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Jobs

July 4th, 2014 3 comments

Wow. The job market improved so much that even Fox News couldn’t find anything bad to say about it. That’s a rarity.

But seriously. 288,000 jobs, 5th straight month of 200,000 or more added jobs, unemployment back down to 6.1%.

We still took dramatic damage since 2001 and 2008 that has not been repaired. We are still crippled by debt. Taxes for wealthy people are still too low. Spending on infrastructure is still too anemic. Jobs still pay less. Who knows, maybe if Republicans in Congress hadn’t obstructed Obama for the past six years solid, maybe things would have improved a lot more—though Obama did not exactly try nearly as hard as he should have.

Bottom line, economies recover sometimes just because they do. But the political bottom line is, for better or worse, whoever is in office when something happens, they get the credit or blame.

Of course, just because Fox can’t find anything bad to say, doesn’t mean they give Obama any credit at all—a search of their main article on the story or other articles shows they do not mention Obama once, even indirectly, alongside good economic news. The opposite holds for bad news, naturally.


On a related topic, Obama shows promise to finally dig himself out of the hole that Bush dug for him. In the past, it has been a reliable fact that job creation under Democrats has been better than under Republicans—so consistently so that the poorest-performing Democrat (Kennedy) did better than the best-performing Republican (Nixon).

Obama’s problem: In his first year, his performance was crippled by Bush’s disastrous recession. Although Obama immediately turned job prospects around for the better, he still had to pull up out of a record-breaking dive. In that first year, 4.3 million jobs were lost. No fault to Obama, as I said, but he gets those losses put onto his portion of the ledger.

As it turns out, with the latest reports factored in, Obama has added a total of 4.8 million jobs net—and more than 9 million jobs if you don’t count the first year. Which is more fair—Obama only improved things, he did not create the abyss he dragged us out of. Obama’s record looks even better when considering that Republicans in Congress not only obstructed but did everything they could to sabotage things, up to and including the debt default threat, which did serious damage.

Compare this with Bush, who only added a net of 1.1 million jobs over 8 years. More fairly, if you count from February 2002 to January 2010, assuming it takes a year for one’s policies to get started and wind down, Bush lost 1.3 million jobs. But the official record, however undeserved, is +1.1 million.

Obama has overseen job gains of 1.4 million in the past 6 months alone, and 2.5 million in the past one year.

Alas, even at that rate, by the time he leaves office, he will only have added only an additional 7 million jobs or so—maybe a total of 12 million jobs added, net, over his eight years. That would probably end up being only a 1.1% average increase over his term, placing him of Ford or Coolidge territory.

Sadly, even if you don’t count that first year of climbing out of the hole, his yearly average job creation would only reach about 1.8%, still below Reagan (2.1%) and Nixon (2.2%).

Unless job creation really takes off and we regularly see numbers over 300,000 until January 2017, Obama will break the trend of Democrats always performing better than Republicans.

Categories: Economics Tags:

Perry’s “Texas Miracle”: Rob the Poor, Lavish the Rich

March 10th, 2014 2 comments

To hear Perry and conservative-cheerleader NewsMax tell it, Perry’s Texas is a paradise for all. 37% percent of all new jobs in the U.S. have been created in Texas since 2009, and it’s all supposed to be because of low taxes and low regulation:

Texas Gov. Rick Perry tells Newsmax that he attributes the “Texas Miracle” — the Lone Star State’s relatively robust economy during the economic downturn — to a “light” tax burden and a favorable regulatory climate. …

[Perry states:] “The men and women in Texas know something now after a decade-plus of our governorship and our policies being implemented by a Republican House, Senate, lieutenant governor and speaker. We’ve kept our tax burden as light as we could and still delivered the services that the people of Texas desire, and we have a regulatory climate that is fair and predictable.I cannot tell you how important is predictability and stability in the regulatory climate.”

What’s not stated is that it’s also because of a lot of other stuff:

  • Oil and gas prices are high, which sucks for the nation, but benefits Texas’ economy
  • Texas has a high birth rate and migration rate, artificially raising job numbers
  • Texas made off like bandits from the Obama stimulus, with half of the job growth coming from education, health care, and government sectors
  • Texas used $6.4 billion in stimulus money to help balance the state budget, more than all but 2 other states

And since the stimulus money is running out, Texas is now facing huge budget shortfalls, which it plans to mitigate in part by slashing Medicare and education spending—in a state which already has rock-bottom health care and education stats.

Certainly, Texas is great for businesses and wealthy people—but is horrible for the majority of people in the state:

  • Texas shares with Mississippi the highest rate of minimum-wage workers in the U.S.
  • 26% of Texans have no health insurance, the highest rate in the country
  • Deregulation of health insurance has led to sky-high rates
  • Texas has the 4th-highest poverty rate of any state in the nation
  • Texas’ unemployment rate, at 8.2%, is higher than the national average
  • Texas has fewer adults with a high school diploma than any other state; is 43rd in the nation in graduation rates, and 45th on SAT scores

I guess that when Perry says that the people of Texas are getting all the services that they desire, he figures Texans don’t “desire” education or health care. Or, likely more accurately, none of the people Perry associates with are lacking in any such services.

But the kicker is in the tax rate, when all taxes are taken into account. The state has no income tax, but it does have a high sales tax, and overall, its tax rates are extraordinarily regressive. Here is Perry’s so-called “light” tax rate, compared with California’s:

Blog Taxes Texas California

The poorest 20% of Texans pay four times more of their income in taxes than do the wealthiest 1%. That’s pretty shocking.

California’s is pretty regressive because it has an even higher sales tax, but that is attenuated by the income taxes. There is no such balance in Texas, meaning that the state’s tax burden falls chiefly on the poorest people—who also get the crappiest education, the least health insurance, and the worst pay.

So the message is clear: if you want all the benefits of third-world cheap-labor exploitation but don’t want to leave the U.S., Texas is your destination!

What’s most scary: this is the model for what Perry and many other Republicans want to bring to the whole country.

Not that that’s a big surprise, or anything.

Categories: Economics, Right-Wing Extremism Tags:

Right Wing Expectations

October 13th, 2013 5 comments

Bill Maher had Carol Roth on his show, yet another of the long line of conservatives calling themselves “independents,” talking deficit reduction we somehow never heard when Bush was in office. One of her points was about how Obama has raised the debt by “6 trillion dollars over the last four and a half years,” and despair that we have to raise the debt ceiling at all.

First of all, the $6 trillion number only comes from adding the full spending for 2009—which was George W. Bush’s budget, not Obama’s. And what Obama did spend over that was expressly to deal with the massive economic catastrophe Obama inherited on day one.

That’s a favorite ruse conservatives love to play: conflate the tail end of Bush with Obama’s own record, as in “Obama gave us a $1.4 trillion deficit,” or “Obama drove the unemployment rate up to 10%.”

A less contrived total deficit would be $4.7 trillion over five years. So, where did that come from? Did Obama just say, hey, let’s generate $4.7 trillion dollars in spending that wasn’t there before?

Of course not. Almost all of the debt under Obama has been from the money that, again, George W. Bush and Republicans in Congress committed us to. The Bush tax cuts for the wealthy. The wars in Iraq and Afghanistan. And then there was the damage caused by the fiscal cataclysm Bush handed Obama in early 2009.

The fact is, Obama has done almost nothing but cut the deficit since he came into office:

Year Deficit in
$ Billions
$ Change
in Billions
2009 1,413   –
2010 1,294 -119
2011 1,300 +6
2012 1,087 -213
2013 973 -114

But that’s not good enough for Roth; she was appalled that Obama’s spending was still raising the debt ceiling at all: “[The debt ceiling is] going up because the government overspends, because they refuse to balance the budget…. If they didn’t overspend, we wouldn’t be hitting the debt ceiling.”

So, what was Obama supposed to do, cut $1.4 trillion dollars in one year? To wipe that out in even five years would require raising revenue and/or cutting the budget by $282 billion per year, every year. Something unprecedented, save possibly for coming off of wartime spending at the end of WWII.

When Bush was in office, most of that time being when Republicans also controlled both houses of Congress, deficit spending went up more often than it came down (up 5 years, down three years). When it went up the first two years of Bush’s budgets, it went up by huge amounts: $286 billion and $220 billion.

The three years the deficit went down under Bush, it went down by $94, $70, and $87 billion dollars, an average of $84 billion a year—something conservatives at the time hailed as little short of genius. Under Bush overall, the deficit increased $192 billion a year—and we did not hear conservatives complaining even a tenth as much as they do now.

Under Obama, the deficit has fallen an average of $110 billion per year.

Even under Bill Clinton, while he was creating a surplus, it went down only $70 billion a year.

So, what exactly do conservatives expect from Obama, when they themselves are entirely mute on where this money should be cut? Of course, we know where they want to cut it: Social Security and Medicare, the exact programs they claim they want to “save.”

We know where Republicans do not want to cut it: from the military, where almost all of the waste and overspending exists. In fact, they want to increase our ludicrously high military spending. They not only want to stay in Iraq and Afghanistan, they want to start a new war in Iran—and wanted to invade Syria, at least until Obama said he’d take action there.

And we know where Republicans do not want to raise revenue: from millionaires and billionaires, and from corporations making tens of billions in profit every year with many of them paying no taxes at all on those profits.

So when a conservative whines about how Obama is spending us into oblivion? I would suggest trying to speak facts to them, but they would almost certainly not listen, and would instead probably spout the same utter bullshit like Roth was on Maher’s show.

Screw Altruism

September 27th, 2013 2 comments

Never live for the sake of another man, nor ask another man to live for mine.

Motto of the man who hoards 40% of the wealth held by 100 people, after he has become wealthy.

Categories: Economics Tags:

Just Saying

September 24th, 2013 1 comment

This is Krugman’s chart showing the U.S. budget as a percentage of potential GDP. To accentuate my point, I highlighted Republican administrations in red, and Democratic administrations in blue. There’s a pattern there, though it may be hard to discern if you are conservative.

Bgdpchart01

Categories: Economics Tags:

Do Tax Cuts for the Wealthy Stimulate Jobs?

September 15th, 2013 8 comments

For the past thirty years and some, conservatives have claimed that the best way to create jobs and stimulate the economy is to cut taxes for wealthy people. From “trickle-down” to the recent drive to cut or eliminate the capital gains tax, the idea is that if you put more money into the hands of wealthy people, they will invest in business, thus creating jobs, leading to a stronger economy with more people paying taxes on greater incomes. Presto! A revived economy and more revenue collected by the government.

This has always struck me as one of the most obviously stupid ideas I have seen. Let me paint a little scenario with two variations.


Let’s say you have a depressed economy. People are not buying products, let’s call them “widgets.” They want to buy widgets (who doesn’t?), they just don’t feel they can afford to. Then there’s a Wealthy Person, who has tens or hundreds of millions of dollars. That person wants to invest in what will give the best return on his investment.

Variation One: you cut the taxes of the Wealthy Person. Both income tax and capital gains tax. The Wealthy Person gets a few million dollars extra that he would have otherwise paid in taxes, adds it to his pile of wealth. So, what happens? Will the Wealthy Person invest that money in a widget factory, thus creating jobs? No: nobody is buying widgets. Investing in a widget factory would be a stupid investment, bound to fail. Cutting capital gains will not lead the Wealthy Person to invest in a business which will fail. It’s not like the Wealthy Person did not already have lots of money to invest; if they weren’t putting it into widget factories before, why will adding a little more to their fortune change anything? The Wealthy Person will take that money and instead apply it to investments designed to increase his personal wealth even further, not to investments that are designed to create jobs or stimulate the economy.

Result of Variation One: the economy is still depressed, you have less tax revenue, and more debt—and some very pleased Wealthy Persons.

Variation Two: you don’t cut the taxes of the Wealthy Person. In fact, you raise his taxes to a marginal rate of 50%. Then you take that money, add it to the money that would have gone to the Variation-one Tax Cuts for Wealthy Persons, and apply all of that to give tax cuts to the lower-middle class and assistance to the working poor. Suddenly, the people who want to buy widgets have enough money to do so. They start buying widgets, and suddenly demand outstrips supply. Building a widget factory is suddenly a prime investment.

What about your Wealthy Person? You just raised his taxes. He won’t have enough money to invest in the widget market, right? Wrong. He’s a Wealthy Person. Which means he has lots of money. He doesn’t need a government tax cut. You can raise his tax rates to much higher than 50%, that’s not going to stop him from wanting to make more money. He’s got piles of cash, so no matter what, he’ll want to invest that in whatever gives the best return. When people start buying widgets, he’s going to build widget factories. And even if somehow his assets are all tied up somewhere, there are things called “banks.” These banks love lending money to people with lots of collateral and who want to invest in a booming business.

In short, no matter how high you raise his taxes, the Wealthy Person will not have any problems investing in a booming market.

Result of Variation Two: a revived economy, more jobs, stable revenue—and Wealthy Persons who are still making money and increasing their overall wealth.


Where am I getting things wrong here, beyond the simplicity of the scenario? How does this math not work out?

Categories: Economics Tags:

Pooling vs. Redistribution

September 7th, 2013 4 comments

Conservatives today have a favorite bugaboo: “redistribution of wealth.” By itself rather innocuous-sounding, it is clear code for a variety of evils: taxes, stealing, and downright, outright communism. It has now commonly been replaced with the term “confiscation.”

What is strange is that redistribution, in its conventional form, is mostly admired, including by the very people who demonize it. Most people favor a progressive tax system, for example. Those who loathe redistribution nevertheless claim that the free market will redistribute, imagining that the wealth will circulate with wealthy people paying handsome wages in exchange for labor—as false a myth as you can find, of course. They approve of redistribution, they just naively and foolishly believe that wealthy people will do it unbidden—many even credulously believe that that is what is happening right now.

What is not usually spoken of is the only alternative to redistribution: pooling of wealth. Most of the wealth in a society being drawn to one place and staying there. Not funding jobs or infrastructure, not moving through the economic engine. Just sitting there, its only purpose to draw more money to the pool.

If you think that redistribution is distasteful, then the effects of pooling are downright catastrophic. We’re seeing many of those effects right now, and they are going to get worse. And as wealth pools more and more, the usual corrective measure of higher tax rates will affect it less and less, because tax only reaches wealth that moves. To reach pooled wealth, you need the estate tax, which takes generations to reenter the economic cycle—and which wealthy people are clamoring to eliminate.

The economy is an engine; capital is the fuel. Should wealth pool, the engine will stall. Redistribute, and the engine runs with efficiency. Even Romney understood the basic principle, he just believed, like so many conservatives, that the fuel runs between capital investors and corporations—from one part of the top to another part of the top—with money to workers being a by-product, if anything—instead of the actual path it must take for an economy to be dynamic, which is from bottom to top and top to bottom.

A necessary observation is that while the bottom is forced to spend upward to live, the top has no such built-in force, and unless forced to redistribute downward, the top naturally tends to collect wealth and remove it from circulation. Conservatives have been systematically dismantling the forces we had created to accomplish this, including taxes and unions, thus making downward redistribution voluntary—which, in real terms, means the minimum necessary and no more. And the minimum is too slow a trickle to make our economy run.

At the gut level, most people seem to know this. But too many people now have bought in to the scam that somehow managed redistribution is evil and destructive.

Categories: Economics Tags:

Reward the Rich, Gut the Poor

July 16th, 2013 7 comments

Paul Krugman writes concisely and pointedly on what the Republican Farm Bill, stripped of food stamps, fully represents:

For decades, farm bills have had two major pieces. One piece offers subsidies to farmers; the other offers nutritional aid to Americans in distress, mainly in the form of food stamps (these days officially known as the Supplemental Nutrition Assistance Program, or SNAP).

Long ago, when subsidies helped many poor farmers, you could defend the whole package as a form of support for those in need. Over the years, however, the two pieces diverged. Farm subsidies became a fraud-ridden program that mainly benefits corporations and wealthy individuals. Meanwhile food stamps became a crucial part of the social safety net.

So House Republicans voted to maintain farm subsidies — at a higher level than either the Senate or the White House proposed — while completely eliminating food stamps from the bill.

To fully appreciate what just went down, listen to the rhetoric conservatives often use to justify eliminating safety-net programs. It goes something like this: “You’re personally free to help the poor. But the government has no right to take people’s money” — frequently, at this point, they add the words “at the point of a gun” — “and force them to give it to the poor.”

It is, however, apparently perfectly O.K. to take people’s money at the point of a gun and force them to give it to agribusinesses and the wealthy.

In the previous post, I pointed out something very similar. In the 2012 election, Republicans proposed tax cuts that would have heavily favored the wealthy, including capital gains tax cuts, a 20% income tax cut (new top rate: 28%), and a 30% corporate tax cut, on top of a slew of new loopholes for corporations, eliminating the estate tax and slashing the gift tax.

Romney tried to sell it as a “fair, flat” proposal that would cut things evenly for everybody—except that in reality, the top 0.1% would have gotten a 13% cut (just in personal taxes, not counting corporate savings) while the lower-middle class and the poor would have received less than a 1% decrease in their tax burden.

In the same year, Republicans also tried to raise taxes—something they had purportedly pledged never to do—on more than 20 million lower- and middle-class families. They tried to kill a tax credit for 11 million families paying for college for their kids; they tried to end child tax credits for as many as 12 million families; and they tried to end the Earned Income Tax Credits for as many as 6 million families.

They have consistently tried to slash unemployment insurance payments, and now are trying to eliminate food stamps for millions of families below the poverty line—while at the same time fighting for the most generous possible handouts to wealthy people and corporations.

Tell me, exactly what do Republicans have to do to get most Americans enraged at this kind of crap? Do they have to ritually slaughter a poor family and feed their flesh to billionaires on live TV or something?

The Truth, Revisited

May 20th, 2013 3 comments

This post is from a year ago. Maybe I should re-post this annually, or even monthly. It bears seeing again, and again. Recommend this. Share it. Post it. It’s the Truth.


Precisely. I’ve also been reading Thomas Frank’s Pity the Billionaire, which deals with the same topic from a different perspective.

The frustrating thing is, this should be so obvious, as obvious as the fact that the Laffer curve was full of crap. And yet millions, even a majority, buy into the bull.

Money naturally circulates upward; in order for an economy to work well, there must be some kind of mechanism to circulate the money back down. Conservatives think that jobs will perform this function all by themselves, even as they try to destroy unions, deny workers benefits, and otherwise minimize that precise flow downwards. In fact, a healthily progressive tax system and good working conditions are what create jobs and a prosperous economy.

The best way to stimulate the economy is to inject the money into the lower half of the economic cycle; injecting it into the upper half is counter-productive.

Taxing the rich is not only a good thing, it is a necessary thing. Government spending on infrastructure, education, and supporting the poorest among us is not just a good thing, it is a necessary thing. If you truly wish to have a robust economy.

But just as we still prosecute the same old drug war despite decades of studies telling us that decriminalization and treatment would be light-years better, we still bridle against the bloody obvious in economics.

We know it’s a fact that dollar for dollar, food stamps are the most effective stimulus mechanism, followed closely by unemployment benefits and infrastructure spending, and yet most of the nation seems to accept Republican whining about how that will destroy the economy.

It is just as solid a fact that dividend & capital tax gain tax cuts, corporate tax cuts, and the billionaire-slanted Bush tax cuts are among the absolute worst stimulators–and yet we somehow allow right-wingers to insist that these be given a priority.

We’ve tried it the Republican way for 30 years and we have nearly destroyed our economy. Now right-wingers complain about how they have never gotten a chance and how liberals have ruined everything. They are absolutely wrong. Tax rates for the wealthy and for corporations should rise, for their own good as well as everyone else’s. Tax rates for the middle class should stay the same (being as low as they are) or be eased. Money should be spent on infrastructure, scientific & technological research, and education.

Categories: Economics, Right-Wing Lies Tags:

Top 20 Pages with Ads You Should See

February 17th, 2013 Comments off

In case you were wondering why “Top 10” and “Top 20” lists are so popular right now, it’s the same reason why regular articles which are not that long are broken up into four parts, or why sites like the Christian Science Monitor offer so many “fun” quizzes and tests: to get money.

It’s all about the ad count. The more times you can make a reader visit a new page, the more ads they are exposed to. Numbered lists are perfect for this: each item gets its own page. Make it interesting, and you get 10 or 20 times the number of ads you can reasonably get away with on a page.

Quizzes (can you pass a citizenship test?) are even bigger traps: users are drawn into finishing these as they get no payback until the very end; this is abused when the number of questions is not initially revealed and the test goes on and on and on…. Alternately, sites can double the ad views by giving a page to each answer as well as to each question.

However, any quiz or numbered-item article should be approached with caution; they are the go-to gimmick these days, and are made not because they have anything interesting to forward, but simply because it’s time for a new one.

I understand that sites have to find a way to pay for everything, but there comes a point when it goes a bit too far.

You know what would probably pull in more money from ads? Stop making them distracting. I’d love to see an ad service that guarantees no ads will move, jump, cycle, or otherwise distract from the primary focus of the page. If they did that, I would switch off my ad blocker (as would perhaps millions of others) and, if the ads were designed right, I would probably start clicking on them.

But if Top 100 lists draw in enough yokels and lets those with ad blockers sail serenely past… well, so be it.

Categories: Economics, Entertainment Tags:

Undoing the Damage

December 5th, 2012 1 comment

The Los Angeles Times just gave us a reminder of the fact that when Bush proposed his tax cuts, there were 450 economists, including 10 Nobel laureates in Economics, who signed a public letter (PDF) warning that the cuts were dangerous:

Passing these tax cuts will worsen the long-term budget outlook, adding to the nation’s projected chronic deficits. This fiscal deterioration will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research. Moreover, the proposed tax cuts will generate further inequalities in after-tax income.

Well, a decade later later, and it has come to pass exactly as they warned. Well, not exactly—conservatives made it much worse. Bush and his cronies twiddled their thumbs while 9/11 unfolded, then bungled the war in Afghanistan, which should have taken at most a few years, mostly screwing up by starting the even more expensive and completely unnecessary war in Iraq, and then deregulated the economic sector so badly that we nearly imploded. Not that we didn’t know this from the beginning.

Conservatives made this debacle happen, and now they want to use it to further their agenda of dismantling the social safety net.

Of course, conservatives will deny all of this. They’ll make the claim that Clinton wrecked the economy, that 9/11 was unexpected and unavoidable and we had to spend more on security and wars, that the 2007 subprime mortgage crisis was caused by black people who were too greedy and the Democrats who forced banks to loan money to them, and that the debt all magically appeared on January 20, 2009.

The LA Times suggests:

Here’s another idea: Let’s join hands and walk to the bottom of the cliff together. It’s not very far down. The deficit and national debt will be reduced; Social Security, Medicaid and, for the most part, Medicare will go on unharmed; America will go back to tax rates that worked better than the cuts we’ve been living with; and Congress will actually be forced to do something for a change: Republicans and Democrats will have to work together to repair those programs damaged by sequestration, rather than filibuster or chant talking points to make their way around the hard decisions.

Perhaps America is on the brink of a fiscal opportunity.

Categories: Economics Tags:

Unemployment

November 4th, 2012 Comments off

Well, my streak ended. Unemployment ticked back up a point this month. So, while I was right much of the time, I was wrong on this one. Still, not bad for someone who knows next to nothing about economics. All this means, however, is that the three-quarters lag is not the only variable; people re-entered the workforce in enough numbers to bring the rate back up.

As a result, it’s not necessarily bad news for Obama—in addition, the jobs number were much higher than expected, and previous month’s numbers keep getting bumped up. This, plus Obama’s performance governing during Hurricane Sandy will likely help him this Tuesday.

In the meantime, Obama seems to have solidified his place in the battleground states; it is looking less and less likely that Romney will pull a victory out of this.

Categories: Economics, Election 2012 Tags:

Called It, Again

October 6th, 2012 4 comments

In March, upon seeing February’s numbers, 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.

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.

Then here’s what happened:

Uechrt

So far: wow. I really did call it, didn’t I? It dropped a few in the 4-6 months following February’s numbers, the started dropping regularly when the numbers for August came out, and fell into the range of 7.6 ~ 7.8%. I’m willing to bet that the figure will be 7.6 or 7.7 % in next month’s report.

Question: will this put a damper on Romney’s fueled charge post-debate? It certainly subtracts from the ammunition he could have fired if the rate hadn’t dropped 0.3%…


I wrote the above last night but fell asleep before finishing up… and awoke to a series of reports I could hardly believe: job truthers.

Really.

A lot of people on the right are now crying foul, forwarding the conspiracy theory that Obama faked the jobs report, in “Chicago style,” whatever that’s supposed to mean.

As it happens, truth beats out truthers:

Betsey Stevenson, the former chief economist in the Labor Department, wrote this morning, “Anyone who thinks that political folks can manipulate the unemployment data are completely ignorant about how BLS works and how data are compiled.” Alan Krueger, the chairman of the White House Council of Economic Advisers and one of the nation’s preeminent labor economists, told Bloomberg today, “No serious person would question the integrity of the Bureau of Labor Statistics. These numbers are put together by career employees. They use the same process every month. So I think comments like that are irresponsible.”

So: the polls show your guy behind? They’re faked! It’s a liberal conspiracy which includes Rasmussen and Fox News! The unemployment rate drops? Fake! A socialist conspiracy from the Bureau of Labor Statistics!

Frankly, I’m surprised they didn’t call Hurricane Isaac, which hampered the GOP convention in Tampa, a liberal conspiracy. It’d be just as realistic a call. Blame it on Al Gore.

Categories: Economics Tags:

Yep. This Is What Obama Needs to Say.

September 16th, 2012 4 comments

An Obama Ad which hits the mark:

It has all the elements on the key issue, the economy. It answers the 4-years-ago question just well enough for people to remember without getting too bogged down in details. It mentions the hemorrhage of jobs in 2008 and the growth (though tepid) since; it fails to mention the effect of the stimulus directly, but it is implied. It then paints the differing plans, again hitting the key points. This is a well-planned and -crafted ad. Yes, it glosses over the down points, but that’s what campaign ads do—but even on this point, it does the rare campaign trick: admit you haven’t done as well you you intended while still not sounding like it was a failure. Obama can thank Clinton for planting that seed.

What it does, most importantly, is to win the argument on the economy. That was Romney’s only real hope: blame Obama for the recession. It was, in fact, the Republican Party’s chief goal, as you recall. But here we have Obama beating Romney on that, and it reflects in the polls, which show no advantage for Romney on the issue. Republicans have, amazingly, lost their advantage on security, the military, and foreign affairs as well. The GOP led us in to the recession, into huge debt, and into two massive, costly, and lengthy land wars in Asia while governing over a time of fear and crisis. For all the lingering pain, it’s felt better under Obama, and bringing Clinton out reminds us of the 90′s, now almost a golden age. Obama can say he’s brought back job growth, rescued Detroit, ended the Iraq war, killed bin Laden and brought down Gaddafi. What’s left for Republicans to attack against? Obama can even go on the offensive in these areas, most bitingly against Romney’s tax plans.

Romney would certainly deny that he is planning the tax hike for the middle class, so you could conceivably call Obama’s claim in the ad a “misrepresentation”—but certainly not a “lie,” and I would even argue the term “misrepresentation.” Romney promised deficit-neutral tax breaks for the rich which, mathematically, can only be achieved with the tax hike on the middle class. Romney denies this, claiming that economic growth will magically rocket upwards to a point where all the money falling from the sky will make the break deficit-friendly, but that’s BS. And Romney has failed to take back his pledge about the tax break. Ergo, he may not be directly proposing a tax hike and may utterly deny it, but it is the certain result if he keeps his promises. If I say I will drive my car off a cliff by deny it will crash in the ravine below due to magical flying abilities, it is safe for others to claim that I propose to crash my car in the ravine.

Categories: Economics, Election 2012 Tags:

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:

Four Years Ago

September 3rd, 2012 3 comments

Astonishingly, Republicans are asking the question, “Are you better off now than you were four years ago?”

Have they forgotten what the economy was like four years ago? Maybe they meant “five years ago” or something.

Sadly, I think they are depending on people having forgotten about the near-collapse Republicans brought us to; they need Americans to forget that Obama’s stimulus, however underpowered, still halted the horrific plunge that had us losing 800,000 jobs a month and brought us quickly back to positive territory. They instead rely on people simply remembering a vague time in the past when things were better, and that things aren’t so great now—and undoubtedly hope that people won’t think too hard about the specifics. This right-wing blogger, providing an apt example, asks the “four year” question and then shamelessly compares the economy now to the economy three years ago.

The fact that they can ask that question now and not be torn to pieces is hard, cold proof that Americans don’t know as much as they should, don’t remember as sharply as they could, and that the media, far from being “liberal” or “in the tank for Obama,” is in fact criminally derelict in its duty as envisioned by the founders—to ensure an informed electorate.

Otherwise, how could Republicans refer back to a time of economic near-collapse and ask Americans if they want to return to that, and not have the people, much less the press, fall on them in a wave of incredulous contempt?

Categories: Economics, Election 2012 Tags:

Try Something Different This Time

August 25th, 2012 3 comments

Upon the eve of the 2012 elections, the economy is not doing well. Why is this the case?

After Obama’s election in 2008, Republicans announce a policy of obstructing progress and reform, saying that it “works for” them. They fight against the Stimulus, eventually watering it down to the point where it is far too ineffective. They fight against health care reform, watering down that as well, costing billions and offering alternatives that would balloon the budget and cost massive numbers of jobs. Instead of focusing on how to fix the economy they broke, they instead focus on sloughing off blame on Obama for doubling unemployment and losing millions of jobs, while fighting to maintain the policies which decimated the economy in the first place. Republicans fight equal pay, fight minimum wage increases, fight unemployment benefits, fight stimulative spending. Republicans announce that their primary goal is not jobs or fixing the economy, but making Obama fail so they can retake the White House. Republicans force the extension of Bush tax cuts, proven to significantly deepen the deficit while being poison to job creation. Upon gaining control of the House, Republicans fail to act on jobs, instead focusing on things like restricting abortions. Republicans instead push for cuts, admitting that it would kill jobs. Republicans repeatedly put “nuclear options” into play, sometimes over severely ideological issues like Planned Parenthood. Republicans pass budgets that promise job losses. Republicans threaten defaulting on the debt, causing the US credit rating to be downgraded for the first time in history. Republicans kill Obama’s jobs bill, even though it offers $250 billion in tax relief. Republicans finally offer their own “jobs” bill which essentially includes deeper tax cuts for corporations and elimination of regulations governing pollution and corruption, none of which would create jobs.

So now, four years later, the economy has not yet recovered from the devastating effects of the Republican policies that led to the effective depression we suffer from today.

Republicans point at Obama and shout, “Look what he did!!

Yes, the president owns the economy, for better or for worse. All the media plays into this, acting as if Republican policy to essentially sabotage the economy somehow does not exist, and only Obama is to answer for it.

That may be a political reality. But it is not reality.

Had Obama been free to do what he wanted, the economy would look far different than it does today. Obama may own the economy, but he was far from alone in creating it.

The key point: Republicans have been far more destructive to the economy, even openly stating goals which work against economic recovery, again openly admitting their goals in this are to gain political power.

The answer to this is not to reward them with more power.

The answer is to give that power, definitively this time, to Democrats, even just for two years, so we can see what Democratic policies would reap without Republicans poisoning everything.

If, after two years, things don’t improve, we can try something else. But the idea that Democrats have tried and failed, or that Obama has tried and failed, are fiction.

But that’s just reality. My apologies.

Romney’s Evasions Are Nothing New

August 18th, 2012 6 comments

During some Q&A with reporters, Romney claimed:

I did go back and look at my taxes and over the past 10 years I never paid less than 13 percent. I think the most recent year is 13.6 or something like that. So I paid taxes every single year.

At first, the thought was, hmm, okay, he’s on the record, so he’s probably telling the truth.

But then everyone started to realize that Romney’s statement was not off-the-cuff, but had been very carefully phrased—so much so that it means almost nothing.

Remember, words—especially when talking about money and economics—can be very cleverly phrased to make something sound like the exact opposite of what it is. A case in point is a Limbaugh favorite, to support trickle-down economics: “In the 1980′s, Reagan lowered taxes, and revenues doubled.” The statement is simple, to the point, and each part of it is true—but the whole statement is as bald-faced as lies get. The revenue doubling does not discount inflation, which makes up most of the increase, leaving only a 19% increase during Reagan’s terms, as much as 7% of which was due to simple population increase; and although Reagan lowered some taxes, he raised others more, making the premise of lowered taxes causing increased revenue unsupportable.

So, how about Romney’s statement?

Note that he did not say the magic words “federal income” taxes. He just said “taxes.” Also, note that he did not say what income he paid the 13% on. It is very likely, almost to the point of assuredness, that Romney paid no taxes on his capital gains income in 2009, and since that constitutes much of what he makes, it is likely that he was not including that in his statement.

In short, what Romney said was essentially meaningless; by playing with words, he could be saying that, if you take his non-capital-gains income, and include property taxes, sales taxes, state income taxes, and every other tax he can account for, the taxes he paid could well add up to more than 13% of his non-investment income.

And yet, in terms of federal income tax, which is what the question was actually asking about, he could have paid zero or close to zero for one or more of those years.

It is similar to what his wife is saying, that they have done what is “legally required,” when in fact, no tax returns are “legally” required and no one suggested they were; and that no one is suggesting that they illegally evaded taxes, instead the whole issue being about what is legally possible to evade.

You have to remember, though, that this is nothing new. In 2000, the question came up about Bush and drugs. At first he tried to evade the question, then he made statements about how he could have passed White House background checks when his father was president—which only ruled out a few decades, but left open the possibility that he was a heavy cocaine abuser in his 20′s. The fact that he didn’t just come out and say, “No, I never used hard drugs” essentially meant that he had, and knew that if he made a statement that he had not, it was possible that some witness or evidence could emerge to contradict him.

The same is true here: Romney is playing games, hoping to twist and turn through the slippery use of language until the media tires of the cat-and-mouse game and turns to other issues.

However, his reticence on his taxes has been so damaging that it is obviously clear that there are details in his returns from 2009 at least, and probably in earlier years as well, which are pretty damning in some way. Romney has judged that it is better for people to suspect that he possesses embarrassing wealth and uses his privilege to avoid his civic duty, than to open his records and remove all doubt.

Categories: Economics, Election 2012 Tags:

Yes, Ryan’s Medicare Plan Would Hurt Seniors Already on Medicare

August 16th, 2012 1 comment

A reader at Sullivan’s blog put it very succinctly:

The Ryan Medicare plan absolutely will effect people currently on Medicare. If you establish that in 10 years the Medicare risk pool will stop growing and start shrinking, you do damage to how the program works. First, you increase the risk in the pool and drive up cost by stopping younger healthier seniors from entering the plan. Second, as the pool shrinks Medicare looses [sic] power to dictate reimbursement rates. Doctors will begin not to accept Medicare patients because not only will the volume of patients no longer justify the low reimbursement rates, but those left in the pool will be older, sicker and more expensive to treat. The program that they say will be in place will not only become much more expensive to maintain then projected, but it will collapse on itself.

Let there be no doubt: that is their ultimate goal. Republicans have made it agonizingly clear over the years: they want to get rid of Social Security and Medicare. Not reform, not preserve, not save. They want to fully eliminate these programs, preferably phasing them out by transitioning to private “programs” which will essentially be equal to people buying private-market pension and health care plans by themselves, with private industry skimming a 10 ~ 30% profit (which currently goes to benefits for the payer) right off the top, whilst being mostly unregulated and therefore much more easily able to raid the remaining investments.

The result will be that in the short run, seniors slowly notice their benefits collapsing, costing more and giving less. In the end, we’ll be back where we were 80 years ago: if you’re not wealthy, you’re going to get inferior health care–and even if you were able somehow to save money your entire life after well-paying jobs got shipped overseas and the conservatives lowered your salary to below-poverty levels by abolishing or neglecting the minimum wage, you are liable to lose whatever retirement savings you do have to financial skullduggery of one form or another by rich bankers.

Welcome to the 19th century, folks. Didn’t you know that conservatism is all about driving us backwards? It is right there on the label, after all.

Hard-Hitting Ad

August 14th, 2012 3 comments

But factual:

With Romney, it was only possible to infer tax hikes for the poor and middle class; he said what he would give the rich, and then said that he’d pay for it but not how. However, there’s only one real way to do that.

Imagine a guy standing next to a vault, with a box of dynamite nearby, and no one has the combination. “I promise I will open the vault,” he says.

“Do you have the combination?” you ask him.

“Nope,” he says.

“Do you have any special tools, a cutting torch or diamond drills?”

“Nope.”

“So, the only way to open it is to blast it with that dynamite right there. Will you use the dynamite?”

“I’m not saying.”

With Ryan, however, the picture is a bit more clear. Ryan has made positive statements about some of the stuff he plans. His math is fake and he still holds back on many details, but he is on the record about a lot of draconian crap he plans to pull.

Romney has tried to distance himself on this, but it’s what Ryan is known for. It’s why Ryan was even in the field in the first place. Choosing Ryan not for his budget and Medicare plans would be like the Yankees saying they got Ichiro not for his batting skills.

Romney is trying to do what he has been doing: veering hard right and then calling foul when people say he veers hard right.

Categories: Economics, Election 2012, Health Issues Tags: