The Great Debate

There may be no better illustration of President Barack Obama’s appeal than his ability to hold onto voters — minorities, single moms and young people — who have fared the worst under his presidency. The big question as we approach Election Day may be whether these constituencies, having been mauled by the economy, will show up in sufficient numbers to ensure Obama’s re-election.

Welcome to the politics of disappointment. Much has been said about the problems facing the middle class, which has been losing out since the 1970s. But the biggest recent losers have been groups like African-Americans and Latinos. In the current economic downturn, middle class African-Americans have lost virtually all the gains they made over the past 30 years, according to the National Urban League. Median annual household income for blacks declined by more than 11 percent from June 2009 to June 2012, according to the Census bureau. That’s twice the loss suffered by whites.

African-Americans and Latinos have also borne much of the pain from the housing downturn. Latinos suffered the biggest loss of net worth in the recession — largely based on decline in housing values — of any ethnic group, according to the Census. Weakness in the housing market, now only beginning to recover, also hurt many Latino workers, who represent a large part of the nation’s construction industry labor force.

Latinos have been doing so poorly under Obama’s tepid recovery that, by some estimates, more are headed back to Mexico than coming here. Many voters who might make a difference in November could be in Michoacán or Oaxaca rather than Michigan or Ohio.

As for the young, even those with college education, they still suffer high unemployment rates and constricted job opportunities. More than 15 percent of all age 18- to 24-year-old workers are unemployed.

America’s second-favorite holiday is upon us, and once again the forces of intolerance are demanding that hardworking people give up their most hallowed traditions.

In the cities, urban elitists at the finer preschool programs issue bans on fun costumes because of anti-corporate and gender-neutral policies. Around the rest of the country, religious zealots turn Halloween parties into bloodless “fall festivals” where even our ancient rituals of harvest are prohibited.

A school district in Pennsylvania killed the traditional October celebrations because of “controversy surrounding the religious connotations of Halloween.” A suburban Seattle elementary school stomped the hearts of its littlest goblins by canceling the usual Oct 31 costume day because unnamed religious groups were “offended by Halloween.” From coast to coast, our nation’s biggest celebration is under attack by those who would strip it of ghosts and goblins.

There is no Election Day in America anymore.

By failing to understand this fact, much of today’s political chatter is based on an obsolete view of the presidential race.

Until recently, of course, elections did occur on a single day. Nine out of 10 people cast their votes on the first Tuesday in November 2000. Now, one out of three Americans vote early, with even higher turnout in the decisive swing states. In 2008, a majority of citizens voted early in 10 states. Those trends continue today.

This is a fairly sudden and radical shift in how we pick our president.

Early voting shortens the race, locking in voter preferences long before big events, like the debates, are even finished. It also reduces the effects of late-breaking developments, from last-ditch October Surprises to unpredictable incidents, such as the video that Osama bin Laden released days before the 2004 election.

Spikes in grain prices are regularly blamed on oil shocks, droughts and emerging markets’ hunger for meat. The real culprit in the three bubbles-and-busts of the last five years, however, isn’t the weather. It’s financial speculation.

The Midwest drought this summer, the worst in a half-century, produced a bumper crop of profits for derivatives traders like Chris Mahoney, the director of agricultural products for Glencore, the world’s largest commodities trading firm. Mahoney noted during one August conference call that tight grain supplies and the resulting arbitrage opportunities “should be good for Glencore.”

They’ve been a disaster, however, for the world’s poor.

More than 40 percent of grain futures can now be traced to financial institutions, which nearly doubled their commodity bets over the last five years — from $65 billion to $126 billion.

George McGovern’s death Sunday marked the departure of a remarkably influential figure in American national politics. Though remembered largely for his landslide defeat to Richard M. Nixon in the 1972 presidential race, McGovern succeeded in reshaping the U.S. political landscape for the next 40 years.

His losing campaign forged the modern political party. Just as Barry M. Goldwater’s crushing defeat in 1964 mobilized a generation of conservative activists and transformed the GOP, McGovern’s insurgency led to the modern Democratic Party of Bill Clinton and Barack Obama. For the South Dakotan senator bequeathed to his party a reconstituted style of politics, a cadre of activists and an new path to electoral victory.

McGovern’s star-crossed campaign opened up the entire U.S. political process—he appointed, for example, the first national party chairwoman. More important though, he created a template for challenging the party establishment, one emulated frequently over the next 40 years — by the Republican right as well as the Democratic left.

Some of the most acrimonious moments of Monday’s presidential debate occurred during the candidates’ discussions of China, with Barack Obama attacking Mitt Romney for his investments in Chinese companies, and Romney demanding that we adopt a tougher line on the Chinese counterfeiting of American products. Romney was particularly shocked to discover that counterfeit valves –bearing fake serial numbers – were “being sold into our market and around the world” as though they’d been made by the U.S. competitor. “This can’t go on,” he insisted, as if this were a fraud being perpetrated for the first time during Obama’s presidency. While Romney’s outrage may make for good politics, history shows that Chinese counterfeiting is almost as old as America itself.

The first American ship to travel to China was the Empress of China, which sailed from New York to Canton (modern-day Guangzhou) in 1784, returning to New York in May 1785 with a cargo of tea, cotton fabric and porcelain. It earned its backers $30,000, a 25 percent return on their investment.

As word of the Empress of China’s successful trip spread, a growing number of American merchants headed out to get their piece of the proverbial China pie. Between 1784, when the Empress of China blazed the trail, and the end of the War of 1812, almost 300 American ships made 618 voyages to Canton.

Erskine Bowles and former Senator Alan Simpson deserve some kind of medal for creating the widely held perception that their plan for reducing the deficit and debt is anything other than a bad proposal.

It has been nearly two years since the commission they chaired, which I served on, finished its work. The duo’s proposal has attained almost mythical status in Washington as the epitome of what a “grand bargain” should look like.

But everyone look again. They will discover that it is far less than meets the eye.

Editor’s note: This piece was originally written for Tomorrow Magazine, whose first issue comes out this month. The article is being republished with permission.

On May 20, 2011, John Delaney awoke 550 meters from the summit of Mount Everest. Delaney, who founded Intrade, a website for those who love to predict the future, had been trying to get to the top of the world for years. His company invited users to bet on the news: Customers would calculate probabilities, assess risk, make a wager. On Everest, Delaney was doing much the same.

This close to the summit, he was on an area of the mountain known as the death zone, where the atmosphere is about three times thinner than at sea level. Cerebral and pulmonary edemas—the leaking of fluid to the brain and heart—are increasingly likely at that altitude. Still, between 1921 and 2006, just 94 people died at this stage of the climb—above 8,000 meters, but before the summit. Altogether, Everest claimed 192 climbers’ lives in that 86-year span, 1.3 percent of those who attempted a climb. The odds that Delaney would succumb to the mountain were low.

The Dodd-Frank Act to re-regulate the big banks was intentionally tough. It was passed in the wake of the 2008-2009 financial crash to end cowboy banking; require far more capital  and much less leverage, and rein in the trading-desk geniuses who pumped up serial bubbles. Since Congress is a poor forum for crafting such a complex statute, the details were left to the expert regulatory agencies.

The big banks pay lip-service to the goals of Dodd-Frank — but they’re mounting bitter, rearguard actions in federal courts to block meaningful constraints and regulations on procedural and other grounds. This is an ominous turn of events, since these banks have the legal firepower to overwhelm budget-constrained U.S. regulatory agencies.

While Dodd-Frank is aimed at preventing another cycle of bubble-and-bust, shrinking the financial sector is crucial for other reasons. One is a mass of evidence demonstrating that hyper-financialized economies have lower growth. Another is the appalling ethical record of large financial companies. The chance of making huge paydays by risking other people’s money, it seems, can sometimes derange moral compasses.

Foreign policy attempted to take center stage at the presidential debate Monday evening but failed resoundingly. For the candidates agreed to agree on a number of key issues — the timeline for ending America’s longest war, support for Israel, and the importance of diplomacy and sanctions in Iran. Nation-building at home trumped nation-building abroad, and small business won as many mentions from the nominees as the death of Osama bin Laden. It was no accident that the contenders talked about teachers more than Libya.

What both President Barack Obama and his GOP challenger Mitt Romney made clear to a nation exhausted by one decade of two bloody wars: The era of big military interventions is over. Romney, who earlier in the campaign sounded poised to embrace a more activist foreign policy, embraced a loudly centrist worldview that eschewed saber-rattling in favor of promoting entrepreneurship and civil society.

“Peaceful” was the night’s catchphrase for Romney, who told the president, “we can’t kill our way out of this mess.” This key word is likely to resonate with the women voters his campaign now sees as both critical to victory and open to his more centrist message.