Archive for the ‘Economics’ Category

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:


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:


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.


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?”


“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:

Is Government Necessary?

August 12th, 2012 13 comments

Part of an analysis of Obama’s “You Didn’t Build That” false controversy:

Jefferson, whom Democrats claim as the progenitor of their party and whom they celebrate with annual “Jefferson-Jackson Dinners,” was perfectly clear. The people of the United States created the government for one purpose only: to secure their rights. That is, the people, their possessions and their God-given rights existed prior to the state, which the people created to serve them.

With his Roanoke speech, Obama turned Jefferson on his head. In Obama’s formulation, government is not a tool for the people’s use, but the very foundation upon which all of American prosperity is built. Government is not dependent upon the people; the people are dependent upon the government.

Aside from the question of whether the author’s interpretations of the founders’ intentions are correct, the real question here is, can we say that Obama’s analysis is true? Do we depend on the government for being who we are?

The answer is easy: of course we do. I am tempted to add the biting comment, “Duh.”

We would be a completely different nation had we followed limited intentions as to the role of government. The fact is, we have grown, evolved, and become much more than was first established or envisioned. Had we not, we would not be the world power we are today, and we would not have the society we have today.

Historical romanticism is good and all, but you cannot base modern governance upon an ideal of returning to the principles of the role of government which may or may not have been an intended ultimate limit back when we were a fledgling agrarian society in a completely different age where human rights were delegated to a privileged few.

We should also not be fooled by the idea that this is about principles. Those espousing severe cutbacks in government programs are not doing so out of love for historical virtue. It is a more visceral reaction based upon avarice and bias. All the good that government does and has done is either dismissed, taken for granted, or subsumed into accomplishments by agents other than government. The cries for cutbacks come primarily from a desire to funnel money to the sector from which the cries originate while cutting as much as possible the burden of those doing the crying.

As a result, we see not so much reason and support as we do rewriting and obfuscation.

The writer of the article does essentially that. He first dismisses Obama’s idea that the middle class owes much of its existence to the the federal government by throwing up the straw man that Obama’s argument rests upon the supposition that the “middle class” at the time of the revolution would have to have been created, or allowed to form, by King George. Then he dismisses the entire argument about infrastructure by bizarrely arguing that this was the people acting, and not the government acting, defining the difference as being that the American people had tight control over how far the government would go in such endeavors. In short, the key to his argument seems to be based upon redefining things so that he’s right.

This has nothing to do with the argument being made publicly today, including the response to Obama’s statement: that government should not be, nor should ever have been as big as it is or as involved in advancing the general welfare of our nation. Building the nation should be up to private enterprise, as should health care, pensions, schools, security, and most everything else. And if you build a business, it’s all you and the government never did anything to help you–instead it only hindered you. Because we all know that government can never actually create any jobs, and when it tries to help, only horrific disaster ensues.

The question, then, goes back to that fundamental idea which the writer proposed, or more specifically, to the idea being forwarded by conservatives today: that the sole purpose of government is “to secure our rights” and anything beyond that is irrelevant to our achievements, or has actually held us back.

To consider this, you have to ask, exactly how does government secure our rights?

In the minimalist sense, government should do nothing more than is absolutely necessary to see that our rights are preserved. This would require a very small government, defending our borders and doing minimal policing inside them. No foreign wars would be prosecuted; no special services or assistance would be rendered to the people; no involvement in the economy would be performed. The government would make sure we’re not molested from without and do the bare minimum to preserve order within, and otherwise try to be as invisible as possible to the people. No huge projects, no safety nets, no redistribution of wealth. No trying to make the people better, just maintain the status quo and leave the rest up to society without the government sticking its nose in. No forced integration, no affirmative action, no government condoning of things like gay marriage.

Think over our history and how this would have affected our development as a country. Would we be who we are today without that?

Hell, no. We’d be a completely different society, and not a better one. We’d still be capitalist, but with income inequality even more severe than it is now. We would have become a plutocracy far beyond what we see today, with a manufacturing economy spreading from the north based on slave wages, and an agrarian economy from the south based on slave labor. Slavery would have lasted far longer, perhaps even into the present, with civil rights probably still only a dream. Public education would have been for-pay and only for those with wealth, as would be any kind of substantial medical care.

Despite being wealth- and production-centered, American industry and business would not have grown as it did. There would have been no government push for infrastructure. The rail system would have been minimal, interstate highways never built. Electrical systems would not have grown beyond sparse usage. Everything that our government has spent a great deal of money on in terms of infrastructure would have only been built as far as it was economically viable for private business–in short, not nearly as comprehensively as we have today. This would have saved money for businesses in the short run, but stunted their growth terribly in the long run. Computer technology was primarily funded by government spending, even as far back as the 19th century; that industry would have been greatly delayed, and infrastructure like the Internet never built. Ironically, it has not been the people bleeding the rich and the businesses for welfare checks, it has been industry calling for taxpayer money to build infrastructure too expensive for them to build themselves.

The author of the article suggests otherwise, and the argument could be made that building a national infrastructure is vital to preserving the rights of the people. (Ironically, these same conservatives are trying to stop infrastructure spending.) The problem with that argument is that if you take the idea of “preserving the rights of the people” as far as doing things like building infrastructure (acting positively to improve the society the people live in) then you essentially have the government we have today–in fact, you actually have a far more socialist government than we have today. How is providing financial security and good health to the populace not preserving their rights while building an infrastructure is? Really what the author is saying is, “We’ll stick to the absolutist principle except for stuff we like.” Sorry, but no–this is a situation where you cannot be “a little bit pregnant.” Either government works to preserve the rights of the people actively, or it doesn’t. Anything else is not principle, but instead is cherry-picking. Either we stick to the barest principles of the founders or we expand beyond it. You can’t establish a principle and then pick and choose when to violate it and still say the principle is sacrosanct to suit your needs. Sticking to the principle would have meant no government building of infrastructure, instead leaving it to private industry. And the fact is, we have decided as a society to act in the people’s interest.

Minimalists would have furthermore only protected imminent threats to our borders, but would not have participated in conflicts overseas. Even the Monroe Doctrine might not have passed. America would not have expanded its influence overseas, and would have sat out the first two world wars, figuring that we were not threatened because it would be too costly for European and Asian powers to bring war to American shores. America would never have become a world leader, and its ability to extend trade beyond its own shores would be in grave doubt.

I could go on, but you get the idea. All of this and far, far more serves as the foundation for the America we all know and want to have. It is all based on a strong central government which has grown well beyond simply minimally maintaining the rights of citizens–something which, when the Constitution was drafted, was limited mostly to wealthy white male land owners in any case.

What the government became, and what conservatives are trying to deconstruct, is a government which acts as an advocate for the people. If industry pollutes, the government stops them from harming the people. If a group is deprived of its rights by a bigoted majority, the government protects the rights of the people, not the ability of the majority to persecute. If the people are forced through desperate poverty to work for ruinous wages in harmful conditions, the government becomes their advocates. But the government does more than just that; it has tried to create a society where, as in a family, no one gets left behind to die in the street. It intervenes so the elderly are not forced to sleep under bridges in winter because some rich bastard stole their pension funds; so the poor are not made to starve in a land of plenty; so people can expect decent medical care without having to pay a king’s ransom because an industry holds their very lives as hostage.

Conservatives hate this. To them, it means that they are paying money for some freeloading bum to live in the lap of luxury with washing machines and big-screen TVs. They see a stark dichotomy with them doing all the work and making all the progress while half the nation sits on their ass without paying a dime in taxes, smoking dope and buying booze with food stamps, acting as parasites on the teat of big government. Reagan’s mythical welfare queen, now on steroids and writ large across an entire class.

Conservatives hate this straw-man moocher. You heard the crowds at the debates, not cheering, but shouting in outraged triumph at the idea of letting a poor schmuck die cold and alone in the streets instead of making them participate in paying for health care that would save the man’s life. You heard the crowds bused in to disrupt town hall meetings: I’ve got my Medicare, don’t you dare tax me to pay for health care for the poor. This is what they mean when they say they want “their country back.” It is what this all really comes down to: not a return to the founders’ glorious principles, but instead, “I want the benefits of government for me, not for those other bums.” Its just like the vote-suppression movements: “this country is for me; I deserve it and you’re a no-good parasite; you can go to hell!” They see others as being selfish when in fact it is them.

Obama was perfectly correct, and those who think government should never have grown beyond its infancy are indulging in a pipe dream. We are, in fact, not just dependent on each other within our own borders, we are dependent upon the world as a whole. Contrary to the fantasy world some libertarians dream of, you cannot have even a fraction of the wealth and prosperity we have enjoyed without also requiring exactly the things that these people wish never existed. Anyone who thinks they built a business and did it “completely” on their own is sadly and selfishly mistaken. Anyone who believes they would be better off without government is a fool.

The fact is, were the “drownable in a bathtub” government to exist, these people would not have a fraction of the things they presume have appeared because of their own individual efforts or the independent might of free markets. They are prosperous and believe they owe no one else for that prosperity.

Reality is very much distant from that presumption.

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:

Points of Departure

August 4th, 2012 Comments off

This is a post from exactly a year ago, but merits repeating.

I just want to bring up a little bit of history here. Back in 2000, when we were looking at surpluses, Republicans hated the idea. They were nearly apoplectic at the thought of government taking in more than it spent within a limited time frame. They used the catchphrase, “It’s your money,” as if the people were being robbed or something. It was as if the debt did not exist, and did not need to be paid off, so if the government had a surplus, that meant that taxes were too high.

Clinton and Gore proposed paying off the debt (by 2013!), extending the solvency of Social Security, and even establishing a reserve in case emergency funds were needed. Yes, the economic downturn at the turn of the century would have muted this, but had Gore been in office, the economy would have been much better. No huge tax cuts for the wealthy, no Iraq War, and, even if 9/11 had gotten past the counter-terrorism structure that Bush disassembled, the war in Afghanistan would have been shorter and far less costly. We might have maintained surpluses and actually gotten some debt reduction (though we probably would not have paid off the whole debt by 2013, especially with Republicans whining about surpluses and pushing for tax cuts); we certainly would have had a far healthier economy, back in 2001 and later on as well, no question about that whatsoever.

Republicans rejected the idea of paying off debts. They wanted to erase the surplus with tax cuts–which they did, and then some. Then 9/11 hit, and they added the burden of two massively expensive land wars in Asia. Over the years, they piled on more tax cuts, more unpaid-for entitlements, and precisely the kind of wasteful pork-barrel spending they always accused Democrats of, even worse than the Democrats actually carried out themselves. They drove the economy into a deep ditch, and then tried to pile all the blame on the next Democrat who took office, as if nothing untoward had happened in the previous eight years and the debt crisis had somehow how magically materialized the moment Obama stepped into the Oval Office.

Amazing how history can hinge on even the smallest of things. There is one graphic designer somewhere in Florida who slapped together the butterfly ballot for Palm Beach County for the 2000 elections. Had that person not made a simple design error, Gore would not have lost thousands of votes to Buchanan (and to Gore-Buchanan cross-votes), and the course of American history would have been changed to an astonishing extent.

And to think that in the 2000 elections, people bemoaned the idea that there was little or no difference between Gore and Bush.

Categories: Economics Tags:

Robber Barons, 21st-Century Style

August 2nd, 2012 5 comments

According to the Brookings Institute Tax Policy Center (the TPC is a Brookings project), Romney will raise taxes on the middle class in order to pay for tax breaks for corporations, the rich, and especially the super-rich.

Brookings has been called “liberal” (as well as “centrist” and even “conservative”) in the past, but in fact is centrist, or at least a muddle of various positions. The Tax Policy Center is noted as being carefully non-partisan. While one of the three economists who made the analysis was an Obama adviser, another was an adviser to Bush 41. Furthermore, the institute went out of its way to make the analysis as favorable to Romney as possible. If there are any errors or misinterpretations, they are the fault of the Romney campaign for not making public all of the plan–probably because they know it’s bad news and are trying to hide it. But this analysis is decidedly not a liberal smear against Romney.

So, what is Romney’s plan? If you recall, he plans to:

  • cut all income taxes by 20%
  • reduce the corporate tax rate from 35% to 25%
  • eliminate the estate tax

This is all, of course, heavily slanted to the rich. Take the 20% income tax cut for “everyone.” Sounds fair, right? Everyone gets the same cut, right? Welllll, no. If you pay as much as 35% on your income, you get a 7% cut; if you pay, say, 10% (which the poorest tax-paying families do), you get a paltry 2% cut.

Yep, that’s fair, right? And why do this? Under the presumption that rich people will then use that money to create jobs. Which is complete BS. We know for a fact that this kind of tax cut is the least stimulative expenditure the government can possibly make.

Then corporations get a whopping 10% tax cut, or 30% of their current rate. And will they be required to add a single job? Hell, no. Nor will they, if they can manage it; corporations are about increasing profits, not jobs.

And the estate tax? Well, right now, a married couple would have to inherit more than $10 million for even one penny of an inheritance to get taxed. And farmers and small business owners–usually trotted out as the “victims” of the estate tax–are rarely, if ever affected by the tax. Only a handful of farms a year, for example, owe anything at all, and the family gets 14 years to pay it. Nope: this tax is ultimately a tax on the rich, and a tax on the rich only. Paris Hilton, this cut’s for you!

In the meantime, the cuts would hike the deficit by hundreds of billions of dollars more than Bush’s standing cuts already do–more tax cuts for the rich that Romney wants to defend, by the way–and Romney has promised to be revenue-neutral on this. So, how can he pay for it?

By socking it to the middle class, of course:

His rate-cutting plan for individuals would reduce tax collections by about $360 billion in 2015, the study says. To avoid increasing deficits–as Romney has pledged–the plan would have to generate an equivalent amount of revenue by slashing tax breaks for mortgage interest, employer-provided health care, education, medical expenses, state and local taxes, and child care–all breaks that benefit the middle class. …

Millionaires would get an $87,000 tax cut, the study says. But for 95 percent of the population, taxes would go up by about 1.2 percent, an average of $500 a year.

Got that? Romney himself will get enough to pay for another car elevator, while Joe Six-pack has to give up, well, you decide–money for his kids’ college funds? Any hope of paying off his mortgage early? Cutting corners like buying enough clothes, or food, or what few luxuries the family can afford nowadays? Or, probably, more likely, just descending even further into debt.

Anyone who makes less than a couple hundred grand a year and votes for Romney is either a certifiable moron, or they care enough about conservative social values or foreign policy to pay through the nose for it. But then, 45% were stupid enough to vote for McCain, another nine-figure millionaire who forwarded tax plans which would also short-change poor and pay handsomely to the rich.

And none of this even touches on the fact that Republicans are on the record as wanting to tax people who are so fracking poor that they can’t even pay taxes in the first place. If Romney gets into office, the chances are that the Republican Poor Tax will be far more likely to pass.

Contrast this to Obama, who wants to end the deficit-bloating Bush tax cuts for the wealthy, while maintaining the tax cuts for the middle class–and in the meantime, has cut the payroll tax, as well as several other taxes, for the poor and the middle class. For people who work, not for people whose fortunes work for them.


Romney, predictably, is calling the study “biased” and “liberal.” Neither institution involved is “liberal,” and if they are biased, it was in favor of Romney, not the reverse.

Not to mention that when the exact same group that the Romney campaign is now calling “liberal” and “biased” came out with a report on Rick Perry’s tax proposal last November, Romney called it an “Objective Third-Party Analysis.”

Krugman takes a look at the study and confirms that not only were they fair, they actually went out of their way to be more fair than they needed to be:

The question one might ask is, did TPC – which is actually painstakingly and painfully nonpartisan – make questionable assumptions to get its results, so that some other set of assumptions might portray Romneynomics in a more favorable light? And the answer is no: TPC actually bent over backwards to literally give Romney every possible benefit of the doubt.

Here’s what they did. They took Romney at his word that he plans to offset his cuts in income tax rates by broadening the base, that is, limiting exemptions and other loopholes. They also assumed, however, that Romney would not be willing to tax dividends and capital gains as ordinary income, since he has made it clear that he opposes any rise in taxes on investment income. As they point out, this leaves a relatively small pool of loopholes to close – big enough that the Romney tax cuts could, in principle, be paid for by base broadening, but not with a lot of room to spare.

So which loopholes are closed? TPC made the most Romney-friendly assumption they could – namely, that base broadening is concentrated on top incomes as much as possible. First you eliminate all deductions that benefit those with more than $1 million in income; then all that benefit those with between $500,000 and $1 million; and so on. …

So they’re actually giving Romney every possible benefit of the doubt – and still his plan is a redistribution from the middle class to the rich. In practice it would surely be much worse.

Not much to decode in Romney’s charge: if the conclusion is unfavorable to Romney, it must be liberal. Forbes, which concluded that the TPC was impartial, or perhaps only slightly left-leaning, came to that conclusion in part by asking if the TPC analyses “loved” Obama’s or McCain’s tax plans better. That’s baloney–if Obama’s plan was fiscally more responsible and more accurate in its claims, the TPC would not be “liberal” for recognizing that. This is more of that BS “balance” in reporting–if Obama tells the truth and Romney lies, you can’t say that without being “liberal” or “pro-Obama.”

In the end, the real question is, was the TPC’s analysis fair? And the answer seems clear: it was more than fair.

As Krugman pointed out, and as I did earlier, if the Romney campaign doesn’t agree, they can release the details of the plan themselves and show everyone how ‘fair’ their plan is. Romney wants to be secretive about his religion, secretive about his taxes, secretive about just about everything–including, apparently, his proposals for what he would do as president. We, apparently, have no business knowing what they are, and we’re liberal and biased if we make the best possible guess while being as favorable to Romney as possible.

That’s fair, isn’t it?

The Heckler on Via Dolorosa

July 7th, 2012 7 comments

So, Romney flip-flopped yet again. Initially faced with having to admit that he was the biggest tax hound in Massachusetts history, he coweringly sent out a flunky to say it wasn’t a tax, causing a huge uproar among the right wing who were salivating at the prospect of beating Obama to death with the word “tax.” Sensing that he had to jump on the bandwagon, Romney joined the chorus and called it a “tax.” He knows that he won’t pay much for the hypocrisy; he didn’t “tax” the whole country as governor of Massachusetts, and the media almost never calls out politicians for lies or rank hypocrisy anymore.

Of course, it’s not actually a tax in the usual sense, unless the money you pay when you evade taxes is a “tax,” or the money you pay when you get caught driving without insurance is a “tax.” The most onerous “burden” will actually be the fact that you have to get insurance–which is mostly onerous to those who want to get the best out of the system without paying full price for it.

Not that the penalty-versus-tax meme lasted long; the economic report came out, and it’s a lot less than we need right now.

Yes, Obama’s job numbers are lackluster. But that doesn’t mean that Romney will do better–quite the opposite, in fact.

Romney is, as predicted, having a field day with Obama’s numbers–but hypocritically so.

Never mind that it is the 21st consecutive month of growth following an economic catastrophe which ignited a depression–all caused by Obama’s predecessor.

Never mind that we are now adding more than 800,000 more jobs per month than when Obama came in to office.

Never mind that despite being handed a far less difficult economy, Bush took two and half years to return to stable job growth, while it took Obama only one year.

Never mind that at this point in his term, again despite far better conditions, Bush had only 12 months of growth, only four of those being over gaining 150,000 jobs.

And never mind that Obama has had to deal with the most extreme opposition in living memory, a Congress actually dedicated to sabotaging his attempts to repair the economy in order to make him fail.

That last is a key point. Yes, Obama could have done better–but not because he acted liberally, rather because he did not stand up the the Republicans to do what he should have known was right.

It is a key point for two reasons: first, as Obama was trying to carry the nation back up, Republicans were grabbing his heels and pulling him back down. And second, had we done what Republicans were clamoring for–more tax cuts for the wealthy, higher taxes on the poor, and less spending on infrastructure and other ways to get the economy pumping again–we would be in far deeper shit than we find ourselves today. As is only sometimes observed, Obama’s poor ratings are not just because he’s more liberal than the right is comfortable with, but also because he’s not as liberal as those on the left want him to be.

Romney, unconcerned with facts, likes to wave around “his record” as governor of Massachusetts:

Romney takes credit for vetoing more than 800 spending items passed by the Legislature, saying he wiped out unneeded programs, cut taxes 19 times, built up a $2-billion rainy-day fund and balanced the budget four years in a row. All of that, he says, shows he can stop overspending. “We can balance our budget and live within our means,” he recently told supporters in Ohio.

He leaves out a few tiny details, however:

But Romney’s telling omits key facts that clash with the agenda of his campaign for president:

• The Legislature overrode most of Romney’s spending vetoes.
• State spending rose by 22% on Romney’s watch, nearly double the rate of inflation.
• Romney increased corporate taxes and state fees by $750 million a year, outstripping his tax cuts.

In short, everything had to get past the Democrats, just as Obama has to now get everything pat the Republicans. And while the Democrats shot down a lot of Romney’s ideas, it was not to sabotage the economy–quite the opposite, it was to help the economy, to improve it. Directly the opposite of Republican’s in Congress during Obama’s term. Romney and the Mass. Dems may have been at odds, but it was a constructive rivalry.

In the end, Massachusetts increased spending and it raised taxes on the wealthy–this is what Romney is celebrating, despite his claims to the opposite. Furthermore, it is not what he would do as president.

The primary moves initiated by Romney that helped Massachusetts improve their economy were fee increases and closing corporate tax loopholes. As president, Romney would not be able to raise funds with fee increases, and he wants to slash corporate taxes, not close their national loopholes.

But that was not the main reason Massachusetts’ economy improved–it was because, at the time, the country as a whole was finally coming out of the recession.

So, Romney’s record as governor really reflects a Democratic agenda being pushed over his vetoes, tax and fee hikes he cannot or will not implement as president, and improvements in a more general economic environment which Romney will definitely not have to benefit from as president.

Just the other day, I got a belated comment to a blog post from April 2010. In that blog post, I pointed out that Democrats should run on a chart showing where Bush and the Republicans had been leading us versus where Obama had taken us.

That is very important, yet something that goes virtually unrecognized because it is the proverbial dog that didn’t bark–despite the economy being shitty, instead of focusing on what Obama could have done, imagine what would have happened had McCain won and Republican had control over Congress.

Anyway, the commenter linked to this chart:

7454295280 2E6894D993 B

It appears to be a chart the commenter made himself–and seems to be pretty bogus. The claim of measuring jobs by the “percentage of jobs lost or gained vs. 1st month in office” is misleading; this chart does not compare each successive months’ performance to the first month, thus showing performance against the initial benchmark (which would be a fairer way to judge).

Instead, it simply shows the number of existing jobs with starting number keyed to zero. The author pretends fairness by changing Romney’s numbers somehow so the nadir matches Obama’s, but it is far from accurate, for several reasons. For example, it is easier to recover from a stumble than it is to reverse direction when falling at terminal velocity. Obama was handed an economy in freefall and immediately set upon by an opposition bent on making him fail against the backdrop of a sputtering world economy. Romney was handed a state in mild trouble with a Democratic legislature trying to fix things their own way, against the backdrop of an improving national economy. So, yeah, “Apples to Apples” my ass.

Curious as to what the real picture was, I got the numbers on my own and ran them through a comparison that used the initial state as a benchmark against which you could compare future results, and got this result:

Screen Shot 2012-07-07 At 4.02.20 Pm

The “100%” mark means that you are gaining jobs as opposed to losing; 200% would mean that you are gaining as many jobs as you were losing at the start. Again, a huge advantage for Romney, as gaining 9500 jobs in Massachusetts is a hell of a lot easier than gaining 750,000 jobs at the national level.

As you can see, this shows a pretty different story than the ginned up chart above. As one might expect, Romney’s numbers show greater month-to-month variation due to the fact that he’s presiding over a smaller workforce. Whereas Obama deals with changes in the tens or hundreds of thousands, Romney was dealing in changes of no more than 15,000 in a single month. To smooth that out, I added a trendline–and interestingly, it tracks pretty much exactly with Obama’s performance.

Which means that Romney, in Massachusetts, got just the same level of job growth as Obama despite (1) starting off with a far less catastrophic situation; (2) having a far lower bar in order to claim accomplishment; (3) having a legislature that’s trying to help you instead of hurt you; and (4) getting buoyed by a greater economic environment. In short, he did exactly as well as Obama despite lacking virtually every great disadvantage that Obama had to face.

Imagine what would have happened if Massachusetts were imploding, were Romney pressed to create impossible numbers of jobs, had the Democrats been pitted against him, resolved to sabotage his recovery attempts, and the nation as a whole been in serious decline. Massachusetts would have been crushed under Romney’s governance.

Faced with that challenge at a far greater level, Obama has done passably well instead of impossibly great, for which Romney blasts him for being an abject failure. Kind of like a guy who directed a community theater play, which got good reviews on account of a great cast, heckling Steven Spielberg for not winning the Oscar.

If Romney becomes president and Republicans maintain control of the House, with Republicans blocking or even controlling the Senate, we can expect (a) even more and bigger tax cuts for the wealthy; (b) mild (obligatory) tax cuts for the middle class, offset by (c) tax hikes for the poor and the middle class in various forms, including forcing the poor to pay or pay more; cutting federal aid, thus forcing either tax hikes at state and local levels or reducing local services which essentially forces individuals to pay more, hitting the poor the hardest; and a much more antagonistic environment against the worker–less pay, fewer benefits, less union protection, less regulation against unfair pay and other worker abuses, etc. etc.

This along with spending austerity measures which Krugman points out is poison to an economy like ours right now.

So, yes, Obama’s job numbers are lackluster. But that doesn’t mean that Romney will do better–quite the opposite, in fact. Only in American politics is it the case where the voters are stupid enough to vote for the Penguin just because Batman hasn’t stopped the Penguin’s minions from wreaking havoc.

No Occupancy

June 5th, 2012 1 comment

Michael Kazin opines on why the Occupy movement fizzled:

[T]he Occupy movement gave American leftists a chance to appeal to millions of their fellow citizens who care about the same crisis they do and were willing to listen to egalitarian solutions. But the open-ended nature of the movement and, to paraphrase Marx, the incubus of failed ideas and strategies on the left still weighs heavily on its fortunes.

I disagree. I stated last October:

A real problem with the OWS protests seems to be the nature of the political support behind it. When the Tea Party had far less groundswell (especially protests not paid for or otherwise supported by billionaires), they wielded incredible political influence. This was because the conservative establishment immediately picked up on the influence they represented and made the most of it. Fox put their full weight behind them, and the conservative political force responded strongly to it, took full advantage of a popular protest.

In the case of OWS, there is no “liberal media” (outside of a few MSNBC shows) to rally behind it (while Fox has spent all their time vilifying and/or mocking it), and Democrats seem to be unsure of what to do. Obama even seems to be ignoring them for the most part–all in character, of course. As a result, we see this huge movement which seems to be running in place, getting nothing at all accomplished.

If a movement has no political arm and no political party gets behind it, isn’t it kind of obvious that nothing will happen? All Wall Street had to do was walk by them every day and wait them out.

Categories: Economics, The Class War Tags:

Would Romney Have Done Any Better?

June 5th, 2012 9 comments


From The Washington Post’s “Fact Checker”:

Take a look at the chart above, which uses seasonally adjusted Bureau of Labor Statistics employment data to show the change in the level of employment during the first 40 months of each man’s tenure as governor or president.

The similarities are actually more striking than the differences. Both men took office as the economy was plunging, but the hole (in percentage terms) turned out to be much deeper for Obama. The jobs picture started to turn around for both men at about the same time, but because Romney’s job deficit was comparatively smaller, he moved into positive territory sooner — though it still took him 36 months.

Of course, Kessler forgets one tiny little detail in his analysis: Romney, aside from having to deal with a tiny disaster instead of an unprecedented clusterfrack, did not have a legislative opposition which was dedicated to sabotaging his work, defeating or watering down his proposals to help the economy, and preventing him from concentrating on his job. I do not believe that any Democrat in the Massachusetts state legislature ever said that their #1 task was to make Romney fail.

Considering that the vast majority of actually useful things one can do as chief executive is controlled by the legislature–who typically escape virtually all responsibility even when they overtly work to hurt the state, as Republicans have–this should be counted as a factor. But maybe I’m just being crazy here.

Categories: Economics, Election 2012 Tags:

Romney’s “Job Creating” Shell Game

May 19th, 2012 12 comments

Robert Reich explains how Romney & friends over at Bain capital got stinking rich. A teaser: they risked not a single dime of their own money and used a bunch of accounting scams, while working Americans paid the price, and footed the bill in the form of taxes and debt to pay for the debris trail they left behind.

The Truth

May 18th, 2012 4 comments

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. So now right-winger shrieks about how they have never gotten a chance and how liberals have ruined everything.

Once Again, A Reminder of Where the Deficit Really Comes From

May 16th, 2012 8 comments


Answer: the policies and failures of George W. Bush, the same policies still being pushed by the GOP today, toward the same failures. Under a Republican administration, the cost of the wars in Iraq and Afghanistan might be replaced by expanding and extending our presence in those countries, plus maybe a new war in Iran (or who knows where else); the Bush tax cuts would not only be extended, but would be expanded.

Of course, all other costs of government could be put up there as well, but this does quite well to demonstrate what a huge difference the cessation of the wars and the repealing of the Bush tax cuts would make.

Not that this, even were it to come from an unbiased source, would make an impression on those opposed to Obama. They still think he’s not a Christian, for chrissakes, or even not born in the U.S. Even more moderate people have accepted the idea that the deficit is “his,” which it may be in a political sense, but clearly is an artifact of Bush and continued GOP pressure.

The problem is, voters seem far more interested in blaming whomever is in office when bad stuff is happening than they are in figuring out whose policies would lead to a better result.

It’s as if we had a babysitter who turned out to be a child molester, and after we got rid of him and hired a qualified babysitter, the kids are still suffering severe trauma, made worse by the molester hanging around, so we blame the current sitter and start looking at hiring back the molester.

Categories: Economics, Election 2012 Tags: