally different missions… and so there is a conflict."

Asked about the campaign by U.S. automakers to get government help, an issue on the front burner in the lame duck session of Congress, Donaldson was reluctant to back any one approach to the problem. "When you get into the automotive industry, we're dealing with a totally different animal," he said. "We're dealing with a commercial operation and a competitive industry that's competing on a world-wide basis."

An option he said both the automotive companies and government could consider is bankruptcy, wherein the company does not disappear, but winds up being restructured under new management - although American morale, he acknowledged, likely would be dented by a bankruptcy of a landmark corporation such as General Motors.

Another possibility could be a compromise between bankruptcy and a federal bailout plan, in which creditors and stockholders negotiate a plan of reorganization without filing for Chapter 11.

All in all, Donaldson believes the auto industry's woes will be another burden pushed onto the next administration. In his opinion, there is no "silver bullet" regulation that can be immediately put into effect and fix the economy, but he does suggest that the credit market should open up again to consumers, both at home and worldwide.

"We're no longer isolated," he said. "We can address some of these regulatory changes… and get our house in order, but it will be meaningless unless we have a global approach - unless we have regulation around the world that is coordinated and basically prevents somebody from fleeing a highly regulated environment to a less regular environment. That's going to be really tough to do… An attempt to get the world coordinated is one of the big challenges going on in the world right now."

Donaldson said that events such as the G-20 meeting held this past weekend in Washington are critical to addressing the need for global cooperation with economic regulation. While principles and guidelines are easy enough to extract from thought, he knows enforcing them worldwide as rules will be a task built from the ground up; something he believes our country has to achieve on its own before we can apply it to the global economy.

In the end, he left the audience with a glimmer of hope for the economy. "Things do change," Donaldson said. "There's an amazing resuscitating – from the ashes rise entrepreneurs – and I think that's going to continue."

To keep informed on the economy and the choices we face as a nation, and to let our leaders know what you want, check out our Citizen's Survival Kit and our Take It To The Next Level console of e-mail addresses for everyone from the president and president-elect on down to your Senators and Congressional representative.

Large majorities of Americans say people taking on more debt than they can afford and banks making risky loans...

Allison Rizzolo — Thu, 13 Nov 2008 11:39:17 -0500

Majorities say the government should step in to address the problems facing financial institutions, but are divided...

Allison Rizzolo — Thu, 13 Nov 2008 11:33:32 -0500

Our Responsibility And Opportunity To Participate In Change

Francie Grace — Tue, 11 Nov 2008 12:02:29 -0500

Now that the election is over, will citizens stay engaged and continue working for the public good, or will they become passive observers and consumers, waiting for the latest set of leaders to come up with solutions to the incredible challenges we face? To make real progress on entrenched, unresolved issues, the public voice that made itself heard during the election cannot afford to be silent. Click here to read Public Agenda President Ruth Wooden's thoughts on what citizens need to do, and to be an informed citizen on the issues, check out our Citizen's Survival Kit.

Voter's Survival Kit: Seven Things You Need to Know About the Economy

Thu, 30 Oct 2008 13:41:11 -0400

By Scott Bittle and Jean Johnson

It's official: the economy shrank in the third quarter, the clearest sign that the global financial crisis isn't confined to Wall Street. When the economy actually gets smaller, we're moved beyond the realm of financial gyrations and started affecting Main Street as well.

Surveys show the economy is by far the most important issue to the voters this year, and given the events of the past six weeks, it'd be amazing if it were otherwise. And the economy is an issue most people can judge by what's going on around them. People know if their own job is safe, what they're paying for gas, what’s happening to their 401K, and whether there are foreclosures in their neighborhood.. The big picture, however, can be hard to follow -- and most candidates talk about the big picture.

The Voter's Survival Kit from Public Agenda is all about getting the basic facts and alternatives sorted out so you can make a better judgment on what politicians are telling you. The politicians, and to some extent the media, tend to focus on the candidates' specific plans and who said what in the last 24 hours. But most voters would also like to get a little perspective on the debate—to be able to weigh what the candidates are saying against what’s really happening to our economy. That’s where the Voter’s Survival Kit can really help out.

So with that in mind, here are 10 key points about the economy to keep in mind as you listen to the candidates. This issue is moving as fast as any problem out there, but these will help keep you keep the big picture in mind. These are adapted and updated from the Voter's Survival Kit :

The United States has the largest, most powerful economy of any single country in the world. Our gross domestic product – the value of all goods and services in the whole country – is more than double that of the next biggest economy, China. And the influence that the United States has on the world economy is huge. As economists like to say, when the U.S. sneezes, the world catches a cold.

Despite its size and power, the U.S. economy faces two separate issues, and political candidates sometimes mix them together. One is how to respond to some specific problems the country is facing right now as part of the global financial crisis – in other words, how to head off a recession or at least make it less painful. The second issue is whether the U.S. economy, over the long term, is doing what most Americans want and expect from it.

Experts worldwide consider the global financial crisis deeply serious, and the consensus is that both the United States and the world in general are headed for a recession. The U.S. economy actually grew in the first six months of 2008, despite high energy prices and the mortgage crisis. That's partly because of the rebate checks the government sent out to goose the economy earlier in the year. But in the third quarter the economy did decline, and economists expect the fourth quarter to be bad as well. As the International Monetary Fund put it, "recovery is not in sight and likely to be gradual when it comes."

It’s important (but uncomfortable) to remember that recessions every once in a while are pretty much an economic fact of life. Since 1970, the U.S. has had five recessions lasting anywhere from six to 16 months. The government can ease the pain of a recession somewhat – maybe by cutting taxes, extending unemployment benefits, or creating new programs to pump cash into the economy – but the government can’t prevent it entirely.

Banks and financial institutions aren’t the only ones who’ve been on a wild and crazy spending spree. Average Americans are borrowing more and saving less, and maybe that trend has finally started to bite us. The level of consumer debt has climbed dramatically over the last three decades, and the rate of individual savings has dropped. The federal government is as addicted to borrowing as everyone else, with the national debt at more than $10 trillion.

And then there’s the cost of oil and gas. Earlier this year, skyrocketing oil prices helped push the economy into this mess, but ironically the global economic downturn is now causing prices to drop. This is basic supply and demand. When the economy slows down, industries make and ship fewer products, and people drive and travel less, so demand for energy falls and prices falls too. In the long run, however, we can't count on prices staying low, because when the economy starts picking up demand will start going up again, and prices will likely follow. And remember, there’s a lot competition for oil than there used to be. China and India are still expanding and will need a lot more energy. In fact, experts are predicting that worldwide demand for energy will increase by 50 percent in the next 20 years. That’s just a recipe for mushrooming energy costs.

Another huge concern for many Americans are some of the long-term trends. Take income, for example. Income for the typical American family has increased slightly in the last three decades, but mainly because there are more families with both husband and wife working. Using figures adjusted for inflation, the median household income in 1979 was a little over $42,000. In 2006, it was about $48,000. But the average hourly wages for workers has actually fallen. In 1970, it was $8.45; in 2006, it was $8.32. Also, the gap between the income of the wealthiest Americans and the poorest Americans has increased since the early 1980s. Since 1975, most increases in household income have gone to Americans in the top 20 percent of households.

On top of this, the world economy is changing very quickly. The economies of China and India are growing very rapidly. The European Union is a friend, but an economic competitor as well. Many jobs can now basically be done anywhere on the globe. On the other hand, growing prosperity in developing countries means more consumers for the kinds of products and services the U.S. provides. The question of the hour is how to respond to the global economic challenge and at the same time build an economy that works well for the vast majority of Americans.

About 12 percent of Americans live below the poverty line, roughly 36 million Americans. That’s five million more than in 2000, but a smaller percentage than 15 years ago – and in the long run, far fewer than in the 1950s.

How do we know all this? Here are our sources:

Sources: Income, Poverty and Health Insurance Coverage in the United States, U.S. Census Bureau; Overview of the U.S. Economy, Bureau of Economic Analysis; Monetary Policy and the Economic Outlook, July 2008, Federal Reserve Board; Bureau of Labor Statistics ; World Energy Outlook 2007,, International Energy Agency; World Economic Outlook, October 2008, International Monetary Fund; NABE Outlook, October 2008, National Association of Business Economists; Business Cycle Expansions and Contractions, National Bureau of Economic Research

Bush Pushes for Sustained Commitment to Foreign Aid

Jenny Choi — Wed, 22 Oct 2008 15:30:01 -0400

President Bush urged against curtailing U.S. aid to foreign nations at a White House summit yesterday on global development. He spoke directly to issues of America's current economic crisis, national security and moral authority in pushing for a sustained commitment to impoverished nations. Secretary of State Condoleezza Rice echoed his statements, saying: "Some will ask the inevitable question in these troubled times: 'How can we afford it?' I would ask instead, 'How can we not afford it?' "

A critical point to make here is that U.S. spending on foreign aid remains roughly one percent of the total federal budget. So while federal spending overall has proved to be a major sticking point for both presidential campaigns in the current climate, John McCain and Barack Obama have both said the current economic downturn would not have an impact on their plans for foreign assistance.

Our Confidence in Foreign Policy Index has indicated that the public generally favors global development. In fact, majorities consider helping other countries struck by natural disasters (73 percent), cooperating with other countries on the environment and the spread of disease (75 percent), and helping countries develop clean water supplies (74 percent) all "very important" foreign policy goals. Longer-term projects, like helping people in poor countries to get an education (59 percent) or helping countries move out of poverty (53 percent), rank lower. But on the whole, the public doesn't view these efforts as instrumental national security strategies; in other words, global development simply doesn't rank high as something that Americans think will make them safer.

Be sure to visit our Voter's Survival Kit on the federal budget, the economy and foreign policy for information on these key election issues.

The Third Debate: What Would Joe the Plumber Do?

Scott Bittle — Thu, 16 Oct 2008 13:12:13 -0400

This morning most of the pundits are saying the last presidential debate was sharper in tone but just highlighted the well-established differences between Sen. McCain and Sen. Obama in substance. When it comes to the issues, the main innovation was the laser-like focus on an Ohio plumber as the stand-in for the electorate. But this debate did get into important questions that have been underexamined so far, like education and abortion.

So, with full knowledge of the irony involved, I'm going to repeat my defense of repetition: all of the talking points from Sen. McCain and Sen. Obama are old news to those who've been following this long, long campaign. But for the large number of voters who are only paying casual attention, repeating the basic points is important. These fundamental arguments about policy often get buried under a pile of media coverage of tactical decisions. By the time a campaign reaches the final weeks, everyone in the media assumes the public has actually been reading and remembering all the stories they've filed on this stuff over the past year and a half. And that's a bad assumption.

There are some things the candidates didn't say (click here for video of the debate along with our frame-by-frame comments) in their final appearance together and there are some key facts that voters need to know. The election's less than three weeks away, and if you're looking to get up to speed on the problems facing the country, have a look at our Voter's Survival Kit.

Some key points:

On the economy, both candidates continue to do something that is quite frustrating, which is mixing up the short-term problem – how we deal with the current financial crisis and looming recession – with how we deal with creating a sound economy in the long run.

In all three debates, the moderators have done their best to pin the two men down on fiscal responsibility, but none have succeeded. The fact is that the next president will be facing an extremely constrained budget, and will have to govern accordingly. Money’s going to be tight.

Here’s something Obama and McCain agree on: that the United States can eliminate some sources of foreign oil in 10 years. Note that neither one endorses complete energy independence, and most experts would agree that can’t be done, at least not anytime soon. Even eliminating imports from the Middle East and Venezuela, which both candidates endorse, would be a challenge. Those regions supply about one-quarter of U.S. oil imports.

The candidates had quite a lot to say about trade, which is one of the classic cases where leaders have very different views than the public. Most economists say global trade is a good thing, but the American public isn’t so sure. In Public Agenda’s Confidence in U.S. Foreign Policy Index, we found huge numbers of Americans (41 percent) aren’t sure whether the U.S. or foreign countries benefit more from trade. About as many (42 percent) say other countries benefit more, and only 14 percent think the U.S. benefits more.

We heard a little about education in this debate, including math and science education, which hasn't gotten much attention in this campaign. Education and business leaders are deeply worried about math and science education, but our research shows the public hasn’t caught up with them yet. Most parents think the amount of math and science their child gets is about right, which is the last thing most business leaders would say.

UPDATE: Here's our video commentary on the debate:

The Last Debate: What Happens Now and What Happens Next

Scott Bittle — Wed, 15 Oct 2008 10:48:47 -0400

There's a French saying about how "nothing lasts as long as the provisional." That's worth keeping in mind for tonight's final presidential debate between Barack Obama and John McCain. The government's ad hoc response to the global financial crisis has dramatically increased its role in the economy – and one of these two men will inherit that role in a few months. It would be nice to know what they intend to do with it.

Both candidates have put out revised economic plans in the past few days. As you watch the debate, we'd suggest you keep in mind one thing that often gets glossed over: we're facing both short-term and long-term problems with the economy. Politicians often mix these up in their speeches, but you shouldn't, because they're not the same thing.

The short term problem is, of course, how to stem the financial crisis and at least temper the recession that's likely to follow. Everyone agrees that the U.S. government has leaped into the financial markets with both feet to stop the crisis. Everyone also says the latest plan to inject money into major banks, in effect partially nationalizing them, is a short-term response. But nobody knows how long the "short-term" is. That's forgivable to some extent, because Washington is trying everything it can think of to stem a fast-moving crisis. But figuring out how much of this provisional response becomes permanent will fall to the next president, and we deserve to know what these two candidates are thinking.

The long-term problem is how we ensure a good economy, where there are enough jobs to go around, the economy grows, and people have a chance to get ahead. Some of the trends in this area are good – the long-running growth in worker productivity, for example – and some not so good, like the widening gap between rich and poor. We need to get through this crisis, but we also have to work on the fundamentals. It's the difference between what happens now and what happens next.

The government's own financial means are going to be strained. New figures show the deficit has swollen, as anticipated, and the long-term budget picture isn't that great either. So far we've had very little public debate over how we're going to pay for trying to fix the economy. Realistically, that means the government's going to borrow the money, increasing the national debt.

Granted, in the long run the bailouts could actually bring revenue to the government. The mortgage debt and bank assets will be worth something when the government eventually sells them. In the short-term, however, the federal budget will take a financial hit, and the next president will probably want to do more. McCain says he wants to spend another $52.5 billion, mostly for additional tax cuts, while Obama want to spend $60 billion on tax cuts and public works projects to create jobs.

There are clear alternatives here, drastically different visions for the U.S. economy. Are we abandoning the free market? How much government intervention is enough? How much can the government realistically do? This final debate is being portrayed as the last chance to really change the outcome of the race, and the media will also focus on attacks and "gaffes."

But more importantly, it's the last chance voters have to really compare these two candidates on these fundamental economic questions. Our Voter's Survival Kit lays out some of the options available, with the pros and cons of each – including the cons that politicians are generally loathe to admit. We deserve to have answers to these basic questions before voting, because we're going to be living with the answers for years to come.

In the Economic Crisis, an Opportunity for Citizens

Tue, 14 Oct 2008 15:29:14 -0400

You are the taxpayer feeling like you were left holding the bag with the Wall Street bailout. You are the worker cursing the oil companies for high gas prices and feeling like a hostage to your own car and your dream house payments. You are the citizen who wants a bright future for your children and low taxes for your family. This messed-up economy is actually your fault. Here’s why.

If you are like the vast majority of Americans, you haven’t taken the time to really look past the temporary economic conditions to learn about the basic long-term strategies our leaders have proposed for building a healthy economy and haven’t done your part to hold our leaders accountable for articulating a clear and forthright approach to fostering Americans’ economic well-being.

Many of the pundits are already laying the blame for our credit crisis at the feet of borrowers who got in over their heads and whose defaults started the boulder rolling down the hill that has grown into a financial system avalanche of panic and frozen credit. But average citizens are just bit players in that drama. The real reason citizens are to blame for our current financial mess is because most have never taken responsibility for learning about the basic approaches for creating economic well-being for the greatest number of Americans and haven’t forced our nation’s leaders to have a coherent strategy that reflects their priorities.

But the current economic downturn provides an opportunity for normal folks to get up to speed on economic issues and exert some influence on their leaders.

The first thing angry and skeptical citizens should do is take a step back from the talk of “crisis” and put things in perspective. It does look like we’re headed into a serious recession that will adversely affect families across the nation, but after the market shakeout, the United States will still have an economy with strong, innovative companies, healthy financial infrastructure and incomparable assets. Growth and widespread prosperity will return, but we should be more conscientious about the direction in which we’re heading.

Here are three basic approaches to building a strong economy that voters should learn more about:

Approach one: Keep taxes low and government involvement at a minimum so that the free market can work. From this perspective, the free market consistently provides a higher standard of living than any other method and, while difficult recessions come and go, making business as free as possible means the American consumer benefits with lower unemployment, lower prices and wider choices of products.

Approach two: Build from the ground up by providing for the well-being of middle- and working-class Americans. This means investing in government social programs that improve the financial well-being of typical Americans so they have more resources to purchase the products American companies sell by doing things like raising the minimum wage, bolstering unions to raise the wages of ordinary workers, improving the healthcare system so citizens are less vulnerable to personal bankruptcy, revamping our tax system to bring in more revenue from high-net-worth Americans and companies and reduce the tax burden for lower-income workers.

Approach three: Maintain our basic system, but get our federal government’s fiscal house in order and focus government investments on efforts to build “21st century industry” in America. Here, the priority would be to reduce U.S. debt (which would not only reduce the amount of interest we pay on national debt, but would also make more funds available for investment in the markets) and make targeted investments like research and development for high tech and alternative energy companies, and programs to encourage young people to pursue careers in science, technology, engineering and math. Compared to the other two approaches, this one might be described as “tinkering at the edges” or “mending, not ending,” depending on your perspective.

One of these perspectives may appeal to you, angry voter. But these are just very broad approaches that demand more inspection from you. The billions and trillions involved and the complexities of the financial system may have you thinking that it’s all beyond your comprehension, but the core issues are not that different from your own home economics. It’s about not spending beyond one’s means, making wise investments in the future and being clear about the values that guide your choices.

I know, I know, you’re very busy, what with your picking up the kids at hockey practice and gathering round the TV to watch Dancing with the Stars. Luckily for you, there are a bunch of do-gooder organizations making it easy for you with nonpartisan issue guides that function essentially as citizen “cheat sheets.” My own organization has produced an economy issue guide in The Voter's Survival Kit. It’s only 14 pages long and you can probably read it between commercials.

Being angry about the bailout, gas prices and everything else that seems to be going wrong with America’s economy is understandable. In fact, it’s commendable. Get angry! Stand up and say: I’m not going to take it anymore! But if you don’t want to be taken advantage of yet again and want to arm yourself against the political spin of the presidential campaigns, get with the program. Learn the basics about the economy now.

Michael Hamill Remaley is Vice President and Director of Communications for PublicAgenda.org, home of The Voter's Survival Kit

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Bush: We're Intervening To Preserve The Free Market

Jenny Choi — Fri, 10 Oct 2008 11:42:58 -0400

"The government's role will be limited and temporary," said President Bush Tuesday, unveiling details of a plan for the federal government to use $250 billion of taxpayer funds to partially nationalize nine major banks. "These measures are not intended to take over the free market, but, to preserve it." This latest effort to stabilize the banks and the stock markets, including limits on executive compensation and new FDIC guarantees, dramatically highlights the choices facing voters on different approaches to the economy. To learn more, see our Voter's Survival Kit.

At the Town Hall: Time for Real Issues

Scott Bittle — Tue, 07 Oct 2008 14:04:25 -0400

I admit it, I like the town hall-style presidential debates best. Over the years, the big advantage of the town hall debates is that the real people in the audience ask about real issues. We don't have the spectacle we saw during the primaries, where the journalist-moderators spend precious minutes relaying the charges-and-countercharges that the candidates themselves spend more of their time on. The presidential debate tonight will be in the town hall format, and if we’re lucky, the questions will be about things that really matter to voters.

That said, you can sit through a debate and still come out without learning anything about substantive issues. Despite the best efforts of Jim Lehrer and Gwen Ifill, the moderators of the first two debates, most candidates are well trained to answer the question they wish had been asked, rather than the one that was actually asked. At last week's vice presidential debate, if you listened carefully, pretty much all you would have learned about the economy was that Gov. Sarah Palin supported "reform" while Sen. Joseph Biden wanted to help "the middle class." Okay, now what?

There are actual options out there for dealing with the problems facing the country. It would be nice if the candidates took the opportunity to lay them out for the public. Since their record on that is pretty sketchy, Public Agenda has set out key facts and some options in our Voter's Survival Kit, which includes great resources and links on the debates. The kit makes a pretty good cheat sheet to look over before the debate (or right after, when you're wondering, "did that really make sense?")

The economy will almost certainly be Topic A at tonight's debate. If you've only got time for to look at one thing, check out "The Fix We're in Now." The "Get the Facts" section will give you some perspective, too. Another good resource is the Bureau of Economic Analysis' Overview of the Economy page.

The other big topic will likely be taxes and federal spending. Our "Has the Bill Arrived?" guide lays out the basics on that – including a number of things that I'm betting neither candidate is going to acknowledge onstage.

Generally speaking, candidates assume you already know something about the tax system –or that you won't bother to look it up. Numbers get thrown around but nobody every steps back and talks about what the government actually spends and how it raises money. We can save you some time, because a few charts really tell the story. Have a look at our charts on Federal Spending, Federal Revenue, Deficit/Surplus and Top Tax Rates – this will really help clarify what they're talking about. Remember that's the top ("marginal") tax rate, and most people don't reach that level.

Our other guides cover health care, Iraq and foreign policy, Immigration and climate change. Have a look, settle in for the debate – but don't let the candidates slide. They'll be asked specific questions, and you deserve specific answers.

Francie Grace — Tue, 07 Oct 2008 09:52:48 -0400

DEBATES 2008

Campaign 2008's debates are history - but that doesn't mean they're not important. This is the place to check out what was promised, what was proposed, and learn more about the arguments on both sides. The new administration and 111th Congress, even before swearing out their oaths of office, already have full plates: they're going to need a lot of help from us - the citizens - on what path to take on a host of critical public policy issues. Here are some great tools to use when checking back to see what was said in the 2008 debates.

Oct. 15, 2008: Presidential Candidate at Hofstra University in Hempstead, New York

Video of the debate including frame-by-frame commentary by Public Agenda's Scott Bittle, visible simultaneously as you watch the candidates compete for votes on the issues of the economy, health care, and energy independence, as well as a lot of byplay on who said what on the campaign trail. A roundtable discussion moderated by Bob Schieffer of CBS News.

Complete transcript of the debate

Hofstra University's debate site

Oct. 7, 2008: Presidential Candidate Debate at Belmont University in Nashville, Tennessee

Video of the debate including frame-by-frame commentary by Public Agenda's Scott Bittle, visible simultaneously as you watch the candidates square off on the economy, health care, Iraq and Afghanistan.

A town hall meeting-style debate, moderated by Tom Brokaw, with additional questions submitted by citizens participating via the Internet.

Complete transcript of the debate

Belmont University's debate site

Oct. 2, 2008: Vice Presidential Candidate Debate at Washington University in St. Louis, Missouri

Comments by Public Agenda's Scott Bittle on portions of the widely anticipated and viewed showdown between Sen. Joe Biden and Alaska Gov. Sarah Palin, with thoughts on the remaining presidential debates.

The vice presidential candidate debate was moderated by Gwen Ifill of PBS.

Complete transcript of the debate

Washington University in St. Louis' debate site

Sept. 26, 2008: Presidential Candidate Debate at the University of Mississippi in Oxford, Mississippi

BloggingTheDebates.com posting by Public Agenda's Scott Bittle: frame-by-frame comments on portions of the debate, visible simultaneously as you watch the video of the debate which very nearly did not happen, with Sen. John McCain agreeing to the debate with Sen. Barack Obama only about 12 hours before its scheduled beginning. Moderated by Jim Lehrer of PBS.

Complete transcript of the debate

University of Mississippi's debate site

More Great Candidate Debate Resources

Commission on Presidential Debates

This nonprofit nonpartisan organization, which sponsored all the presidential and vice presidential debates since 1988, has a lot for concerned citizens including a look at the 150-year history of the political debates and information on how to hold your own debate on the issues.

Great Moments in Presidential Debate History

Belmont University's Election 2008 lecture series takes you behind the scenes of the presidential debates of the past few decades, with observations from political strategists and commentators who were there.

Take It To The Next Level

Public Agenda's collection of links to the candidates and the positions they endorse, plus the latest news from the campaign trail, information on voter registration, absentee ballots and more.

FacingUp.org

Straight talk about the burgeoning federal budget, why it matters, and what can be done about it.

Election 2008 Countdown Clock, Budget Deficit Clock, and Smash The Spin!

Public Agenda's free widgets to put on your own web site, to link your site visitors to the latest news on the big issues in this critical election.

Get Widgets!

Our gallery of free election widgets from all over, to spread the word to other voters as time runs out to make a choice at the polls on Election Day.

Scholastic.com's Election 2008 Kids Newsroom

Wondering what America's future voters are thinking? This site includes debate coverage by Scholastic's Kid Reporters, as well as an ongoing student vote and many other interactive features.

Here We Go Again

Francie Grace — Wed, 01 Oct 2008 14:18:55 -0400

As Wall Street, President Bush, Congress and the presidential candidates wrangle over how best to calm investors, reassure the credit markets, and stabilize the economy, we can't help noticing a prominent element of the many proposed rescues. Each one, at times in increasing proportion, involves huge hikes in the already staggering federal budget deficit and national debt, which takes its own toll on the economy. While some kind of Wall Street bailout is widely viewed by experts and politicians on both sides of the aisle as a necessary evil to halt a crisis so wide many cities, businesses and individuals are unable to raise needed cash, critics of the bill in its current form have been meeting with William Isaac, an architect of a 1980s savings and loan bailout whose ideas so far haven't involved taxpayer funds.

The ripple effects of the turmoil that began here have governments around the world scrambling to safeguard their most important financial institutions and have led to both calls for an international conference to forge new financial regulations and reform global economic institutions and new questions about U.S. leadership in the financial sector. Even in countries where most citizens are unlikely to follow the stock market or big business news, the echo of recent rocky times in the U.S. is being felt. In Mexico - where money sent home by Mexicans living in the United States is Mexico's second largest source of income, exceeded only by oil revenue – there's been a 19 percent drop in how much cash got sent back to Mexico. No numbers yet on how other Latin American and Caribbean nations are being affected, but according to a Pew Hispanic Center study, the total cash normally received is in the tens of billions, with the impact no longer limited to the countryside or the poor.

In Congress and on Main Street USA, which the candidates have been repeatedly referencing as the battle rages over what to do about the economy, there are important decisions to be made and we strongly recommend that voters consult our nonpartisan Voter's Survival Kit now and before Election Day, to learn more about different approaches to economic health and the escalating federal budget crisis.

Lawmakers Propose Bailout Provision: Curbs on Executive Pay

Jenny Choi — Tue, 23 Sep 2008 12:40:13 -0400

One possible sticking point that's emerged over the Treasury's Wall Street bailout request of $700 billion is the proposal from a group of lawmakers for curbs on what top executives can earn. The alarming fact that heads of Fannie Mae, AIG and others were contractually guaranteed millions of dollars in severance pay has prompted some members of Congress to request such curbs on executive compensation in the bailout bill. Treasury Secretary Henry Paulson has resisted the provision.

Public attitudes are complex on the issue of executive pay. Public Agenda's focus group report on business ethics, A Few Bad Apples?, found that most people weren't actually bothered by high salaries for executives, and some said executives are entitled to their salaries if they oversee a thriving business. In fact, many attributed the reality of high executive compensation to the nature and function of the free market system, and nearly no one begrudged Bill Gates his wealth. But the public did show serious concern with business leaders who enrich themselves while driving their companies into the ground; many expressed outrage at how they could be rewarded with exorbitant salaries or bonuses during times of company struggle and employee cutbacks.

Plugging the Virtues of Fiscal Responsibility

Jenny Choi — Tue, 23 Sep 2008 11:17:27 -0400

Two items of note this week on the economic crisis, from our own Public Agenda staffers:

Scott Bittle and Jean Johnson, authors of Where Does the Money Go?, shed some light in the Huffington Post this week on the proposed $700 billion Wall St. bailout and its implications for the Obama and McCain campaigns. Both presidential camps have said the bailout won't affect their policies, but it's hard not to be skeptical, with a looming $400 billion deficit -- projected by the CBO before the proposed bailout.

Also be sure to check out Forgive Us Our Debts author Andy Yarrow's op-ed piece in the Baltimore Sun -- a pointed primer on the fact that we are all, especially our kids and grandkids, affected by fiscal responsibility.

The Time for Fiscal Truth is Now, Like it Or Not

Scott Bittle — Sun, 21 Sep 2008 14:49:16 -0400

A new study shows that the public is capable of facing facts about the nation's fiscal problems – which is a good thing, because they're probably going to have to take a big bite of a reality sandwich in the coming week.

The Changing Expectations study, conducted by Viewpoint Learning as part of the Facing Up to the Nation's Finances initiative (which includes Public Agenda) covers a lot of territory, but this is probably the key paragraph:

"What we found, in dialogue after dialogue across the country, is that the main obstacle to building public support for the difficult choices we face is not public opposition to tax increases or program cuts, nor is it public lack of interest. The main obstacle is a deeply felt and pervasive mistrust of government."

The unique Facing Up partnership is focused on the long-term problems facing federal finances: the combination of an enormous national debt, changing demographics and out-of-control health care costs that will eventually eat up the federal budget unless something is done. But I don't know that anyone thought the short-term situation would deteriorate as badly as it has over the last couple of weeks. Consider these facts:

Because of the troubled economy, the Congressional Budget Office now projects
a $400 billion deficit next year, and continued deficits for the next 10 years. And for the first time, the CBO projects deficits even if President Bush's tax cuts are allowed to expire in 2010.
This weekend the Bush administration asked Congress to authorize $700 billion over two years to bail out Wall Street by buying up bad mortgage debt. Those mortgage assets are worth something when the government resells them, so if we're lucky the total price tag will be less than that – but some experts warn it could be more. Congress may well add more money to help homeowners, as well as banks.
This is on top of the earlier government bailouts of mortgage giants Fannie Mae and Freddie Mac and insurance company AIG. The mortgage bailout is at least another $25 billion, and maybe a lot more, while AIG will be $85 billion. And if these bailouts go worse than expected, they could push the total bailout bill to $1 trillion.
As part of the bailout, the Bush administration is asking that the national debt limit, the total amount the government is allowed to borrow, be raised to a staggering $11.3 trillion. Our national debt is already past $9.6 trillion, and the government will be borrowing to cover these bailouts.

Just to put some of these numbers in perspective, $700 billion is roughly what the government spent on national defense and Medicaid combined in 2006, and more than double what we spent on Medicare.

Congress will want to act on the plan before it goes on recess this Friday. At this point it looks like there's bipartisan support for action but there's also going to be ferocious debate over the details of a bailout plan, as there should be. And where this much money is at stake, our leaders have to be candid with the public. This is not merely going to shape what happens in the financial markets over the next few months. This is going to shape the course of the next presidential administration and the country for years to come. Whoever the next president is, he's going to find his ability to get things done is limited by our financial problems.

What better moment for candor, both from our current leaders and our presidential candidates? The fact that the public is capable of coping with harsh financial facts should be comforting to our leaders. And the fact that the public considers trust to be a prerequisite for action means that honesty isn't just the best policy, it's the only policy that can work.

Recession, Depression or Just Plain Bad

Scott Bittle — Thu, 18 Sep 2008 13:03:45 -0400

A new survey finds six in ten Americans say the nation's in a recession or a depression – and given the events of the past week, that result is no surprise.

With central banks worldwide trying to stave off the financial crisis, and investors trying to find safe havens for their money, a Gallup poll conducted earlier this week found 61 percent said the economy was either in a recession or a depression. That's up from 45 percent in January. The number who said the country is in a depression nearly doubled, from 12 percent to 23 percent. (The survey was conducted Monday and Tuesday, as the financial crisis escalated).

The anxiety out there on the economy is very real. But when most people answer survey questions about whether we're in a recession, they're answering a technical question with a non-technical response. The old rule-of-thumb is that a recession happens when there are two consecutive quarters in which the economy contracts, although the "official" definition from the National Bureau of Economic Research is more complex. The government's numbers show that despite the mortgage problems and rising energy prices, the economy actually grew in the first six months of 2008.

But few Americans are analyzing this the way an economist would. Essentially, a survey question about recessions or depressions pretty much corresponds to the public's perception of whether the economy is "bad" or "really bad." (The CBS/New York Times poll conducted from Sept. 12th through Sept. 16th put the question in those terms and found 39 percent who said "fairly bad" and 39 percent who said "very bad.")

Broadly speaking, personal experience plays a bigger role in public attitudes on the economy than in some other policy areas. In foreign policy, for example, most people are really dependent on the media for their information – very few will have any personal experience of Afghanistan. With the economy, however, people know whether or not their job is secure, whether houses are selling in their town, whether they can afford to fill up their tank with gas. That experience is just as legitimate as any government statistic, and vital for policymakers to understand.

Public attitudes about the economy have been pretty negative all year. In this particular case, however, you've got to remember that this survey was in the field during wall-to-wall news coverage of what happened to Lehman Brothers and Merrill Lynch. So this snapshot of public anxiety may be more media-driven than usual.

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Here We Go Again

Lawmakers Propose Bailout Provision: Curbs on Executive Pay

Plugging the Virtues of Fiscal Responsibility

The Time for Fiscal Truth is Now, Like it Or Not

Recession, Depression or Just Plain Bad

The View From Here: One Of Wall Street's Own
Looks At Past Mistakes, Present Opportunities