Researching the Innovation Economy

By James Dohnert

In recent weeks President Obama has set his focus on economic growth and American innovation. Having put an emphasis on renewing the country’s infrastructure, the president is hoping the country can take the lead in the international business landscape. Speaking to the U.S. Chamber of Commerce, the president recently said, "We need to out-innovate, out-educate and out-build our competitors." But just how far has the U.S. fallen in the business innovation race? Has American innovation and entrepreneurship died? And what does the push for alternative energy mean for our countries economy? The Commonwealth Club has highlighted February lectures that may offer answers to those questions and others.

Environment and Natural Resources Planning Meeting

Consumer demand for viable fuel alternatives has never been higher. Business now must put an emphasis in understanding the future of energy. To innovate in the growing industry entrepreneurs must gain insight into what exactly is viable going forward. Keep that in mind when The Commonwealth Club holds an environment and natural resources planning meeting on Thursday the 17th.

Successful Strategies for Products That Win

With a new focus on homegrown business and American innovation, now is the time of an entrepreneurial boom. Facebook, MySpace, and many other American businesses have started out with just a singular idea and grown into multimillion-dollar businesses. To learn more about how you can take your idea and turn it into a viable business, come to our Successful Strategies for Products that Win seminar. Listen to author and entrepreneur Steve Blank as he discusses his strategies for creating a successful business on Tuesday the 8th.


Has China Surpassed the U.S. in Supercomputing?

Some members of the media have recently declared China the global leader in high-performance computing. As another major industry on the world's businesses front (and a point of global bragging rights), supercomputing is an industry that must remain viable. With China's continued growth in the market, now is the time to get educated to what business are doing both home and abroad in the field. It's even more important for those of us here in Silicon Valley. Coming up at the Commonwealth Club, the associate director of computation at Lawrence Livermore National Laboratory, Dona Crawford, will discuss how far we are lagging in the supercomputing race. With more than 30 years of industry experience, Crawford hopes to shed light on the global industry when she speaks on Wednesday the 23rd.

Unrelated:
Club Space

Timothy Geithner on Recession, Recovery -- ABC7 News Video

Photo Slideshow: Timothy Geithner at Commonwealth Club 10-18-2010

Below are photos, by John Zipperer and William F. Adams, from the program in Silicon Valley yesterday featuring U.S. Secretary of the Treasury Timothy Geithner. The program was moderated by Sequoia Capital's Michael Moritz.

Timothy Geithner Addresses the Top "Five Myths About TARP"

U.S.Treasury Secretary Timothy Geithner took to The Washington Post opinion pages this past Sunday to address what he calls five myths about the Troubled Assets Relief Program, known by its acronym TARP.

TARP has become broadly unpopular in the country, but Geithner and other Obama administration leaders have been working lately to get out the news that TARP will ultimately result in a much smaller cost to taxpayers than is popularly believed:

[T]he cost of the TARP, which succeeded in reducing the overall economic damage, will be considerably lower than once feared. In fact, the direct budget cost of the program and our full investment in the insurer AIG is likely to come in well under $50 billion -- $300 billion less than estimated by the Congressional Budget Office last year. And taxpayers are likely to receive an impressive return (totaling tens of billions) on the investments made under the TARP outside the housing market.

Even looking beyond the TARP to the losses associated with Fannie Mae and Freddie Mac's pre-crisis mistakes, the direct costs of the government's overall rescue strategy are likely to be less than 1 percent of GDP. By comparison, the much less severe savings and loan crisis of the late 1980s and early 1990s cost 2 1/2 times that as a share of our economy.

In the article, Geithner addresses other concerns of critiques, such as that TARP helped Wall Street and not Main Street, that it led to greater presidential control over the economy, and other claims.

Read his entire article here.

Bring your own questions for the Treasury secretary when you see Timothy Geithner live at The Commonwealth Club of California this Monday, October 18, in Palo Alto for a 1:00 p.m. program. Details and ticket information are now available.

Offshore Drilling on the Hot Seat

News analysis, by Allison Vale

In the minds of millions of Americans, offshore drilling has been an issue of patriotism, a politically charged declaration of our independence from foreign oil and not an issue of environmental protection. Survey after survey has shown that a big majority of Americans agree that relying on foreign oil is bad and energy independence is good. But differences arise when people are confronted with the challenge of just how we’re going to achieve energy independence and what is the best source of energy to replace foreign oil.

Enter a catastrophe of epic proportions, also known as the oil that continues to seep into the Gulf of Mexico. It may just prove to be the one of the worst spills in United States history. As a result, new surveys are showing Americans re-evaluating their affection for offshore oil drilling, and politicians have begun distancing themselves from the idea.

Is China the Next Bubble?

The financial press is taking its eyes off the Google-vs.-China story long enough to pay attention to a growing worry in some quarters that the economy of the People's Republic of China could be the next bubble to burst.

Economist and former U.S. Secretary of Labor Robert Reich expressed such a concern in his January speech to The Commonwealth Club of California. In his Bank of America-Walter E. Hoadley Economic Forecast, Reich suggested that commodities and China's economy were two possible bubbles, despite the relatively good management of the Chinese economy in these turbulent times.  Watch the video excerpt below for more from Reich.



Now, two months after Reich's speech, the possibility of a burst China bubble are all over the news. We've collected some news links here for you:

ChinaStakes.com: "'Short the China Bubble' Trend Is Spreading"
National Post (Canada): "China's Financial Bubble Ready to Pop"
Business Week: "China Stocks Fall Most in Two Weeks on Rising Trade Tensions"
Business Insider: "Citi: If You Thought China Was in a Bubble, You Haven't Seen Anything Yet"
Financial Times: "Is China Blowing Bubbles?"
HargreavesLansdown (UK financial advisors): "A Bubble in China?"

Or watch our video of recent Commonwealth Club program "China: Great Power Interrupted."

Robert Reich Gives 2010 Economic Forecast

Robert Reich, former labor secretary during the Clinton administration and currently a professor at UC Berkeley, gave the Commonwealth Club's annual economic preview. The Bank of America Walter E. Hoadley Economic Forecast saw Reich speak to a sold-out crowd on January 22, discussing how far we've come since the financial crisis began, what legislation can work and what won't, and what we can expect in the coming year.

Fixing America's Health-Care System

Early this week, President Obama made a landmark decision to grant the federal government, through a new office in the FDA, authority to regulate the content, marketing and sale of cigarettes and other tobacco products. Despite his own well-known cigarette habit, he says his intention is to reduce health risks from tobacco and make cigarettes both less accessible and less inviting to young people. The move, aimed at focusing on health wellness and disease prevention, is in line with his much larger health-care plan for America. He made reference to his proposed health-care agenda in his Tuesday, June 23, 2009, news conference.

“This is legislation that must and will be paid for,” said the president. “It will not add to our deficits over the next decade. We will find the money through savings and efficiencies within the health-care system, some of which we’ve already announced.”

President Obama also stated that the government’s reform would work to lower the cost of health care, and he warned that doing otherwise would leave millions more Americans uninsured. He further emphasized that the current state of the health-care system needs drastic change and that “the status quo is unsustainable and unacceptable.”

“So reform is not a luxury,” said President Obama. “It’s a necessity, and I hope Congress will continue to make significant progress on this issue in the weeks ahead.”

The president’s web site outlines his health-care reform package. Among his recommendations, he cites the necessity to reduce the growth of health-care costs for businesses and government, protect families from bankruptcy or debt, and assure affordability for all Americans. He also supports guaranteeing choice of doctors and health plans, investing in preventions and wellness, improving patient safety and quality of care. Moreover, he advocates ending barriers to coverage for people with pre-existing medical conditions.

Will his changes go far enough, or might they go too far? The Commonwealth Club has heard from a number of health-care advocates, economists, and others seeking to change the system. Zeke Emanuel, chair of the Department of Clinical Bioethics at the Clinical Center of the National Institutes of Health and the brother of Obama's chief of staff, Rahm Emanuel, spoke to The Club on January 8. (See embedded video below.) Zeke Emanuel urged a roots-and-branches overhaul of the system, but it's not clear that such a change is politically feasible. In his talk, Emanuel said, “Most Americans understand that the system is broken. We understand that we have a problem in this country, and I think it’s very widespread.”



Christina Romer, chair of the Council of Economic Advisors in the Obama Administration, made the economic case for health-care reform in her June 8 speech at Club headquarters. She shared the president’s vision for reform. She observed, “The overarching goal is to develop a cost-effective health-care system that preserves quality, expands coverage, and ensures choice and security for all Americans.” (See video here.)

More recently, former U.S. Secretary of State and former Secretary of Labor George Shultz and Hoover Institution Senior Fellow John Shoven explained their plan for handling the nation's spiraling social service commitments, specifically health care costs and Social Security. See video below.



--Commonwealth Club Media and Public Relations Department

Chevron and Sierra Club: Peace at Last?

In a highly anticipated face-to-face between the heads of Chevron and the Sierra Club last night at The Commonwealth Club's Climate One program, the sold-out audience got a surprise preview of what the future holds in store for these two working together.

Pelosi Calls for Commission to Investigate Wall Street

With an eye toward quelling the populist anger roiling across the nation, House Speaker Nancy Pelosi today called for the creation of a commission to root out the causes of Wall Street's meltdown patterned after an obscure Depression-era committee.

In San Francisco to speak about her book encouraging the rise of women in society at a gathering for the Commonwealth Club of California, Pelosi said Americans are angry with the economy and bonuses given to AIG, and at least 75 percent of them want an investigation into the missteps that led to this recession.

"That's what we would do with this commission, is to make sure it does not happen again," she said.

Pelosi spoke with Treasury Secretary Timothy Geithner this morning about the plan to emulate the Pecora Commission created in 1932. That commission, named after Deputy District Attorney of New York County Ferdinand Pecora, followed two failured attempts but ultimately benefited by Franklin Roosevelt's election to the presidency. The commission's findings led to the Securities Act of 1933 and the creation of the Securities and Exchange Commission – itself alleged by many to have been lax in regulating Wall Street (with Bernard Madoff's infamous Ponzi scheme being the poster boy for this age).

“Some people can tell you one piece of it. Others can tell you another piece of it. It's really hard to know. Do you understand it?” Pelosi asked rhetorically. “We need a clearer understanding of how we got here.”

Pelosi is not the first politician to allude to the Pecora Commission in recent weeks. Democratic Sen. Byron Dorgan called for a new iteration of the committee along with the resurrection of the Glass-Steagall Act, which separated commercial and investment banking. Many believe its repeal in 1999 was the impetus for banks and investment firms like Citigroup and Travelers to merge and allow the subprime credit markets to run rampant. (Wells Fargo Chairman Dick Kovacevich gave the banks' side of the deregulation story in a speech to The Commonwealth Club in 2008. Click here to view video.) A New York Times editorial last month also called for a Pecora-like commission to be created.

Besides making news with her call for a Wall Street investigation, Pelosi had a full schedule. Earlier in the day, appearing on the local Fox affiliate KTVU, Pelosi characterized an upswing of “Tea Party” tax protests as window dressing for elite conservative interests that mainly wanted lower taxes, mocking them as “Astroturf” or fake “grassroots.”

The Speaker also drew upon her personal biography to encourage woman to continue reaching for more positions of power. Her book, Know Your Power: A Message to American Daughters urges women to get involved in all aspects of community service. Pelosi is the daughter of the Baltimore establishment and said she found politics both exciting and distasteful. “It taught me I didn't want to be a part of it,” she said.

While raising five children with husband Paul Pelosi – who incidentally spent the speech doting over their newest grandchildr – she slowly became immersed in Bay Area politics with her big break occurring in 1976 when she secured Maryland for a youthful Jerry Brown in the Democratic presidential primaries. Pelosi joked, though, that the then-governor of California had a problem with saying, “thank you,” but he nonetheless found time to praise her for delivering Maryland to his campaign.

Are Positive Economic Signs Helping Ordinary Americans?

While some people point to Wells Fargo's surprisingly healthy first quarter last week (Noriel Roubini said in Time magazine last month that Wells Fargo was one of the weaker banks; what happened?) as proof the recession has bottomed out, unemployment is still 8.5 percent and likely rising. A chipper AP story reports that the first week of April had the lowest amount of new jobless claims in months. One good week in the middle of 40 may not be a great indicator, and its impact on the unemployed remains to be seen. This New York Times piece speculates that the strong Dow could be covering up significant problems in the overall economy.

This blog has quoted economist and frequent Commonwealth Club speaker Robert Reich on numerous occasions, but he, along with Paul Krugman, have consistently spoken with clarity and caution regarding the state of the economy. In a Salon article Monday, Reich again tempered the media's newfound bullishness and believes the economic perkiness is due to the massive cash infusion issued by the Treasury.

But we're not at the beginning of the end. I'm not even sure we're at the end of the beginning. All of these pieces of upbeat news are connected by one fact: the flood of money the Fed has been releasing into the economy. Of course mortgage rates are declining, mortgage originations are surging, and people and companies are borrowing more. So much money is sloshing around the economy that its price is bound to drop. And cheap money is bound to induce some borrowing. The real question is whether this means an economic turnaround. The answer is it doesn't.

The inclusion of the theory that the recent bump in the Dow is due to the printing of new money was non-existent in most news coverage. Instead, the message in nearly every major story last week, save for a very cautiously optimistic article in the Boston Globe Friday, is that the financial sector is doing well and could indirectly help the pocketbooks of struggling Americans. It's true that short- and long-term interest rates are unbelievably low, but will it translate into more construction of homes? The inventory of already built new homes is high, and recently foreclosed homes are even higher. This could be where Wells Fargo's announced $190 billion in new loan applications are emanating. Once the glut of inventory begins to deplete in relation to low interest rates, where will this segment of the economy look like?

The attitude of much of Wall Street is to keep things positive; to keep the wheels of finance rolling. But it's likely that more than a half million additional workers will get a pink slip this month. Add to this the previous 5 million, and you have quite a segment of the population scrimping and saving and not purchasing goods and services. Until Americans see their own personal economies picking up, the overall mental health of the economy will not be viewed as looking as rosy as recent news reports might be leading people to believe.

--Steven Tavares

San Francisco Chronicle Staff Cuts

The San Francisco Chronicle may have escaped the grave, but there's still a painful downsizing taking place at the city's major print news outlet. The online news site San Francisco Sentinel is publishing online a list of what it says are the first batch of Chronicle employees to accept a voluntary exit deal.

The list includes some names and news beats that are likely to interest long-time Chronicle readers.

For more background on the Chronicle's troubles, see here.

Bad News Bears

The US economy is still suffering, and some serious strategic and structural changes are needed in business and government to address the underlying causes of the crisis.

But in the spirit of FDR’s comment about fearing fear itself, I believe the US media is making this crisis far worse than it needs to be. As the headlines and newscasters scream the latest bad news – job losses, stock market plunges, poor corporate results – investors’ jitters increase. They shun the markets, which dries up the capital available to companies, which reduces their operations, which leads to layoffs, which leads to foreclosures and falling consumer spending, which drags down the banks, which . . . you get the picture. It becomes a self-perpetuating negative cycle, which our national leadership is struggling to turn around by pumping bailout money into the damaged economic sectors.

But it seems to me that this cycle of doubt itself, rather than fundamentals of the economy, is partly to blame for the dizzying decline in the market averages and the associated fallout. The media reports the economic news that fuels this downward cycle. And I believe there is more here than just the media acting as the bearer of genuine bad news. So let’s take a hard look at what is going on in the media today and how that affects news reporting.

As we know, the traditional media is highly threatened now, because its historic business model, based on advertising, has been blown to smithereens by the internet. Few newspapers and not many radio or television operations have successfully made the transition to the Internet era. We have a front row seat for this sorry spectacle here in the Bay Area, as San Francisco’s only daily newspaper, The Chronicle, dies a slow death. The Rocky Mountain News ceased publication in February, and both the LA Times and New York Times are wobbling.

As the classic media fights for its life, publishers, editors and reporters grasp at hyperbolic subjects and viewpoints they hope will command attention, in a struggle to retain readership and viewership and to continue to attract advertising dollars. Bad news has long been known to draw more attention than positive stories, so it’s not surprising that a concentration on bad economic news would dominate the media right now.

But there are degrees in the extent of negative focus. At the moment, editorial decisions are being made in favor of covering bad economic news at the expense of other important topics, concentrating media coverage obsessively on negative stories about the economy. For example, last month a TV editor scrapped a story for which I was to be interviewed on some important good news - a potential US-Russian deal to work together on stopping Iran’s nuclear program and to cancel the missile defense plan for Eastern Europe - to instead report on the latest US government support for the insurance company AIG. Those micro-level editorial decisions being made throughout the media are what in the aggregate are producing the unitary focus on economic bad news.

No one, least of all I, would argue for media happy talk about the economic crisis. The real underlying factors behind the crisis – the long neglect of a prudent energy policy, the need to rethink the criteria for extending credit to homebuyers, for example – need to be reported in full, and the media should help to surface new directions and policies to put our economy on a sustainable growth path.

But this constant yammer of the latest declines on Wall Street and how Joe Public feels about the disaster surrounding us is simple fear-mongering, which leads to bearish behavior by investors and shoppers. I am afraid that the media’s own perceived interests, at this time when their backs are against the wall, may not be serving public needs as they once did when they could be counted on for more fair and balanced coverage.

This points up the importance of reading, watching and listening critically to what the media is currently reporting, discounting the crisis tone and looking more at the fundamentals of the economy. As President Obama said in his inaugural address, “our workers are no less productive today than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished.”

We are experiencing a crisis of confidence, and I fear that the media are fanning the flames in an effort to save their own skins. The ironic thing is that media perceptions of their own interests may be shortsighted. The economic downturn may finally demolish many media companies, whose business fundamentals are weak, along with all the other individuals, companies and other organizations that are being so negatively affected.

Obama Adviser: Fundamentals of Economy are Sound

Christina Romer, one of President Obama's top economic advisers, echoed one of Sen. John McCain's most derided campaign quotes when she told David Gregory on yesterday's "Meet the Press," "The fundamentals [of the American economy] are sound in the sense that the American workers are sound, we have a good capital stock, we have good technology," she said. "We know that -- that temporarily we're in ... a bad situation."

California residents can get a fuller sense of her interpretation of the health of our economy and how it will be affected by continuing government actions when Romer appears at The Commonwealth Club of California in -- we hope -- the near future. She had been scheduled to appear at The Club tonight, but she had to postpone the speech when government business came up. (Keep watching The Club's web site for a new date when it is scheduled.)

The administration looked to be using the Sunday morning and evening public affairs circuit to paint the picture of an ailing economy beginning to stir. In addition to the president's comments earlier in the week and Romer's assessment yesterday, Federal Reserve Chairman Ben Bernanke told "60 Minutes" the recession would "probably" end this year. (View the video here.)

A story on Fox News makes note of the similar language used yesterday with that of McCain's uttered just days before the fall of Bear Stearns last September. It quotes White House Press Secretary Robert Gibbs making a hard-to-understand argument in the administration's defense, "there's a definitional difference between sound and strong."

When Romer comes to the Bay Area, maybe they'll have the definitions figured out.

Populist Anger Continues to Rise

Jon Stewart is a comedian, not a media critic, but he voiced America's frustration with the financial system last week when he sparred with CNBC's Jim Cramer. Robert Reich is an economist who better summed up the essence of Stewart's populist rant in a word: "helpless."

Writing in Salon.com today, the former Clinton administration cabinet secretary is a frequent speaker at the Commonwealth Club of California. Reich spoke at the Club in January, saying that the federal stimulus bill needed to be much larger than the legislation that ultimately passed ($787 billion over two years). On his blog, Reich recommends that the Obama administration quickly draft another stimulus bill of roughly the same size.

He also believes the populist streak that is becoming more fervent across the nation as instances of financial impropriety increase is hindering the confidence of the American people and rendering them helpless.

If our very own Secretary of the Treasury [Timothy Geithner] doesn't even learn of the bonuses until months after AIG has decided to pay them, and cannot make stick his decision that they should not be paid, AIG is not even accountable to the government. That means AIG's executives -- using $170 billion of our money, so far -- are accountable to no one.

The possibility of this firestorm of populism possibly engulfing the Democratic-led Congress and White House may be the impetus for a story in today's New York Times in which top White House officials fear the backlash could make future bailouts more difficult to push through Congress.

Reich also makes an interesting point regarding AIG's financial priorities if it were forced into bankruptcy last fall, instead of being propped up by the government.

Had AIG gone into Chapter 11 bankruptcy or been liquidated, as it would have without government aid, no bonuses would ever be paid (they would have had a lower priority under bankruptcy law than AIG's debts to other creditors); indeed, AIG's executives would have long ago been on the street. And any mention of the word "talent" in the same sentence as "AIG" or "credit default swaps" would be laughable if laughing weren't already so expensive.

In the meantime, Geithner and economic adviser Larry Summers, among others in the administration, continue to say there is little the government can do to stop AIG employees from keeping their portion of the $165 million pie. And New York Attorney General Andrew Cuomo wants the names and job performance records of every AIG employee receiving the infamous bonuses. Whether such efforts at instilling confidence in the accountability of recipients of the bailouts works or not will likely play a big role in forming future attitudes of American citizens toward government response to the economic crisis.

--Steven Tavares

Newsom Courts California's Left; Says State's Fiscal Crisis Can Be Fixed

Putting a positive spin on California's continuing fiscal crisis, San Francisco Mayor and likely gubernatorial candidate Gavin Newsom says the problems can be fixed, though he did not offer specifics. The Democrat also maintained his support for same-sex marriage.

“I don't think there's anything particularly extraordinary about the state's problems,” Newsom said Wednesday night at The Commonwealth Club of California in San Francisco. He later criticized the lack of creativity from state lawmakers. “The problem we have in Sacramento is an absence of new ideas,” he said.

Newson's visage has recently blanketed the national media, appearing on seemingly every possible news program in an appeal to gain visibility in advance of a probable run for governor. The mayor has also held numerous town hall-style meetings up and down the state and said he believes voters in predominately conservative counties like Placer share most of the same concerns as liberal voters.

"We have the exact same concerns,” said Newsom, “People there have different perspectives and points of view on many issues, but when it comes down to it, at this time, in the world we live in, in the environment we're living in, it's about jobs, it's about education, it's about health care, it's about roads, infrastructure.”

But it was the contentious issue of same-sex marriage to which the mayor is invariably linked by pundits across the nation that was the portion of the hour-long program where Newsom seemed to hit his stride and rationalized his infamous rallying call that proponents of Proposition 8 successfully used against him.

“I learned that I prefer to be the guy that made a mistake saying, 'whether you like it or not' than the guy who just sits there and plays in the margin," said Newsom, "I'm not going play it safe. I'm going to be authentic. I'm going to be myself. You may not like me, but you know where I stand.”

For a politician with state-wide aspirations, Newsom's appeal appears targeted to the most progressive wing of the California electorate, despite the unpopularity and the politically peril that supporting same-sex marriage poses to his candidacy. He was unapologetic in response to a question from moderator Scott Shafer, who at times sparred with Newsom, saying he did not regret officiating the marrying of the first same-sex couple in the city five years ago.

“The idea that someone wants to share that moment and that experience of something that has been denied them their entire life and they want you to share that, and for [me] to say no because I'm worried about my politics is everything I'm not about. If I was worried about politics I would have never done this, ever. Do you think it's helped in the context of everything else? These guys are running around -- these politicians -- on this.

"I know it's not good politics," he continued. "I understand it better than any human being alive. Every single day people are expressing their point of view about how outraged they are and every consultant saying, 'Well, just tone it down.' I can't tone [down] something as fundamental as someone else's rights. If a politician can put aside someone else's rights so they can get ahead politically ... you've got a million politicians who wish to do that. I'm never going to be that person. I never will.”

At one point early in the program, Newsom sounded a bit like an auctioneer, listing his accomplishments and talking points for a nearly two-minute stretch elicited a few groans from the audience. The point was not lost on the mayor. Later, Newsom was asked about his fight with dyslexia and said that “everyone overcompensates in their own way,” and that he has an ability to retain facts and figures that tend to muddle his message. “It's given me more empathy for special education and to recognize that we are not all wired the same, and we all have a wonderful capacity to live our lives out loud.”

--By Steven Tavares

Economy Already a Hot Topic for 2010

The politics over the stimulus plan and its near-unanimous rejection by congressional Republicans is already taking center stage for the drama that will be the 2010 mid-term elections. Robert Reich wrote an interesting blog posting this week exploring the reasons why Republicans will not have a thing to do with the proposal.

Republicans don't want their fingerprints on the stimulus bill or the next bank bailout because they plan to make the midterm election of 2010 a national referendum on Barack Obama's handling of the economy. They know that by then the economy will still appear sufficiently weak that they can dub the entire Obama effort a failure -- even if the economy would have been far worse without it, even if the economy is beginning to turn around.

During two votes in the U.S. House of Representatives, no Republican backed either version of the stimulus. It took a few centrist-leaning Northeastern Republicans to win passage by a single vote in the Senate. A Reuters story yesterday implied that President Obama's rival Sen. John McCain was portraying the nascent administration as adverse to bipartisanship and characterized the plan by saying, "I think that the majority of people understand that this was generational theft." Democrats, conversely, begin to complain that the bill was too bipartisan -- even without GOP cooperation. In an interview with conservative newsweekly NewsMax, the leader of 1994's "Contract with America" Newt Gingrich said he "absolutely" sees a connection between when Republicans took over the House and 2010.

Irwin M. Stelzer imparts these talking points while writing in The Weekly Standard and illustrates this point by saying that Obama "now owns the recession." By pegging the troubled economy solely on Obama, these critics may believe that the president cannot possibly make in-roads in quite enough time for congressional elections next year.

He has asked to be judged by whether this bill and other measures he will propose create or "save" 3.5-to-4 million jobs, the number lost so far since unemployment turned up. Forget "save" -- if unemployment keeps rising, voters are not likely to rally around the slogan "It would be still worse if I hadn't spent your trillions." What the President has done is to promise what he certainly can't deliver in time for the congressional elections next year -- a reversal of job destruction, and millions of new jobs, said Stelzer.

When it's all said and done, it's still all about the economy, stupid, as Bill Clinton's campaign declared in 1992. How President Obama, congressional Democrats and the Republican opposition react to that in 2009 will be a tale we're likely to hear a lot about in 2010.

--Steven Tavares

How to Win a New Job

When the country is in a severe recession, it's a good time to have a job. The trick sometimes is holding onto it.

Johnson Publishing, the Chicago-based home to such long-standing magazines Jet and Ebony, recently announced that it was reorganizing its operations and that current staffers would be allowed to reapply for their jobs. The company says it is part of a process of repositioning the company "to service the changing media environment."

Johnson's changes are not unique, of course, either in the media industry or in business of any industry. Every week and almost every day brings news of more layoffs, store closings, and cutbacks in hours worked. The country has gone through downturns before, and layoffs are not unusual. But in past recessions, the downturn was often in specific sectors, hitting hardest some whil leaving others only lightly or not at all damaged. One could leave a job and expect to find employment elsewhere. This time, the carnage is widespread.

Consider one young scientist we know who moved to the Bay Area in 2001 after getting his degree from an Ivy League school. After two months on the job, and while still paying off moving expenses, he was laid off when his company was purchased and went through a round of "servicing the changing [science] environment," so to speak. But within two weeks, he had landed a new job -- and a better-paying one, at that.

But just this week, his company laid off about a quarter of its work force, and those employees will have to compete with every other laid-off scientist if they search within the science markets for a new job, and if they start looking in other industries, they'll have to do jobforce-battle with out-of-work real estate agents, store clerks, sales people, and, perhaps, postal carriers. There's no schadenfreude when everyone's in the same boat.

The Bay Area is still filled with enough people who remember the layoffs following the collapse of the dot-com bubble. And once again, people are looking for information and leads on new careers, new jobs, new industries. The Commonwealth Club's Inforum division held a green-jobs fair on January 26, drawing an overflow crowd (literally out the door, down the stairs and onto the sidewalk). See ABC7's report, video and photos here.

The massive turnout demonstrated both the thirst for help with job-seeking and the eagerness to find the next big thing that wil power a career and an economy. In this case, it's the new technologies driving the green business future that many people, including President Barack Obama, have been touting. People who missed that event will be heartened to know that Inforum will produce another jobs fair in the near future, and will remain focused on how the economy is impacting people's lives and what they can do about it.

Activist and self-appointed "green jobs guru" Van Jones made a repeat appearance at The Commonwealth Club on February 2. See the video embedded above for his previous appearance at The Club, when he and California legislator Darrell Steinberg discussed their vision for helping the economy by helping industry to help the environment.

So there is help out there. But people in the Bay Area may be finding that the best results will come via the region's famous networking opportunities, such as Inforum job fairs and meeting the people who are building the new economy.

Economic Forecast: An Interesting Year Ahead

Former Clinton administration Labor Secretary Robert Reich gave the annual Bank of America-Walter E. Hoadley Economic Forecast speech last month to a sold-out crowd of people curious about what's going to happen in 2009. Reich tried to allay the audience's worst fears, but he did not sugar-coat the basic message, that he believes we are in for a rough recession -- he mostly avoided the "d-word" -- but that effective action by Washington could shorten the pain.
Watch the excerpt above to see his message. And Commonwealth Club members should keep an eye out for their March magazine in a few weeks, which will feature a Reich forecast cover story, as well as some valuable looks-back at previous economic times of trials in 1980 and 1933.

Tough Times in the Citi

When Wells Fargo & Co. Chairman Dick Kovacevich spoke at The Club October 21, he gave a detailed history of the drive to deregulate banking in the United States and open up new lines of business for banks. (See video above of Kovacevich's speech, or listen to audio.) Kovacevich's history drew heavily on his many years of work as an executive at Citibank, as it grew to global giant status and led the way in the deregulation fight.

Now, is that fight over? News this week is that Citi is dividing itself up, sequestering its "bad bank" businesses from its "good bank" businesses so that the bad doesn't drag down the entire business. And the Congressional financial overlords are talking of tightening regulation of banks -- something that will be easier, now that many banks are taking taxpayer money in one form or another. (There's no free lunch, even for the pinstripes.)

We should get at least a glimpse of the answer on Tuesday, when Barack Obama gives his inaugural speech in Washington, D.C.