StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between

The Andrew Samwick Archives

Posted by Andrew Samwick

I'd like to begin the New Year and end my run on CG&G by thanking Stan and my former co-bloggers (the FCBs) for the opportunity.  I am up and running on my new blog, and I invite you all to join me there in the New Year.

Posted by Andrew Samwick

With less than a month to go until the New Hampshire primary, my usually hot seat as the director of a public policy center at a college in New Hampshire is, in fact, ice cold.  There is literally no sign of the candidates, nor has there been for most of the year.  It is like the year without a primary.  (This is in marked contrast to how I spent 2007, and this day in particular.) 

The way I would summarize this is to say that there has been no aggressive retail campaigning.  Other than the debate in October, we have had minimal outreach from the candidates who have been invited to these debates.  The key reasons, in no particular order, seem to be:

Posted by Andrew Samwick

The best thing I've read lately about how to channel public frustration into constructive action is this column by Scott Turow, holding forth at Bloomberg last weekend:

By treating money as an analog for speech, the court’s post-Buckley jurisprudence has figuratively allowed the rich to speak through microphones while the poor can barely whisper, and tolerates a situation in which the voices of contributors are amplified to the point that they drown out the opinions of mere voters. I have never understood how permitting the wealthy so much greater influence over the political process can be squared with the vision of equality on which the country was founded.

As I've suggested before, some money in politics is speech, but too much money in politics is bribery in one form or another.  Turow is quite realistic about what it will take to accomplish this:

Posted by Andrew Samwick

Peter Orszag provides some clear and sobering commentary on the value of a college degree in a column for Bloomberg yesterday.  The key message is here:

The effects of globalization are already moving up the wage scale, though, and that trend will likely continue. As Alan Blinder of Princeton University trenchantly noted in 2006, “Many people blithely assume that the critical labor-market distinction is, and will remain, between highly educated (or highly skilled) people and less-educated (or less-skilled) people -- doctors versus call-center operators, for example.” Instead, the crucial distinction is between those tasks that are easily digitized (and thus subject to substantial competition from workers abroad) and those that are not.

Posted by Andrew Samwick

When I first started writing about this in January 2008, I was hoping the Treasury would get on board.  This Treasury Note by Aaron Klein makes the case very well (h/t Mark Thoma):

A Tax Policy Rant

26 Oct 2011
Posted by Andrew Samwick

I couldn't agree more with Pete on the discussions of tax policy that are now occurring as part of the Republican primary campaigns.  The Republican primary campaign almost always gets sidetracked by some inane proposal for tax reform.  This year it is the 9-9-9.  And now we have another version of the flat tax, as if the crushing irrelevance of Steve Forbes to the primaries in 1996 and 2000 were not an indication of how unproductive the discussion will ultimately be.  What are the prospects that a Republican President would actually be able to implement such a change if elected?  They are equal to the chance that Republicans will both retain control of the House and secure a filibuster-proof majority in the Senate in 2012.  In other words, absolutely zero.

The problem that we have with tax policy is that we don't raise enough revenue to cover our expenditures, not the particularly ways we choose not to raise that revenue.

Posted by Andrew Samwick

Nicely written, "Making the Most of our Financial Winter."  The novel part:

In every depression the nation has faced, there have been proposals for the government to do just this: increase spending on public improvements to create jobs for the unemployed.

An article in The St. Louis Post-Dispatch, written in 1877, during the 1873-79 depression, argued that the government could create a great many infrastructure jobs. “There are many needed improvements: the construction of the Texas and Pacific Railroad, the widening of the entrances to the Mississippi, the diking of its alluvial blanks, the clearing of obstructions from the beds of the great rivers of the West, the improvement of the harbors and rivers in the East, the completion of the post offices, custom houses, seawalls, breakwaters and other useful works of a national character,” the article said.

Posted by Andrew Samwick

A note to Nelson D. Schwartz and Eric Dash of The New York Times.  If you are going to put this in your article, put it in quotes and attribute it properly or keep it out of the news section of the paper:

Without a coherent message, the crowds will ultimately thin out, Wall Street types insist — especially when the weather turns colder. They see the protesters as an entertaining sideshow, little more than flash mobs of slackers, seeking to lock arms with Kanye West or get a whiff of the antiestablishment politics that defined their parents’ generation.

Posted by Andrew Samwick

Other words that weren't mentioned, even for their economic impact: Iraq, Afghanistan, education.

Posted by Andrew Samwick

Dartmouth plays host to a Republican primary debate tomorrow, focusing solely on the economy.  Here's a page of events for those in the local area.  I'll be on Bloomberg TV tomorrow morning (around 10) as host Margaret Brennan broadcasts from the Green.  [Update -- I blogged too soon.  I've been bumped.]  From the Washington Post's overview:

The Washington Post and Bloomberg TV, in partnership with WBIN-TV and host Dartmouth College, present the first debate of the 2012 campaign focused exclusively on the issue that matters most to American voters: the economy. Join us here on on Tuesday, October 11 at 8:00 p.m. ET for the first debate to focus on the how to solve the nation's debt crisis and economic problems.

Posted by Andrew Samwick

The brewing scandal regarding Solyndra is an opportunity to consider which roles the federal government can and should play in developing alternative energy and which roles it should not.  Take as a starting point the friendly column by Joe Nocera in Friday's New York Times:

But if we could just stop playing gotcha for a second, we might realize that federal loan programs — especially loans for innovative energy technologies — virtually require the government to take risks the private sector won’t take. Indeed, risk-taking is what these programs are all about. Sometimes, the risks pay off. Other times, they don’t. It’s not a taxpayer ripoff if you don’t bat 1.000; on the contrary, a zero failure rate likely means that the program is too risk-averse. Thus, the real question the Solyndra case poses is this: Are the potential successes significant enough to negate the inevitable failures?

Posted by Andrew Samwick

I recommend Bruce Bartlett's latest Fiscal Times column to you, where he discusses how "Obama's Lack of Focus Could Be Politically Fatal."  I'd like to offer two refinements:

First, Bruce argues that with regard to the 2009 stimulus plan, the medicine was appropriate but the dosage was inadequate:

By way of analogy, suppose you went to your doctor for an illness and he prescribed the correct medicine. But for some reason, you were given a dosage only half as big as necessary to cure your condition. Consequently, while you got better, you were not cured and continued to suffer. Under these circumstances, it is clear that the problem was not the medicine itself, but the dosage. Had you been given the correct dosage in the first place you would have been cured.

Meet the New Speech

09 Sep 2011
Posted by Andrew Samwick

Aaron Blake and Chris Cillizza write in The Fix that President Obama almost granted me one of my wishes last evening. "There was a word missing from President Obama's jobs speech Thursday night: 'stimulus.'"  Their statement reminded me of something I wrote in December 2008 when asked about the ideal stimulus package by the Economix blog:

If I had my druthers, the word ’stimulus’ would be expunged from public discussion, along with ‘bailout’ and ‘rescue.’ These words convey the idea that, because we have so mismanaged our economic and financial affairs, we are somehow able or entitled to conjure up additional funds out of thin air to fix our problems. There are two problems with this idea.

Posted by Andrew Samwick

Tonight's was the first Republican primary debate I watched start to finish.  My bottom line is that, based on this performance, only Mitt Romney and Jon Huntsman looked like viable candidates in the general election.  I was underwhelmed by Rick Perry, and sadly disappointed in the discussion of Social Security as a Ponzi scheme.  There is a difference between a Ponzi scheme and a pay-as-you-go system.  The Social Security Administration provides a very clear explanation here.  The key excerpt:

There is a superficial analogy between pyramid or Ponzi schemes and pay-as-you-go programs in that in both money from later participants goes to pay the benefits of earlier participants. But that is where the similarity ends. A pay-as-you-go system can be visualized as a simple pipeline, with money from current contributors coming in the front end and money to current beneficiaries paid out the back end.

Posted by Andrew Samwick

Kevin Drum has joined the chorus, with "My Jobs Plan: A Trillion Dollars for Infrastructure:"

All of us have our fantasies about what we'd like President Obama to say in his big speech next week about jobs. Here's mine: ask Congress to appropriate a trillion dollars to be spent on infrastructure upgrades over the next five years. That's it. That's the jobs plan. A trillion dollars to make us into a first-world country again. And as part of the enabling legislation, ask for emergency powers to temporarily streamline the regulatory red tape, interagency approval processes, environmental-impact statements, and labor rules that might otherwise keep the money from being put to work speedily.


01 Sep 2011
Posted by Andrew Samwick

My colleague, Matt Slaughter, holds forth today on the link between infrastructure and jobs.  He is a former member of the CEA and an expert in interanational economics:

There is a crucial connection between potholes and unemployment. America's crumbling infrastructure is eroding America's competitiveness in the global economy by eroding America's ability to attract and retain global corporations and their high-productivity, high-wage jobs.

Posted by Andrew Samwick

An excellent choice.  Here's the video:


One cannot help but notice the pleading tone of the President's remarks, for Congress to actually do something.  I bet he wishes he was Prime Minister now.

Posted by Andrew Samwick

In a column last week, Fareed Zakaria asked, "Does America Need a Prime Minister?"  It is a question that often comes up when political gridlock makes it appear that we cannot respond to a crisis.  My answer is no.  Answer yes if you would have rather had the country governed with the Speaker of the House as the chief executive rather than the President over all of the last two decades.  Prime Minister Gingrich.  Prime Minister Pelosi.  Answer yes if you would like to have more and possibly more influential Tea Party movements legitimized as parties of their own, or if you would like Bernie Sanders (Socialist-VT) to have more company serving in elected office on Capitol Hill.

A Failed Analogy

25 Aug 2011
Posted by Andrew Samwick

I enjoyed this essay on the many failures of Steve Jobs, by Nick Schultz at NRO.  But I think he misses the point with this cautionary tale for Washington:

There’s a moral here for a Washington culture that fears failure too much. In today’s Washington, large banks aren’t permitted to fail; nor are large auto firms. Next up will be too-big-to-fail hospital systems. Steve Jobs is a reminder that failure is a good and necessary thing. And that sometimes the greatest glories are born of catastrophe.

The analogy would have more meaning if thousands of Steve Jobses of varying degrees of quality had been bundled and securitized in the most opaque of ways, given ratings by agencies that were on the take, and funded by enormous amounts of debt backed by minimal capital.  We didn't have that and thus we had very little to fear from failure on anyone of the many ideas Steve Jobs launched.

Posted by Andrew Samwick

Dartmouth welcomed the Gallup Poll's editor-in-chief, Frank Newport, to campus yesterday for the closing lecture in our "Leading Voices in Politics and Policy" series.  His assessment of President Obama's re-election chances was negative:

Ten presidents have run for re-election since we’ve had modern polling, since Harry Truman. Seven of them have been successful, and three have been defeated. … in August before his election year his current 38 percent job approval rating is lower than any other president who was successfully re-elected. So history would say he’s in big trouble.

There has been a rash of commentary in recent weeks about what the Obama Administration could have done better.  (Pick up one thread here and follow it back.)  At a very general level, I think President Obama's biggest problem is that he wants to be the president who transcends politics.  The president who wants to transcend politics will be a patsy for a Congress that doesn't. 

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