New Order

Rahm Emanuel, image from standupforamerica

Tonight is Barack Obama’s State of the Union address. Let’s hope it’s more exciting than Steve Job’s iPad announcement and I’m sure many Dems. hope it elicits less ridicule.

The WSJ has an even article on Rahm Emanuel, the White House Chief of Staff, about how he’s taking heat from the left.

“The friction was laid bare in August when Mr. Emanuel showed up at a weekly strategy session featuring liberal groups and White House aides. Some attendees said they were planning to air ads attacking conservative Democrats who were balking at Mr. Obama’s health-care overhaul.

‘F—ing retarded,’ Mr. Emanuel scolded the group, according to several participants. He warned them not to alienate lawmakers whose votes would be needed on health care and other top legislative items.”

From a strategic perspective, I feel both the Republicans and Democrats are rudderless. The Republicans have taken potshots at Obama and the Democrats, but don’t have a unifying vision. The Democrats led by Obama are taking heat for not addressing the problems-at-hand head-on and the left wing of the party feels the administration is compromising ideology.

A year ago, Obama was ushered in on a mandate of change. Emanuel is a Clintonian centrist and deals in a raw pragmatism in the service of getting things done. So, while many in the Democratic party in wake of the loss of Ted Kennedy’s old Senate seat in Massachusetts {hey, I spelled it right, unlike Coakley} think the party should go more centrist. Strategically, the Obama administration needs to address the concerns of the people in effective ways. While Emanuel’s centrist pragmatism may seem like a reasonable way to push policies through, it’s passive. Love him or hate him, George W. Bush was good at changing the game with the help of Karl Rove. Jon Stewart for weeks has lambasted the Dems. for focusing so much on retaining a filibuster-proof Senate majority, something W never had. While it could be argued that this is because of many centrist constituencies that Senators are beholden to, I see a dearth of effective communication and policies that people can get behind.

The lack of support on health care reform is a perfect storm. The right has framed it as a government interventionist boondoggle and the left have failed to communicate what they perceive the stakes to be. I see “centrist pragmatism” as resulting in the proposed healthcare legislation, which is overly complex, hard to understand, and reeks of compromise.  As we’ll see below, healthcare is now the “wrong” issue, no matter how hard politicians try to spin it as being tied to the economy.

Rahm’s centrism is wrongheaded, but blindly following a hard left agenda would also be a mistake. I think the Obama administration needs to look at the priorities of the people and the challenge will be to craft policy addressing these and communicating how the policy will effect change.

What are the public’s priorities?  According to a Pew Research study conducted earlier in the month, overall, the economy is looming large as a concern::

Terrorism is third, with the Christmas airline bombing attempt fresh in people’s minds. The next three are interesting with possible drivers:: social security {decimated retirement plans and obliterated pensions}, education {rising costs}, and Medicare {rising pharmaceutical costs}. Breaking things down by ideological lines, the following pattern emerges::

Republican % Democrat % Independents %
Defending the US against terrorism 89% Improving job situation 90% Strengthening nation’s economy 82%
Strengthening nation’s economy 81% Strengthening nation’s economy 87% Improving job situation 77%
Improving job situation 80% Defending the US against terrorism 80% Defending the US against terrorism 76%
Strengthening the military 64% Improving educational system 75% Securing Social Security 66%
Securing Social Security 62% Securing Medicare 72% Improving educational system 64%

Interestingly, what matters to all groups is pretty similar. Healthcare is only in the top 5 for Democrats, painting the issue as partisan, given its divisiveness.

What to do? All roads lead to the economy and while the deficit is a concern, strategically, I see populist Keynesian measures that put people to work as a way to win over independents, appeal to the Democratic base, and would be hard for Republicans to fight.

Twitterversion:: Centrist pragmatist R. Emanuel under fire from left-Democrats, but what about people’s priorities? Insights fr. Pew data. http://url.ie/4sen  @Prof_K

green_wallet

Notes from north of 49ºN

In the Twittersphere, this Ottawa Citizen article on green stimulus has been going around, based on a forthcoming UN report.  While 15% of the $3.1T in global stimulus investments are green, Canada, under the leadership of Prime Minister Stephen Harper is lagging behind {See data below the jump}, barely in the top 10 in amount spent and percentage of green stimulus.  South Korea is leading the way, in terms of both amount spent and percent of stimulus spending, while the US is third in total green stimulus spending.  Not surprising, given news reports up in Canada::

“A common theme, though, appears to be a series of delays in approvals and disbursements, with less than one-quarter likely to be spent in 2009.”

The UN report recommends that G20 countries increase the rates of investments in green infrastructure and stimulus.  Five key areas for focus were identified::

  1. energy efficiency in old and new buildings
  2. renewable energy technologies such as wind power
  3. sustainable transport technologies such as hybrid vehicles or high-speed rail
  4. global ecological infrastructure such as forests
  5. sustainable agriculture

I haven’t crunched any numbers, but looking at the list, I think there’s an interaction effect with policy support of green initiatives and clusterings of firms with green innovation strategies.  One of the questions I had is whether, thus far, is the idea that “green” is viewed as a luxury.  While imperfect, I wanted to see the relationship between richer nations {higher GDP per capita} and investment in green stimulus {per capita}.  I crunched these numbers (below the jump, with the GDP data taken from the IMF 2008 data}.  While there are not enough data points to make strong inferences about the data relationship, the following graph tells a story.  South Korea skews the curve::

Green.One

Taking the US & South Korea out, increases in green stimulus increases at a decreasing rate with respect to higher levels of GDP::

OutliersOut

So, looking at the data, South Korea and China are investing in green technologies, despite having lower average national incomes.  It would be interesting to monitor which technologies are being invested in the various countries and track the outcomes.  Canada should heed what’s going on, as they try to shift towards innovation and away from natural resource extraction.

Twitterversion:: #PMHarper’s #Canada lagging #G20 in green stimulus innov. spendng. Richer tend2 spend+, but China& S.Korea making a play. http://url.ie/2ihx @Prof_K

Song:: Everythings Gone Green (Edit) – New Order

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