A Blog Called Hope

Senator Obama appears in Michigan to discuss the economy

Just hours ago, Senator Barack Obama delivered a speech at Kettering University in Flint, Michigan in which he laid out his plans to make the United States more competitive in the global economy.

“I know as well that more than anything else, success will depend not on our government, but on the dynamism, determination and innovation of the American people,” -Senator Barack Obama in Flint, MI on June 16, 2008.

Obama’s speech can be viewed at MLive.com.

In addition to the video, a transcript of Senator Obama’s speech is also available.

Today, Congressman Kennedy (D-RI) voiced his support for a bill that would extend unemployment compensation for roughly four million citizens.

Here is a glimpse of the press release from Congressman Kennedy’s office:

Congressman Patrick Kennedy today announced his support for H.R. 5749, the Emergency Extended Unemployment Compensation Act of 2008, which is being considered today by the House of Representatives. The legislation, effective through March of 2009, will offer much needed relief to 3.8 [million] unemployed workers. It will immediately provide up to 13 weeks of extended unemployment benefits in every state to workers exhausting the 26 weeks of regular unemployment benefits. The additional benefits would be paid for out of the federal unemployment compensation trust fund.

“Rhode Island has an unemployment rate that ranks the highest in New England and among the highest in the country. Rhode Islanders are suffering, and unfortunately it looks like our national economy may get worse before it gets better. We cannot lose sight of the fact that our current economic woes are affecting people in profound ways. In addition to providing an additional safety net to help out-of-work Rhode Islanders through our current economic downturn, this legislation will bolster our economy by putting money directly into the hands of consumers, offering some assistance with cost of living expenses,” said Congressman Patrick Kennedy.

McCain’s foreign policy competency called into question due to Al-Qaeda-Iran gaffe

John McCain must be thanking his lucky stars that the remaining Democratic hopefuls continue to battle it out to decide who will get the nomination. Or otherwise, McCain’s own incompetence and misunderstanding of world affairs would be in the limelight.

But his confusion is not about just ANY issue. It is about THE predominant global conflict facing America. One could understand if McCain was a little mixed up about the Nigerian oil conflicts, strife in the Democratic Republic of Congo, or even human rights atrocities in China and Darfur. MAYBE an observer, or a voter, could let such a gaffe pass because they are not issues directly affecting our country at this moment. (Though, one would like to believe a potential leader of our country would have knowledge of such prevalent global topics.)

The issue is al-Qaeda. The issue is the leading terrorist organization in the world and our most dangerous and heinous adversary. The issue is al-Qaeda’s relationship (or lack thereof) with the always contentious Iran.

Unfortunately, John McCain appears to not grasp the realities surrounding al-Qaeda, Iran, and terrorism as a whole.

In recent weeks John McCain has upped his efforts to poke holes in Obama’s candidacy, and particularly what McCain deems Obama’s ‘naïve’ foreign policy approach. Speaking in front of an American-Israeli committee, McCain took the opportunity to rail against Mr. Obama’s desire to sit down with Iranian President Mahmoud Ahmadinejad.

During one of his rants, John McCain falsely linked al-Qaeda to the Iranian government. McCain asserted unequivocally that, “Al-Qaeda is going back into Iran and is receiving training and are coming back into Iraq from Iran.”

The truth of the matter is that the Sunni al-Qaeda is a rebellious counterpart to the ruling Shi’a regime in Iran. In fact, Iran has gone to great lengths to keep adversarial al-Qaeda fighters out of the country. It is this deep-seeded conflict that continues to enflame the already volatile situation in Iraq. So to think, and then say, that there is a relationship between a Sunni faction in al-Qaeda and a hard-line Shi’a regime in Iran is immensely deceptive.

It is hard not to notice the similarity in rhetoric between McCain’s baseless assertions and those spewed by Bush in late 2002 and early 2003. As we have seen, by way of the 9/11 Commission’s detailed report, al-Qaeda had no ties, affiliations, or relationship with Iraq. Despite this, the President continues to hold out false hope that he was somehow correct in his misrepresentation of Middle Eastern dynamics.

It’s these kinds of unfounded assertions that continue to shift our focus away from where it should be; finding al-Qaeda leadership and stemming the spread of its brutal ideology.

For those who hoped that the lens would shift back to a genuine focus on waging the war on terror, think again if McCain is elected. Given McCain’s misrepresentations, it would appear that the misleading of the American people won’t end with George W.

… Maybe getting riled up about McCain improperly aligning two prominant figures in our war on terror is an overreaction. Maybe foreign policy is not McCain’s strong suit… Problem is John McCain himself has asserted that foreign policy is a point of strength for him. In an interview with the Wall Street Journal back in November 2005, McCain proclaimed, “I’m going to be honest: I know a lot less about economics than I do about military and foreign policy issues. I still need to be educated.”

Given McCain’s egregious mix-up of two key U.S. foes, it certainly appears McCain needs a lot more education on BOTH (economics and foreign policy) fronts. Perhaps McCain should crack open some history books and prepare to pull some all-nighters studying; because, are there any more significant concerns facing our country than the economy and the war on terror?

McCain co-chair, and potential Treasury Secretary, tied to root of subprime mortgage crisis

Plummeting property values. Job losses numbering in the hundreds of thousands. Financial institutions crumbling to their knees. Economic growth screeching to a halt.

What may have been perceived as merely an economic nightmare during the booming 90s, has quickly become all too real in the last few years as the subprime mortgage crisis has reached immense proportions.

What some people may not understand what actually spurred this current crisis.

In 1999, under direct influence from bank lobbyists, the then-existing regulatory scheme controlling the banking industry was abandoned. As economists have theorized, this de-regulation was a leading cause of the current mortgage crisis our economy faces today.

As Chairman of the Senate Banking Committee, Former Texas Senator, and current John McCain campaign co-chairman, Phil Gramm helped spearhead that shortsighted and devastatingly erroneous legislation in 1999.

Then, three years later, Phil Gramm joined Swiss bank UBS where he served as a lobbyist on legislation regarding the mortgage crisis as recently as the end of 2007. Currently, while taking time away from McCain’s camp, Gramm continues to serve as a UBS vice chairman. Given the rivaling concerns within the mortgage crisis, this relationship with a predominant banking institution calls into question whose interests that former Senator Phil Gramm aims to protect. Will he work to protect the floundering property market and strapped mortgage borrowers, or work to sure up UBS’ bottom line?

John McCain, apparently cut from the same ragged cloth as Gramm, has come out in support of further de-regulation of the banking industry, which he believes will help resolve the current mortgage crisis. This proposal stands in direct conflict with the assessment of the Secretary of the Treasury. In March 2008, Treasury Secretary Paulson remarked that it would be necessary, and beneficial, to again regulate financial sectors that were de-regulated back in ‘99.

Amazingly, it appears that Phil Gramm, despite his immense miscalculations with far-reaching ramifications, has the ear of John McCain and the inside track to become the next Secretary of the Treasury if John McCain is elected in November. For now, as Jared Bernstein of the Economic Policy Institute explained to the Washington Post, “[Senator] McCain is counting on people having very short memories and not connecting some pretty obvious dots.”

Excellent news for Coventry! Allco Renewable Energy, of New York, has chosen Coventry as a location for a 90-acre, 8-megawatt solar farm. The exact location is the former Picillo pig farm, 8-acres of which was declared to be so polluted that is was a Superfund site in the 1980s.

The agreement with the town gives Allco a 50-year lease to use the site. Allco has agreed to pay the town $200,000 a year or 4 percent of the electricity sales, whichever is greater, with future increases corresponding to the rise of inflation.

The project will be paid for completely by Allco, without the town incurring any financial liability. The project, however, is contingent on passage of the Renewable Energy Sources Act, a proposal submitted by Rep. Ray Sullivan (D-Coventry). The legislation, dubbed “feed-in tariff,” would require National Grid to purchase renewable energy from Rhode Island producers (i.e. Allco). The rate will be set by the Public Utility Commission.

The important issue is that developing a clean solar farm is a step in the right direction to alleviate Rhode Island’s dependence on fossil fuels for energy production. Since 2000 the country has seen the price of oil skyrocket from about $25 per barrel to over $100 per barrel. And while oil is only a small part of the energy production pie (coal and natural gas), the rise in oil prices is indicative to the general trend of higher energy prices.

With renewable energy, the cost won’t go up. Rhode Islanders don’t have to worry about another war in the Middle East, increased consumption by China, India, or Russia, or diminishing global supplies. If anything, the more development of renewable technology will only bring the cost of production down.

Of course not everyone is happy. Rep. Nick Gorham (R-Coventry) isn’t happy. He thinks building a solar farm is dumb because Rhode Island isn’t the best spot in the country to produce solar energy.

So, the choice before everyone is as follows: develop renewable energy in the state, provide green-collar jobs for the construction and maintenance of the solar farm, and produce enough clean, pollution-free energy to supply a small town, OR do nothing, keep doing things they way everyone’s been doing it and hope that the world doesn’t fall apart.

I think it would be wise for Governor Carcieri to reconsider his plans to slash government spending on social programs.  While it’s heart-warming to hear the Governor talk about no new tax increases, and that we’re “already too highly taxed,” it’s foolish if Rhode Island is expected to overcome the budget deficit, especially in the current recessionary period when revenues from personal income taxes are shrinking.  Much of the current economic hardships facing the state are due to the slowdown in the economy.

I invite Governor Carcieri to read a report written during the last recession by Peter Orszag and Joseph Stiglitz.  The report essentially reads that given the two options of cutting spending or raising taxes, the latter option is the least harmful for the economy during recessions.  

The reasoning is pretty straight-forward, although anathema to Republican thought.  Basically, everything is dependent on an individual’s propensity to consume.  And as Americans, we all love to spend our money on stuff!  A reduction in government spending on goods and services will reduce consumption by exactly the same amount.  For every dollar that the government does not spend, the economy does not generate that economic activity.  Conversely, if taxes are increased by $1, there may be a drop in consumption by 90 cents while savings is reduced by 10 cents.  This scenario is less harmful to the economy that the former. 

A cut in social welfare spending will not only harm those who are economically disadvantaged, it will harm the entire Rhode Island economy more than an increase in taxes.  This is due to the aforementioned propensity to consume.  Additionally, while some of us spend all or most of our money, there are others who spend only some of it and save the rest of it.  An extra dollar of income is relatively less valuable for someone making over $200,000 a year than it is for an individual making $11.50 an hour.  Individuals with fewer dollars to spend a month are more likely to spend more of their dollars than are those with much greater resources.  The wealthier are much more likely to save a larger proportion of their income, so the additional impact on the economy would be compounded by their savings rate.  As those in the lower economic brackets see larger reductions in their benefits, the economic impact would be much more profound than a tax increase on those with high economic resources would be.

I know everyone hates taxes, but a longer and more destructive recession would be much worse.