Great Recession or Little Depression

July 26, 2011

It was understandable at the time.  With financial markets in a panic and confidence shattered, everyone from media, politicians, and financial analysts characterized the period from late 2008 through early 2009 as the Great Recession.  But has that characterization, which underrepresented the extent of the economic crisis, hampered our nation’s recovery?  In addition, has it prevented politicians from enacting the policies necessary to combat devastating economic conditions not seen in this country since the 1930’s?

Subsequent economic analysis from 2008-09 demonstrates that the period was unlike any recession we have seen since World War II.

U.S. post-WWII Job Losses

The graph above – compliments of Calculated Risk – highlights the percentage of job losses compared to peak employment prior to economic contraction.  Clearly, the period from late 2008 to now is far worse than anything seen since the Great Depression.

U.S. Long Term Unemployed

The second graph illustrates people unemployed for more than 26 weeks.  Renowned economist Paul Krugman argues that we are still in the midst of a depression.  He notes that historically depressions do not normally comprise periods of nonstop contraction.  Instead, depressions usually have a period of economic growth, but the growth is too small to undue damage from the initial slump.  Krugman, along with other economists, are arguing for more expansionary fiscal and monetary policy.

But since many pundits characterized the period from 2008-09 as a recession, many Americans believe the worst is behind us.  Thus, they are more agreeable with political sentiment that argues for contractionary fiscal policy, such as near-term reductions in government spending.  Barring a complete collapse in our economy, which is certainly possible if the government defaults, a stimulus would be impossible to navigate through Congress.

Politicians most harmed by this are the ones who were in power in 2009, particularly the Democratic Party and President Barack Obama.  The public is more apt to compare the Great Recession with more recent recessions, such as 2001, 1991, or the early 1980’s, as opposed to the 1930’s.  As such, the public is less inclined to give elected officials the benefit of the doubt for slow progress in the job market.  America bounced back quickly in the 1990’s, why isn’t it happening this time?  President Obama’s fleeting words during his Election Day victory speech, when he said “the road ahead will be long, our climb will be steep, we may not get there in one year, or even one term,” are but a distant memory.

In many ways, President Obama is a victim of his own words. By downplaying the seriousness of the crisis in early 2009 to restore confidence in the markets, the American public never truly comprehended the seriousness of the economic slump.  And when a recovery was not immediately realized, frustrations mounted, leading to a Republican rout in the 2010 elections.

If anything, this illustrates the consequences of words in the long term.  It was certainly important for elected officials to restore confidence in 2009.  But in 2011, as our economy still teeters on the balance of recovery or collapse, officials lack the capabilities to instill the policies necessary to ensure this Little Depression doesn’t become great.

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Where do Americans Turn for Breaking News?

May 8, 2011

The death of Osama Bin Laden has rightfully captured a majority of our national discourse since the announcement on the evening of May 1.  But what does the announcement demonstrate about our new media paradigm?  In the moment of breaking national news, how is information circulated?  What channels to Americans leverage to find news?

SocialFlow, a social media optimization company, analyzed Twitter on May 1 from 9:46 p.m. EST, when the White House sent a news alert regarding a pending press conference, to 11:30 p.m. EST, when the President took to the podium.

Following the news alert at 9:46 p.m., the Internet lit up with speculation regarding what Obama was going to address.  By 10:24 p.m. EST the mystery was leaked through a lone tweet.  Keith Urbahn, chief of staff to former Secretary of Defense Donald Rumsfield, sent this tweet to his followers:

Moments later, New York Times reporter Brian Stelter retweeted Urbahn’s tweet to his more than 50,000 followers.  After that, the news spread rapidly through Twitter, the blogosphere, and eventually to national news.

The image above demonstrates how exponentially information can travel through Twitter.  As people read an important tweet, they are likely to spread it by retweeting or creating an original tweet, building a cumulative Web of information.  SocialFlow notes:

Twitter has proven time and time again its value in tracking events as they unfold in realtime, accelerating the flow and spread of information across the globe. Twitter has become the dominant mechanism to get timely updates about events that are taking place regardless of geography, topic or even language.[i]

On May 2 people jumped to the Internet for news, analysis, and developments of the astonishing story.  This chart by Eric Savitz shows website visits for top online news sites on Monday, May 2 versus Monday, April 25:

As Felix Salmon, a financial reporter for Reuters astutely acknowledges, the increase in visitors for TV news organizations such as MSNBC, CNN, and ABC increased at a larger rate than more traditional print-only organizations such as The New York Times and The Washington Post.  Yahoo! News was the glaring exception, with nearly twice as many visitors as any other news site.  Salmon determines that despite our increased usage of the Internet, when breaking news hits, Americans still run to their television sets for real-time coverage.

While Americans still leverage their television sets to follow breaking news, its influence is waning.  The amount of Americans with televisions is decreasing and Felix Salmon notes the news on Osama Bin Laden’s death was reported via Twitter before any traditional news organization.  In addition, it is important to realize many people turning on a television and jumping online for news on May 1 or 2, were directed to a particular station or URL via social media – ultimately demonstrating the median’s growing significance in our culture and on our flow of information.



The Power of the Bully Pulpit

April 19, 2011

“I suppose my critics will call that preaching, but I have got such a bully pulpit!” – Theodore Roosevelt[i]

President Theodore Roosevelt poignantly coined the phrase “bully pulpit” to describe the president’s ability to leverage his stature in order to dominate media messaging and push a specific agenda. Rooseveltwas a master at manipulating media, much to the consternation of his political opponents.  He was known to give insider tips to reporters who responded with favorable stories.  In addition, his first State of the Union Address, known as the Message to Congress back then, was nearly 20,000 words long or approximately three times longer than President Obama’s State of theUnionin January 2011.

Franklin Roosevelt continued the family tradition of leveraging the bully pulpit for political advantage.  He successfully coerced the media to photograph him in certain ways to mitigate public knowledge of his paralysis and simultaneously charmed them with weekly off-the-record question and answer sessions.

Even in our present day, media saturated society, the power of the presidential bully pulpit still resonates.  Its influence was never clearer than during the final days leading up to the expiration of the FY11 continuing resolution in early April.  Prior to April 1, Obama seemingly stayed above the fray of Congressional budget negotiations.  But beginning April 4, with the launch of his reelection campaign, Obama leveraged his position to establish himself as a mediating voice in an increasingly acrimonious debate.

In order to measure media influence, we studied the amount of Google News hits from April 4-13 for Obama, House Speaker John Boehner, House Budget Committee Chairman Paul Ryan, and Senate Majority Leader Harry Reid – the four most influential voices during budget negotiations.  Obama dominated the airways with an average of 69,330 Google news hits per day.  This is more than twice as much as John Boehner (26,790) and Paul Ryan (26,500), and approximately four times greater than Harry Reid (17,790).

Despite Chairman Ryan unveiling a House Republican budget plan on April 5, the president still received more national media attention.  When Obama unveiled his own long-term budget plan on April 13, Boehner was unable to garner media interest in a press conference he scheduled approximately one hour before the president’s speech.

The advent of social media and proliferation of alternative news sources has done nothing to mitigate the power of the bully pulpit.  Similar to presidents before, Obama was able to leverage his position to dictate the narrative during budget negotiations.  In addition, he continued to set the tone for future budget talks on April 13 with his blistering rebuke of Chairman Ryan’s plan while simultaneously proposing his own alternative.

It is important to remember that the bully pulpit is only as powerful as the president wants it to be.  The president is always capable of setting the tone for debate, but sitting idle on the sidelines can lead to alternative messages spinning out of control.  This was never more apparent than during the early days of the health care reform debate in 2009, when accusations of socialism and death panels filled the airways while the Senate dragged negotiations along for months.

This time around, President Obama certainly took a page from his predecessors.  It will be interesting to see how he leverages his pulpit when Congress returns in May and the debt ceiling takes center stage.



Develop a Relationship Before Asking for Cash Online

November 20, 2010

It is perplexing how many campaigns utilize e-mail solely to solicit money without ever building a rapport with supporters or enticing supporters with insider bits of information.  This practice goes entirely against the basic tenets of sales and inhibits digital success.

Dr. Jeffrey Lant, a leading scholar in marketing and sales, coined the “rule of seven.”  The idea is it takes seven marketing touches before a marketing message or sales pitch will have any significant impact.  For campaigns, a supporter joining your newsletter isn’t enough.  You still need to win their hearts.  By making them feel a part of the campaign, they will be happy to contribute when the time comes.

In his book, The Audacity to Win, David Plouffe discusses how the Obama campaign decided to announce the selection of Joe Biden as Obama’s running mate over text message, as opposed to a traditional press conference or event.  The campaign saw two primary benefits from such a decision.  First, it would grow the campaign’s text messaging database, which ultimately rose from a few hundred thousand phone numbers to millions.  Secondly, it made the campaign’s fervent supporters feel even closer to Obama, truly believing they were a part of history by hearing about the Vice Presidential selection before anyone else.

Plouffe also highlights in his book how the Obama campaign was careful not to ask for money too often in its e-mails and when it did, would go out of its way to explain why the money was important.  For instance, in an e-mail to Florida supporters, Plouffe shot a video explaining the campaign’s Florida budget and how an additional $4 million could be the difference between winning and losing the sunshine state.

Want to raise $20,000 in the final 12 hours before the FEC reporting deadline?  Need another $50,000 for more television advertising during the campaign’s final week?  Then be sure to do the due diligence early.  Send supporters insider tidbits or videos about the campaign.  E-mail instructions on how to obtain bumper stickers or free campaign paraphernalia.  Initiate contests such as the volunteer who knocks on the most doors in a weekend wins a free dinner with the candidate.

Above all else, do not fall into the trap where all you send is solicitations for money.  Because not only will supports not contribute, they will also stop reading your e-mails.

 

Editor Note: Apologies for the lag time between articles.  A combination of leaving town, work obligations and illness placed this blog post on the backburner.  Thank you for your understanding and continued readership.

 


Getting Out the Vote

October 27, 2010

Less than one week until Election Day. In order to celebrate, we are going to spend these final days examining original and effective tactics campaigns are deploying to market their final message and drive voters to the polls.

Commit to Vote Challenge

http://www.barackobama.com/commit-to-vote-challenge/?inspired_by=506315849&g=3&source=20101022_CTVC_IFP_C_F&ref=nf

If you are a Democrat then chances are you received this on your Facebook page at some point over the last few days. OFA is sending this message to registered Democrats on Facebook asking them to commit to vote. Users are transferred to the Commit to Vote website on barackobama.com. After signing up, users can then challenge their friends to also vote in November. This is social media canvassing at its core.

Road to Victory Tour

http://burrforsenate.com/newsroom/7-days-victory

Senator Richard Burr (R-NC) has fired up the bus and is travelling throughout the state of North Carolina on his Road to Victory tour. The one-term Republican, and fellow Wake Forest alum, is primarily using video to generate voter enthusiasm – with his website front page saturated in Youtube links. He is also using Facebook to ensure North Carolinians know where they can vote early. The “EarlyVoteNC” icon on his page allows supporters to find their early voting location by entering their address.

24 Hours of Tom

http://www.perrielloforcongress.net/24hoursoftom

Embattled Freshman Congressman Tom Perriello (D-VA) embarked on a 24 hour, 22 stop tour on October 25. The Congressman tweeted continuously throughout his tour and placed a tour map on his website. The tour generated substantial positive publicity in local newspapers and the coverage continued into the follow day with the announcement that President Obama will hold a rally with Perriello on October 29.


Enthusiasm or Emphasis?

October 24, 2010

Recent studies have found Republicans capturing a decided advantage over Democrats in the social media sphere. A September study by OhMyGov finds Republican Members of Congress outdistancing their Democratic counterparts on Facebook by more than 2-to-1. The gap is also widening, with the Republican Facebook following increasing by 35 percent from May 1 to August 31, compared to 22 percent by Democrats. A recent Burston-Marsteller report found similar numbers for Twitter. Republican campaign-focused Twitter accounts average 4,820 followers versus 2,972 for Democrats. Of the top ten most followed Twitter accounts, eight are Republicans.

According to the OhMyGov report, on Election Day in 2008, President Obama’s Facebook page had more than 112,000 fans compared to Senator McCain’s 4,600. The Democrats’ social media dominance seemed as firmly entrenched as their Congressional majorities. But in a span of two years – just as they are on the cusp of flipping the makeup of Congress –­ Republicans have captured the social media market. The question is how? Is it firmly the result of voter enthusiasm? Or have the Republicans placed a greater emphasis on social media and used it to ignite an anti-Democratic fervor?

Accounting for official Congressional social media pages, Republicans Members of Congress have 133 Twitter pages (61%) and 206 Facebook pages (96%), according to www.govsm.com. Democratic Members of Congress total 99 Twitter pages (32%) and 238 Facebook pages (76%). These numbers demonstrate that Republicans place a greater emphasis on digital communications than their Democratic counterparts.

Heading into the 2010 midterm elections, no constituency has shown more enthusiasm than the Tea Party. A recent CNN poll finds that 73 percent of Tea Party supporters are “very enthusiastic” about voting in November. Consequently only 43 percent of Democrats and 57 percent of Republican say the same. And these numbers are reflective in campaign social media statistics. According to a recent study by headcount.org, four of the top seven Senate campaign social media followings – when combining Facebook and Twitter followers – are Tea Party backed candidates. These politicians include Jim Demint, Marco Rubio, Rand Paul and Sharron Angle.

While far from being statistically significant, these numbers prove that both enthusiasm and emphasis are necessary to build a social media following. In 2010, the Republican Party has both – its base is much more engaged and party leaders are effectively capitalizing on that fervor through multimedia means – reminiscent of President Obama’s campaign in 2008.