Some wonky stuff about unemployment and what can be done about it, “We Dare Not Let This Happen” (But Don’t Support Doing Anything About It)
Dean Baker is frustrated with a Washington Post editorial telling the public there’s nothing we can do about the unemployment problem, a problem it cannot even characterize correctly (see Dean on this point). Me too.
The editorial starts by noting that:
unemployment remains well above what it should be; the longer this persists, the more we risk a “new normal” of structural unemployment, which is a fancy term for elevated human suffering and snowballing economic waste. We dare not let this happen. The question, though, is how to generate the new jobs.
We dare not let that happen! We need to do something! Unless, according to the editorial, fear of what might happen if we try to help the unemployed gets in the way.
First, fiscal policy is ruled out as a solution to this urgent problem. As Dean Baker notes, “The Post tells readers that we can’t try to create jobs through fiscal stimulus” because bond vigilantes might drive interest rates up. However, the “interest rate on 10-year Treasury notes is now 3.14 percent, much lower than it was in the budget surplus days of the late 90s” even though we’ve heard these warnings for some time now.
Well, if the problem is so urgent, certainly the editorial will support money policy instead? Nope. Here, the worry is inflation. But, as Greg Mankiw notes this morning, he agrees with Paul Krugman that “the price of labor does not show any significant inflationary pressures right now,” and hence there is little to worry about in terms of inflation (and other signs of inflation are absent as well).
So what should we do about the unemployment problem given that (according to the Post, not me) both monetary and fiscal policy are off the table?
Mark Thoma thinks we need to take some risks in terms of possible inflation. Policy makers are not exactly risk prone at the moment. Even Democrats, with the exception of the House’s progressive Caucus have bought into the mind-boggling narrative that cutting spending, making the working poor and middle-class ( or median class – those making $55k and below) should bear most of the hardship and sacrifices – are the path to fiscal nirvana. Fingers crossed, maybe the ideas in the People’s Budget – which contains some spending for job creation, and goodness forbid rising some revenue will start to generate some pressure on both the House and Senate to realize rising revenue to the key to digging ourselves out of the deficit hole and out of everyone’s fears of long-term structural unemployment. It is just a phenomenon of the Village that once a problem has been around long enough, and short of people dropping dead in the streets, they just get used to what has or will become the new status quo.
While the Republicans have settled on the narrative that poor people and all the super powers poor people have, caused the Great Recession, because, you know, markets are perfect and deregulation always leads to the best outcomes. Republicans have also decided the unemployed are shiftless dirt-bags that need to be cut off from the government entitlement wealth machine as soon as possible, Florida Lawmakers Approve Deep Cuts in Jobless Benefits
A bill that would establish some of the deepest and most far-reaching cuts in unemployment benefits in the nation is heading for the desk of Gov. Rick Scott.
The Republican-controlled House and Senate passed the compromise measure just before the legislative session ended Friday night.
The legislation would cut maximum state benefits to 23 weeks from 26 when the jobless rate is 10.5 percent or higher.
If lower, the maximum would decline on a sliding scale until bottoming at 12 weeks if the jobless rate was 5 percent or less.
Both chambers were agreeable to a sliding scale, but the House wanted to cut the maximum to 20 weeks while the Senate wanted to keep it at 26.
The benefit reduction is expected to cut unemployment taxes paid by employers, but not until next year.
Florida has one of the highest unemployment rates in the country, 11.5 percent, and already had some of the lowest unemployment benefits.
Florida’s Criminal-in-chief Rick Scott and the Florida Republican Mob thinks it is fine to steal from the government and senior citizens (and cut corporate taxes yet again), but Americans who need a little help getting through tough times can just find a cardboard box and a bridge to live under. Scott would fit in great with Republicans in the U.S. House of Representatives. They both campaigned on job creation and have yet to do anything to create jobs ( They have voted to repeal the Affordable Care Act, to gut Medicare and to spend millions to protect DOMA) and . House Republicans, taking heat for their vote to gut Medicare have gone into stealth mode and are now attacking Medicare and Medicaid through a “compromise” bill that Robert Reich describes as The Republican Plan With Lipstick. The implications of this new compromise explained here, On Medicaid, Cinderella and Pumpkin Politics
The only real hope of not cutting the state budgets by cutting off aid to the most vulnerable might lie in the fact that a quarter of Medicaid funding goes to the elderly, mostly because long-term nursing home stays are not covered by Medicare but by Medicaid, absent private funds for them. Many of these elderly recipients, if not most, were not poor to begin with. Nursing home care is expensive and once private funds are run down it is Medicaid which takes over.
Thus, the Medicaid cuts might mean that middle-class voters will wake up some day finding an extra very large bill for grandpa’s nursing home care in their mailbox. Or grandma might be deposited on their front step because there are no longer funds to care for her.
Wait, wasn’t I talking about Medicare. Do not be fooled by thinking cuts to any of the social insurance programs – Medicare, Medicaid and Social Security – exist in a vacuum. Changes, massive cuts in one, have effects on the other. Cuts in Medicare will mean of funds for one’s care will be paid for out-of-pocket with Social Security funds. Cuts in Medicare will be mean more reliance on Medicaid. More reliance on Medicaid also means more of a drain on Social Security funds, especially for the retired and severely disabled. In turn any of these cuts will mean more of a burden on working class families who cannot afford to pay the new larger portion of their family’s medical expenses.
The money is there. We are still one of the wealthiest nations in the world. A world in which it is considered courageous to take money and medical care away from the most vulnerable Americans, but just crazy to rise revenue, U.S. Taxes At Lowest Level Since 1958
The post-World War II historic average is that federal revenues equal about 18 percent of the U.S. gross domestic product, the broadest measure of annual economic production. In the year 2000, after the longest economic expansion in U.S. history, federal revenues equaled almost 21 percent of the economy. As a result, Washington cut taxes in 2001 and 2003.
Revenues plunged to around 15 percent of the economy in 2009 and 2010 amid the deep financial crisis, and dipped even further this year, to 14.4 percent, the lowest level since 1950.
The revenue issue is not simply about rising federal income taxes on the richest 2% or the richest corporations. One of the reasons those at the top pay so little taxes in proportion to their income is because much of that income is not from a payroll check but from capital gains, An Empty Offer from the Super-Rich
It drives economist Bruce Bartlett crazy every time he hears another bazillionaire announce he’s in favor of paying higher taxes. Most recently it was Mark Zuckerberg who got Bartlett’s blood boiling when the Facebook founder declared himself “cool” with paying more in federal taxes, joining such tycoons as Bill Gates, Warren Buffett, Ted Turner, and even a stray hedge-fund manager or two.
Bartlett, a former member of the Reagan White House, isn’t against the wealthy paying higher taxes. He’s that rare conservative who thinks higher taxes need to be part of the deficit debate. His beef? It’s a hollow gesture to say the federal government should raise the tax rate on the country’s top wage earners when the likes of Zuckerberg have most of their wealth tied up in stock. Many of the super-rich see virtually all their income as capital gains, and capital gains are taxed at a much lower rate—15 percent—than ordinary income.
We don’t need to just rise taxes back the rate they were during the 90s we need to rise capital gains taxes back to their rate during the Reagan years of 28 percent. The argument goes that rising capital gains makes all the wealthy folks start hiding their money in the mattress rather than invest. That’s just a fairy tale. Have never seen any empirical truth to that. Why stop investing and bringing in substantial amounts of easy money. Executive compensation has grown disproportionately to the income of the average Americans since the 1970s. The income and investment trends shows that capital gains is one of the ways the richest have escaped the top tax rates ( add to that the usual loopholes and deductions)
Brent Bozell: Bush Gets All The Credit, None Of The Blame for getting Bin Laden,
Every Friday the Media Research Center president appears on Fox & Friends to whine about how awful and terrible the biased liberal media are, and his complaints almost invariably revolve around how unfairly the media treated former president Bush. This morning, Bozell attacked the press for not giving Bush enough credit for the death of Osama bin Laden, even giving the 43rd president a “hip hip hooray!”
Bush-era policies have had a lasting impact and deserve credit for this successful counterterrorism operation, argues Bozell. And that’s funny, because in December 2009, Brent Bozell wrote this:
The economy can no longer be blamed on Bush. Obama has shaped it with his fiscal policies. He owns it. So when wil his allies in the press ever acknowledge that the “jobs program” is a fiasco, and that Team Obama failed to match its own hyperbole on what the “stimulus” would accomplish?
So, in Bozell’s reckoning, eight years of Bush economic policies had only a fleeting carry-over effect and could not be “blamed” in any way for the poor state of the economy less than a year after Obama took office. (For a rational, less-hackish analysis of the impacts of Bush’s and Obama’s economic policies, see last week’s Washington Post.) But at the same time, argues Bozell, Bush’s counterterrorism policies have had lasting benefits and were clearly responsible for Bin Laden’s death more than two years after Bush left office.
I’ve read this economic meme from several right-wing pundits and blogs. When is Obama going to man-up and take credit/blame for the economy. About the same time we all start taking blame for the thief who stole our car and drove it off a cliff. Obama substantially altered Bush’s national security polices in regard to Bin Laden. President Obama resurrected the CIA’s Bin Laden unit for starters. he shifted military resources away from Iraq to Afghanistan, where Bush used 9-11 to sweep up Iraq into some kind of global threat from terrorism. More here, Torture May Have Slowed Hunt For Bin Laden, Not Hastened It
Obama Thanks SEAL Team Who Killed OBL For ‘Job Well Done’ . This is just another reason the Right is so pissed off about Bin laden’s death. Most of the military actually likes Obama. Which makes sense, since BushCo treated them with such contempt.
TBogg’s post on Andrew Breitbart’s interview with CBS – I Was Sad Because I Had No Shoes Until I Met a Teabagger Who Had No Balls
But what about those “smooth as a Ken doll” American men (obviously not including Lindsey Graham who is literally hung like a gay bull. Seriously. Just ask Joe Lieberman):
The “Big Government” publisher also said the Tea Party is “run by women.”
“Because their husbands are afraid, they’re eunuchs,” he said. “They’re afraid of being called a racist, they’re afraid of being accused of sexual harassment in the workplace for even looking the wrong way, they live in a politically correct world where they’ve been turned into eunuchs.”
That’s right. Out of necessity the Tea Party is being run by ladies in mom-jeans and be-sequined American flag sweatshirts because their husbands haven’t been worth jackshit since they told that joke about the coloreds at the Teambuilding Tuesday luncheon and then got fired by that lady in HR who is probably a total man-hating dyke.
Andrew has some personal issues that go well beyond politics.