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Unemployment and November

August 6th, 2012 2 comments

In March, I debunked the Fox News claim that, after a one-month stall at 8.3%, “unemployment is not likely to fall much further and may rise again.” The message was that there is no hope for improvement, and that the numbers will stall or get worse for the indefinite future.

In the five months since then, Fox might, without looking too closely, seem to have been correct, in that the unemployment numbers have stayed steady since then:

  • February: 8.3%
  • March: 8.2%
  • April: 8.1%
  • May: 8.2%
  • June: 8.2%
  • July: 8.3%*

*July is really 8.254%; “8.3” is a rounding-up from that. It is only slightly up from 8.217% in June.

However, as I pointed out in March, conservatives often seem blind to the fact that unemployment numbers are a lagging indicator, especially when it means they can make Obama look bad, or their own guys look better.

Knowing that the unemployment rate lags about 9 months behind the jobs numbers gives us a bit of a crystal ball to see what will happen in upcoming months as far as unemployment goes. Yes, I know that it’s not that simple, but there is, in fact, a correlation. For example, the recent stall at 8.3% to 8.1% beginning last February matches very nicely with the stall in job creation that happened last year in May.

In March of this year, I predicted:

The bad news for Obama is that, for the next 4-6 months, unemployment will not be so hot–it may drop a point or two over the next 4-6 months (numbers might show a drop in June or July more than other months)…

I was not spot on where the slight drop would occur, but I was correct in that it could vary by a point or two. The real test, however, will be in next three months, about which I made this prediction:

[The unemployment rate] may not really start to change again until just before the election–which is the good news for Obama. The rate should start dropping regularly come September, when we see the numbers for August.

Based on nothing but a guess, I would say that the unemployment rate will probably be between 7.6% and 7.8% come November. The last three months, all good gainers, will show up in the unemployment rate in the three months leading up to election day.

That still remains a distinct possibility. My prediction was based on this chart:

Screen Shot 2012-03-10 At 1.21.56 Pm

A slump in job creation hit in May 2011 and continued for roughly six months up until October. Nine months forward, this would apply to February to July–which is precisely where the unemployment rate stalled. Then, from November 2011 (August 2012) there was a surge again, with overall job growth going above 200,000 per month. If the correlation holds true, then we should be seeing the unemployment rate going down again starting next month, at latest in October, but with an appreciable drop when the numbers come out just before election day.

Note that I am not hailing a recovery or anything, but rather simply the short-term number which could have a real effect on the election this fall.

In the meantime, I am otherwise sanguine about Obama’s chances. Yes, the wingnuts have been going to town with the dishonest “You Didn’t Build That” campaign. However, Romney has been obliging in shifting the focus to his tax returns (making it seem for all the world that he’s hiding some pretty bad stuff in there), his tax plans (raising taxes on the 95% to pay for yet another whopping big tax cut for the rich), and his gaffe-tastic trip abroad (demonstrating that not only can he not handle foreign policy, he can’t even keep from pissing off our strongest allies for a day or two).

In the meantime, while the popular vote has not shown much shift (Obama 50.7%, Romney 48.3%), Obama has made significant electoral gains. Not just in total numbers (he currently leads Romney 300 to 238), but in how much he may have key states locked up. Pennsylvania was supposed to be a battleground state; the numbers have shifted so far in Obama’s favor, however, that Romney gave up and stopped advertising there. Ohio and Florida have shifted to Obama’s column fairly significantly, with Obama enjoying 6-point leads, which may expand as economic forecasts for those states predict improvement. At FiveThirtyEight, Obama is projected to have a 55% chance of winning Florida, and a whopping 71% chance of winning Ohio. In fact, Obama now leads in all swing states.

Not that things can’t change. However, there is presently no evidence that they will. If a change comes, it will come from somewhere we do not expect–a terrible last-minute scandal that Obama cannot deflect like Bush did with his drunk-driving charge, a sudden, unexpected economic downturn, a series of bad gaffes on Obama’s part–that kind of thing. The odds, however, seem to be against that.

In fact, I now see enough breathing room to tempt fate and possibly even foresee excellent election results for not just Obama, but the Democrats in general. Right now, both the House and the Senate look like toss-ups. However, look forward to November: what if Romney is in the doghouse, and enthusiasm for Obama is up? That could have a negative effect, as Obama voters will not feel as threatened and may feel less inclined to vote (an effect magnified by vote-suppression campaigns by Republicans, not to mention massive redistricting).

What about the other side, however? If Mitt Romney stands little chance to win, what effect will that have on Republican voters? A key point here is religion: traditionally, the strongest get-out-the-vote campaigns have come from the churches and fundamentalist elements, the deep-red areas which rally to send out the troops. What if the election is about sending these warriors of God out… to vote for a Mormon who stands little chance of winning anyway?

I am not talking about the possibility of a landslide for Obama–I refer instead to the possibility that a depressed fundamentalist vote in red states could lead to unexpected gains for Democrats in down-ballot races, possibly giving Democrats a majority in both the House and the Senate.

If they can win that, and if the rumors are true that Democrats in the Senate will finally wake up and realize that Republicans have succeeded in utterly destroying the usefulness of the filibuster in overall terms, then when the Senate resumes business next year and Democrats have a chance to rewrite the rules, they could do away with it–and, as a result, they could actually start to get things done without Republicans blocking everything.

This is my big hope–not that Romney loses big, but that the built-in religious prejudice, which until now has hindered Obama and the Democrats, will finally come home to roost for the right wing, possibly handing Congress to the Democrats.

If that happens, maybe Democrats can start some real infrastructure spending, raise taxes on the wealthy to a reasonable level, cut them a bit more for the middle class to help get the flow running better, and help at least some form of recovery finally come along.

In short, after four years of Republicans “leading from behind,” we can actually have a Democratic presidency which is more sabotage-proof than it has been.

Of course, Obama will probably make concessions to Republicans even then, even when he doesn’t have to.

Categories: Economics, Election 2012, Religion Tags:

Lagging Behind

February 5th, 2011 2 comments

Good news, bad news–unemployment dropped rather sharply to 9.0%, following an identical 0.4% drop from 9.8% from November to December. Unfortunately, it’s not such great news. Only 36,000 jobs–an anemic number–were added in January, and while that’s still significantly better than the -740,000-job hole Bush left us with in January 2009, it’s not nearly enough.

Last month, Republicans laughably tried to take credit for the drop in unemployment after taking the reins of the House for only 19 days. Being consistently inconsistent, they are now claiming that a second similar drop is not enough. Make up your minds already.

Something is interesting about the news articles on this, and maybe one reason why people can’t see the Republican claims as being ridiculous lies. From the AP:

The unemployment rate dropped sharply last month to 9 percent, based on a government survey that found that more than a half-million people found work.

The Washington Post:

The jobless rate fell to 9 percent in January from 9.4 percent in December and 9.8 percent in November. In a promising sign, the improvement in January reflected the success of nearly 600,000 more people in finding work. By contrast, the rate fell in December in part because people had dropped out of the labor force, too discouraged perhaps to even look for work.

Funny how none of these articles mentions that the unemployment rate is a lagging indicator, which allowed me to predict the current changes in the unemployment rate last October. What we’re seeing now reflects the pop we saw about nine months ago when jobs went in the black for the first time in a few years. A few months later, the number of new jobs dipped, and though we haven’t gone negative on average, we’re more or less trading water–meaning that, in all likelihood, the unemployment rate fall will slow or stop soon (maybe the reason why Republicans stopped trying to take credit for it).

And while Obama has been trying to get us back on track with new stimulus spending, Republicans have countered with demands for cuts (except their massive increase in the form of the tax deal, mostly for wealthy people who don’t need them). A lot of those cuts–aside from the usual stabs at “liberal” spending like for PBS–are for infrastructure, job creation, education, scientific research–some of the best values in both short- and long-term investment. A great deal of what the Republicans are trying to cut represent lots of jobs–in short, they say we can create jobs by cutting jobs. Some of their proposals are painful–like the one-time sale of federal properties which are unused, with not a whisper of charging for public resources the government currently gives away to big business.

Even if they were actually serious and could really cut spending–doubtful–we would still be sinking further into this deep pit, and it probably would not have a positive effect on jobs–just like continuing the Bush tax cuts won’t have a positive effect.

The good news is, at least now they’re coming out with proposals, actual ideas–a significant change from before. The bad news is, they’re mostly the wrong ideas, ones that will likely hurt more than help, many of them simply having no effect at all.

Categories: Economics Tags:

Conservatives Are “Mistaken” about the Minimum Wage

May 14th, 2016 1 comment

BoehnerquoteI have written before about how conservatives make rookie “mistakes” in economics when it serves their purposes. They claim that Reagan doubled revenues but “neglected” to take inflation into account; they claim Obama drove unemployment up to 10% but “forget” that unemployment is a lagging indicator; they claim minimum wage hikes caused job losses in 2008, but “overlook” the subprime mortgage crisis.

With the current minimum wage debate, conservatives are at it again. With willful ignorance, they make two glaring “mistakes” in their claims.

“Mistake” #1:

In 2013, Boehner said, “When you raise the price of employment, guess what happens? You get less of it.” This quote exhibits the exact same knowing ignorance behind the whole minimum wage issue: that increasing wages is an cost, and when cost goes up, consumption goes down.

The rookie “mistake”? That employees are a commodity. They’re not. They’re an investment. Saying that raising wages will make businesses hire less is like saying that when stock prices go up, people don’t buy as many.

When you raise wages, people leave the job less; turnover is reduced. Employees stay on longer, acquire more experience, have greater job satisfaction, and they become more skilled, more efficient, and more effective at their jobs. In short, their value rises. Employers recognize this, and give the employee greater responsibilities. End result: by investing, the employee becomes more valuable, thus returning on the investment and making it worthwhile to the employer.

“Mistake” #2:

Conservatives often claim that businesses will not be able to afford higher wages; a common retort they have is, “Where do you think that money comes from?” The answer is easy: where do you think the money goes?

If all minimum wage earners get a higher wage, that is a massive amount of money going into the economy. Minimum wage workers do not stash their money overseas like a rich person would; they buy goods and services here and now, because they need them. Where do they shop? They shop at the exact kind of business that pays their workers the minimum wage. So the money that pays minimum wage workers goes right back to the businesses paying minimum wage.

That’s where the money comes from.

Conservative Claims and Rookie Economic “Mistakes”

October 26th, 2015 7 comments

MwcOne axiom I have noted over time is that when conservatives trumpet right-wing economic success or decry left-wing economic disaster, the claims are consistently riddled with distortions and errors, but there is usually at least one big, whopping Rookie “Mistake” involved. I use the word “Rookie” because the errors usually involve simple, fundamental errors in economic reality which a first-year Econ student could easily spot. I put the word “Mistake” in quotes because it seems pretty evident that they are not actually mistakes, as the errors are not random, but always work to conservatives’ favor.

This came to my attention again recently upon hearing the old conservative chestnut that minimum wage hikes will result in massive layoffs for minimum age workers, and a hike in unemployment overall. While no support for such a claim can be presented, and the record says the opposite, the claim is still made, and “facts” are published to “prove the point”—“facts” which feature these Rookie “Mistakes.”

Let me give you three whoppers from over the years and disassemble each one. The three are:

  • Reagan cut taxes and doubled revenues;
  • Obama drove up the unemployment rate to 10%; and
  • Minimum wage hikes from 2007 to 2009 drove up unemployment for young people.

Jeff Cox at CNBC wrote in 2011, “During the Reagan years, the man they called Dutch cut taxes but doubled revenue…” while Sean Hannity in 2005 gave the meme in it’s most basic form: “Reagan cut taxes and doubled revenue in his eight years.” Limbaugh has repeated this chestnut repeatedly over the years, most recently in 2015, when he claimed that “the amount of money collected from the tax code’s almost doubled to 900 some odd billion dollars by reducing the rates.”

The “doubling” of revenue comes from taking the revenue from 1980 to 1990, and yes, it did increase from $517 billion to $1.032 trillion (find the data here). And yes, Reagan did cut taxes.

However, Reagan also raised taxes 11 times, including one of the biggest in history. How that comes out in terms of hikes vs. cuts is difficult to say, but there is naturally an evening out in play.

More importantly, Reagan was not president in 1980, and his first budget did not take effect until the beginning of 1982 (conservatives love to include 1980 because it contains the biggest distortion). Realistically, we should use 1981 as a baseline and 1989, the last year Reagan’s budget was in place, to compare. Between those years, revenue increased from $599 billion to $991 billion. Not a doubling, but still, a 65% increase. So, still impressive, right?

Well, here’s where the Rookie “Mistake” comes in. Reagan oversaw massive inflation in his early years. The inflation rate from 1981 to 1989 was 36.4%. Take that into account, and in constant 1989 dollars, we saw revenue rise from $871 billion in 1981 to $991 billion in 1989—a much lesser 21% increase.

The lion’s share of the increase that conservatives claim under Reagan came from inflation. Were Carter’s revenue increases to be measured in the same way, we would have to say that after only 4 years in office, he increased revenue by 69%! Even bigger than Reagan’s increase on a year-by-year basis! Jimmy Carter was even more an economic genius than Reagan! No conservative would agree to that, making their unadjusted claims about Reagan dishonest as hell.

But hey, we’re not done. Reagan’s biggest tax hike was in Social Security taxes. Sure enough, Social Security revenue increased 44% during his budget years. Personal income tax revenues rose only 14% in contrast.

Not to mention that revenue increased in part because the population of the country also rose, by 17.4% in total, and by 8.2% in working age population. Reagan could not have been responsible for that! These changes would increase consumer spending, the amount of business done, and the amount of revenue collected overall. By how much, again it is hard to say—but it likely cuts Reagan’s revenue increase due to tax policy down to the single digits, possibly the low single digits.

How much of the remainder was normal economic cycles? Again, hard to say. However you slice it, though, Reagan did not even come remotely close to doubling revenue. Accounting for inflation and factors beyond his control, it is arguable that Reagan oversaw almost no revenue growth at all.

Conservatives will try to muddle the picture by claiming that it was Democrats who raised taxes and who also raised spending, that Reagan did everything positive but Democrats sabotaged it—but Reagan signed every tax increase into law—none were passed over a veto—and seven of the eight Reagan-era budgets Congress passed were less than what Reagan proposed.

Next, let’s look at the unemployment claim. Some, like Limbaugh, not only claimed that Obama raised the unemployment rate to its peak at 10.1%, but even tried to get people to believe that he inherited a 5.7% rate from Bush—not even remotely true. Some claimed that Unemployment “rose steadily” for two and a half years after Obama took office, from 7.8% to 9.2%, neglecting to mention that it peaked 9 months after Obama took office and decreased on and off since then. Most were slightly more honest in saying that the rate rose from 7.8% when Obama came in to office and peaked at 10.1%, but were dishonest in claiming that Obama “caused” this.

The immediate and obvious fact that conservatives “overlook” is momentum. To blame Obama for the economy mere weeks or months after he walks into the Oval Office is dubious at best—not that conservatives were even that constrained, many instantly proclaimed the “Obama recession” in full effect mere days after he was elected. Reagan had a 10.8% unemployment rate after inheriting a 7.5% rate, hitting the peak a full 22 months after he entered office; I don’t hear conservatives saying that Reagan spiked his unemployment numbers. They’ll likely blame that on Carter.

I have often made the analogy to pilots flying an airplane: one pilot, Bush, pushes the plane into a steep dive, from 40,000 feet to 20,000 feet; in mid-dive, he hands the controls over to the new pilot, Obama, who immediately struggles to come out of the dive, but drops to 10,000 feet before he can level out. Critics immediately blame Obama for the 10,000-foot altitude, noting that he’s been in control of the plane for a full minute and a half.

However, the real Rookie “Mistake” comes into play when you consider the fact that unemployment is a lagging indicator—often changing only 2 or 3 quarters after an upturn in the economy. Take that into account, and Obama’s influence on the unemployment rate begins at 10.1%—and has fallen steadily ever since. This tracks with the fact that job numbers took a rare sharp turn very soon after the Obama stimulus, and when a 9-month lag is accounted for, tracks pretty much exactly with the unemployment rate.

And how does the lagging indicator account for Reagan? Not well—when unemployment caught up with Reagan, it had gone from 7.5% to 7.9%, only minor fluctuations. It shot up to 10.8% only after Reagan fully owned the numbers.

In short, Obama did not raise the unemployment rate to 10.1%, from neither 5.7% nor from 7.8%; the 10.1% was pretty much inevitable. As I have often pointed out, Obama has driven it down, now to such a low number (5.1%) that conservatives have been forced to resort to a variety of other metrics to make Obama look bad. (Reagan, by comparison, never got the number down past 5.3%.)

Finally, let’s look at the minimum wage. The conservative claim has always been that raising the wage will increase unemployment, using the very simple idea that businesses have a finite budget, and so if wages are raised, they will be forced to lay some people off. I recall Mary Matalin asking the question, “Where do you think that money comes from?”

The answer is part of the Rookie “Mistake”; to find out where the money comes from, first look at where the money goes. It goes to workers, who then have more disposable income, who then start buying more things, which then winds up in the hands of businesses paying the wages. They don’t even need to raise prices. That’s how the economy works, but it only works if done on a societal level—one business raising wages can’t trigger that effect.

But The Wall Street Journal, unsurprisingly, used bogus figures to back the conservative claim. In a 2010 article, often cited by right-wingers, they showed that minimum wage hikes instituted by Democrats after they took control of Congress in 2007 resulted in rising unemployment figures which tracked almost exactly with the wage hikes:

WSJ Bogus Chart

This chart was further exaggerated by right-wing bloggers, with the comparison skewed even more by dual axes:

Even More Bigus Chart

Wow! Look at how those figures line up so perfectly! Iron-clad proof that the minimum wage destroys jobs!

Except for the other Rookie “Mistake,” that being the fact that unemployment rose in both charts because of the sub-prime mortgage crisis leading to a near-depression, and had nothing to do with the minimum wage. A first-year post hoc ergo propter hoc fallacy, committed by the supposed “experts” at the Journal, the kind of rational thought we can expect from people who blamed the sub-prime meltdown on businesses wishing people “Happy Holidays.”

This is par for the course. Conservatives “overlook” these “errors” in basic economic figuring only when it suits them. Despite the common stereotype that conservatives are more expert when it comes to financial matters, one has to question every claim and assumption made, especially by these jokers.

Categories: Right-Wing Lies Tags:

Conservative Myths, Memes, & Lies

July 14th, 2013 3 comments

There comes a point where the sheer volume of fault- and falsehood-ridden conservative “facts” and ideas is rather breathtaking to behold. With sadly lowered expectations of what passes for logic and standards of evidence, and then to be assaulted with such claims on an almost daily basis, we sometimes fail to appreciate the startling number of assumptions and opinions held by conservatives which are not only demonstrably false, but usually obviously so.

Here is a list of ones that come to mind at the moment. I had to stop at fifty, the list was getting so long.

You cannot say the word “God” in the public square. Yes you can. God is everywhere, in every public oath and on every piece of currency. How many children are compelled daily to mention God in the pledge in public schools? How many television and radio shows and even stations are dedicated to preaching 24/7? Clearly, you can say the word all you want. Myths about people practicing religious freedom in public and being arrested for it are inevitably about people failing to secure parade permits and the like. If this claim is instead made to mean that god cannot be mentioned in government buildings, then a person claiming such may be referred to any American legislative session at any level, virtually all of which are initiated, daily, by a clergyman saying a prayer.

You cannot say the word “God” in a public school. Of course you can. The only restriction is that no one representing the school may advocate a specific religion to the exclusion of others.

Children are not allowed to pray in public schools. Wrong. Students can and often do pray in public schools. Any “private, voluntary student prayer that does not interfere with the school’s educational mission” is allowed.

There is a war on Christianity in American society. Quite the contrary. It is other belief systems that are discriminated against; Christianity is safely dominant in American society. The perceived “war” on Christianity is nothing more than (1) appropriate and yet often-less-than-wholly-effective resistance to unconstitutional encroachments by Christianity in violation of the First Amendment, such as resistance against teacher-conducted prayer in public schools; or (2) fictional “attacks” on religion which are nothing of the sort, such as a business using the expression “Happy Holidays!” to greet all customers, including Christians.

Conservatives fight for freedom of belief. Not true; they do so only when the religion in question is Christian; all other belief systems are second-class or worse. Religious discrimination is in fact practiced in the United States—only it’s conservative Christians who are the most often guilty of it. Blocking the building of mosques, demanding atheist billboards be taken down, shouting down a Hindu cleric delivering an invocation—even harassing a Jewish family when they object to their daughter being pressured to convert to Christianity.

Secularism is anti-religious. Secularism is not the banning of religion, it is the policy in which no one religion is allowed to be presented as the official religion of the state, as it is a historical fact that when a belief system is endorsed by the state, all other belief systems suffer as a result. Christians who want state officials and representatives to overtly promote Christianity are in violation of this principle, but do not see things that way. They see their dominance in state affairs as a given, only natural and right; they see secularism as a means of preventing their “religious freedoms,” i.e. to impose their religious beliefs (which they see as moral imperatives) on others. In a way, this is similar to the claim that science is anti-religious when it announces observations such as life evolves from simpler forms or that the universe is billions of years old; these claims do not attack religion, but instead simply contradict religious excursions into realms in which religion has no right to dominate.

Separation of church and state is an offense to religion; the founding Pilgrims would have abhorred it. Very similar to the claim above. The invocation of the Pilgrims is especially ironic, as their plight was one of the reasons that separation of church and state was established, and serves as an excellent example of why the principle is sound. The Pilgrims were driven out of England when the state-endorsed religion enacted a series of laws requiring all subjects to attend state-sponsored churches and to read from state-authorized prayer books, else face fines and imprisonment. The only way to allow all belief to flourish is to do so in a state where no one belief system is allowed to dominate; the only way to assure that is to maintain a strict separation of church and state.

Corporations are job creators. As Nick Hanauer pointed out, businesses, by nature, are opposed to creating jobs. Employing people is an expense, and businesses avoid every expense possible. Businesses hire people only when there is no other choice, and fire people whenever possible. Job creation is most accurately attributed to demand for goods and services, which is mostly driven by middle-class consumption.

Wealthy people are job creators. Untrue, for many of the same reasons listed above. Consumption by rich people is far less responsible for creating jobs than is consumption by other groups, including the poor. Investment by wealthy people does not create jobs, rather said investment is a response to demand that presents an opportunity to a wealthy person to gain more money by purchasing ownership in a business which will attempt to hire the fewest number of people possible to respond that that demand.

Cutting taxes raises tax revenues. The idea that the government can raise more revenues by cutting the amount of taxes people pay is dubious at best. There may be stimulative tax cuts if they are targeted precisely, but it is more likely that there are far better stimulative alternatives—amongst which the strongest include issuing food stamps and spending on infrastructure projects. Worse, conservative tax cuts are aimed primarily at the wealthy, a type of tax cuts which is rather plainly not stimulative.

Cutting taxes for wealthy people and businesses spurs investment in businesses which create jobs. This is usually argued when conservatives wish to cut the capital gains tax, or other taxes which mostly affect wealthy people. It is patently untrue. If a market is depressed and no one is spending, you can give all the money in the world to wealthy people and businesses, and they will not invest it in job-creating industries—precisely because no one is buying anything. Why should a wealthy person build a factory to create things when no one is buying them? In contrast, if you give wealthy people and businesses no tax cuts, or even if you raise their taxes, they will always find revenue to invest (by using their collected wealth or by borrowing from banks) if people are buying something.

Wealthy people will stop working if you raise their taxes. And people will stop eating if you take away most of their food. Or, wait, that’s incredibly stupid.

Reagan cut taxes and doubled revenue. Net taxes actually went up under Reagan, and most revenue increase claimed to his credit was inflationary.

Conservatives want to cut taxes for all Americans. This is contradicted by the most recent election cycle, in which conservatives wanted to repeal both the estate tax and slash the capital gains tax and corporate taxes—and at the same time also advocated raising taxes on the poorest Americans, most specifically by eliminating tax credits and breaks aimed squarely at low- and middle-class earners. This was proposed under the infamous “47%” claim, in which it was usually asserted, either overtly or by inference, that 47% of Americans paid no taxes. The number referred to those who owed no federal income taxes, but who still paid sales, property, payroll, and many other taxes, some even in excess of the percentage paid by the excessively wealthy Republican presidential candidate himself.

Liberals are “takers” who tax hard-working conservatives so they can live off of government entitlements. It is usually not directly stated that liberals are the takers and conservatives are the makers, but that is clearly what is meant. What is ironic is that it is conservative states that take more than they contribute, conservative areas that take more than they give. Generally speaking, the division is much closer to equal than otherwise; there are takers and makers on both sides. However, it is clear that conservatives are just as enamored of entitlements as liberals are; they are just less willing to pay for them when they go to other people.

Democrats are tax-and-spenders; Republicans want to cut the budget. Everyone in government is a “tax and spender.” If there is a differentiation, it works out that Republicans are “spend-and-debtors,” in that they are less willing to pay the bills at the end of the day. The vast majority of spending, the deficit, and the debt has been incurred by Republican administrations and policies over the past several decades.

Business owners built their businesses without any government help. Nobody lives in a vacuum, nobody lives cut off from everyone else. Everyone depends upon resources created by others, many created by or nurtured by the government. Everything from trade deals to education to infrastructure contributes to every business; without the government, business as we know it today would be completely unrecognizable, and certainly far less robust. The assertion to the contrary is part of the recent conservative desire to stop having to pay for what they receive by denying they receive anything at all.

Private industry created the Internet. Yes, people really claim that. I refuted it here. Spoiler alert: the claim is not true.

Freedom on the Internet is threatened by government regulation. To the contrary, the “regulation” claimed to be throttling Internet freedom is that which prevents private industries, primarily telecommunication firms, from asserting ownership over a public resource, which would result in diminished freedom, not to mention higher costs.

Government never creates jobs. This claim is obviously ludicrous, considering the 22 million jobs held in federal, state, and local governments, many of them life-long, in fields ranging from education to the military. One can only assume that the claim being made is that specific stimulative spending does not create jobs in private industry, under the assumption that “creating jobs” means permanent lifetime employment. However, no matter how absurdly you parse the claim, it is utter nonsense; the 2009 stimulus saved millions of jobs, and helped create millions more. Claims of its “failure” are as unfounded as all the other conservative claims on this list.

Conservatives support higher wages and better working conditions, which can only result from a free market system without government regulation. This is one of a class of statements which predicts riches for everyone if only the government stops interfering and businesses can do virtually anything they like. Needless to say, the relentless drive to deregulate business, dismantle unions, and block minimum wage raises has resulted in a workforce remunerated far less than before. It is a rule of business that, unless forced otherwise, wages must be driven down and benefits cut wherever possible, while “efficiency” (fewer people doing more work for less pay) is driven as high as it can be. Witness the rare exception, Costco, paying better wages and benefits—and being castigated by Wall Street for doing so.

Academic excellence can only be achieved through government-regulated standardized testing. Which, when you think of it, is kind of ironic when you consider how conservatives are against anything being government-regulated. Unless, of course, it is something they don’t like, in which case, the government should regulate or ban it. Suffice it to say that standardized testing is a horrible way to run public education.

Conservatives freed the slaves. Conservatives to blacks: “You’re welcome.” This claim is dredged up when conservatives feel like minorities, for some weird, inexplicable reason, seem to be voting less and less Republican. The logic: conservatives today are Republicans, the Republican Party was founded by Abraham Lincoln, Lincoln freed the slaves—therefore, conservatives freed the slaves and are champions of civil rights. They even sometimes try to claim that liberals supported slavery, hinting that liberals oppose religious groups (another common conservative fallacy), and religious groups were abolitionists (most religious groups of the day were not).

Martin Luther King, Jr. opposed corrective or reparative measures against racism. An old idea to combat Affirmative Action by citing King’s statement about judging a person only by the content of their character—whilst conveniently ignoring that King was speaking of a future devoid of racism, not a present in which racism flourishes and corrective measures are the best manner to at least partially counteract such forces.

Racism is no longer an issue in America; the country is color-blind, and corrective measures are reverse racism against whites. This is essentially what the conservative bloc on the Supreme Court recently decided. Within hours of that decision, states which had formerly been restrained by the Voting Rights Act immediately begin passing and enacting strongly discriminatory redistricting and laws, aimed at robbing minorities of the ability to vote and elect representatives for their interests. So, no, we’re not color-blind, and the Voting Rights Act was not reverse racism.

Laws intended to offer equal protection to women and minorities are “special privileges.” “Special privileges” is one of those code words for equal rights and treatment under the law. How a law, for example, requiring equal pay for women and allowing them to sue when they do not receive it, is a “special privilege” is somewhat difficult to reason. Conservatives will likely point to hate-crime legislation as a “representative” example of such special treatment; however, such laws apply to everyone—including violence against whites—and are in effect not to give special treatment to minorities, women, or gays, but to protect society from individuals who pose a special threat as they wish to do violence against entire classes of people.

Businesses and workplaces are often forced to hire unqualified women and minorities in order to satisfy quotas. If such a thing ever happened, it would only as a misapplication of the law, usually due to people believing this very myth. No quota ever required any business or office to hire someone unqualified for the job.

The free market is self-regulating. No it’s not. Oh, it regulates certain economic factors in very crude ways, but it does not self-regulate the behavior currently handled by government regulations. Left to itself, it would abuse employees, pollute the environment, and cheat people to no end. Its chief goal is to make money; all other considerations fall in that wake of that prime directive. It does not react to consumer complaint by cleaning itself up and regulating itself; if it did, government regulation would never have been necessary in the first place. Besides which, non-governmental factors which would help regulate certain aspects of business—such as unions—are consistently opposed by conservatives.

Treatment for drug addicts is coddling criminals / a waste of money. All evidence to the contrary. People have a tendency to reject treatment over incarceration because it means spending money to help people they disrespect or outright despise. No matter that it costs far more to incarcerate, and creates an incredible drag on the economy as well as general damage to society as a whole. Like drug laws overall, it is not about what makes sense or is best for people, it is about appearances and appearances only.

The context of the Second Amendment has not changed at all in 222 years, but the context of the Voting Rights Act has completely changed in 48 years. Do I even need to go into details?

We have never executed a person innocent of the crime for which they were executed. Wrong. Statistical evidence proves it beyond any rational doubt. Most individual proof is extremely difficult as states regularly destroy all evidence after someone is executed, and police and prosecutors refuse to investigate the crime further. Not to mention the fact that we do know of such specific cases. Ironically, conservatives who claim the government never does anything right and do not trust the government at all to regulate business, educate children, or run health care, nevertheless seem to trust the government explicitly to never wrongly execute someone.

States rights must prevail. Except when they want to do something conservatives don’t like. If a state, for example, wants to legalize marijuana, allow gay marriage, or permit people dying of terminal illnesses the right to end their own lives, then states do not have rights over the federal government. But if a state wants to ban abortion, relax gun control, or outlaw gay marriage, medicinal marijuana, and right-to-die, then state’s rights becomes the absolute principle that must be respected. Historically, “state’s rights” has a powerful racial impact due to its use to defend slavery, and later, segregation; like “strict constructionism” and “judicial activism,” “state’s rights” is really just a code word for advocating conservative agendas; these are by no means actual “principles.”.

Conservatives are against “big government.” Funny, then, that every time they get control of things, we get bigger government. Not that Democrats are much better at it—but at least they don’t pretend to be against something they clearly support. For conservatives, “big government” is yet another code word, this one meaning “spending we don’t like.” Medicare, for example, is “big government,” while an exploding military budget which vastly outspends the rest of the world combined is somehow defensible.

Conservatives want to “save” Medicare and Social Security. By dismantling them and replacing them with programs given the same name but not resembling the original programs at all.

Conservatives support the troops; liberals hate the soldiers. Remember how liberal protesters spat on returning Vietnam vets on the tarmac of airports? So do a lot of people—which is strange, as it never happened. In fact, war protesters were usually supportive of vets, which is evidenced by the fact that so many of the protesters were themselves veterans. The specific story as well as the general myth that conservatives are pro-soldier is false. Conservatives have gained the reputation for being pro-military primarily for their support of military spending, in addition to their generally hawkish stances. They mouth support for the troops, but fall short of actually giving it. In fact, when it comes to supporting veterans’ causes, it is liberals who often do the best job, while conservatives do their best to block such support. Conservatives have even claimed that Obama’s efforts to increase benefits and support for troops is evidence that he hates them—I shit you not. Veterans groups typically give very high scores to Democrats for supporting veterans’ issues, and very low scores to Republicans. Republicans, despite their reputation, are much more liable to block the granting of benefits and programs for vets. As General Wesley Clark said in 2004, “Republicans like weapons systems; Democrats like the soldiers.”

If a conservative says something that offends people and results in damage to their reputation or career, their First Amendment rights are being violated. This is a common dodge to controversy. Although conservatives have no problems pushing for boycotts to punish people and causes they disapprove of, when the same happens in reverse, they often claim that the person’s first-amendment rights are being violated. This despite the clear fact that the First Amendment protects your right to say what you want, and not your right to avoid people shunning you for it.

Obama caused high unemployment. Conservatives who claim that Obama was responsible for high unemployment consistently and conveniently ignore that the rate began to skyrocket under Bush, who took it from 5.0% in April 2008 to 7.8 % in January 2009, a rise of 2.8% in just 9 months, and that it hit a high of 10% in October 2009, a 2.2% rise in another 9 months. However, to hold Obama responsible for the latter rise is questionable at best, and most likely completely inaccurate. Imagine Bush piloting an aircraft at 40,000 feet: he pushes the airplane into a steep dive, and at 28,000 feet, as the plane plummets, he hands over the controls to Obama. Obama struggles to level out the plane, but cannot manage to do so until it reaches 20,000 feet—at which points conservatives blame him for the low altitude and do everything they can thereafter to impede his piloting duties. In addition to sheer inertia, the fact is that the unemployment rate is a “lagging indicator,” meaning that the current rate indicates the response to what was happening in the economy 6 to 9 months previously. Meaning that Obama only began “owning” the unemployment rate when it was already at its peak—and has consistently driven it down ever since.

Obama skyrocketed the deficit. Nope. As with the unemployment rate, the deficits skyrocketed under Bush; Obama has done nothing but reduce them. The current deficit is primarily a result of Bush-Cheney tax cuts, the wars in the Middle East, and the 2008 economic collapse. Obama has initiated far less deficit spending than Bush; Bush went from incipient surpluses to a trillion-dollar deficit; Obama has only brought down spending and deficits. Historically, over the past half-century, Democratic presidents have presided over deficit reductions, while Republican presidents have exploded them.

Republicans have always fought hard to balance the budget, but are confounded by Democrats who bust it. See above. When Republicans had control of the presidency and both houses of Congress, they went from a surplus to a nearly $600 billion deficit—and that was before the 2008 collapse. They try to take credit for the deficit reduction in the 90’s, but that was due as much to the Internet boom and to Clinton’s 1993 tax hike. Even under Reagan, who supposedly tried to cut spending while Democrats foiled his efforts, the facts are that the Democratic Congress passed budgets which were lower than Reagan’s proposals 7 of 8 times.

Gay marriage will undermine the institution of marriage, leading to polygamy and bestiality. See my recent post. In short, no.

Gay marriage will undermine population growth. Again, no. Stupid claim.

Global warming is a myth. Funny that Fox News doesn’t put Al Gore’s book on the sidewalk now. Do we really need to discuss how global climate change is real? I hope not.

Scientists disagree on global warming / evolution. There is no consensus. It can be said that scientists disagree on virtually everything. When 97% believe it is happening, that’s pretty conclusive. When only 1% ~ 6% of climate scientists claim that humans have had little or no effect on climate change, claiming that the debate “isn’t settled yet” is disingenuous at best. As for evolution, only 0.15% of scientists in fields relating to evolution disbelieve in it.

Evolution is “only a theory.” So is gravity, but you ain’t floating away, are you? This chestnut is just a distortion of the meaning and use of the term “theory.” The evidence for evolution is overwhelming; we simply do not understand all of the details yet. The creationists use the “theory” dodge to avoid the mountain of evidence supporting evolution, and contradicting their own claims which are supported only by faulty interpretations of ancient scripture. As stated near the top of this list, noting certain realities such as evolution does not attack religion, but instead simply contradicts religious claims about science which religion is not justified to make.

Money equals free speech. It may be true legally, but not in fact. Free speech is free speech; money is a means to elevate one person’s freedom to speak above everyone else’s. You have the right to speak, just not the right to be heard. Money allows a very few the assurance that one will be heard. That is not a right. It is a means of granting extraordinary power and special rights to those who possess wealth, with all of the freedoms a right confers so as to avoid any attempts to level the field. Arguably, the idea that money is free speech actually degrades the freedom of speech for most people.

Corporations are people. This is a legal fiction constructed to allow corporations to create contracts, participate in lawsuits, and shield individual shareholders (e.g., prevent the collection of debt from reaching personal possessions). Although the legal fiction describes the corporation as a legal “person,” this had never been assumed to grant corporations constitutional rights—at least until the right wing of the Supreme Court made the ethically repellent decision of Citizens United v. Federal Election Commission and declared that corporations have First Amendment rights, as if they were actual people. This is a break from tradition, and has poisoned our political process since then, far in excess of the toxic mess it already was. The conservatives on the court, from thin air, created a right that had not existed before—as audacious a case of “legislating from the bench” as has ever been witnessed before. Suddenly, corporations could be wielded as a super-person by people who already enjoy their own individual rights, giving them extra powers—not by all shareholders, but just those few wealthy and power people who actually control them.

Capital gains tax is double-taxation. No it’s not. Corporate shareholders are shielded by the “body” of the corporation; the price for this is that the corporation is treated separately from the shareholders. It is not double taxation when an employer is taxed and then an employee is taxed. The same principle applies here. Those who make this claim simply want all the protections a corporation supplies without paying any of the costs—an all-too-common conservative theme.

Liberal justices legislate from the bench; conservatives are strict constructionists who want to preserve or “restore” the original constitution. In simple terms, a conservative will define any decision that conservatives disagree with as “judicial activism” and “legislating from the bench,” no matter what the grounds. It is little more than a reflexive response to dismiss judgments that go against them.

Actual judicial activism is when a decision is handed down that goes beyond or contradicts precedent, engages in judicial overreach (the court going well beyond what is necessary to settle the case), and defies standards of judicial restraint.

While it can be argued that both liberal and conservative judges and justices have practiced such activism, there is ample evidence that this is far more a practice among conservative jurists than of liberal ones. Roe v. Wade is the primary and usually sole arguable example of liberal judicial activism. Conservatives, however, have been going on a spree of such activism in recent years. Citizens United v. Federal Election Commission, Bush v. Gore, District of Columbia v. Heller (rewriting the Second Amendment to match current conservative views), or the recent fiasco of Shelby County v. Holder (essentially gutting the Voting Rights Act)—there has been a long string of outrageous decisions by conservative jurists which go beyond any precedent and often any standing law and create completely new legal assumptions based upon little else than a egregiously unrestrained conservative agenda. In 2005’s McCreary v. ACLU, for example, Scalia attempted to rewrite the Establishment Clause.

This flies in the face of “strict constructionism,” which has historically been, according to William Rehnquist himself, a philosophy used when a judge is not “favorably inclined toward claims of either criminal defendants or civil rights plaintiffs.” Strict constructionism, nominally at least, is supposed to be about interpreting the law very narrowly. It holds that anything not clearly expressed may not be interpreted, and—in complete contradiction to the Ninth Amendment—that if a right is not positively granted by the constitution, it does not exist.

Not only is this “philosophy” patently unconstitutional, it is not even consistently applied—as the many cases of conservative judicial activism, exemplified by the cases above, evidence more than clearly. In addition, for a group that claims to be “preserving” the constitution, it seems strange that they are constantly trying to amend it.

Voter fraud is a serious issue. No it’s not. Voter fraud is rare, and conservative claims to the contrary are completely unevidenced. Usually cited are cases where people hired to collect registrations create false documents to collect more money—documents which are found, trashed, and never result in actual stolen votes, mostly due to the fact that there was never any intent to do so.

Election fraud, on the other hand, is copious these days—and is quite notably a completely conservative practice. From Katherine Harris’ historical perverting of the Florida Central Voting File throwing the 2000 election illicitly to Bush, to the current right-wing judicial activism allowing conservative states to gerrymander and rewrite voting laws to specifically disenfranchise minorities, conservatives have rigorously and rather openly driven to abuse their legal power in order to win elections dishonestly.

The media has a liberal bias. I’m not even going to dignify that long-standing piece of excrement with an explanation; if you are not fully aware of why it is wrong, then there’s no talking to you; you may return to viewing Fox News, which is totally unbiased.

If conservatives comment on this list, they will most likely do so in their usual fashion: to ignore the bulk of the list, go after the one or two points they believe are weakest, and within those points focus on only one contention or a subset of the entire point—and never, ever concede everything (and possibly anything) else. We’ll see.

Called It. Six Months Ago.

September 9th, 2012 7 comments

The unemployment rate just dropped to 8.1%—and yet virtually every news source is saying this drop is due to more people dropping out of the workforce—not being fired, but quitting looking for work, which is even worse.

Maybe so, I’m not an economist. But then, how was I able to predict this drop back in March? On March 10, six months ago, I wrote:

The bad news for Obama is that, for the next 4-6 months, unemployment will not be so hot–it may drop a point or two over the next 4-6 months (numbers might show a drop in June or July more than other months), but may not really start to change again until just before the election–which is the good news for Obama. The rate should start dropping regularly come September, when we see the numbers for August.

That is more or less exactly what has happened. The rate drifted down by a point a few times, before drifting back up. I was right to be unsure about a pop in June or July, and I was right that for 4-6 months, the rate would stay flat.

But my key prediction was that the rate would start showing a drop come September, one with momentum. That momentum would be marked by a more significant change than a single-point drift like we have been seeing.

Well, the new jobs report is out, and guess what? the rate dropped by .2%. Changes of .2% or more generally indicate more than just a marginal, one-month shift. We’ll see more evidence on October 5 when the next report comes out; if it falls below 8%, then my prediction will be confirmed more surely.

Still, for the moment, I feel confident in saying “I told you so.” An Econ 101 teacher will tell you that unemployment is a lagging indicator, usually by 9 months.

Now, I may be mistaken about what it lags behind—it may lag behind other factors, and may be more in line with job gains or losses. However, I find it at the very least interesting that the unemployment rate so neatly falls in line with jobs reports like it has over the past several years.

The fact that I was able to predict the unemployment rate six months in advance after noting this has to be worth something.

Still, we have yet to see what happens. If my predictions truly bear out, we will likely see an unemployment rate of 7.8 or 7.9 percent (more likely the latter) a month from now, followed by another drop of .1 or .2% in November. Which makes me wonder, will the November numbers come out before or after election day? In any case, I expect to see the rate at 7.6% to 7.8% in November’s report—as I predicted back in March. We’ll see.

What Obama really needs, though, is not just the unemployment rate, but the jobs numbers as well. While it’s good that we got almost 100,000 new jobs last month, I will be much happier to see more robust growth next month, with a re-adjustment of August’s numbers, upwards of course. That, with my expected unemployment number drop from the low eights to high sevens, could give Obama a nice kick upwards, enough to cancel out the bad news this month.

Categories: Economics Tags:

Jobs Up

August 4th, 2012 2 comments

The economy added 163,000 jobs last month, 172,000 in the private sector (25,000 alone in manufacturing) while the public sector lost 9000 jobs.

It would have been 171,000 added, except ConEd did some union busting and fired 8500 workers for not promising to not go on strike. Damn those people trying to get better wages and decent benefits! Don’t they know that wealthy people have gone weeks without another tax cut?!

Now that the jobs report is better than expected, will conservatives continue to focus on that?

Of course not! Not with a 0.1% uptick in the unemployment rate! Who cares if it’s a lagging indicator and reflects what was happening 6-9 months ago, we can use it to make things look worse than we have ma–er, than Obama has made them by obstructing all of Obama’s jobs prop–er, by, um, by being Socialist! Yeah, that’s what it was!

Tell me again, what were all the “jobs” bills forwarded by Republicans? I remember the “jobs” bill in which they said they could “create” a lot of “jobs” by doing away with regulations that would allow companies to pollute heavily without any controls (I guess in the medical care sector, or perhaps funeral homes), but what else did they do? Are we counting all those proposals to slash more taxes for rich people as “jobs” bills?

Anyway, the Republican whiplash reversal on jobs/unemployment in, wait for it, three….

Categories: Election 2012 Tags:

Debunking the Right-Wing Economic Talk-Down

March 10th, 2012 1 comment

The jobs report is out, and it’s great news: solid growth for the third straight month in a row. Krugman:

OK, definitely a better jobs report than we have become used to. And terrific news for Obama; another six months of news like this and he’ll be in very good shape for reelection.

Krugman goes on to warn that we’ll need a lot more of this–31 months at this level or better to get to “full employment”–but still, the current news is good. A look at recent economic news shows this up:


The job growth is, at least currently, getting better month-by-month; the trend since a year ago is for more jobs created every month, and if it continues, we’ll be seeing better and better job reports as time goes on.

Fox News, of course, was first out of the gate to paint all this as bad news. Amongst all the good news, they point to the unemployment rate standing still for a single month, and claim that “unemployment is not likely to fall much further and may rise again.”

There’s a reason why they are always pointing out unemployment in particular: talking points. The Republican strategy to deflect good economic news and to try to push the economy’s head underwater–which they have been trying to do since Obama took office–currently is focused on touting unemployment, primarily because it’s the easiest thing to make look bad. They start by ignoring the fact that unemployment rocketed from 4.8% to 8.2% (a 3.4% gain) in Bush’s last year in office, and instead make huge noises about how Obama unforgivably drove the unemployment rate up from 8.2% to 10%–despite that being a far lesser increase (1.8%) than under Bush. Forget the past, they argue; it’s no longer relevant.

They therefore come to the specious conclusion that Obama was responsible for unemployment going to 10%. It is completely false because, as I have pointed out several times before, the unemployment rate is a lagging indicator, meaning that it shows what happened three quarters–nine months–earlier. Meaning that the unemployment rate reflecting what Obama started doing the moment he walked into the Oval Office was not in January 2009, but in October 2009–meaning that the real rate when Obama started was 10%–at its peak.

That, of course, means that Bush drove it up from 4.8 to 10%–more than doubling unemployment–and that Obama, far from driving it up, stopped it cold and drove it back down to 8.3%, a decrease of almost two percent. That is the actual assessment of what happened.

Now, keep that in mind when you look at the above charts. Then consider Fox’s claim that a one-month stall means it will never go down again and may in fact rise–and let’s see if we can debunk that. If unemployment is a lagging indicator, that means we should look back nine months to see what was happening, and… whoa, look at that. About nine months ago, job growth stalled. Whaddaya know.

To test this, I got the job and unemployment data, and combined them into one chart. It came out thus:

Screen Shot 2012-03-10 At 12.32.17 Pm

Doesn’t seem to line up, does it? But then, it hasn’t been adjusted to reflect reality–remember the nine-month lag? Look what happens when we move the unemployment data back nine months:

Screen Shot 2012-03-10 At 12.31.55 Pm

Well, look at that–the rate falls when jobs are added, and the rate rises when jobs are lost. The current stall reflects the fact that new jobs stalled nine months ago.

Who’da thunk?

How does this work over the long run, though? Fairly well, as it turns out:

Screen Shot 2012-03-10 At 1.21.56 Pm

The bad news for Obama is that, for the next 4-6 months, unemployment will not be so hot–it may drop a point or two over the next 4-6 months (numbers might show a drop in June or July more than other months), but may not really start to change again until just before the election–which is the good news for Obama. The rate should start dropping regularly come September, when we see the numbers for August.

Based on nothing but a guess, I would say that the unemployment rate will probably be between 7.6% and 7.8% come November. The last three months, all good gainers, will show up in the unemployment rate in the three months leading up to election day. Not stellar, certainly the recovery is slow, but definitely pointing to a recovery. If Obama gets re-elected, then he’ll almost certainly surf the recovery back up, to the outrage of the right wing–who will find a way to claim it was all to their own credit. If Democrats are able to hang on to the Senate and get back the House, it’ll be a disaster for the Republicans, who will be in the back seat when the recovery starts gaining steam.

So, let’s see how I do against Fox News. Who do you think will be better at predicting the economic future–a major news network claiming expertise, or a nobody like me with zero Econ training?

Categories: Economics Tags:

Making the Worst of Good News

February 4th, 2012 1 comment

The economy continues to improve, as unemployment dropped to 8.3% and the number of new jobs created was the highest in almost a year. This is very good news for Obama, as a bad economy would help Republicans defeat him in the elections later this year–a goal they have clearly been shooting for.

So it should come as no surprise who is all alone trying to find the cloud in the silver lining:

Screen Shot 2012-02-04 At 1.14.45 Am

Good to see conservatives cheering America on.

Update: They’re still at it this morning (evening in the U.S.):

Screen Shot 2012-02-04 At 10.11.58 Am-1

I can only imagine that the right-wing core watching Fox has the impression that things are worse than before. Not that the news says that we’re free and clear, or that there’s no down side to it, only that it is hardly as negative as Fox is desperately trying to paint it.

While expression of the down side of the unemployment news is warranted–and all other news sites are including it–highlighting it consistently and downplaying the better aspects is, well, Foxlike.

And if we’re pointing out lesser-known facts about the unemployment rate, another point deserves to be made regarding the oft-noted “fact” that the rate is still “above” where it was when Obama took office (it was putatively at 8.2%). This is superficially accurate, but in truth, since the unemployment rate is a lagging indicator, the “real” rate when Obama took office was between 9.5% and 10.1%–meaning that Obama has not only taken us from losing 750,000 jobs a month to gaining 250,000, a net gain of 1 million jobs per month, but has also lowered the unemployment rate, whatever its accuracy, by between 1.2% and 1.8%. They won’t mention that on Fox, though.

Categories: Economics, Right-Wing Slime Tags:

Republicans and Economics: Reputation for Expertise, Track Record for Cluelessness

October 23rd, 2011 8 comments

A few weeks ago, I posted a stump speech I felt Obama should be making. In it, I pointed out that while Obama is trying to push a modest jobs plan, Republicans are blocking it. I also claimed that Republicans have no jobs plan of their own. They would deny this, of course; they have pitched a plan that they call a “jobs” plan. The plan: erase even more regulations so corporations can pollute. The idea is, if we stop holding back industries from making our air unbreathable, our water undrinkable, and our soil packed with toxic wastes, they will be free to create more jobs. That is logic along the lines of letting criminals serving time for assault & battery out of prison so that we can hire more doctors and nurses.

Paul Krugman (hat tip to Ken) meets this proposal with scorn from the economic side, debunking the idea that it will create loads of new jobs. Pay close attention to the last sentence in the excerpt:

Mr. Perry has put out a specific number — 1.2 million jobs — that appears to be based on a study released by the American Petroleum Institute, a trade association, claiming favorable employment effects from removing restrictions on oil and gas extraction. The same study lies behind the claims of Senate Republicans.

But does this oil-industry-backed study actually make a serious case for weaker environmental protection as a job-creation strategy? No.

Part of the problem is that the study relies heavily on an assumed “multiplier” effect, in which every new job in energy leads indirectly to the creation of 2.5 jobs elsewhere. Republicans, you may recall, were scornful of claims that government aid that helps avoid layoffs of schoolteachers also indirectly helps save jobs in the private sector. But I guess the laws of economics change when it’s an oil company rather than a school district doing the hiring.

This is really what is at the heart of Republican thinking, especially when it comes to economics: “facts” are things we make up to benefit ourselves.

When people listen to conservatives speaking about economics, they tend to give them credence, in part because they sound so confident giving all of these “facts,” but also because conservatives have a long-standing reputation for fiscal responsibility and know-how.

The truth, however, is that they play fast and look with the facts, and when they want to argue their own points or lambaste the opposition, they tend to do so in reckless disregard for even the most fundamental economic principles.

For example, one claim they have been making for a few decades now is that during the Reagan years, taxes were cut and revenues doubled. I heard this just last week, coming from a conservative on Bill Maher’s show. This claim is not just wrong, it is actually fraught with distortion. It tries to proves the claim that cutting taxes increases revenues, but ignores that fact that while some taxes were cut during that period, other taxes were raised, arguably for a net tax increase.

However, the big lie in the assertion is that Reagan doubled revenue, based on the fact that government revenues went from $517 billion in 1980 to $1,031 billion in 1990. First, this calculation includes Carter’s last year in office as well as Bush 41’s first two years. To be accurate, we must actually run from Reagan’s first year in office–1981, by the end of which Reagan’s economic policies were just beginning to kick in (his first tax cut did not take effect until 1982)–as a baseline, and then take the last year in office as a reading of actual increases. That gives us a rise from $599 billion to $909 billion, an increase just a shade over 50%. So, right there, we see the claim half-shattered.

But that’s not even the main point–remember, I am positing the idea that conservatives abandon the most obvious economic facts and principles to distort reality. What was the fundamental economic idea they ignored here?

Inflation. In order for any judgment to be made on revenue, inflation absolutely must be factored out–otherwise Jimmy Carter would come across looking like a magician. So, when you look at the numbers honestly and factor out inflation–using 1987 constant dollars–how did Reagan fare? Well, he went from $767 billion in 1981 to $877 billion in 1989. A net increase of 14%. Add to that the fact that the U.S. population grew by 7% during that time, and we see the net increase which could be attributed to tax policy brought down to a mere 7%.

So, instead of Reagan cutting taxes and doubling revenue, we have him raising taxes overall and increasing revenue by 7%.

Conservatives, however, would prefer to credit Reagan for things that happened when he was not president, and conveniently forget fundamental economic factors such as inflation and population growth.

Nor is the conservative habit of playing fast and loose with economics limited to Reagan. A more current example is their claim that Obama is responsible for the unemployment rate hitting 10%. Sure enough, unemployment hit 10.1% in October 2009, fully 9 months after Obama took office. So, hard to refute that one, right? Pretty sound fact conservatives have to nail Obama with, right?

Of course, no. First of all, when Bush took office in 2001, the unemployment rate was 4.2%; this rate rose to 6.3% by June of 2003, a fact which, one can be sure, conservatives would quickly attribute to the recession they claim Clinton saddled Bush with. It was another two and a half years–five years after Bush took office–before the rate fell below 5% again.

Jump forward to early 2008, a full year before Obama took office. The unemployment rate was at 4.8%, near to where it had been hovering for the previous three years. Then, in mid-year, the effects of the sub-prime crisis, the beginning of Bush’s Great Recession, started to show; the unemployment rate rose until, in February 2009, when Obama was in office, it hit 8.2%. (Unless you want to credit Obama with numbers that represent a month 2/3rds presided over by Bush, in which case it was 7.8%.)

So, right off the bat, we have Bush overseeing a rise in the rate from 4.8% to 8.2%–a 3.4% jump, or a 70% increase. Conservatives conveniently pretend this never happened–that the rate rose under Bush at all, or that the trend began with him. While they would eagerly attribute two years of rises in the Bush unemployment rate to Clinton, they would not dream of crediting Bush with any of the rate’s rise in Obama’s first nine months.

But still, the rate rose from 8.2% to 10.1% under Obama, right? That’s a 1.9% rise, or about 23%–so, still we can criticize Obama, right? OK, let’s blame Bush for the rate’s rise once he started office. See? I can be reasonable when it helps my argument. Can’t we then blame Obama for the 1.9% spike up to 10.1%?

Here, again, is where conservatives conveniently forget Economics 101. The unemployment rate, you see, is what you can call a “lagging” indicator–in other words, it does not immediately reflect changes in the economy. It takes 2-3 quarters to do so. For example, consistent job losses did not begin until January of 2008–but it took until May or June for these figures to have an effect on the unemployment rate.

Which means that at least the first six months of the unemployment rate under Obama is actually a direct reading on the last six months of the Bush administration. That would mean Bush was directly responsible for taking the unemployment rate not just up to 8.2%, but up to at least 9.5%–a total rise of 4.7%, roughly double the rate. Obama, then, is only responsible for the rate going from 9.5% to 10.1%–a mere 6% next to Bush’s staggering 98%.

And that is only if you blame Obama for the unemployment rate increases that started the moment he sat down at his desk, which is unrealistic, as he had to slow the plummet before he could turn it around. It is completely fair to claim–I would even say it is a solid fact–that Bush was completely responsible for the rise in the unemployment rate. Considering also that job losses did not begin to slow until just after Obama’s stimulus and therefore can easily be attributed directly to that act, it would be just as fair and factual to attribute the subsequent lowering of the rate to 9.1% to Obama.

So, instead of Obama causing the unemployment rate to shoot up to 10%, Bush is fully responsible, while Obama stopped the increase and actually brought it down a bit. Conservatives deny this simply by ignoring Bush’s existence and then conveniently forgetting the fundamental economic fact that the unemployment rate is a lagging indicator.

Not that any of this is a surprise. Whatever financial & economic clout, aptitude, or reputation conservatives might have had, it has now been thoroughly trashed. Yes, there are undoubtedly conservatives with good economic smarts around–but they seem to be in hiding.

In fact, the Republican party seems to be going completely around the bend; instead of just claiming that tax cuts for the rich will create jobs, now they are clamoring for significant tax hikes on the poor and the middle class in addition to tax cuts for the rich–and are arguing that in order to create jobs, all we have to do is open the flood gates on pollution. And, oh yeah, they want to dismantle health care.

If the American people–the 99%–vote Republicans into office next year, they will get exactly what they deserve: a trashed economy, higher taxes for them, even more tax cuts for the rich, and air, water and soil so polluted they’ll start getting sicker faster–just as Republicans shatter the last remnants of public health care.

In other words, they will not only be idiots–they will be suicidal idiots.

Seriously, could the Republican Party be more openly hostile to the American people? They’re like a mugger who just stole your money and knifed you in the gut, then told the you that it was all the fault of the cop who tried to stop him but failed–so vote for the mugger!

Sometimes As Bad As Crossfire

June 5th, 2011 4 comments

I do like Bill Maher’s show, but sometimes it gets me as upset as the CNN show Crossfire used to, in that obvious right-wing lies get spewed without any rebuttal from Maher or his left-wing or moderate guests–even when the lies are obvious and the rebuttals well-known.

His panel guests this week were Melissa Harris-Perry, Rick Lazio, and Larry King. Harris-Perry, the liberal, is a writer and former professor of politics and African-American studies at Princeton. Rick Lazio, the conservative, is a former Republican Congressman from New York.

Lazio was spouting all kinds of BS throughout the show. One of his big points was about how the stimulus failed–that it did not accomplish anything, and had in fact a negative effect. He trotted out the tired old statistic that When Obama took office, the unemployment rate was 7.8% and it went up to 10.1% from there.

Forget that Lazio, like all conservatives, forgets to mention that in the previous year, under Bush, the rate jumped from 5.0% to 7.8%–a more significant jump–or that it was on an upward incline when Obama took office, meaning that inertia was bound to carry it that way.

I say to forget that because they are moot points. What nobody said on the panel, and everyone should have known, is the well-known fact that unemployment is a lagging indicator, and it usually takes three quarters for changes in the real world to be reflected in the unemployment rate.

Taking into account an accurate reading of the unemployment rate, we see that Bush took unemployment all the way from 5% in January 2008 to 10.1% in October 2009. That’s three quarters after he left office, so that’s when his effect stopped. Obama’s effects are seen from that point onward–which means that Obama has seen the unemployment rate down from 10.1% to the current 9.1%. That’s still a sucky number, but the idea that Obama’s policies made unemployment increase are a bald-faced lie–and I think Lazio knows that full well. It just makes for an easy talking point that’s much harder to explain is wrong–but shame on Maher and Harris-Perry for not catching something they should, by now, know well.

But that’s only half the lie shot down–the other half is that the stimulus failed. I have covered that in depth in this post, pointing out that job creation was plummeting to staggering depths and showed no sign of improving–but when Obama came in to office and instituted the stimulus, the numbers turned on a dime, in a way they never do naturally, and shot straight back up in the opposite direction.

Again, we have not yet returned to the place we’d like to be. Job creation is still lackluster–but light-years better than Bush left us with. The stimulus worked, and worked magnificently. The only problem is that we needed more than magnificent, we needed miraculous. And we could have gotten that, had the stimulus had more spending on things like infrastructure and less in the way of tax cuts for people who didn’t need them, as Krugman pointed out. And who was mostly responsible for changing the stimulus into something half as much as it needed to be? Well, Obama let them do it, but in the end, it was the Republicans who short-circuited the recovery. The stimulus itself worked.

Harris-Perry gets credit for making that last point–that we needed more spending–but she did not make the whole point. Granted, she’s not an economist, but she missed the greater argument which could have sent Lazio down in flames.

Lazio also made the argument that Obama has failed to pull us out of the economy, and used other recessions to make that point, noting that “in 1982, Reagan inherited a 10 or 11% unemployment rate; coming out of that recession, they ended up creating about 14 million jobs.” Guess what? Lies.

OK, first, the unemployment rate was 7.5% when Reagan entered office. Taking the lagging indicator into account, we move to October, when it was 7.9%. Then it became Reagan’s figure, and over the following year, rose to 10.8%. It then stayed in double digits until June 1983, almost two and a half years after Reagan took office, and did not drop below Reagan’s inherited 7.9% until February 1984.

Had Obama performed like that, Lazio would be even more aggressive in his criticism. Instead, he trots Reagan out as the hero standing heads and shoulders above Obama. A liar and a hypocrite.

Also, remember that Lazio held Obama responsible for the unemployment rate the moment he took office–by that metric, Reagan did not lower unemployment below his inherited rate until May 1984–a full year later in his term than where Obama is now. Even more hypocrisy.

Next, the 1981 recession started in July 1981, six months after Reagan entered office. Again, Lazio claims Obama immediately owned unemployment, a 9-month lagging indicator, but Reagan “inherited” a recession that began six months after he took over. I will not argue that Reagan was responsible for the recession, but that Lazio is being brazenly dishonest in comparing the two.

Furthermore, Lazio expects Obama to pull out of a recession twice as deep as the 1981 recession even faster than Reagan pulled out of his.

Worse, Lazio then uses a job creation number–14 million jobs–that spans the whole of Reagan’s two terms in office. Obama hasn’t had that kind of time yet–but in the past 14 months, 1.8 million new jobs have been created. What’s more, if you compare the number of jobs created relative to the 820,000 that were lost in his first month in office, where Bush left him–taking that as a baseline, 20 million jobs are now held that would not have been had we just maintained that level. That’s an artificial number, of course, job loss could not have been sustained long at that level–but it demonstrates the hole Obama has dug us out of.

Another way of looking at it: Starting a full year after each president took office, allowing each one time to dig himself out of whatever hole the previous occupant had dug for him, Obama has created a net total of 1.6 million jobs. Over the same period in his first term, Reagan lost 1.25 million jobs.

Despite the fact that Obama was handed the worst recession since the Great Depression, and when Reagan took office, there was not yet a recession and he had positive job growth.

These lies are blatant, egregious, and hypocritical to the extreme–but went almost unanswered on the show.

On this show, even Larry King managed to frustrate me. First of all, King tried to take the moral high ground in the Edwards case, making a very pointed remark that “In the era of 24 hour news, he’s judged guilty already, right? I believe in not guilty till proven, so why don’t we wait?”

This incensed me because, back in 2000, when Chandra Levy went missing, The Larry King Show more or less became the Let’s Convict Gary Condit in the Public Eye Show, with Nancy Grace on all the time proclaiming his guilt, with Ann Coulter, Barbara Olsen, and Laura Ingraham echoing her, and King himself casting aspersions. During July and August, King hosted roughly 40 shows on the topic, almost every night, in fact, until 9/11 took over the headlines. He issued a “standing invitation” for Condit to appear on his show, and repeatedly hammered away at how Condit not “coming forward” made him look suspicious.

This, in fact, is what made me stop watching his show. Keep in mind that King stood to profit handsomely were Condit to appear on his show. Keep in mind that King himself was perhaps the primary reason the case remained in the public attention for so long, placing even more pressure on Condit. Also keep in mind that if you have been wrongly accused of a crime and might stand trial, appearing on TV and talking about the case is the most monumentally stupid thing you could ever do, and any lawyer would tell you that immediately.

Nevertheless, King, on his show, said that he found it dubious that Condit was not appearing on TV and spilling his guts–King said that it’s what he would do, and he found it telling that Condit was not doing it, supporting the idea that Condit was guilty, or at least sure looked that way.

So, to have King now acting all non-judgmental, criticizing the TV talking heads for jumping to conclusions, after what he did to Condit–that just struck me as the most hypocritical thing imaginable. Well, almost–Republicans tend to do stuff that bad on a daily basis, but outside of that.

Maybe King has changed his beliefs on this and regrets what he did to Condit–who was eventually cleared of wrongdoing–but he sure hasn’t said so, not that I know of.

Then he said something almost as stupid:

I’ve been interviewing economists over the years. Answer me something. The deficit. I’ve heard about the deficit for fifty years. Did the deficit ever call you? Did the deficit–what did the deficit ever do to you? I don’t understand what the deficit does…

Hmm. Let’s see. The deficit adds to the debt. The debt is currently over $14 trillion. Last year alone, we paid more than $400 billion just to service the debt, to pay interest on it. That’s a huge chunk of the deficit right there. Not to mention that if we were spending that much on, say, infrastructure, every year, our economy would be in far better shape.

$400 billion could buy 18,000 new schools–or five thousand magnificent new schools, an average of a hundred for each state. Each year. One year of interest payments on the debt would pay for a manned mission to Mars. It could pay to convert most of America to solar energy.

So, Larry, that’s what the deficit has been doing to you. It’s been robbing you, and all of us.

Which brings up another Lazio distortion–that Bush wasn’t responsible for half the national debt. Technically, maybe–it’s $14 trillion and counting only from Bush’s first day in office to his last, it increased by $5 trillion–but if you count the money that Obama had to spend because Bush committed the nation to spending that money, not to mention the fact that Bush was handed a surplus and was the one who turned that around–then it is more than fair to say that Bush, all by himself, is responsible for half the U.S. national debt., and possibly more.

I swear, I have to stop watching this program. It gets me all wound up and makes me spend hours writing blog posts.