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July 2011

A Bad Labor Report All the Way Through...

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Paul Krugman:

Falling Wages: Ugh. That was a seriously ugly jobs report (pdf). Almost no job creation, with slow private-sector growth offset by falling public-sector employment; a falling employment-population ratio; and (I don’t know how many people have picked this up), an actual [monthly] decline in wages, albeit a small one. Let me emphasize that last point. My bottom line on the inflation-deflation issue has always been to look at wages; you can’t have a wage-price spiral if wages ain’t spiraling. And they aren’t, to say the least. It’s important to realize, by the way, that stagnant wages are NOT good for recovery; all they do is ensure that the burden of debt relative to income remains high, keeping demand and employment down.

The situation cries out for aggressively expansionary monetary and fiscal policy. Instead, however, all the political push is in the opposite direction.

And:

NEC and NEC: Laura Tyson — who headed the National Economic Council under Clinton — has an excellent, clear, sober discussion of the economic problem at the FT. She calls for long-run fiscal restraint, but more, not less, spending right now, with the economy deeply depressed. Laura is anything but a radical; what she’s saying is basically macroeconomics 101. Meanwhile, the current NEC director, Gene Sperling, is spouting right-wing talking points, essentially claiming that you can do the opposite of what macro 101 says you should do, and the confidence fairy will make everything OK.

You can argue that Laura’s program is politically infeasible; but that doesn’t mean that the administration has to embrace right-wing nonsense. Unless, of course, it actually believes it.


The Macroeconomic Situation: Mark Thoma Asks the Obvious Question

Mark Thoma:

The Employment Report: Job Creation Weak, Unemployment Rises, Recovery Hopes Fall - CBS MoneyWatch.com: The jobs report is very discouraging. The economy added only 18,000 jobs in June and the unemployment rate rose to 9.2%.... Remembering that we need around 100,000 to 150,000 jobs per month just to keep up with population growth, this represents a net reduction in employment. We have 14.1 million unemployed according to the report, with 6.3 million out of work for six months or longer. Wages fell slightly.

Why, again, are we spending so much legislative time trying to figure out how to cut the deficit in the short-run — which will make things even worse — instead of focusing on job creation?

We do need to get the budget under control in the long-run, but deficit reduction can wait until the economy is on better footing. We need more help for job markets right now, not the creation of additional headwinds that work against the recovery.


A Very Bad Employment Report

The BLS speaks:

Nonfarm payroll employment was essentially unchanged in June (+18,000), and the unemployment rate was little changed at 9.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment in most major private-sector industries changed little over the month. Government employment continued to trend down....

The number of unemployed persons (14.1 million) and the unemployment rate (9.2 percent) were essentially unchanged over the month. Since March, the number of unemployed persons has increased by 545,000, and the unemployment rate has risen by 0.4 percentage point. The labor force, at 153.4 million, changed little over the month. (See table A-1.)...

The civilian labor force participation rate was little changed in June at 64.1 percent. The employment-population ratio decreased by 0.2 percentage point to 58.2 percent. (See table A-1.)

Make that not a 33% but a 35% chance that the unemployment rate announced on the first Friday of November 2012 will be 9% or above...

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Liveblogging World War II: July 7, 1941

Franklin Delano Roosevelt:

Message of President Roosevelt to the Congress on Iceland, July 7, 1941: I am transmitting herewith for the information of the Congress a message I received from the Prime Minister of Iceland on July first and the reply I addressed on the same day to the Prime Minister of Iceland in response to this message.

In accordance with the understanding so reached, forces of the United States Navy have today arrived in Iceland in order to supplement, and eventually to replace, the British forces which have until now been stationed in Iceland in order to insure the adequate defense of that country.

As I stated in my message to the Congress of September third last regarding the acquisition of certain naval and air bases from Great Britain in exchange for certain over-age destroyers, considerations of safety from overseas attack are fundamental.

The United States cannot permit the occupation by Germany of strategic outposts in the Atlantic to be used as air or naval bases for eventual attack against the Western Hemisphere. We have no desire to see any change in the present sovereignty of those regions. Assurance that such outposts in our defense-frontier remain in friendly hands is the very foundation of our national security and of the national security of every one of the independent nations of the New World.

For the same reason substantial forces of the United States have now been sent to the bases acquired last year from Great Britain in Trinidad and in British Guiana in the south in order to forestall any pincers movement undertaken by Germany against the Western Hemisphere. It is essential that Germany should not be able successfully to employ such tactics through sudden seizure of strategic points in the south Atlantic and in the north Atlantic.

The occupation of Iceland by Germany would constitute a serious threat in three dimensions:

The threat against Greenland and the northern portion of the North American Continent, including the Islands which lie off it.

The threat against all shipping in the north Atlantic.

The threat against the steady flow of munitions to Britain which is a matter of broad policy clearly approved by the Congress.

It is, therefore, imperative that the approaches between the Americas and those strategic outposts, the safety of which this country regards as essential to its national security, and which it m therefore defend, shall remain open and free from all hostile activity or threat thereof.

As Commander-in-Chief I have consequently issued orders to the Navy that all necessary steps be taken to insure the safety of communications in the approaches between Iceland and the United States as well as on the seas between the United States and all other strategic outposts.

This Government will insure the adequate defense of Iceland with full recognition of the independence of Iceland as a sovereign state.

In my message to the Prime Minister of Iceland I have given the people of Iceland the assurance that the American forces sent there would in no way interfere with the internal and domestic affairs of that country, and that immediately upon the termination of the present international emergency all American forces will be at once withdrawn, leaving the people of Iceland and their Government in full and sovereign control of their own territory.

FRANKLIN D. ROOSEVELT

THE WHITE HOUSE,
July 7, 1941.


Republican Claims That People Are Better Off Having No Insurance than Having Medicaid: For the Virtual Green Room

Rebutted by Amy Finkelstein et al.:

In 2008, a group of uninsured low-income adults in Oregon was selected by lottery to be given the chance to apply for Medicaid. This lottery provides a unique opportunity to gauge the effects of expanding access to public health insurance on the health care use, financial strain, and health of low-income adults using a randomized controlled design. In the year after random assignment, the treatment group selected by the lottery was about 25 percentage points more likely to have insurance than the control group that was not selected. We find that in this first year, the treatment group had substantively and statistically significantly higher health care utilization (including primary and preventive care as well as hospitalizations), lower out-of-pocket medical expenditures and medical debt (including fewer bills sent to collection), and better self-reported physical and mental health than the control group.

And Ezra Klein:

Amazing Fact! Science Proves Health Insurance Works: Compared with the uninsured group, those in the Medicaid sample got 30 percent more hospital care, 35 percent more outpatient care and 15 percent more prescription-drug care. There were similar gains for preventive care; mammograms were up 60 percent and cholesterol monitoring rose 20 percent. The Medicaid recipients also had fewer unpaid bills sent to collection, were 25 percent more likely to report themselves in “good” or “excellent” health, and 10 percent less likely to screen positive for depression. The one surprise was that there was no evidence of “crowd-out”: Medicaid coverage didn’t make someone more or less likely to purchase private insurance...

And Austin Frakt:

Compared to the uninsured group, those in the Medicaid group: received 30% more hospital care, received 35% more outpatient care, were 15% more like to use prescription drugs, received 60% more mammograms, received 20% more cholesterol checks, were 15% more likely to have had a blood tested for high blood sugar or diabetes, were 45% more likely to have had a pap test within the last year (for women), had lower out-of-pocket medical expenditures and medical debt, had a 40% lower probability of needing to borrow money or skip payment on other bills because of medical expenses, incurred $778 more in spending on health care in one year, a 25% increase over the uninsured mean spending level, were 25% percent more likely to report themselves in “good” or “excellent” health, were 70% more likely to have a usual source of care, were 55% more likely to see the same doctor over time, reported better physical and mental health, were 10% percent less likely to screen positive for depression...


What Would Laura Tyson Do If She Were NEC Chair?

Rebutted by Laura Tyson:

The US economy has just marked two years of recovery from its worst recession since the Great Depression. But few Americans are celebrating; indeed, most believe that the economy is still in recession.... According to calculations by the Hamilton Project, the US will face a “jobs gap” of about 21m jobs.... The jobless recovery is also a wageless recovery for most Americans.... Real median household income in 2009 was 4 per cent lower than its pre-recession high and about the same as it was in 1997....

It is not surprising that many Americans are pessimistic about their economic future. Nor is it surprising that they think jobs should be the top priority for policymakers. They are right. Unfortunately, many members of Congress are not listening. Urged on by Tea Party Republicans interested more in the size of government than the size of the government’s debt, the debate in Washington is focused on deficit reduction rather than on job creation. It is true that the US faces a major fiscal challenge that must be addressed. But this is a long-run challenge... primarily the result of rising healthcare costs, the ageing of the population and unwise [Republican and Bush] fiscal choices.... The short-run challenge is inadequate demand – a gap between the amount of goods and services the economy can produce and the demand for them, caused mainly by the private-sector deleveraging. The long-run challenge calls for fiscal contraction. The short-run challenge calls for fiscal support.

There is a logical way out of this policy conundrum: pair temporary fiscal measures targeted at job creation during the next few years with a multiyear, multitrillion-dollar deficit reduction plan.... [I]magine for a moment that logic prevails. What should the federal government...?... [I]ntroduce additional stimulus measures to offset the substantial fiscal drag – in excess of 2 per cent of GDP... invest more in infrastructure maintenance and replacement.... Each $1bn of infrastructure investment creates between 11,000 and 30,000 jobs. On the revenue side, the government should extend some of the targeted tax measures enacted at the end of last year... the payroll tax cut for employees and the capital investment expense deduction... cut payroll taxes for employers on all new hires.... This cut should be linked to the unemployment rate and should be maintained until it falls to the 5-6 per cent range....

For many Americans, the first decade of the 21st century was a lost decade for the economy. A second lost decade has already begun. No wonder they think the economy is still in recession – for them, it is.


Claims That America Needs Not More Stimulus, But Fiscal and Monetary Retrenchment

Rebutted by Laura Tyson:

The US economy has just marked two years of recovery from its worst recession since the Great Depression. But few Americans are celebrating; indeed, most believe that the economy is still in recession. No wonder.... The employment decline during the 2008 recession was more than twice as large as those of previous postwar recessions.... More than 2m discouraged workers will have stopped looking for work. The fraction of the population working is near a 25-year low. According to calculations by the Hamilton Project, the US will face a “jobs gap” of about 21m jobs.... The jobless recovery is also a wageless recovery for most Americans. Corporate profits have soared, claiming an unprecedented share – more than 80 per cent – of the growth in national income since the recovery began. But real average weekly earnings for production and non-supervisory workers have increased by less than 1 per cent since the recovery started. Real median weekly earnings have fallen. Real median household income in 2009 was 4 per cent lower than its pre-recession high and about the same as it was in 1997....

It is not surprising that many Americans are pessimistic about their economic future. Nor is it surprising that they think jobs should be the top priority for policymakers. They are right. Unfortunately, many members of Congress are not listening. Urged on by Tea Party Republicans interested more in the size of government than the size of the government’s debt, the debate in Washington is focused on deficit reduction rather than on job creation. It is true that the US faces a major fiscal challenge that must be addressed. But this is a long-run challenge... primarily the result of rising healthcare costs, the ageing of the population and unwise [Republican and Bush] fiscal choices.... The short-run challenge is inadequate demand – a gap between the amount of goods and services the economy can produce and the demand for them, caused mainly by the private-sector deleveraging. The long-run challenge calls for fiscal contraction. The short-run challenge calls for fiscal support.

There is a logical way out of this policy conundrum: pair temporary fiscal measures targeted at job creation during the next few years with a multiyear, multitrillion-dollar deficit reduction plan that would begin to take effect once the economy is closer to full employment. Pass both now as a package. Current signals from Washington indicate that this way out will be not taken: instead, partisanship and politics will trump logic and premature fiscal contraction will undermine the already anaemic recovery. Even worse, a political stalemate over the debt limit could precipitate a financial crisis...


Barack Obama's Claim That the Federal Budget Is Usefully Analogized to a Family Budget: For the Virtual Green Room

Rebutted by Jared Bernstein:

Here’s the gist: “The federal budget is just like a family budget, and we in government must tight our belts and live within our means just like families do.”... [I]t’s almost always used as an argument for cutting everything to the bone right away, and... it’s wrong.

First of all, it’s bass-akwards: when families are tightening their belts, the federal government is the one institution that can actually help the economy—and these belt-tightening families—by loosening its belt and running a deficit. That deficit should be temporary and should come down when the private economy climbs up off the mat....

But there’s another fundamental way in which this family budget analogy gets misused.  Families borrow to make investments and to get over rough patches.  They run deficits too.  I went into pretty deep debt to finance college and grad school and I’m glad I did. The whole credit system is based on the fact that if we had to pay cash-as-we-go for everything, we’d seriously underinvest.  And that’s true for families and governments—and yes, you can overdo the borrowing thing.  But to flip too far the other way is equally dangerous.

So... discount those who want to use it as a hammer to insist on instant cuts.

This has been yet another quick response to an erroneous--or a misleading, or a mendacious, or a flat-out cynical lie--talking point circulating in America's crippled civil society public sphere.


False Forbes Claims That Per Capita Grain Production Is Rising Because of Warmer Temperatures: For the Virtual Green Room

Rebutted by Peter Gleick:

Forbes, which regularly publishes biased, misleading, and distorted opinion pieces on climate issues, has just published a remarkable one by Patrick Michaels. Michaels is well known for his regular misleading statements about climate. And while his statements are mostly worth ignoring, this one contains a particularly remarkable combination of errors and falsehoods.... In this case, his misstatements are easily checked (though not, apparently, by Forbes fact-checkers) by actually looking up the real data on world food production. Here are Michaels’ most grossly misleading or simply false statements:

False Statement #1. Michaels says: Gillis claims that “[t]he rapid growth in farm output that defined the late 20th century has slowed” because of global warming. His own figures show this is wrong. The increasing trend in world crop yields from 1960 to 1980 is exactly the same as from 1980 to 2010. [Emphasis added.]

Did Michaels think no one would actually look at the data? Gillis is right and Michaels is wrong. Crop yields are certainly increasing, on average, as we do better and better with technology. But the trends are in the wrong direction. Very simply, from 1960 to the present, yield increases have been slowing (exactly as Gillis notes), even accounting for year-to-year variation....

False Statement #2. Michaels states: “And per capita grain production is rising, not falling.”

In this case, Michaels does not provide any year. Rising between when and when? In fact, per-capita grain production has been flat for decades as increases in production have been countered by increases in population. Indeed, in 2008, per-capita grain production was around 374 kilograms per person (and it dropped a bit in 2009, the last year for which global data are available). But the peak in per-capita grain production was 1984 and 1985 — more than a quarter century ago....

Finally, the heart of Michaels’ Forbes piece seems to be that climate change will be good for food production, not bad. In his op-ed, under the title “Facts,” Michaels says the following:

Facts: Global surface temperature rose about three-fourths of a degree Celsius in the 20th century. U.S. corn yields quintupled. Life expectancy doubled. People got fat. Global warming didn’t cause all of this, but increased atmospheric carbon dioxide directly stimulated plant growth. Further, greenhouse warming takes place more in the winter, which lengthens growing seasons. With adequate water, plants then fix and yield more carbohydrate. [Emphasis added.]

Here, Michaels is saying that the warming of the past century was largely responsible (even if it “didn’t cause all”) for increases in U.S. corn yields, life expectancy, and people’s well-being (which is presumably what he means when he says “People got fat.”). This isn’t “fact.” It is... in contradiction to actual science on food and agriculture....

Truthful statement, but not in the way Michaels means it: “I continue to be amazed at how little the facts are checked on global warming, even when writing for the so-called newspapers of record.”

Well, this statement is certainly true. Alas, it applies to Michaels and Forbes.

Rebuttals to talking-points misinformation that I want to have at the forefront of my brain--for when I am surprised, as I will be, by an unexpected question from an unexpected direction while talking to reporters, phone callers, passers-by, radio interviewers, cable TV interviewers, etc....


Veronique de Rugy's Claim That Taxes Cannot Rise Above 19% of GDP No Matter What Happens to Tax Rates: For the Virtual Green Room

Lying Chart Of The Day Classic Edition | The New Republic

Lying Chart Of The Day Classic Edition | The New Republic 1Rebutted by Jonathan Chait:

Ubiquitous libertarian anti-tax pundit Veronique de Rugy pulls out the old hackneyed Republican line that tax revenues can't go above 19 percent.... I've seen versions of this dating back two decades. Part of the scam is a simply visual trick familiar to anybody who read "How To Lie With Statistics" -- you scale the chart to make a major change appear tiny.... Here's a chart showing the range of revenue within a reasonable scale... the swings are fairly dramatic. De Rugy's chart purports to show that reducing the top marginal tax rate produced no real change in revenue. But of course the first Reagan tax cuts in 1981 caused revenue to plummet. The top marginal tax rate was also reduced in 1986, but that was accompanied by equally large reductions in tax expenditures, and the whole reform was not designed to reduce revenue.

Meanwhile, the tax hikes by George W. Bush and Bill Clinton -- which supply-siders claimed would not increase revenue -- were followed by a massive spike in revenue. And then the tax cuts by George W. Bush -- which supply-siders claimed would not reduced revenue by very much -- were followed by a massive, 5% of GDP drop in  revenue, which receded to 2% of revenue at the peak of the 2000s economic cycle.

Rebuttals to talking-points misinformation that I want to have at the forefront of my brain--for when I am surprised, as I will be, by an unexpected question from an unexpected direction while talking to reporters, phone callers, passers-by, radio interviewers, cable TV interviewers, etc....


Maerk Thoma: How Republicans Stoked Economic Uncertainty

Mark Thoma:

How Republicans Stoked Economic Uncertainty: Prior to the midterm elections, Republicans made a big issue out of the economic uncertainty supposedly created by Democrats in areas such as health care reform, financial reform, future tax rates, the deficit, environmental regulation, and the long-run viability of our social insurance programs. Even though there was little to suggest that uncertainty rather than lack of demand was the fundamental economic problem, Republicans were able to persuade many voters that this uncertainty was holding back the economic recovery and lowering long-run economic growth. Electing Republicans, it was argued, would help to eliminate the uncertainty and go a long way toward curing our economic ills. Does anyone think that uncertainty has been reduced since Republicans gained a majority in the House of Representatives? I certainly don’t...


In Dialogue with the Twentieth Century?

Jo Walton:

papersky: In dialogue with his century: I was getting a book off the shelf last night and I came eye to eye with the hardcover of Patterson's biography of Heinlein Robert A Heinlein: In Dialogue With His Century and I realised what a stupid title it is. Especially for Heinlein, who seemed to write things that went straight from the nineteenth century to the future without pausing for the present:

Twentieth Century: Cars, planes, electricity!

Robert A. Heinlein: The nineteenth century is over! Soon we will be going to the stars!

Twentieth Century: The depression, WWII!

Robert A. Heinlein: To the stars! First we'll settle the solar system. Martians!

Twentieth Century: Cold war.

Robert A. Heinlein: Bomb shelters!

Twentieth Century: Boop, be doop, be doop, be doodle-ooo, boop, be boop, be boop, be doodle-ooo, boop, be doop, be doop, be doodle-eye-doo!

Robert A. Heinlein: The nineteenth century is over! Soon we can have sex with our mothers and our clones! Also, come on, hey, we haven't even got to the moon yet, and I want to have sex with Martians!

Twentieth Century: Apollo XI. Done with space now. Boop be doop be doop...

Robert A. Heinlein: The stars!

Twentieth Century: Computers!

Robert A Heinlein: The stars! Also, more hot competent red-heads, are you listening?

Twentieth Century: If one of us isn't listening, are you sure it's me?


Claims That at Least Some of the Republican Candidates--at Least Mitt Romney--Have Done Their Homework: For the Virtual Green Room

Rebutted by Travis Waldron/a>:

Romney Calls Dodd-Frank An Overreach, Then Admits He’s Not Sure What’s In It Former Massachusetts Gov. Mitt Romney (R) continued leveling attacks on the Dodd-Frank financial reform law during two campaign stops in New Hampshire yesterday. According to Romney, who had previously indicated support for repealing the law and has attacked it repeatedly in the early stages of his campaign, tightening regulations on Wall Street financial firms is akin to “pouring molasses” on the economy. But when a reporter asked him to name what he opposed in Dodd-Frank, Romney failed to offer any specifics, saying only that the bill was “massive” and repeating the claim that it is causing uncertainty...


Bill Clinton for White House Chief of Staff

The Big Dog speaks:

Bill Clinton: Economy Should Recover Before Deficit-Cutting Deal Takes Effect: WASHINGTON -- Former President Bill Clinton said Wednesday that any deficit-cutting deal worked out between Democrats and Republicans shouldn't take effect immediately, but rather wait until after the economy has recovered. He warned that implementing the cuts too soon could imperil the fragile economic recovery and possibly send the country spiraling back into a recession.

"Almost nobody's talking about one of the central points that everyone who has analyzed this situation makes -- including the bipartisan Simpson-Bowles commission -- which [is] you shouldn't do any of this until the economy is clearly recovering," said Clinton in remarks at the annual Campus Progress National Conference in Washington, D.C. "If you do things that dampen economic growth…there's a good chance that economic activity will go down so much that tax revenues will be reduced even more than spending is cut and the deficit will increase," he added....

He also took aim at Republicans for griping about the size of the national debt under a Democratic president and standing by as it ballooned under Republican presidents. "The Republicans, who control the House and now have greater control of the Senate, have now decided -- having tripled the debt in the 12 years before I took office and doubled it since I left -- that it's all of a sudden the biggest problem in the world," he said....

Earlier this week, the former Democratic president advised President Obama "not to blink" on the budget debate with Republicans. Obama has now stepped into the discussions with Republican congressional leaders after Vice President Biden's debt ceiling talks broke down.


Paul Krugman Tries to Understand Barack Obama

Paul Krugman:

The Obama-Keynes Mystery - NYTimes.com: I’m not alone in marveling at the extent to which Obama has thrown his rhetorical weight behind anti-Keynesian economics; Ryan Avent is equally amazed, as are many others. And now he’s endorsing the structural unemployment story too.

To those defending Obama on the grounds that he’s saying what he has to politically, I have two answers. First, words matter.... Yes, he has to make compromises on policy grounds — but that doesn’t mean he has to adopt the right’s rhetoric and arguments....

Second, since Obama keeps talking nonsense about economics, at what point do we stop giving him credit for actually knowing better? Maybe at some point we have to accept that he believes what he’s saying. The question then is why.... [T]he facts overwhelmingly refute the anti-Keynes talking points. Neither the invisible bond vigilantes nor the confidence fairy have made an appearance. So why is Obama talking up those talking points?...

Maybe the president just doesn’t like the kind of people who tell him counterintuitive things, who say that the government is not like a family, that it’s not right for the government to tighten its belt when Americans are tightening theirs, that unemployment is not caused by lack of the right skills. Certainly just about all the people who might have tried to make that argument have left the administration or are leaving soon.

And what’s left, I’m afraid, are the Very Serious People. It looks as if those are the people the president feels comfortable with. And that, of course, is a tragedy.


Gretchen Morgenson and Josh Rosten's Claims That "Sure, [Johnson] Retired... [from Fannie Mae] in 1999. But... His... Hardball Tactics to Ensure Fannie Mae's Dominance... Are Crucial to Understanding the Origins of the Worst Financial Debacle since the Gr

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Rebutted by David Beckworth:

Market Share of Mortgage Debt Outstanding: Mark Thoma is frustrated to see some commentators once again push the view that Fannie and Freddie caused the economic crisis. When this issue arose back in late 2008, Richard Green's figure on the share of mortgage debt outstanding held by type of institution settled the debate for me.  That figure showed the GSE's share declined during the housing boom while the asset-back security issuers' share increased.... The data is unambiguous here: Fannie and Freddie were not the immediate cause of the housing boom.   They may be guilty of a number of things, but directly causing the housing boom is not one of them.


Barack Obama’s Claim That Unemployment Is "Structural": For the Virtual Green Room

Rebutted by Matthew Yglesias:

Obama’s Today Show interview where he appeared to suggest that unemployment is primarily attributable to technological change:

There are some structural issues with our economy where a lot of businesses have learned to be much more efficient with fewer workers. You see it when you go to a bank and you use an ATM, you don’t go to a bank teller. Or you see it when you go to the airport and you use a kiosk instead of checking at the gate. What we have to do now, and this is what the jobs council is all about, is identifying where the jobs for the future are going to be, how do we make sure that there’s a match between what people are getting trained for and the jobs that exist, how do we make sure that capital is flowing in those places with the greatest opportunity.

Now obviously this is true.... The invention of the answering machine reduced the need for secretaries.... ATMs reduce the need for bank tellers.... And this is, indeed, one reason why people are unemployed. It’s also the source of progress over the long term. But technological change is a constant. Firms were seeking to adopt labor-saving technology in 1998 and 2006 and 1967 just as much as they are today in 2011. And yet the unemployment rate was much lower in 1998 and 2006 and 1967 than it is today....

Maybe Barack Obama has some reason to believe that the pace of technological change accelerated in some unaccountable way during his time in office. But... the housing crisis and the problems in the banking sector led to a historically unprecedented drop in personal consumption.... All else being equal, if households spend fewer dollars, then fewer people will be employed in providing them with goods and services. One strategy would be to ensure that all else is not equal and that government spending fills the gap opened up by the collapse in private spending. But that hasn’t happened. Federal spending has continued roughly at trend levels, and state/local spending has also fallen below trend. The result is mass unemployment.


Francisco Franco Is Still Dead. Quite Possibly Jiang Zemin as Well

James Fallows:

Is Jiang Zemin Dead? Real-time Illustration of News Control in China: For the past 24+ hours, anyone following various social-media feeds about China has seen rumors, then official denials, then silence, about the possible demise of former president Jiang Zemin....

For another time, an assessment of what Jiang has meant, the differences between him and the current regime (and the regime about to take control), his family's role in China, and all of that.

The fascinating part at the moment is the gap between the speed and back-and-forth of the unauthorized discussion of his condition, and the ponderousness and opaque nature of official statements. An item two hours ago in the WSJ's China Realtime Report illustrates the extreme heavy-handedness of the news control. For instance: Jiang's name in Chinese is, 江泽民, with the first character, 江, being his family name. That character, jiang, literally means "river" -- and in the past few hours, any search for info about China's big rivers on Sina Weibo (China's Twitter counterpart, the real Twitter being blocked in China) comes up empty. As Josh Chin of the WSJ says:

In addition to "river," the company has also blocked searches for "death" in various iterations as well as "301 Hospital," a reference to the People's Liberation Army General Hospital in Beijing where top leaders are often treated....

I wish Jiang and his family well. He has been out of power for nearly a decade. The government's difficulty in handling even the most basic info about his health is one more illustration of the unevenness of its emergence as a full-fledged world power. It will be interesting to see what the government finally says about him, when it does.


Right-Wing Claims That QE II Was Masking the Unpleasant "Real" Financial Market Equilibrium: For the Virtual Green Room

Rebutted by Paul Krugman:

World, Not Ended: QE2 — “quantitative easing 2″, the Fed’s program of buying long-term bonds — ended last week. For a program that arguably did very little, QE2 attracted an amazing amount of vitriol. On one side, it was accused of fomenting “currency wars”, driving up inflation and/or exchange rates in developing countries. On the other, it was claimed that the program was masking the true effects of the US budget deficit, and that interest rates would soar after it ended....

Strange to say, the world as we knew it has not ended.... As of this morning, the 10-year rate was 3.09%. And Brazil’s real is still hitting records.

Needless to say, nobody will ever admit that they were wrong.


Right-Wing Claims That the Bond Market Is Crazy and Doesn't Understand the Seriousness of the U.S. Debt: For the Virtual Green Room

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Rebutted by Jared Bernstein | On the Economy:

Listening to the radio tonight, I heard some economics commentator give yet another rant about how our debt has reached crisis proportions, we’re borrowing billions a day, the end is near, yada yada.  The moderator had the presence of mind to inquire how this could be so, when our gov’t is able to borrow at such low rates. “The bond market is crazy... traders are in denial... it’s a bubble... the end is near... yada yada,” came the reply.... [But] the bond market is global, and it is pricing risk very differently in countries with very different sovereign debt profiles... ergo, the market cannot be selectively crazy, i.e., sane when pricing Greek, Irish, or Portuguese debt, crazy when pricing US debt.

So I reject this particular hysteria.  US debt in cheap because it’s a risky world out there and we, along with Germany, remain among the safest bets. Investors may be getting nervous, but the price signals tell us they believe Congress will soon stop screwing around and raise the debt ceiling...

And, I would add, put the long-term financing of the social insurance state on a firm basis.


U.S. Ambassador Joseph Grew Liveblogs World War II: June 6, 1941

Joseph Grew:

Statement Handed by the Ambassador in Japan (Grew) to Mr. Tomohiko Ushiba, Private Secretary of the Japanese Prime Minister: From a variety of sources reports are reaching the Government of the United States that it is the intention of the Japanese Government to enter upon hostilities against the Soviet Union.

As is well known to the Japanese Government, the maintenance and preservation of peace in the area of the Pacific has been the earnest desire of the American Government, which has contributed its greatest efforts to the achievement of that high purpose.

From statements made in recent months by the Japanese Ambassador in Washington, Admiral Nomura, to the Secretary of State, Mr. Hull, in the course of conversations between them, as well as from the utterances of responsible Japanese officials, the Government of the United States has derived the hope that it was also the desire of the Government of Japan to maintain and preserve peace in the area of the Pacific. The reports which are now reaching the Ameri can Government are so completely contrary to those statements and utterances that the Government of the United States finds it very difficult to believe in the truth of those reports.

Should Japan enter upon a course of military aggression and conquest it stands to reason that such action would render illusory the cherished hope of the American Government, which it understood was shared by the Japanese Government, that peace in the Pacific area, far from being further upset, might now indeed be strengthened and made more secure.

It is the earnest hope of the Government of the United States that the reports of Japan's decision to enter upon hostilities against the Soviet Union are not based upon fact, and an assurance to that effect from His Excellency the Prime Minister of Japan would be deeply appreciated by the Government of the United. States.


Bruce Schmeichen: The Titanic Sails at Dawn!

Bruce:

The Titanic sails at dawn: Paul Krugman's latest over-the-top, shrill, vituperative, anti-GOP column in the New York Times...:

[T]he Republican Party may no longer be a normal party...it has been infected by a faction that is more of a psychological protest than a practical, governing alternative. The members of this movement do not accept the logic of compromise...

The members of this movement do not accept the legitimacy of scholars and intellectual authorities...

The members of this movement have no sense of moral decency...

The members of this movement have no economic theory worthy of the name....

The struggles of the next few weeks are about...an odd protest movement that has separated itself from normal governance, the normal rules of evidence and the ancient habits of our nation.

Oh wait a minute.  That's David Brooks, musing on the incoherence of GOP Mad Hatters, fearful of chickens that have come home to roost on his carefully trimmed front lawn, smelling noxious stuff that has hit his political fan, chafing at the inmates taking over his asylum and angered at long-go losing any shot at the driver's seat in the GOP Clown Car.


Gretchen Morgenson and Josh Rosner's Fake Claim That Fannie and Freddie Were the Origin and at the Center of the Financial Crisis: For the Virtual Green Room

Rebutted by Richard Green:

Mark Thoma and Dean Baker are correct: Fannie Mae and Freddie Mac did not start the crisis. Rather they followed it.... Mark Thoma and Dean Baker take down the Will-Brooks-Morgenstern-Rosner meme that in the absence of Fannie and Freddie, we would not have had a financial crisis. Did Fannie and Freddie behave admirably?  In many respects no, but they did maintain underwriting discipline longer than most of the rest of the mortgage market.  On the other hand, their bad behavior from early in the decade prevented them from leading the market: accounting scandals (Freddie understated earnings while Fannie overstated them) led the companies' regulator, OFHEO, to require both companies to improve their capital ratios, which meant they needed to shrink their share of the mortgage business. The most disturbing part of the attacks on the GSEs is that it is an indirect method for blaming minorities and the poor for the financial crisis, an argument that is at once ludicrous, disingenuous, and reprehensible. (Once again, I should disclose that I worked for Freddie from September 2002 until January 2004.  I should also note that the fact that I stayed there for such a short period reflects in part a lack of particularly warm feelings for the company.  I do own a few hundred worthless shares of Freddie Mac stock).


David Alpert on the Catastrophic Failures of the Washington Post

Why oh why can't we have a better press corps?

David Alpert:

Ignorant editorial, thoughtful analysis juxtaposed in Post: Let's say you have some opinions about what Metro should do, but you actually know almost nothing about Metro's actual policies. You might talk to your friends about it or comment on blogs, but it's unlikely the Washington Post will put your ideas on its Sunday local opinion page. Unless, that is, you work for the Reason Foundation. The Post published an op-ed from Reason's Sam Staley, who shows he knows little about Metro by suggesting a policy that's already in place today: peak-of-the-peak fares. Nobody must have checked with the Post's own transportation writers, like Bob "Dr. Gridlock" Thomson, who know plenty about transportation....

Coming down at the opposite end of the ignorance-knowledge spectrum is Thomson's article today about the terrible 2030 Group report.... Thomson notes that the study looked at "what transportation programs are most needed to ease congestion, [but] this is not how governments and commuters think." Instead, congestion relief is one priority along with "the creation of new travel options, economic development and neighborhood revitalization." He notes how it's tough to assign credibility to a study which relies on anonymous "experts" and ends up suggesting many of the same projects the authors already were promoting, but also argues that these problems "[don't] mean the ideas are bad or unworthy of discussion."...

Every reporter should read Thomson's story as an example of how to thoughtfully analyze, rather than regurgitate, a report that comes out from a group with an agenda and a well-funded PR operation. And every editor should look at Staley's piece as a cautionary tale to beware op-eds on local issues from national organizations with an agenda, a well-funded PR operation, and little actual knowledge of local circumstances.


Republican Claims That America's Health Care System Is "the Best in the World": For the Virtual Green Room

We are sent by Ezra Klein to a rebuttal by Seth Roberts:

In December, the Los Angeles Times reported — very briefly — that from 2007 to 2008, life expectancy in the United States declined by 0.1 year. It should have been the lead story of every newspaper in the country with the largest possible headlines (“LESS LIFE“). Did 9/11 reduce life expectancy this much? Of course not. Did World War II? Not in a visible way — American life expectancy rose during World War II. I can’t think any event in the last 100 years that made such a difference to Americans. The decline is even more newsworthy when you realize: 1. It is the continuation of trends. The yearly increase in life expectancy has been dropping for about the last 40 years. 2. Americans spend far more on health care than any other country. Meaning vast resources have been available to translate new discoveries into practice. 3. Americans spend far more on health research than any other country and should be the first to benefit from new discoveries....

It is human nature that everyone in the supply chain remains silent. They are protecting their jobs. But the silence of the journalists is The Emperor’s New Clothes writ large. To explain why smart journalists fail to notice the stagnation, I think you have to go back to studies of conformity. When everyone you talk to — people in the supply chain  — says black = white (i.e., that progress is being made), you say the same thing.


New York Times Fail: Why Oh Why Can't We Have a Better Press Corps?

It would probably be good for everybody if Eric Lipton of the New York Times were to find another line of work:

Congress’s Man of the Vines, Including His Own: Representative Mike Thompson... who represents this grape-obsessed district in Congress, is not only the [wine] industry’s foremost champion in Washington, helping it secure tax breaks, get money for pet projects like the Napa Valley Wine Train or beat back restrictions on direct sales of wine. He is also a vineyard owner, growing 20 acres of sauvignon blanc grapes at his farm north of Napa. While plenty of lawmakers in Washington act as advocates for particular industries, Mr. Thompson is in business with some of the same companies whose agendas he promotes. His vineyard has been paid at least $500,000 since 2006 by two wineries whose executives have appealed to Congress on legislative matters. Mr. Thompson could also benefit from his own efforts on the industry’s behalf, including a push to increase the value of grapes grown near his vineyard by seeking a special designation from the Treasury Department. Mr. Thompson’s dual role as industry backer and grape producer has drawn some criticism, particularly from his alcohol industry rivals. “Clearly, he has a personal interest in what he is advocating for,” said Craig Wolf, president of the Wine and Spirits Wholesalers of America, which has been in a dispute with wine producers over the past year. “And the ethics rules in Congress say you are not supposed to do these kinds of things”...

Eric Lipton could have inquired whether Craig Wolf's accusations that Mike Thompson has violated congressional ethics rules were well-founded or not.

Eric Lipton did not.


John Taylor's Claim That Fiscal Policy Would Be Ineffective in Curing a Deep Depression: For the Virtual Green Room

Rebutted by Paul Krugman: Noah Smith says something I’d been meaning to say about John Taylor’s recent work.... [I]t’s far from clear that the ARRA actually led to much of a rise in government spending, while the tax cuts that made up much of the stimulus were probably largely saved. But Taylor then presents this as an argument against Keynesian economics — whereas it seems to be an argument that Obama wasn’t Keynesian enough. But wait, there’s more. I remember what Taylor was saying early on: he was dead set against any rise in spending, and called for permanent tax cuts (in response to a temporary crisis?) instead.

So the position Taylor is taking now seems to be:

  1. Keynesian economics doesn’t work, as evidenced by the fact that Obama didn’t try it.
  2. Obama failed utterly by not following the policies I (Taylor) specifically demanded that he not follow.

Oh, Kay.

Rebuttals to talking-points misinformation that I want to have at the forefront of my brain--for when I am surprised, as I will be, by an unexpected question from an unexpected direction while talking to reporters, phone callers, passers-by, radio interviewers, cable TV interviewers, etc....


Bernanke's Claim That the Federal Reserve Has Done Enough "Extraordinary Things" to Boost the Economy: For the Virtual Green Room

Rebutted by Joe Gagnon:

If Bernanke says the “little blip in inflation is temporary and it’s going to go back below target, and he says he’s very unhappy with the unemployment rate, then why isn’t he doing more? It’s really ironic. It’s a self- induced paralysis.”"

Rebuttals to talking-points misinformation that I want to have at the forefront of my brain--for when I am surprised, as I will be, by an unexpected question from an unexpected direction while talking to reporters, phone callers, passers-by, radio interviewers, cable TV interviewers, etc....


Non-Denial Denials: Tom Friedman and Rupert Murdoch

Duncan Black:

Eschaton: Inconceivable: I can't verify this anecdote, and I'm also presenting it from my fuzzy memory, but years ago a reader wrote in and said that he bumped into Tom Friedman. He'd had a couple of drinks and first asked if he was Paul Krugman. Then, realizing it was Friedman he asked him about his "suck on this" comment. Friedman replied, "That doesn't sound like something I would say." Well there you go.

I was reminded of that when I read about the ongoing unfolding phone hacking case in the UK.

It is almost too horrific to believe that a professional journalist or even a freelance inquiry agent working on behalf of a member of the News of the World staff could behave in this way. If the allegations are proved to be true then I can promise the strongest possible action will be taken as this company will not tolerate such disgraceful behaviour. I hope that you all realise it is inconceivable that I knew or worse, sanctioned these appalling allegations.

It might be difficult or impossible conceive of, but that isn't actually a denial.


Paul "Cassandra" Krugman Croaks Again!

...and says nice things about me:

Paul Krugman: Liquidity Trapped - NYTimes.com: Brad DeLong has a nice piece for Bloomberg about the nature of the trap we’re in — and I’m only partly saying that because he gives me credit for warning about this very trap back in the 1990s. But I’d emphasize something a bit different from what Brad does. His piece is set up as a mea culpa — he should have seen the possibility of this kind of trap, but didn’t. I’d say that’s a very pardonable error compared to the many people who are still denying the nature of the trap we’ve been in for more than 2 1/2 years.

Think of it this way: those of us who worried about the liquidity trap (see the macro readings off to the side for background) made two big predictions that ran very counter to the kind of stuff you were hearing on CNBC and reading in the Wall Street Journal. We said that even if the Fed printed lots of money (not really, of course; we’re talking mainly about bank reserves), it would not be wildly inflationary. And we also said that even very large government deficits would not cause soaring interest rates as long as the economy stayed depressed. These predictions were right; at most you can quibble over why we have low inflation but not deflation. (Someone is bound to insist in comments that the Austrians were even righter; so, how’s that hyperinflation by 2010 thing going?)

Yet our political discourse, and even much of what economists are saying, is proceeding as if the inflation and crowding-out types had been vindicated rather than utterly refuted by events.

Never mind my hurt ego; think about the policy disaster.


David Brooks Says That the Republican Party Deserves Political Annihilation

About eighteen years late, but welcome in any event:

David Brooks: The Mother of All No-Brainers: The struggles of the next few weeks are about what sort of party the G.O.P. is — a normal conservative party or an odd protest movement that has separated itself from normal governance, the normal rules of evidence and the ancient habits of our nation. If the debt ceiling talks fail, independents voters will see that Democrats were willing to compromise but Republicans were not. If responsible Republicans don’t take control, independents will conclude that Republican fanaticism caused this default. They will conclude that Republicans are not fit to govern.

And they will be right.


Michele Bachman's False Claim That the "Founders" Worked "Tirelessly" to End Slavery: For the Virtual Green Room

Rebutted by Mark Byrnes:

[I]t is complicated, and Bachmann is looking for simplicity. To talk about the movement to end slavery in the northern states inevitably draws attention to the reality that the southern states not only did not follow, but over time grew more committed to maintaining slavery. The reason later generations had to work so "tirelessly" against slavery is that other Americans were working so tirelessly for it. The reason the Founders did not end slavery in their new republic, one born with the phrase "all men are created equal," is that to insist on an end to slavery would have insured an end to the United States.... A truthful account of the Founders and slavery has to acknowledge this fact. They were something today's Tea Partiers say they abhor: compromisers. In the Constitutional Convention, they compromised on everything, most notably on slavery.

Another reason those later generations had to work so tirelessly to end slavery is that the Constitution so well ensconced slavery in the United States. Arguably the Constitution was the largest impediment to ending slavery. The abolitionist William Lloyd Garrison denounced the Constitution as a "covenant with death and an agreement with hell." He burned a copy of the Constitution in protest.

So to speak honestly and accurately of "the Founders" is to confront that messy reality.

Bachmann prefers her Founders simple, god-like, and unchanging. Since the Tea Party ideology deems the Constitution a sacred document, inspired by God (remember, it was Bachmann who enlisted the fraud David Barton to teach Constitution classes to Congress), those who wrote it must be responsible for all that is good. Thus she cannot be accurate. She cannot say some of the founders worked tirelessly against slavery while others defended it....

On this Independence Day, to truly honor their work, we should stop pretending we can lazily rely on them to tell us what to do, and instead take up the challenge of finding what it means in our times to strive for what "of Right ought to be."

Happy Fourth.

Rebuttals to talking-points misinformation that I want to have at the forefront of my brain--for when I am surprised, as I will be, by an unexpected question from an unexpected direction while talking to reporters, phone callers, passers-by, radio interviewers, cable TV interviewers, etc....


Franklin D. Roosevelt Liveblogs World War II: July 4, 1941

FDR:

Independence Day: In 1776, on the fourth day of July, the Representatives of the several States in Congress assembled, declaring our independence, asserted that a decent respect for the opinion of mankind required that they should declare the reasons for their action. In this new crisis, we have a like duty. In 1776 we waged war in behalf of the great principle that government should derive its just powers from the consent of the governed-in other words, representation chosen in free elections. In the century and a half that followed, this cause of human freedom swept across the world. But now, in our generation-in the past few years-a new resistance, in the form of several new practices of tyranny, has been making such headway that the fundamentals of 1776 are being struck down abroad, and definitely they are threatened here.

It is, indeed, a fallacy, based on no logic at all, for any Americans to suggest that the rule of force can defeat human freedom in all the other parts of the world and permit it to survive in the United States alone. But it has been that childlike fantasy itself-that misdirected faith-which has led nation after nation to go about their peaceful tasks, relying on the thought, and even the promise, that they and their lives and their government would be allowed to live when the juggernaut of force came their way. It is simple-I could almost say simpleminded-for us Americans to wave the flag, to reassert our belief in the cause of freedom, and to let it go at that.

Yet, all of us who lie awake at night-all of us who study and study again-know full well that in these days we cannot save freedom with pitchforks and muskets alone, after a dictator combination has gained control of the rest of the world. We know that we cannot save freedom in our own midst, in our own land if all around us-our neighbor nations-have lost their freedom. That is why we are engaged in a serious, in a mighty, in a unified action in the cause of the defense of the hemisphere and the freedom of the seas. We need not the loyalty and unity alone; we need speed and efficiency and toil and an end to backbiting, an end to the sabotage that runs far deeper than the blowing up of munitions plants.

I tell the American people solemnly that the United States will never survive as a happy and fertile oasis of liberty surrounded by a cruel desert of dictatorship. And so it is that when we repeat the great pledge to our country and to our flag, it must be our deep conviction that we pledge as well our work, our will, and, if it be necessary, our very lives.


What Debt Limit? Plan B Is the 14th Amendment

Bruce Bartlett:

What Debt Limit? Plan B is the 14th Amendment: I now feel even more strongly that the Fourteenth Amendment trumps the debt limit. There is strong support for this position in an article by George Washington University law professor Michael Abramowicz. Writing in the Tulsa Law Journal (“Beyond Balanced Budgets, Fourteenth Amendment Style,” 33:2, Winter 1997, pp. 561-612), he concludes that any government action “making uncertain whether or not a debt will be honored is unconstitutional.” As Abramowicz explains:

A debt does not become valid or invalid only at the moment payment is due. A debt’s validity may be assessed at any time, and a debt is valid only if the law provides that it will be honored. Therefore, a requirement that the government not question a debt’s validity does not kick in only once the time comes for the government to make a payment on the debt. Rather, the duty not to question is a continuous one. If as a result of government actions, a debt will not be paid absent future governmental action, that debt is effectively invalid. The high level of generality recognizes that instead of referring to payment of debts, the Clause bans government action at any time that affects the validity of debt instruments…. Moreover, there is no such thing as a valid debt that will nonetheless not be honored.

This means that the very existence of the debt limit is unconstitutional because it calls into question the validity of the debt. So would any other provision of law. That is a key reason why Congress created a permanent appropriation for interest payments at the same time that the Fourteenth Amendment was debated....

It goes without saying that provoking a constitutional crisis over the debt limit is a bad idea, but a debt crisis would be worse. At a minimum, the Fourteenth Amendment greatly strengthens the president’s hand in getting the debt limit increased in a timely matter. He should not be afraid to use it.


Would Leo Strauss Have Been Opposed to Gay Marriage?

Alan Gilbert informs me that, for some bizarre reason, Sam Tanenhaus has given Harry Jaffa a platform in the New York Times Book Review to denounce gay marriage in New York in the name of Leo Strauss:

Book Review - Aristotle’s Nicomachean Ethics - NYTimes.com: The debunking both of Socratic skepticism (“the unexamined life is not worth living”) and of biblical faith (“Fear of the Lord is the beginning of wisdom”) has led to the crisis of the West, a chaos of moral relativism and philosophic nihilism in which every lifestyle, no matter how corrupt or degenerate, can be said to be as good as any other.

[M]uch of Strauss’s work is a radical attack — made with the greatest intellectual competence — against the latter-day enemies of both the Bible and a Socratic Aristotle. Strauss maintained that Athens and Jerusalem, while disagreeing on the ultimate good, disagree very little, if at all, on what constitutes a morality both good in itself and the pathway to a higher good.... It is an assumption of Aristotle’s philosophy of nature that the highest good of each species is accessible to all, or nearly all, its members. For man the highest good is wisdom. But since few if any human beings attain it, Aristotle’s nature requires a supernatural correlate: the afterlife. Whatever one thinks of this argument, it points to a dialectical friendship between Athens and Jerusalem. All the more reason for them to join forces in the desperate struggle, still going on, between civilization and barbarism.

Only the informed elite, of course, will grasp that Jaffa's review is intended as a denunciation of gay marriage...

And the fact that Leo Strauss's 1974 obituary was written by his student Allan Bloom makes me suspect, however, that Leo might well have surprised Harry, were he still with us...


Google Plus, Translated

Char:

char - Google Plus, translated:

Circle = List

Share = Post

Share = Repost

Reshare = Repost

Sharing = Following

Plus One = Appreciate

Plus One’s = Things you have appreciated

Friends = Acquaintances

Acquaintances = People you met once and don’t remember who you are

Privacy = How public your posts are

Sparks = Sponsored links  

Field Trial = Public beta

Hangouts = Video conference


Americq Needs a More Stimulative Macro Policy: Ryan Avent Is a Shrill Hippie Edition

RA:

Stimulus: Erring on the side of incaution> That's what the old administration hands are saying. What's their former boss saying?

Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.

That's a wow statement. It's profoundly uneconomic. Government doesn't face the same borrowing constraints as a household. It seems clear that the government can afford current levels of spending. It wasn't that long ago that government revenues were far higher than they currently are. And there is precious little evidence that the confidence-creating impact of deficit reduction, if there's one at all, will compensate for the contractionary impact of budget cuts. It seems quite clear that cutting government will be a net negative for the current economy.

I don't know why Barack Obama is making these claims. The most straightforward explanation is that he believes it.

Continue reading "Americq Needs a More Stimulative Macro Policy: Ryan Avent Is a Shrill Hippie Edition" »


Greg Mankiw's Claim that Ryan's Medicare Plan Is Like the ACA: For the Virtual Green Room

Rebutted by a really angry Jonathan Chait: Mankiw's Misleading Defense Of Paul Ryan:

Former Bush economic advisor Greg Mankiw, writing in the New York Times, picks up the GOP talking point that Paul Ryan's plan to radically alter Medicare is really a pretty familiar bipartisan idea being blown out of proportion.... [L]iberals, who couldn't pass universal single payer health care, prefer giving people medical coverage through regulated private insurance subsidies than letting them go without coverage at all. That's why liberals support the Affordable Care Act vis a vis the status quo. But that is not the same thing as liberals agreeing that private insurance is better than single payer health care. Thus Mankiw's claim that the ACA demonstrates "agreement about the value of private competition" is clearly false.... Even if liberals did prefer to turn Medicare into a private insurance voucher, they would strongly object to his plan to make the vouchers grossly and increasingly inadequate to the cost of a plan. Likewise, conservatives agree that the rich should pay some taxes, but they would object to making them pay a 98% tax rate. Mankiw's logic would present this objection as hysterical partisanship -- we all agree the rich should pay taxes, so what's the problem?... Mankiw may share Ryan's ideological values and thus have reasons to wish to discredit critics of his program, but he should refrain from misleading people about the criticism.

Rebuttals to talking-points misinformation that I want to have at the forefront of my brain--for when I am surprised, as I will be, by an unexpected question from an unexpected direction while talking to reporters, phone callers, passers-by, radio interviewers, cable TV interviewers, etc....


Josef Stalin Liveblogs World War II: July 3, 1941

Stalin:

BROADCAST TO THE PEOPLE OF THE SOVIET UNION: Comrades! Citizens! Brothers and sisters! Men of our army and navy! I am addressing you, my friends!

The perfidious military attack on our Fatherland, begun on June 22nd by Hitler Germany, is continuing.

In spite of the heroic resistance of the Red Army, and although the enemy's finest divisions and finest airforce units have already been smashed and have met their doom on the field of battle, the enemy continues to push forward, hurling fresh forces into the attack.

Hitler's troops have succeeded in capturing Lithuania, a considerable part of Latvia, the western part of Byelo-Russia, part of Western Ukraine. The fascist airforce is extending the range of operations of its bombers, and is bombing Murmansk, Orsha, Mogilev, Smolensk, Kiev, Odessa and Sebastopol.

A grave danger hangs over our country.

How could it have happened that our glorious Red Army surrendered a number of our cities and districts to fascist armies? Is it really true that German fascist troops are invincible, as is ceaselessly trumpeted by the boastful fascist propagandists? Of course not!

History shows that there are no invincible armies and never have been. Napoleon's army was considered invincible but it was beaten successively by Russian, English and German armies. Kaiser Wilhelm's German Army in the period of the first imperialist war was also considered invincible, but it was beaten several times by the Russian and Anglo-French forces and was finally smashed by the Anglo-French forces.

The same must be said of Hitler's German fascist army today. This army had not yet met with serious resistance on the continent of Europe. Only on our territory has it met serious resistance. And if, as a result of this resistance, the finest divisions of Hitler's German fascist army have been defeated by our Red Army, it means that this army too can be smashed and will be smashed as were the armies of Napoleon and Wilhelm.

As to part of our territory having nevertheless been seized by Germany fascist troops, this is chiefly due to the fact that the war of fascist Germany on the USSR began under conditions favorable for the German forces and unfavorable for Soviet forces. The fact of the matter is that the troops of Germany, as a country at war, were already fully mobilized, and the 170 divisions hurled by Germany against the USSR and brought up to the Soviet frontiers, were in a state of complete readiness, only awaiting the signal to move into action, whereas Soviet troops had still to effect mobilization and move up to the frontier.

Of no little importance in this respect is the fact that fascist Germany suddenly and treacherously violated the Non-Aggression Pact she concluded in 1939 with the USSR, disregarding the fact that she would be regarded as the aggressor by the whole world.

Naturally, our peace-loving country, not wishing to take the initiative of breaking the pact, could not resort to perfidy.

It may be asked how could the Soviet Government have consented to conclude a Non-Aggression Pact with such treacherous fiends as Hitler and Ribbentrop? Was this not an error on the part of the Soviet Government? Of course not. Non-Aggression Pacts are pacts of peace between states. It was such a pact that Germany proposed to us in 1939.

Could the Soviet Government have declined such a proposal? I think that not a single peace-loving state could decline a peace treaty with a neighboring state, even though the latter was headed by such fiends and cannibals as Hitler and Ribbentrop. Of course only on one indispensable condition, namely, that this peace treaty does not infringe either directly or indirectly on the territorial integrity, independence and honor of the peace-loving state. As is well known, the Non-Aggression Pact between Germany and the USSR is precisely such a pact.

What did we gain by concluding the Non-Aggression Pact with Germany? We secured our country peace for a year and a half, and the opportunity of preparing its forces to repulse fascist Germany should she risk an attack on our country despite the Pact This was a definite advantage for us and a disadvantage for fascist Germany.

What has fascist Germany gained and what has she lost by treacherously tearing up the pact and attacking the USSR?

She has gained a certain advantageous position for her troops for a short period, but she has lost politically by exposing herself in the eyes of the entire world as a blood-thirsty aggressor.

There can be no doubt that this short-lived military gain for Germany is only an episode, while the tremendous political gain of the USSR is a serious lasting factor that is bound to form the basis for development of decisive military successes of the Red Army in the war with fascist Germany.

That is why our whole valiant Red Army, our whole valiant Navy, all our falcons of the air, all the peoples of our country, all the finest men and women of Europe, America and Asia, finally all the finest men and women of Germany--condemn the treacherous acts of German fascists and sympathize with the Soviet Government, approve the conduct of the Soviet Government, and see that ours is a just cause, that the enemy will be defeated, that we are bound to win.

By virtue of this war which has been forced upon us, our country has come to death-grips with its most malicious and most perfidious enemy--German fascism. Our troops are fighting heroically against an enemy armed to the teeth with tanks and aircraft.

Overcoming innumerable difficulties, the Red Army and Red Navy are self-sacrificingly disputing every inch of Soviet soil. The main forces of the Red Army are coming into action armed with thousands of tanks and airplanes. The men of the Red Army are displaying unexampled valor. Our resistance to the enemy is growing in strength and power.

Side by side with the Red Army, the entire Soviet people are rising in defense of our native land.

What is required to put an end to the danger hovering over our country, and what measures must be taken to smash the enemy?

Above all, it is essential that our people, the Soviet people, should understand the full immensity of the danger that threatens our country and should abandon all complacency, all heedlessness, all those moods of peaceful constructive work which were so natural before the war, but which are fatal today when war has fundamentally changed everything.

The enemy is cruel and implacable. He is out to seize our lands, watered with our sweat, to seize our grain and oil secured by our labor. He is out to restore the rule of landlords, to restore Tsarism, to destroy national culture and the national state existence of the Russians, Ukrainians, Byelo-Russians, Lithuanians, Letts, Esthonians, Uzbeks, Tatars, Moldavians, Georgians, Armenians, Azerbaidzhanians and the other free people of the Soviet Union, to Germanize them, to convert them into the slaves of German princes and barons.

Thus the issue is one of life or death for the Soviet State, for the peoples of the USSR; the issue is whether the peoples of the Soviet Union shall remain free or fall into slavery.

The Soviet people must realize this and abandon all heedlessness, they must mobilize themselves and reorganize all their work on new, wartime bases, when there can be no mercy to the enemy.

Further, there must be no room in our ranks for whimperers and cowards, for panic-mongers and deserters. Our people must know no fear in fight and must selflessly join our patriotic war of liberation, our war against the fascist enslavers.

Lenin, the great founder of our State, used to say that the chief virtue of the Bolshevik must be courage, valor, fearlessness in struggle, readiness to fight, together with the people, against the enemies of our country.

This splendid virtue of the Bolshevik must become the virtue of the millions of the Red Army, of the Red Navy, of all peoples of the Soviet Union.

All our work must be immediately reconstructed on a war footing, everything must be subordinated to the interests of the front and the task of organizing the demolition of the enemy.

The people of the Soviet Union now see that there is no taming of German fascism in its savage fury and hatred of our country which has ensured all working people labor in freedom and prosperity.

The peoples of the Soviet Union must rise against the enemy and defend their rights and their land. The Red Army, Red Navy and all citizens of the Soviet Union must defend every inch of Soviet soil, must fight to the last drop of blood for our towns and villages, must display the daring initiative and intelligence that are inherent in our people.

We must organize all-round assistance for the Red Army, ensure powerful reinforcements for its ranks and the supply of everything it requires, we must organize the rapid transport of troops and military freight and extensive aid to the wounded.

We must strengthen the Red Army's rear, subordinating all our work to this cause. All our industries must be got to work with greater intensity to produce more rifles, machine-guns, artillery, bullets, shells, airplanes; we must organize the guarding of factories, power-stations, telephonic and telegraphic communications and arrange effective air raid precautions in all localities.

We must wage a ruthless fight against all disorganizers of the rear, deserters, panic-mongers, rumor-mongers; we must exterminate spies, diversionists and enemy parachutists, rendering rapid aid in all this to our destroyer battalions.

We must bear in mind that the enemy is crafty, unscrupulous, experienced in deception and the dissemination of false rumors We must reckon with all this and not fall victim to provocation.

All who by their panic-mongering and cowardice hinder the work of defence, no matter who they are, must be immediately haled before the military tribunal. In case of forced retreat of Red Army units, all rolling stock must be evacuated, the enemy must not be left a single engine, a single railway car, not a single pound of grain or a gallon of fuel.

The collective farmers must drive off all their cattle, and turn over their grain to the safe-keeping of State authorities for transportation to the rear. All valuable property, including non-ferrous metals, grain and fuel which cannot be withdrawn, must without fail be destroyed.

In areas occupied by the enemy, guerrilla units, mounted and on foot, must be formed, diversionist groups must be organized to combat the enemy troops, to foment guerrilla warfare everywhere, to blow up bridges and roads, damage telephone and telegraph lines, set fire to forests, stores, transports.

In the occupied regions conditions must be made unbearable for the enemy and all his accomplices. They must be hounded and annihilated at every step, and all their measures frustrated.

This war with fascist Germany cannot be considered an ordinary war. It is not only a war between two armies, it is also a great war of the entire Soviet people against the German fascist forces.

The aim of this national war in defense of our country against the fascist oppressors is not only elimination of the danger hanging over our country, but also aid to all European peoples groaning under the yoke of German fascism.

In this war of liberation we shall not be alone. In this great war we shall have loyal allies in the peoples of Europe and America, including the German people who are enslaved by the Hitlerite despots.

Our war for the freedom of our country will merge with the struggle of the peoples of Europe and America for their independence, for democratic liberties.

It will be a united front of peoples standing for freedom and against enslavement and threats of enslavement by Hitler's fascist armies.

In this connection the historic utterance of the British Prime Minister Churchill regarding aid to the Soviet Union and the declaration of the United States Government signifying its readiness to render aid to our country, which can only evoke a feeling of gratitude in the hearts of the peoples of the Soviet Union, are fully comprehensible and symptomatic.

Comrades, our forces are numberless. The overweening enemy will soon learn this to his cost. Side by side with the Red Army many thousands of workers, collective farmers, intellectuals are rising to fight the enemy aggressor. The masses of our people will rise up in their millions.

The working people of Moscow and Leningrad have already commenced to form vast popular levies in support of the Red Army. Such popular levies must be raised in every city which is in danger of enemy invasion, all working people must be roused to defend our freedom, our honor, our country--in our patriotic war against German Fascism.

In order to ensure the rapid mobilization of all forces of the peoples of the U.S.S.R. and to repulse the enemy who treacherously attacked our country, a State Committee of Defense has been formed in whose hands the entire power of the State has been vested.

The State Committee of Defense has entered upon its functions and calls upon all people to rally around the Party of Lenin-Stalin and around the Soviet Government, so as to self-denyingly support the Red Army and Navy, demolish the enemy and secure victory.

All our forces for support of our heroic Red Army and our glorious Red Navy! All forces of the people--for the demolition of the enemy!

Forward, to our victory!


Bright Blue Sky!

Max Read issues a warning:

African Grey Parrots Are Going to Enslave Us All: There is not, as far as we know, a forum where we might place bets on which non-robot species is most likely to conquer and enslave the human race, but if there were, we would place our money on the African Grey Parrot, which, scientists have recently confirmed, has the capacity to reason, a skill that places it in the same category as chimpanzees, gorillas and humans.

[E]ach parrot watched a researcher hide a walnut under one opaque cup and a seed under another. Next the researcher hid the cups behind a screen, removed one of the treats and showed the bird which one had been taken. Finally, the screen was removed to see if the parrot could work out which treat must remain, and under which cup it must be. Only one of the parrots, a female called Awisa, was able to do this, choosing correctly in three-quarters of the tests –- 23 out of 30. "So far, only great apes have been shown to master this task," says Mikolasch.

Obviously, not all African Greys are capable of logical reasoning—though neither are all chimpanzees or gorillas, or, we might argue, humans—but even if only one in seven are, that provides the frighteningly long-lived bird with an elite class to lead the rest into battle. As an added advantage, African Greys, unlike great apes, have the ability to mimic, and perhaps speak, human language; they are also, like all bird species, notorious liars. In any event, we are likely to be saved from a future under the booted talon of rational parrots only because robots will get there first, but in the spirit of planning for all eventualities we suggest being nice to all the African Greys you meet from here on out.


Christina Romer Is in the Hippie Caucus, Calling for Measures to Boost Demand

CR:

http://www.nytimes.com/2011/07/03/business/economy/03view.html: DEALING with our nation’s gaping budget deficit is going to hurt. So here is a question for policy makers: What would hurt more, raising taxes or reducing spending?... Tax increases and spending cuts hurt the economy in the short run by reducing demand. Increase taxes, and Americans would have less money to spend. Reduce spending, and less government money would be pumped into the economy.

Professional forecasters estimate that a tax increase equivalent to 1 percent of the nation’s economic output usually reduces gross domestic product by about 1 percent after 18 months. A spending cut of that size, by contrast, reduces G.D.P. by about 1.5 percent — substantially more.

Some in Washington and in the news media have seized on a study I conducted with David Romer, my husband and colleague, that they say shows tax increases having a bigger short-term effect on the economy than spending cuts. They are mistaken. Our study, which examined only federal tax policy, found that conventional analysis underestimates the effect of tax changes on the economy substantially.... If there were a similar study on government spending, it would likely show that spending cuts also have larger effects than conventionally believed. Like tax actions, spending changes are often correlated with other factors affecting economic activity.... All of this argues against any form of fiscal austerity just now.... Far better to pass a plan that phases in spending cuts or tax increases over time. But if federal policy makers do decide to reduce the deficit immediately, reducing spending alone would probably be the most damaging to the recovery....

What about the long-term health of the economy? Here, too, the relative costs of tax increases and spending cuts are often misstated. Higher tax rates reduce the rewards of work and investing. This can have supply-side effects that lower economic growth over decades. But... these effects are relatively small.... [R]aising current tax rates by 10 percent would reduce reported income — the end result of work and entrepreneurial effort — by less than 2 percent....

Government spending on things like basic scientific research, education and infrastructure, on the other hand, helps increase future productivity. This type of spending often produces high social returns, but the private sector is unlikely to step up if the government pulls back.... These long-term considerations, like the short-run concerns, point to a plan for reducing the deficit that combines spending cuts and tax increases. The cuts should spare valuable investment spending. On the tax side, nearly every economist I know agrees that the best way to raise revenue would be limit tax breaks for households and corporations.


Macro Policy Moving in a Bad Direction

Mark Thoma quotes Christina Romer:

So here is a question for policy makers: What would hurt more, raising taxes or reducing spending?

And observes:

That's an appropriate question to ask about the long-run, though the question is really about the size and role of government, but not in the short-run. In the short-run we should be doing everything we can to bolster the recovery, or at least not make it harder to recover through demand/deficit reduction policies. Why are we even taking a chance on making things worse than they already are?

It is a very good question. Mark's answer:

What this shows is how thoroughly the debate has been tilted toward Republican arguments, and the president has to shoulder a lot of the blame for this.

http://economistsview.typepad.com/economistsview/2011/07/wanted-leadership-and-the-willingness-to-fight-for-core-democratic-beliefs.html