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Think Progress

October 7, 2008

by Faiz Shakir, Amanda Terkel, Satyam Khanna, Matt Corley, Benjamin Armbruster, Ali Frick, and Ryan Powers

ECONOMY

The Page That Won't Turn

According to September polling from Gallup, the percentage of Americans who have "negative" feelings about the economy is now at 81 percent. But Sen. John McCain's (R-AZ) campaign admitted this weekend that it is trying to distract the country from focusing on the nation's economic woes. "We are looking for a very aggressive last 30 days," said Greg Strimple, one of McCain's top advisers. "We are looking forward to turning a page on this financial crisis and getting back to discussing Mr. Obama's aggressively liberal record and how he will be too risky for Americans." "If we keep talking about the economic crisis, we're going to lose," admitted another aide. The issue has for months been the number one area of concern to voters. While McCain hopes to avoid talking about the economy -- perhaps because of his poor understanding of economics -- the crisis is quickly altering the lifestyles of working and middle-class Americans and is not going away soon. Consumers are pulling back on their spending, for example, "all but guaranteeing that the economic situation will get worse before it gets better," the New York Times reported yesterday.

AMERICANS HIT HARD:
The poor flow of credit in the U.S. economy is affecting virtually all aspects of American life.  The Washington Post reports today that "unemployment claims are at a seven-year high, and factory orders are sharply down. ... Small businesses can't get financing." The landscapes of American cities are changing.  Because of the rise in foreclosures, the number of homeless people in Massachusetts, for example, is at a record high. The country is seeing a rise in "tent cities" because of rising homelessness. Hourly and weekly wages in July 2008 were at their lowest levels since October 2005. As a "result of the worsening economy," Medicaid enrollment has risen 2.1 percent this year, with a projected 3.6 percent increase for next year -- the highest rate in five years. In the meantime, the McCain campaign announced yesterday that it would cut $1.3 trillion from Medicaid and Medicare.

STATE-LEVEL FINANCIAL CRISIS: The slow economy is also paralyzing the spending of state governments, forcing massive budget cuts. According to a July survey by the National Conference of State Legislatures, states are being forced to slash spending and cut jobs "in order to close a projected $40 billion shortfall in the current fiscal year," more than triple the size of the previous year's. New York Gov. David Paterson (D) predicted that the 2009-10 state deficit will be a record $8 billion, calling on lawmakers to make $2 billion in cuts. With concerns about their states' ability to access credit markets for short-term borrowing, both California and Massachusetts have asked the U.S. treasury for similar bailouts as given to Wall Street banks. The Department of Labor reported last week that the country shed 159,000 jobs in September, and the unemployment rate has increased to its highest level in five years. "The increase in the rate of job loss may well be rooted in credit market tightening," Michael Ettlinger and Amanda Logan of the Center for American Progress observed. The worker is hit doubly hard, as state jobless funds are drying out, too. According to the National Employment Law Project at least 11 states are facing financial challenges paying their jobless benefits. 

STIMULUS NEEDED: Last week, Congress passed a financial rescue package that failed to sufficiently address the underlying problem of creating a mechanism that ensures the restructuring of home mortgages to help homeowners. Today, the country needs a second stimulus package, as CAP has outlined, which would help stimulate the economy and stem the tide of job loss. The second stimulus package should jump-start a low-carbon economy, invest in infrastructure, expand unemployment insurance, increase energy assistance, and boost food stamp support. Contrary to McCain's plan to cut Medicaid, the stimulus package should also expand Medicaid aid to the states. "A proactive Medicaid policy would help preserve health coverage, jobs, and state financial stability -- all of which will help an economic recovery," Ettlinger and Logan noted.

UNDER THE RADAR

ECONOMY -- YOUNG ADULTS' OPINIONS ON ECONOMIC POLICY ARE BECOMING MORE ALIKE AND MORE PROGRESSIVE: According to a new report by the Center for American Progress, "[W]hites, blacks, and Hispanics in the Millennial Generation -- Americans between the ages of 18 and 29 -- are more diverse and share more similar attitudes about the economy than any previous generation of young people." The report, authored by David Madland and Amanda Logan, notes that "young whites today are closing the progressive gap with minorities on most of the economic issues...and on some issues have become more progressive." The study found that "over the past 20 years, an average of 86 percent of blacks aged 18 to 29 agreed that labor unions are necessary to protect workers, while 72 percent of young whites agreed -- a 14 percentage-point progressive gap. Today the gap is just 2 percentage points." Furthermore, "young whites are slightly more supportive of universal government-provided health care than young Hispanics and nearly as supportive as young blacks," and the opinion gap has closed on issues such as federal funding for education and federal support for the poor. A previous report found that, overall, voters under 30 "have decidedly progressive views on the economy, possibly more so than any previous generation."

ENVIRONMENT -- GM EXEC STANDS BY DENIAL OF GLOBAL WARMING: Last February, General Motors Vice Chairman Bob Lutz dismissed global warming as a "total crock of sh*t." He later defended his comments saying his "thoughts on what has or hasn't been the cause of climate change have nothing to do with the decisions I make." Last month during an appearance on the Colbert Report, Lutz even attacked GM's new next-generation hybrid automobile, the Chevy Volt, which can run entirely on electricity for trips of 40 miles or less -- as a weak and unattractive car. During a CBS 60 Minutes interview aired on CBS last Sunday, Lutz refused to back away from his global warming denial. "Well they don't like what you said about global warming," correspondent Leslie Stahl said. "Do you want to repeat what you said about global warming?" "Of course not, because this is a family network," Lutz said. "You don't think there's global warming? Is that really true?" Stahl asked. "I'm not going to get into this," Lutz answered. "Speaking about his own personal carbon footprint, Lutz acknowledges he and his wife own two helicopters and two jets," CBS noted.

CIVIL RIGHTS -- THE NUMBER OF GAY MARRIAGES IN CALIFORNIA SURPASS THOSE IN MASSACHUSETTS: A new study released today by UCLA's Williams Institute finds that "more gay couples were married in California in the first three months that same-sex marriages were legal than were married in the first four years it was legal in Massachusetts." The report comes just a month before California voters will decide "whether gay couples can continue to marry when they vote on Proposition 8, which would amend the state Constitution to define marriage as between only a man and a woman." While opponents of Proposition 8 welcomed the finding, supporters dismissed the significance of thousands of married couples. "There are enormous numbers of people doing cocaine right now. ... Simply because large numbers of people are doing something does not make it right," Pastor Jim Garlow told the Los Angeles Times. The debate over the gay marriage ban in California is highly competitive as both sides have "poured $41.2 million into the race, more than the combined total spent in the 24 states where similar measures have gone before voters since 2004." Polls of public opinion have been all over the place with some showing significant opposition to the ban and others indicating a slight majority support for it.


THINK FAST

61 percent: U.S. households that "watched at least one of the two 2008 election debates aired so far," according to Nielsen. "Homes headed by African Americans made up a larger portion of the presidential debate audience (14.0%) than the V.P. debate audience (12.3%). African American homes normally account for 12.2% of all U.S. TV households."

In an effort to address the growing credit crisis, the Treasury is discussing a new plan to buy up "unsecured commercial paper, essentially short-term i.o.u.'s issued by banks, businesses and municipalities," the New York Times reports. "If this were to happen, the central bank would come closer than ever to lending directly to businesses."

Speaking in Ohio yesterday, President Bush declared that "the lesson is clear: Judges matter to every American." Though Bush "steered clear of mentioning" John McCain in his speech, he made his endorsement implicitly, saying, "The selection and confirmation of good judges should be a high priority for every American."

"The Dow isn't the only thing that's dropped in the current economic crisis," reports the USA Today. According to a new Gallup Poll, President Bush's job approval rating has "fallen to a record low" of 25 percent. That's only one point higher than Richard Nixon's approval rating of 24 percent when he resigned the presidency in 1974.

Robert Zoellick, president of the World Bank, "said the global financial system may have reached a 'tipping point' — the moment when a crisis cascades into a full-blown meltdown and becomes extremely difficult for governments to contain."

And finally: Yesterday, Lehman Brothers CEO Richard Fuld had a rough day under intense questioning from House members. However, his day was even tougher on Sunday when he was punched in the face at the gym by a man angry at the Lehman failure. Fuld "went to the gym after...Lehman was announced as going under," said CNBC contributor Vicki Ward. "He was on a treadmill with a heart monitor on. Someone was in the corner, pumping iron and he walked over and he knocked him out cold."



GOOD NEWS

The European Parliament has "refused to dilute pollution reduction targets," instead backing a tougher Emissions Trading Scheme and planning to install carbon capture technology.

BLOG WATCH

THINK PROGRESS: Lynne Cheney: Right-wing blogs are "centrist."

WONK ROOM: House conservatives oppose regulations because bankers will just "find ways around" them.

YGLESIAS: Adventures in conservative paranoia.

TAPPED: Why we need regulation.

STATE WATCH

NEW JERSEY: Gov. Jon Corzine (D) yesterday "committed to tripling the state's offshore wind goals, calling for enough capacity in 2020 to power 800,000 homes."

ALASKA: "The federal government will designate 'critical habitat' for polar bears off Alaska's coast," which could limit "future offshore petroleum exploration or drilling."

GEORGIA: State Supreme Court "ruled in favor of a transgender politician who was slapped with a lawsuit by two political opponents who claimed she misled voters by running as a woman."

DAILY GRILL

"Our economy continues to face serious challenges."
-- President George W. Bush, 10/04/08

VERSUS

"This economy is going to be just fine."
-- Bush, 10/06/08

INTERNSHIPS

The research team that brings you The Progress Report and ThinkProgress.org needs fall interns! Click here for more information.


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