Archive for the ‘Economics’ Category

Republicans Take Credit for Stuff They Didn’t Do. Surprise!

January 19th, 2011 Comments off

Last October, I predicted that, due to a built-in 9-month lag in the unemployment rate reacting to actual job growth levels, the unemployment rate was bound to drop somewhat following good job performance in early 2010. I also predicted that Republicans would take credit for it despite having done nothing to generate it:

If unemployment lags as predicted, this will be bad timing for the Democrats, and very good for Republicans: if they win the House in November, it will probably be to news that unemployment is dipping, a trend that should continue until early 2011. They would, of course, attempt to take full credit for the change, acting as if it were the euphoria over their election wins and the expectation that they would pass tax cuts for the wealthy that spurred the gains–despite the fact that it would be the tail end of the stimulus and the special employment due to the census. Even more ironically, the trend would have continued far upwards and might even have taken us out of our dire economic straits had not the Republicans cut the stimulus down to well below what it should have been.

The news out today:

Top Republicans are claiming credit for a variety of metrics showing that the economy is improving. Expect this meme to snowball, particularly as Democrats have done little, so far, to stop it. On Fox News today, House Rules Committee Chair David Dreier (R-CA) contended the GOP deserves all the credit for recent economic growth.

“[W]e can get our economy growing. And we’ve gotten some positive numbers. I think it’s in large part because we won our majority and we’re pursuing pro-growth policies,” he said.

In December, the Department of Labor announced that unemployment had fallen from 9.7 percent to 9.4 percent. Its data suggests private sector job growth has been increasing since the fall. The GOP has controlled the House for just over two weeks, but has yet to enact any major economic legislation — and economists agree that even enacted fiscal policy will not be immediately reflected in economic growth.

Wow. I usually don’t call it so well.

Let’s see if my predictions last Fall continue; I said:

Nor would I be surprised if (a) the downturn in unemployment ends somewhere around February or March 2011, and (b) Republicans attempt to blame it on the Democrats for not going along with all the crap they will try to ram through the House the moment they have the gavel.

So far, their agenda has mostly been limited to repealing the health care act. They likely won’t succeed much on that, which will give them something to blame Democrats for if the numbers go bad again.

Categories: Economics, Right-Wing Lies Tags:


December 28th, 2010 5 comments

A pretty scary article about how, in the hundreds of thousands of foreclosures they are carrying out, banks get sloppy–or, one might say, over-eager. Without notifying owners, they break into the homes, change the locks, pilfer all their valuables, and trash all their other belongings. And in some cases, the owners were either not in debt to the bank, or the property had not yet been foreclosed.

When Mimi Ash arrived at her mountain chalet here for a weekend ski trip, she discovered that someone had broken into the home and changed the locks.

When she finally got into the house, it was empty. All of her possessions were gone: furniture, her son’s ski medals, winter clothes and family photos. Also missing was a wooden box, its top inscribed with the words “Together Forever,” that contained the ashes of her late husband, Robert.

The culprit, Ms. Ash soon learned, was not a burglar but her bank. According to a federal lawsuit filed in October by Ms. Ash, Bank of America had wrongfully foreclosed on her house and thrown out her belongings, without alerting Ms. Ash beforehand.

In an era when millions of homes have received foreclosure notices nationwide, lawsuits detailing bank break-ins like the one at Ms. Ash’s house keep surfacing. And in the wake of the scandal involving shoddy, sometimes illegal paperwork that has buffeted the nation’s biggest banks in recent months, critics say these situations reinforce their claims that the foreclosure process is fundamentally flawed.

“Every day, smaller wrongs happen to people trying to save their homes: being charged the wrong amount of money, being wrongly denied a loan modification, being asked to hand over documents four or five times,” said Ira Rheingold, executive director of the National Association of Consumer Advocates. …

Some of the cases appear to be mistakes involving homeowners who were up to date on their mortgage — or had paid off their home — but who still became targets of a bank.

In Texas, for example, Bank of America had the locks changed and the electricity shut off last year at Alan Schroit’s second home in Galveston, according to court papers. Mr. Schroit, who had paid off the house, had stored 75 pounds of salmon and halibut in his refrigerator and freezer, caught during a recent Alaskan fishing vacation.

“Lacking power, the freezer’s contents melted, spoiled and reeking melt water spread through the property and leaked through the flooring into joists and lower areas,” the lawsuit says. The case was settled for an undisclosed amount.

Somehow, it simply does not seem right that it can be legal for a bank to simply break into someone’s home and take everything without there being a formal, open motion to do so, with the owner being given a chance to rebut. If they were notified and could not pay the loan, then a court or some other body could give the go-ahead. But it seems that we live in a society in which the banks are almost a law unto themselves.

At the very least, they seem to be answerable for their errors–though in the above cases, however anecdotal, it seems like we’re looking at people who could get decent representation. How many get everything taken and trashed and just don’t have the wherewithal to do anything about it?

Categories: Economics Tags:

Spam Targets, and, Oh Yeah, Obama and the Dems Are Being Stupid Again

December 15th, 2010 1 comment

As part of some overdue maintenance, I figured I’d check out and empty the Spam box for the blog… and discovered that almost all of it, or at least 60 comment’s worth, was for a single post: The White House White Board post on jobs. Many were the traditional arm’s-length list of spam links, many had the innocuous-sounding “love this place, just peeking in” message along with a site link to spam, several Russian-language spam ads, several longish comments which, when read, are pretty much gibberish (with spam links), and many were the more involved long post on a tangentially-related (if even that) subject which have links (often formatted for forum links styles) to, of course, spam sites.

Makes me glad for spam blockers, despite their occasional inconveniences, and reminds me of the days when blog comment spam was still new and had to be deleted by hand.

By the way, since I brought up the White House White Board, I see they have a new video up–this time on the tax cut issue. Thought I’d put it up here as well.

This one I’m not so crazy about. Obama says that we have to give Republicans the tax cuts for the wealthiest Americans to save the tax cuts for the middle class, but the truth is if he and the Democrats had not been such idiots from the beginning they wouldn’t have to be doing this. Republicans are still the black hats here, but Obama and the Dems are the dumb sheriff that let them get away with holding up the train in the first place. Obama says we have to give in to the hostage takers–but the first rule of hostage negotiation is that you don’t give in, because that will just encourage them to take hostages every time. And Obama says we’ll fight them in two years–seriously next time, though he was supposed to be serious this time–and the fact is, in two years, the story will be exactly the same as it is now, only the Republicans will be stronger and more emboldened by then.

Olbermann had a good discussion on this the other day.

The White House White Board: Jobs

November 20th, 2010 3 comments

I didn’t think I’d be posting another so quickly, but I went to the site and found another White Board mini-lecture that explains exactly what I have been writing on this blog about for the past year or so: the Stimulus Act and its effect on jobs. Goolsbee does a fantastic job of laying it out:

Again, they should have started these long ago. Just this one should have been the Democrats’ primary campaign ad, despite its 4-minute length–the extended buys would have been an unusual move, attention-getting, and very, very smart politically. It would have shown millions of Americans how Obama did focus on the economy, how he did save millions of jobs, how the Stimulus did work, and why it is a smart idea to invest a lot more.

If you are able to spread these around, do so. They need to be shown and seen as much as possible.

Categories: Economics, The Obama Administration Tags:

The White House White Board: GM

November 20th, 2010 1 comment

I had heard people talking about The White House White Board, but had not seen one before this. And now I want to go back and look at the previous ones. This is what should have happened more than a year ago, and should have been–and should be now–publicized as much as possible.

In the video below, Austan Goolsbee, the Chair of the Council of Economic Advisers under Obama, describes the astonishing success of the GM bailout, using nothing but a simple whiteboard and a plain, down-to-earth mini-lecture format. View the video full-screen to get the most of the HD quality:

As you can see, it’s about as low-budget as you can get–but it’s also very effective. Succinct, educational, and not boring–a straightforward telling of an economic success story in terms anyone can understand. No flashy effects, no smarmy music, no ham-handed political demagoguery–just a guy in a shirt and tie giving a lecture, and you come away feeling like you just attended a really good college class. It almost reminds me of something you might have seen on The West Wing back when Sorkin was writing the show.

And this particular episode clears up so much of the lies and obfuscation about the auto industry bailout–how it was done fairly, how it challenged the odds, and how it became a rousing success–that so many Americans need to hear because they probably still believe that the money was wasted somehow, or that the bailout and its terms were socialist and destructive somehow.

I’ll be look at these things more often and posting some here from time to time.

Categories: Economics, The Obama Administration Tags:

Are You Better Off Now Than You Were Two Years Ago?

October 31st, 2010 3 comments

It’s a fair question. For some, the answer may be “no.” But for a lot more, the answer will be “yes.” For me, I cashed in some Apple stock which got badly beaten down by the Bush housing crisis; this week, I sold it for almost four times what it was worth when Bush left office. If nothing else, it speaks to the health of the stock market, which right-wingers initially tried to blame Obama for just a month or two after he took office (they don’t any more, you will note).

But let’s take a look at a more general picture. Three very meaningful questions asked in a post from DailyKos:

1. What was the average monthly private sector job growth in 2008, the final year of the Bush presidency, and what has it been so far in 2010?

2. What was the Federal deficit for the last fiscal year of the Bush presidency, and what was it for the first full fiscal year of the Obama presidency?

3. What was the stock market at on the last day of the Bush presidency? What is it at today?

There is a fourth question (about Boehner, the next Speaker should Republicans win the House, campaigning with a Nazi re-enactor), but I see it as relatively inconsequential, and meaningless to most voters, so let’s go with those three. The answers:

1. In 2008, we lost an average of 317,250 private sector jobs per month. In 2010, we have gained an average of 95,888 private sector jobs per month. (Source) That’s a difference of nearly five million jobs between Bush’s last year in office and President Obama’s second year.

2. In FY2009, which began on September 1, 2008 and represents the Bush Administration’s final budget, the budget deficit was $1.416 trillion. In FY2010, the first budget of the Obama Administration, the budget deficit was $1.291 trillion, a decline of $125 billion. (Source) Yes, that means President Obama has cut the deficit — there’s a long way to go, but we’re in better shape now than we were under Bush and the GOP.

3. On Bush’s final day in office, the Dow, NASDAQ, and S&P 500 closed at 7,949, 1,440, and 805, respectively. Today, as of 10:15AM Pacific, they are at 11,108, 2,512, and 1,183. That means since President Obama took office, the Dow, NASDAQ, and S&P 500 have increased 40%, 74%, and 47%, respectively.

While the source of the questions and answers is biased, the facts are not. Once again, under Obama and the Democrats, job numbers have improved markedly, the deficit, while unwieldily, is not Obama’s doing, and business is much better than it was. Compared to two years ago, things are much, much better.

The question any self-interested voter should ask is, do I want to go with the people who made things worse, or do I want to go with the team that made things better?

You can focus on side details as much as you want, try to ignore the mountain for the pebbles, but one thing is inescapable: Obama and the Democrats performed well on the economy–much better than the Republicans, who dropped us into the cesspool Obama and the Dems have subsequently been blamed for.

For those seeking to confirm the job stats, go ahead and visit the Bureau of Labor Statistics site, and download the data tables showing All Employees, Total private; the data you get will show you private sector job standings by month. Use Excel to calculate the month-to-month changes, then (a) add the gains & losses in 2008 and in 2010 (to September), and then (b) chart it out.

The raw table:


Here’s the table after transposing, selecting, and calculations:


And the chart:


Oh, and from a Feb. 2009 NYTimes article about private sector jobs over the past 35 years:

One of the weakest sectors was manufacturing. The number of such jobs peaked in 1979, when Jimmy Carter was president, and fell in every administration since, with the exception of a small gain in the Clinton years. The decline in the current administration, at a rate of 3.1 percent a year, is the steepest yet seen.

Carter and Clinton were the best at adding jobs; Reagan and both bushes the worst. How about that. If Obama’s total numbers are low, it’s due to the hole Bush left for him to climb out of.

Categories: Economics, The Obama Administration Tags:

The Stimulus, The Budget, Employment, and the Election: Conservatives Are Lying Their Asses Off, Obama Is Doing Great, And Here Are the Numbers to Prove It

October 26th, 2010 9 comments

To hear Republicans talk about it, Obama has done nothing about the economy, has not created any jobs, has busted the budget with unprecedented spending, and is responsible for the unemployment rate being what it is. The stimulus, they maintain, is a failure, and the people are suffering because of Obama’s inaction.

The problem with these accusations is that they are all one-hundred-percent, Grade-A horse shit. Bush wrecked the economy, and Obama and the Democrats, despite massive Republican obstructionism, have managed to pull off a minor miracle. And here are the numbers to prove it.

Before on this blog, I have refuted the claim about the stimulus’ failure; the numbers speak volumes–here’s a chart I published six months back:

With no other notable effect acting on jobs other than the stimulus, it would take huge leaps of legerdemain to explain the turnaround seen here in any other way than to recognize the stimulus as successful. As a result, Republicans simply ignore it, acting as if pulling the country out of a deep hole–their deep hole–is meaningless because the Democrats haven’t made the economy rocket into the sky yet. And sadly, Democrats–who should be plastering this chart up everywhere in sight–are letting their best advertising slip away as the conservative narrative takes hold.

Yes, the surge in jobs and/or the halt in layoffs sputtered soon after I made this chart, and since then the numbers have hovered below zero. However, this is pretty much what was predicted back in early 2009 by those who said the stimulus, as finally passed, wasn’t enough–they were 100% spot-on correct–and let’s not ignore the fact that we are substantially better off now than we were when Bush left office.

Now, how about the budget? That’s another GOP talking point–that things were going OK under Bush, at least tolerably well–but then Obama came in an exploded spending and the deficit. Let’s explode that lie, shall we? Here’s a chart [source data] showing expenditures and receipts over the past six years:


Ouch. Sure enough, deficits have exploded, and spending is up. Yes, spending is more of a straight line, but it’s not supported by revenue. Looks like under Bush, the deficit was under control, and then recently, under Obama, things have gotten out of hand.

Until, of course, you draw a precise line showing when Bush left and Obama took over:


What do you know. The deficit exploded under Bush, not Obama; Obama has been holding relatively steady. His spending is increasing at about the same rate it was under Bush. Also notice that the deficit is not that much greater now than it was when Obama took over–the arrows show the deficit when the transition occurred, laid over the latest numbers and a year before Bush left office. Obama, it turns out, has not really added much at all relative to what he was given. In contrast, Bush more than doubled the deficit in his last year in office.

So much for the “Obama and the Democrats have wrecked the budget” lie. Not to mention that soon after Obama came in to office and deployed the stimulus, the recession ended and government receipts started trending upward again. How about that.

Another tack taken by the Republicans is the unemployment rate; their claim is that since the stimulus did not take the rate down to the optimistic projections of the Obama administration, Obama therefore owns the unemployment rate–he is, they say, responsible for it.

But let’s take a look at that chart over time as well–red represents Bush months, blue for Obama:


Despite the fact that the trend and momentum started and gained steam fully under Bush, it doesn’t look too great for Obama here–when he came in, the rate was just under 8%, then it went up to 10%, and now is hovering between 9% and 10%. Republicans have picked up on this, adding fuel to their criticisms.

One problem: the unemployment rate lags behind improvements in the economy, usually by about three quarters. Apply that to the chart, and you get this:


Seen this way, one finds that not only was Obama not responsible for the 10%, he has actually lowered unemployment since he got into office. This would not be a surprise to anyone aware of the job trends since the stimulus began. Of course, this doesn’t make things all rosy–we’re still in a bad place, and slightly better than catastrophic is still terrible.

However, that’s why the unemployment rate seemed to go the opposite direction of the job surge: not only were we delayed by nine months or so, but in addition to that, we spent a year in negative territory–despite the fact that things were getting way, way better, we were still losing jobs up until late ’09. Thus the reversal in unemployment trends has been tepid so far.

So, let’s pause for a quick review: Conservatives say the stimulus is a failure. The facts say it was a resounding success, reversing the horrific nosedive that Bush had put us in. Conservatives say that Obama exploded spending and destroyed the budget. The facts show that Bush did all of that, and under Obama, spending has increased at the same general rate it did under Bush, but deficit increases have slowed greatly. Conservatives say that Obama made unemployment rise to 10% and hasn’t done a thing to change that. The facts say that Bush drove unemployment up, and that Obama stopped the trend and has slowly been wrestling the number down.

The difference is like night and day–Bush wrecked the economy, Obama has been bringing it back under control. And now Republicans are trying to blame the guy who has been helping for all the damage that Republicans wrought on the economy.

OK, back to the unemployment numbers, and where they will go. Now, the stimulus surge came to an end after May, the month in which we gained about 430,000 jobs. There was a 4-month period from February to May when the surge continued upwards, and then things went dead from June, since which time we’ve lost roughly 100,000 jobs a month.

If unemployment lags as predicted, this will be bad timing for the Democrats, and very good for Republicans: if they win the House in November, it will probably be to news that unemployment is dipping, a trend that should continue until early 2011. They would, of course, attempt to take full credit for the change, acting as if it were the euphoria over their election wins and the expectation that they would pass tax cuts for the wealthy that spurred the gains–despite the fact that it would be the tail end of the stimulus and the special employment due to the census. Even more ironically, the trend would have continued far upwards and might even have taken us out of our dire economic straits had not the Republicans cut the stimulus down to well below what it should have been.

Nor would I be surprised if (a) the downturn in unemployment ends somewhere around February or March 2011, and (b) Republicans attempt to blame it on the Democrats for not going along with all the crap they will try to ram through the House the moment they have the gavel.

I don’t have a sterling reputation for political and economic prognostication, though, so let’s see how this plays out. In the meantime, it looks like Americans are blaming the bad economy on those who have done a good job repairing it so far, and are set to hand over power to the party that caused the worst of it and has hampered the recovery. You get what you deserve. Too bad about all the people who you’re dragging down with you.

What Republicans Would Cut

October 10th, 2010 1 comment

The Republicans always promise cuts, but are too gutless to actually say what they’re going to cut. One reason for this is simple: most of the things they want to cut are popular, and if they gave a complete list of full cuts, it wouldn’t amount to nearly as much as they claim they’ll save. Of course, the biggest reason is that they’re slick political operators: they know that any specifics will piss off someone, and so they remain as vague as possible whilst sounding as adamant as can be, knowing that most voters will stupidly buy the sham hook, line, and sinker.

But they made a bit of a slip in their “Pledge to America”: they said they would cut 21% from $477 billion of domestic discretionary spending in the Stimulus. And since we know what is in that spending specifically, it is possible to get a few things the GOP would rather we not see–that being actual specific. And the specifics are not pretty, as we reflect on the fact that–unlike the GOP plan to cut taxes for billionaires–most if not all of what the Dems want to spend is actually productive and badly needed. Bloomberg figured out a few things that the GOP would actually cut:

  • $15 billion from education
  • $13 billion from money to rebuild our crumbling infrastructure
  • $6 billion from health research, such as the National Cancer Institute and other research
  • $5 billion from student tuition in the form of Pell Grants
  • $400 million from police forces nationwide

Not hard to figure out why they didn’t get specific, is it? Now, military spending, they’ll protect, especially stuff like the missile defense program, stuff that pours billions into corporate research that pays off the least in terms of jobs and infrastructure, but does great for their patrons. But you and me? We can go suck it.

Daniel Dilger at Roughly Drafted had a good sum-up in his piece on large corporate mergers (Microsoft and Adobe are looking to get together), saying:

We now have the product of a decade of pro-consolidation, anti-regulation public policy: banks and massive corporations control the government and entertain the middle class with the notion that they should give up any demand for “socialist” benefits in exchange for providing multinational monopolies with the freedom to pay low wages, syphon their profits into tax shelters, and pay no regard to any sort of environmental issues or invest anything into the proper education and critical infrastructure of the nation.

Understanding this setup helps one see why Republicans hate the kind of spending listed above. Education money does not go into the coffers of large corporations; if teachers get paid and schools get supplies, how does that help the establishment? All it does is make the next generation a bit smarter, which does not help the establishment maintain control. And infrastructure? If the government builds it, how can private industry charge for it? Health research? Doesn’t that cut into Big Pharma’s field? And a lot of that might be research telling the corporations how dangerous their products are.

No, money going directly to people doing their jobs and young people learning to think are counterproductive to the society that today’s GOP wants to build. They don’t want people to be employed without private industry getting their cut off the top, they don’t want the electorate to get too smart (especially off the public’s dime, which goes equally for everyone, or–gasp–to the poor, who need it most), and they certainly don’t want people to see government doing anything right for fear that private industry would not be able to do the same thing while charging more for the profit they skim.

Sorry, just felt like a rant today. Short story: cuts always hurt someone, they always gore somebody’s ox. That’s why government abhors not spending.

Categories: Economics, GOP & The Election Tags:

Busting the Budget

September 24th, 2010 10 comments

If you’re a conservative, you probably hate Obama’s stimulus and health care plan, right? You see them as wasteful spending on a scale that busts the budget and explodes the deficit.

What if Obama were to propose a fiscal plan that would cost four times what the stimulus and health care bill cost, combined??? You would probably burst at the seams, and rant about how Obama is trying to destroy the nation.

Well, exactly such a plan is being proposed.

By Republicans.

From WaPo:

Even as they hammer Democrats for running up record budget deficits, Senate Republicans are rolling out a plan to permanently extend an array of expiring tax breaks that would deprive the Treasury of more than $4 trillion over the next decade, nearly doubling projected deficits over that period unless dramatic spending cuts are made.

The measure, introduced by Senate Minority Leader Mitch McConnell (R-Ky.) this week, would permanently extend the George W. Bush-era income tax cuts that benefit virtually every U.S. taxpayer, rein in the alternative minimum tax and limit the estate tax to estates worth more than $5 million for individuals or $10 million for couples.

Aides to McConnell said they have yet to receive a cost estimate for the measure. But the nonpartisan Congressional Budget Office recently forecast that a similar, slightly more expensive package that includes a full repeal of the estate tax would force the nation to borrow an additional $3.9 trillion over the next decade and increase interest payments on the national debt by $950 billion. That’s more than four times the projected deficit impact of President Obama’s health-care overhaul and stimulus package combined.

So, are you infuriated by the GOP yet? No? Gee whiz, what a surprise.

Four Hours

September 24th, 2010 Comments off

Four hours is all it took. The Republican “Pledge” to help small businesses died a quick death. Four hours after House Republicans released their plan to save America, complete with a whole section on how they want to help small businesses with tax breaks, they voted against a bill to give small businesses $12 billion in tax breaks, and $30 billion in loans.

Why did they oppose it? Supposedly because the lending program smelled too much like TARP, which, despite its failure to secure answerability, transparency, or policy-correction from the banks who used it, turned out to have been fairly successful. And the CBO reports that at the completion of the program, the deficit would be reduced by about a billion dollars. No, the GOP would like the Dems to drop the small-business assistance bill, and instead let the GOP pass their $750 billion deficit-ballooning tax cut extension for rich people. Because they’re fiscally responsible and all that.

So, House Democrats propose a bill which will give a huge boost to small businesses in a revenue-neutral way–and Republicans vote to kill it. Four hours after pledging to turn things around and help small businesses.

This is their “Pledge to America.” Like I said, sabotage anything that Democrats do, no matter how productive or reasonable, so they can claim that the Dems aren’t doing anything productive or reasonable.

Want a clue about how to vote? If you approve of helping small businesses, then keep in mind that they would not be getting this help were the Republicans to have a majority in the House.

A Horse Won’t Drink from a Dry River

July 25th, 2010 3 comments

There is something that I have been wondering about tax cuts for the wealthy supposedly driving an economic recovery. Somebody explain to me if I have this wrong.

The idea behind giving tax cuts to the rich is that they would then invest that money into new businesses, thus generating jobs, which in turn create tax revenue and spending to spur the economy.

However, it seems to me that if the economy is stalled and sales of goods and services is slow, then the last thing you would want to do is give money to rich people.

Here’s how I see it: if most people–lower- and middle-class Americans, in this case–do not have much money to spend and are not going out and buying stuff, then no amount of money given to the wealthy will lead to new jobs. Why not? Because it does not matter if you give a rich person a billion dollars, they are never going to invest in a new business to make stuff if they think no one is going to be able to buy their product. If inventories are sitting on shelves and new products would never sell, it simply wouldn’t make sense. They would find some other way to make that money work for them, but it wouldn’t involve creating jobs, either directly or indirectly.

Now, turn that around. Let’s say that you don’t give wealthy people any money–in fact, let’s say that you raise their taxes and cause them to have less money. But the lower- and middle-class Americans have money to spend and are buying products faster than they can be made. Demand is high. Will businesses say, “Gee whiz, I’d like to invest, but darn it if my taxes are too high”? Of course not. they will use what capital they have, or they will get others to invest in their business, or they will borrow the money somehow–but if there is demand, there will be investment.

So, explain to me exactly why giving money to wealthy people ever makes a stalled economy take off?

Categories: Economics Tags:

GOP Election Year Message: Tax Cuts for the Rich, Cut Funds for Jobless

July 16th, 2010 13 comments

That’s the headline:

GOP: No more help for jobless, but rich must keep tax cuts

WASHINGTON — Republicans almost unanimously oppose spending $33.9 billion for extended unemployment benefits for some 2.5 million people who’ve lost them, because they say it would increase federal budget deficits.

At the same time, they’re pushing a permanent extension of Bush administration tax cuts, especially for the wealthy, which could increase federal budget deficits by trillions of dollars over the next 10 years.

How do they justify this?

Good question. The answer: Darwinian philosophy thinly disguising a well-known bias for rich people. Poor people vote Democratic; you don’t want to give money to those people. Besides, they lost their jobs, and conservative economic philosophy says that losers don’t deserve pity or help–that’s socialist entitlement bullcrap. Rich people, on the other hand, deserve to keep the money they’ve earned–because they’re so good at investing it in stuff like making businesses that employ those jobless people (and, um, they make sizable campaign contributions, ahem).

Forget that the economic engine is driven primarily from money spent by people just like the ones who are jobless, while more money for the rich is what causes the economy to stall. Rich people can be as rich as you can make them, but none will invest in new businesses if the common folk don’t have any money to spend.

And that thing about paying for stuff and how deficits will destroy us? That just applies to Democrats, you silly. Haven’t you been paying attention?

Fracking Market Manipulators

June 23rd, 2010 5 comments

Screen Shot 2010-06-23 At 11.01.49 Pm

So, what does this look like to you? Apple comes out with two hit devices within a few months. Apple posts record profits and sales. Throngs line up to buy new Apple products. Analysts–again–hike up Apple’s stock price target, this time to $375, a full $100 above current value. Apple has never been stronger, and is just getting stronger and stronger still.

So what have we seen the past few days? Apple’s stock taking steep, sudden, unexplained dives. Most notably right this moment, having fallen about $7 or nearly 2.5% in less than half an hour.

Can anyone say “stock price manipulation”? Nothing but criminally dishonest traders beating down the price of an undervalued stock, knowing that it will inevitably get back up again and gain them tons of profits by betting against it and then for it.

Where the hell is the SEC when crap like this is going on? Or is this completely legal and/or just overlooked?

Categories: Economics Tags:

Jobs (Not the Apple Variety)

May 9th, 2010 1 comment

290,000 jobs added in April. With adjusted numbers for February, the fourth straight month of job growth. The best jobs report in 4 years. Even the uptick in the unemployment rate–from 9.7% to 9.9%–was good news in disguise, as it reflected people who had given up the search for work rejoining the ranks of applicants. And the job numbers for February and March were both adjusted upwards. The new chart:


Republican attempts to (a) credit Bush and/or themselves, (b) deny that Obama had anything to do with it, and/or (c) blow this off as insignificant, in three, two, one…

What is encouraging is how the trendline is holding steady. It may be unrealistic, but the current trendline has us gaining roughly 750,000 jobs per month by the midterm elections. That trend will, of course, max out at some point, likely before 500,000, but still, the regularity of the trend so far is very encouraging.

Categories: Economics Tags:


April 30th, 2010 Comments off

I believe that the technical economic term for what you see below is a “roller coaster ride.” You know, where you first get cranked up almost vertically, and then your stomach falls out as you drop, several times.


After Apple’s spectacular earnings report late last week, the stock shot up. Early Monday morning, Philip Elmer-DeWitt quoted a stock analyst predicting a “major sell-off,” and though he thought Apple stock would go up, he also called for it to plummet to $200 soon, taken down with the rest of the market. A few hours later, AAPL dropped by about $3 in a matter of minutes. The next day, there was an even steeper drop of about $5. The next day, in pre-market trading, it plummeted by about $8, erasing all of its gains after the earnings announcement. But then it came back up, then immediately plummeted $8 again in regular trading.

Believe me, after having lived with this stock through the Bush collapses in early and late 2008, when drops like the ones we saw this week led to $80 free-falls and worse, it is not in any way describable “easy” or “comfortable” to sit back and watch this happen, and not do something about it. Fortunately, since Wednesday afternoon, the stock has climbed back up and is just $4 off it’s peak. Hopefully it will start climbing again.

Now, I have been planning for some time to sell off about half my stock this year and hang on to the other half for at least another year or more. I will feel a lot more comfortable having done that, without the whole market tumbling first. And it was not DeWitt’s column or the analyst’s prediction that caused this (though many commenters in the column roundly blamed both for exactly that), but market activity in general, including the thing in Greece. Although, one does smell the malodorous presence of people playing the market for a quick buck–one almost hopes, as it would suggest a better overall stability. Still, it makes you think.

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Digging Out of the Bush Chasm: How to Win the Midterms

April 4th, 2010 15 comments

In a development one can be assured Republicans will try to find a way to attribute to the Bush administration, the U.S. economy added 162,000 jobs in March, the biggest job gain in three years, since the Bush recession began. Analysts expected 190,000 jobs gained, but that figure is likely to be realized with adjustments over the next two months. Unemployment remains at 9.7%, but is below double-digits; while the job market remains tough, we are still in an upward trend and are now in positive territory. Compare this to January 2009, when Bush left office and 741,000 other Americans lost their jobs at the same time.

March Jobs

Obama’s stimulus was put into play, and immediately Bush’s plummet was reversed. Aside from Obama’s election in general, no other major factors aside from the stimulus seem to be able to explain the upswing in job creation. This month’s job report puts us comfortably on the plus side, and hopefully that trend will continue along the lines it has over the past year.

Compare this to when Bush was handed a shaky yet overall positive job market in 2001; he passed his massive tax-cuts-for-the-rich and immediately send jobs down the toilet–and did not see this kind of recovery until October in his third year in office. Bush, on the other hand, handed Obama the worst recession in recent history, the worst since the great depression, and we were hemorrhaging jobs–and Obama is back in positive jobs territory after just 14 months.

Any way the conservatives want to spin this, even despite the still-distressed economy, it cannot be denied that the Obama recovery is remarkable, perhaps even startling. If the current trend continues, we could be seeing aggressive job gains by summer (in the 400,000 ~ 500,000 range), in time to impress voters before the midterms. That would allow Obama and the Democrats to tout their two major victories–the Stimulus and Health Care Reform–in a light that makes clear the long-term benefits of both. And they can point to undeniable massive Republican obstructionism, and state truthfully that the Republicans tried to stop the recovery. Remember, they said it aloud: they wanted Obama to fail. Just run on the record: Republicans were driving us into a recession, and then tried hard as hell to stop the legislation that we can now see is bolstering the economy.

Republicans will no doubt bring up the deficit in criticism of this, but Obama and the Dems can correctly point out–aside from the fact that most of the debt is Republican-generated–that in order to drive down the debt, you must first have a strong economy. We had to spend before we could do anything else; failing to do so would have been courting economic collapse. Had Republicans gained power and there had been no stimulus–or worse, more massive tax cuts for the rich like Bush used in 2001 to drive job losses further–we would have been in a hell of a mess by now, maybe even in a depression.

The Dems just have to show the Bush trend and where it was leading, and contrast it with the Obama trend. This is the magic chart that could win the midterms:

Bush V Obama Wt

Look at that red trend line and imagine where we would have gone had McCain won, or worse, the Republicans had also controlled Congress. One shudders at the thought.

The difference could not be more stark. Republicans were driving us straight into the toilet; a depression was imminent. Obama and the Dems intercepted that long-bomb pass Bush threw straight to the depths of hell, and are now rocketing out of the chasm Bush was dragging us into, a recovery clearly foreseeable. (It won’t be so easy to recover from the staggering debt Bush drove us into, but aside from that….) Back this up with strong job gains into the summer, with people feeling the recovery in their guts, and the point will be driven home.

This is not one of those bogus charts where a regular trend line to the present is “predicted” to take ridiculous turns in the future, with “our” party’s line going straight up and “their” party’s line going way down. These are actual figures showing definite trend lines based on hard fact.

That chart should be made into a theme for the next seven months, it should be iconic for these elections. Show it every chance you get. Put it up on walls, show it on broadcasts, make it into backdrops for rallies and speeches. Convert it into a simpler graphic:


Slap that on every car bumper and home and store window in sight. Drive the point home.

Where the Debt & Deficit Came From

February 1st, 2010 1 comment

This part of Obama’s response to Republican accusations bears repeating often:

Jeb, with all due respect, I’ve just got to take this last question as an example of how it’s very hard to have the kind of bipartisan work that we’re going to do, because the whole question was structured as a talking point for running a campaign.

Now, look, let’s talk about the budget once again, because I’ll go through it with you line by line. The fact of the matter is, is that when we came into office, the deficit was $1.3 trillion. — $1.3 [trillion.] So when you say that suddenly I’ve got a monthly budget that is higher than the — a monthly deficit that’s higher than the annual deficit left by the Republicans, that’s factually just not true, and you know it’s not true.

And what is true is that we came in already with a $1.3 trillion deficit before I had passed any law. What is true is we came in with $8 trillion worth of debt over the next decade — had nothing to do with anything that we had done. It had to do with the fact that in 2000 when there was a budget surplus of $200 billion, you had a Republican administration and a Republican Congress, and we had two tax cuts that weren’t paid for.

You had a prescription drug plan — the biggest entitlement plan, by the way, in several decades — that was passed without it being paid for. You had two wars that were done through supplementals. And then you had $3 trillion projected because of the lost revenue of this recession. That’s $8 trillion.

Now, we increased it by a trillion dollars because of the spending that we had to make on the stimulus. I am happy to have any independent fact-checker out there take a look at your presentation versus mine in terms of the accuracy of what I just said.

It shows up the stunning hypocrisy of the GOP: to take a budget surplus and a promise to start paying off the debt, and immediately turn that into massive deficits and $8 trillion in debt–but the moment Obama takes office, pretend that he created it all and was fully responsible for it being there. Garrison Keillor expressed the Republicans’ mendacity best:

The bums have tiptoed out the back door and circled around to the front and started yelling, “Throw the bums out!”

Let’s make it clear: this is not Obama acting like Bush and trying to blame his current failures on the previous administration. Obama owned up to what he added to the debt. But he also pointed out that you could not blame him for losses incurred before he had the chance to act, nor could you fault him for having to start working deep down in a hole created by someone else. Republicans may be desperate to do so, but Obama’s having none of it, and rightly so.

Remember, Clinton left office with a jobs report that had only 16,000 jobs lost in one month, after several months of sporadic gains and losses (the gains were greater), with only a possibility of downturn; it took Bush 16 months before he broke even with that level of job creation, and it took him two and a half years before he had regular job growth again.

Obama, on the other hand, was handed job losses which for 3 months straight had exceeded 680,000. In just one year he has almost brought us back to jobs being gained again, and by relative terms, is about 600,000 jobs per month in the black from what Bush left him. In fact, the news may be better than that: job numbers for November were revised up to show the first job gain in two years, and although December job numbers came back down to 85,000 losses, that number could also be revised upwards, if things go well.

Unemployment rates are high mostly because of the massive losses that Bush generated, and Obama had to make huge strides upward and go into positive job gains again before the number could come down–and Obama is nearly there after only one year.

Take a look at the differences; below are two charts, showing job gains and losses for one year before the transition, to 11 months after the transition (the latest numbers we have for Obama), keeping in mind that the December ’09 job numbers are preliminary:

Jobs gained/lost: Clinton to Bush
Screen Shot 2010-02-01 At 12.33.48 Pm

Jobs gained/lost: Bush to Obama (Dec. 09 may be revised)
Screen Shot 2010-02-01 At 12.36.58 Pm

See the difference?

Add to that the surprisingly high Q4 2009 GDP numbers, even after mitigating factors are removed, and you have very strong promise for the economy right now. Hopefully, the jobs report due out in a week will show the first growth since December 2007.

Make no mistake: Obama’s economic performance so far has been astonishingly good, extraordinarily better than Bush’s at this point–despite the fact that Bush had already committed the country to far more debt at that point with his tax cuts than Obama has at the same point with his stimulus.

The idea that Obama is not doing a good job with the economy is purely an illusion created by the deep pit Bush had dug for him, an illusion that the Republicans are attempting to reinforce and amplify. And Obama was 100% correct for swatting them down.

Categories: Economics Tags:

Nice to Know That the Economy Is in the Hands of Such Responsible People

January 23rd, 2010 2 comments

Great. My Apple stock was doing great–at $215 a share, and set to go way up. Everyone rates it as strong, and there’s general concurrence that it will go up to at least $260, with many speculating that over the next few years, it can go up to $500 or even $1000–and for very good reason. Apple is set to release the tablet, computer sales are up, it is conquering the smartphone market worldwide, and its computer market share is growing, with lots of potential.

But over the past three days it has slid from $215 to $197, $10 of that just in the last day. WTF?

And then I see the reasons:

The game was “on” big time this week. Petulant “let’s teach Obama a lesson” Street players did their thing on Thursday and Friday (today). The market’s big move down was partly the Street’s retribution against the Obama Administration for daring to regulate proprietary trading by banks.

The news on China and Bernanke didn’t help, but they weren’t the only causes here:

Apple (AAPL), being a large part of the QQQQs, was caught up in today’s down draft and was sold and shorted mercilessly, finishing the day down $10.58 (5.04%). Helping to accelerate the selling was a false report today about Apple (AAPL) being downgraded by Deutsche Bank. This “Apple (AAPL) downgrade” story was pumped widely by the Street echo-chamber (i.e. hedge funds, institutional trading desks and other denizens of Wall Street). It is my opinion that the majority of trading desks understood precisely what happened at Deutsche Bank, but held tight to the truth and may have intentionally misled the financial press (by omission).

Don’t you just love it when your personal fortunes are in the hands of these pricks playing their little games? As for Obama regulating trading, the Street’s reaction proves exactly why there should be a lot more regulation.

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Pulling Out of the Bush Dive

December 8th, 2009 4 comments


Right-wingers have been bashing Obama for “losing” millions of jobs–and have even found ways to bash him further still for the fact that only 11,000 jobs were lost in November. As if there was no such thing as “last year,” or even sometimes “last month.”

A quick study of the chart above (Bush months in red, Obama’s in blue) tells the story in undeniable detail: Bush drove us into one of the worst recessions in memory, with unimaginable levels of job losses totaling more than 700,000 per month by the time he left office. Obama came in, quickly instituted a stimulus package and–purely by coincidence, of course–the trend immediately reversed itself. November job loss numbers were only barely negative, promising possible job growth for December or early 2010. I would not be at all surprised if the new growth turns out to be steady.

There is no way to look at that chart and blame Obama for anything except reversing a horrific hemorrhage of jobs that Bush saddled the nation with. At best, if you want to insist that the turnaround, timed exactly upon Obama’s entrance and his promised deployment of a stimulus package, was nothing more than an incredible coincidence, then you still can’t blame him for anything–unless you want to contend that Obama has damaged job growth but that has only been overcome by a delayed economic miracle that Bush somehow quietly enacted when no one was paying attention. But realistically, this kind of result just doesn’t happen by chance. Obama clearly had a strikingly positive effect on employment. He hasn’t fully repaired the damage done by Bush, but he has clearly turned it back onto the right course, and was correct to claim ownership of that early this year (when it was far from certain that the numbers would improve as much as they have).

In contrast, look at the chart of job gains and losses starting at the same point near the end of Clinton’s second term (in blue), and then where Bush took it afterwards (in red):


Not quite as clear-cut as the previous chart, but one can see a pattern: Clinton handed over a bad economy, but it was only middling-bad. Keep in mind that Bush signed his huge tax boondoggle for the wealthy in early June 2001 (after it passed through Congress in May)–exactly at the time when job losses became steady and notably increasing. It took until late 2003 before sustained job growth returned. Now it looks like Obama will achieve the same thing in just over one year–not two and a half–despite being handed a death spiral which made the economy Clinton handed Bush seem positively robust.

Contrast the Clinton-Bush chart with the stark shape of the job losses under Bush and then Obama, and it’s inescapable: had Obama not come in and turned things around, we could have been looking at ten million more jobs lost. He turned that trend around, but fast.

And for this, right-wingers attack Obama for “losing” all of those jobs. It’s as if Bush put the national aircraft into a deep, steep dive, then Obama took control and immediately started to pull us up, and we’re now leveling out, much safer now–and right-wingers are thrashing Obama for being at a low altitude.

I shudder to think what would have happened had McCain won and vetoed anything except yet another tax cut for the rich. Yeah, that would have worked.

Categories: Economics, The Obama Administration Tags:

Unemployment Reaches 10.2%; Republicans Rejoice

November 7th, 2009 2 comments

Yayy!! Some new terrible-looking thing we can blame Obama for! Yayy!!!

Of course, the truth is, it was Bush. Remember when unemployment went double-digit last time, and it was Jimmy Carter’s fault? Oh, wait, no–unemployment fell under Carter, and didn’t hit 10% (almost 11%) until two years into Reagan’s term. Of course, Republicans hold him responsible for all those jobs lost, right? Um, well…. And of course, they recognize that unemployment spiked the last four times under Ford, Reagan, Bush 41, and Bush 43, yes? Um, maybe not….

Of course, I have long since abandoned any pretext of expecting right-wingers to use actual facts instead of claiming whatever bizarre, hypocritical fantasy that suits their purposes for the moment.

The facts are, the current unemployment rate is solidly a Bush artifact. Take a look at the figures–first, job losses:


See how those jobless figures were dropping under Bush, and then they suddenly shot up under Obama? Oh, wait–the chart’s data reflects the opposite. Well, that can’t be! Jobless figures plummeting right after Obama passed the stimulus bill? Impossible!

Maybe the Unemployment numbers tell the tale better:


There, you see? Unemployment has risen under Obama! Just never mind the fact that it started to rise a year earlier under Bush! Pay no attention to that! Nor to the fact that though job losses have dropped steadily under Obama, he had to work from a massive 700,000+ job less per month that Bush saddled him with, and still hasn’t reached job growth yet.

You can bet that Republicans will crow about this wonderf–er, horrible news for the next week, month, whatever, blaming Obama for it 100%. America failed again! Yayy!!!

Until, of course, the unemployment rate drops under 10% again and steadily goes down, at which time it will be the distant hand of George W. Bush doing all the work!

Categories: Economics Tags: