Was it only last week that health-care legislation was enacted and politicians and pundits were attempting to analyze its effects? Quite quickly the health-care issue has been subsumed in voters' overriding concerns about our general financial and economic health. (It is voters' feelings about their economic present and future, remember, that is always Issue No. 1 at national-election time.)
Items:
- Gov. Chris Gregoire and our Legislature, Mayor Mike McGinn and our Seattle City Council are wrestling with taxing/spending decisions related to closing the state's and city's gaping budget holes. Same for Dow Constantine and the King County Council.
- President Obama and the Congress will begin next month considering in earnest bills sponsored by Sen. Chris Dodd and Rep. Barney Frank to revise the country's financial-regulation regime. Both Democrats and Republicans will urge major changes in the bills as now drafted.
- The European Union continues to consider its bailout of Greece and several other EU countries deep in red ink. The recent financial crisis put them in jeopardy but they also face long-term spending obligations which cannot be met on their current budget paths.
- Relatedly, the White House Office of Management and Budget and the Congressional Budget Office last week issued dueling budget projections, the congressional projection darker than the White House's. Both show the federal government headed, as Europe, toward unsustainable levels of debt. The CBO document says that Obama's budget would increase federal deficits about $1 trillion annually over 10 years. Public debt would rise to a stunning 90 percent of Gross Domestic Product (GDP) by 2020.
- Corporate America shocked both the administration and Congress late last week when several major companies began taking charges against their earnings relating to the new health-care legislation (principally involving changes in prescription-drug benefits for their retirees). The sizes of the charges mainly related to the number of employees at each company. AT&T announced a charge of $1 billion. John Deere, Caterpillar, and 3M were among companies immediately following suit. Others are expected to do so this week.
- The administration announced a new housing-bailout plan aimed at helping mortgage borrowers whose homes' values are less than their present mortgages. Some 5 million mortgages are more than 25 percent higher than the present value of the homes mortgaged. Overall, some 11.3 million mortgages are "underwater" (i.e., higher than home value) and another 2.3 million have less than 5 percent equity — out of a total of 47 million mortgages nationally.
- The economy has been in positive growth for two quarters. But unemployment is projected to remain near 10 percent (and about 17 percent, counting the marginally employed) for the remainder of 2010.
- The Federal Deposit Insurance Corporation has closed 41 banks thus far in 2010, with another 700 on a watch list. In 2009 the FDIC closed 140 banks at a cost to its insurance fund of $30 billion. The insurance fund had a deficit of $20.9 billion at the end of the year. Most of the failed banks were not invested in exotic derivatives but mainly had seen loans and investments go bad in their local economies.
Columnists and TV talking heads thus far have seen Tea Party and related protests as anomalies, characterizing them as attended and promoted by "right-wing extremists" or flakes and associated with media villains such as Sarah Palin and Tim Eyman. It may be time for a second look.
In 1992, populist Ross Perot led three-way national polling matchups against President George H.W. Bush and Arkansas Gov. Bill Clinton until Perot self-destructed with some goofy behavior. Even so, he drew 19 percent of the total popular vote and, in the end, swung the election for Clinton.
Public economic anxiety is far higher now than it was in 1992. Accordingly, it's time to see populist protest as more than an anomaly. Rather, it is part of a still unfocused general movement, seeking issues and leaders as it gathers steam.
