Pandagon

Four Legs Good, Tax Hikes Bad

I was over reading Just One Minute, and I stumbled upon this post on Kerry's tax promises. Now, I agree with Tom that the policy is poorly thought-out - this isn't 2000, there isn't a surplus, and Bush's tax cuts have had so little effect that there's really not a lot to be lost in taking an alternate position.

But the post and the comments seem to be terribly bitter at what they perceive to be a similarity between Kerry's promise now and Clinton's promise of a tax cut for the middle class in 1992 (which turned out to not be a cut after all). My question, though, is this - what was the downside of Clinton's policy? I don't want to hear the normal anti-tax arguments (in other words, "They're higher taxes! That's more money out of my pocket!", etc.), but instead what actual negative impact did Clinton's tax rates have on the economy? Bush cut taxes as a stimulant to an economy that was sluggish (although he did it incorrectly), but what long-term negative impact were the Clinton rates having on the economy? And why would restoring them be bad?

I'll have to find it, but one of the funniest Bush-era critiques of Clinton's policies was that we would have grown even faster if not for Clinton. Since there was no demonstrable failure in a large-scale economic sense, Clinton's policies (particularly the tax cut) were simply an anchor on the speedboat that was the 90s. Luckily, since there was nothing that actually existed to point to, the author could just throw out larger numbers than the 90s economic growth figures, and call it a thesis.

It's The Po-Po!

Small question to any of the numerous folks declaring Dennis Hastert's flat-tax proposal (and proposal to end the IRS) the greatest thing since Jesus discovered Nutella.

How do you enforce revenue collection without a revenue collection service? Just wondering. So long as the government collects taxes, there must be an IRS. The Fair Tax Foundation's proposal says that the states would collect it, then send it in - but wouldn't the IRS not only have to be coordinated to work with fifty different state governments, but also enforce collection and penalize/pursue cheats and avoiders?

The IRS, in most of its functions, would still need to exist. This "end of the IRS" talk has absolutely nothing to do with the proposal at hand.

Awfully Bullish

The New York Times notes that the recovery is starting to feel "woozy".

Question - how low is "sustainable", exactly? I remember just a couple of months ago, we were supposed to be sustaining 300,000 jobs a month and 4% GDP growth for the next four years (at least if the snickering conservative punditariat was any indication - more jobs that Kerry's proposed ten million!). Now, we're talking about low but sustainable growth...are we still living out the bullish fantasy, edited to reflect reality as it now stands, but not as it might be in the future?

The Best Economy In...Well, It's Not Too Bad

Job growth's been slowing down the past few months. In June, only 112,000 new jobs were created, down from May's revised 235,000, down from April's 346,000, down from March's 353,000. Am I trying to be a pessimist on the economy? No. But at the same time, Bush's economic plans set up an obviously unstable equilibrium that, even if it succeeds in creating jobs short-term, can't keep it up for any long-term period.

It's why the hue and cry of "best economic expansion EVER" doesn't make much sense. We didn't even know how good the Clinton years were until they'd been going on for a while - yet after what amounted to five months or so of job growth, Kerry's plan for ten million jobs over four years was supposed to be written off because a short burst would have resulted in more jobs than that if spread out over four years. (The ironic part is that Bush has had four years to create ten million jobs, and he's managed to still lose about a million.)

If Bush goes into November with low or negative job growth, he's lost the election. If the sum total of three years of economic plans is a few months of job growth with worse jobs replacing the ones that we lost, it's gonna be a wholesale repudiation of Bushonomics...or at least we can hope.

Well, When I Said Huge, I Meant In Relative Terms...

Economic growth of 1Q 2004 sort of revised downward, inflation sort of up.

Everyone sort of wondering where things are going from here.

Mo' Money And Its Problems

I'm all for this:

This is a very good thing. Purchasing power for America's workers has been dropping since the 1970's, mainly due to the minimum wage's stagnation. Clinton pushed through a 90-cent increase, but that wouldn't have nearly the effect of the $1.85 jump Kerry's proposing.

Now, this is going to assure business, both big and small, lines up behind Bush. To prevent that, Kerry should sell this as a package with both his corporate tax cuts and his health care plan. The message should be that we'll leave you free to operate, but you have to pay your workers fairly.

Lastly, and this is something I don't know much about, a weak job market racked by outsourcing where the recovery is primarily in low wage jobs -- hiking the minimum wage could send more companies overseas. The best fix I can see is to begin a Reich-like investment budget aimed at making our workers more valuable, not just more expensive.

Update: James Devitt has more on how bad Bush has been to small businesses.

Brave New Economy

Now that's interesting:

That's a very worrying trend. I remember Charlie Cook argued that the large number of structural, rather than cyclical, layoffs separated this recession from others. If the recovery from such a downturn is being driven by low-wage, low-skill jobs, that points to a changed economy. For all this to be happening at the same time as white-collar outsourcing and a decreased commitment to the American worker (in the form of neglecting the safety net, policies slanted towards the rich, etc) paints a bad picture of the labor market we're moving into.

This is also bad news for Bush. Since immigrants vote in lower numbers, and generally not for Republicans, the impact of these jobs will be electorally blunted. Further, if the trend of lower paying, less skilled positions holds within the natural populace, you're going to see increased worker anger as their return to the economy is on worse terms than their exit. They might agree that things are better than they were a year ago, but a low-wage job they feel overqualified for won't beat four years ago.

No Bills Posted

Carpeicthus points out that we do have several incompetent and just plain bad Presidents on our money.

Grant and Jackson are pretty bad choices for the bills, but it's always hard to think of who should be on them in their stead. I'd volunteer the Roosevelts, myself.

Looking back at the history of bill designs and how presidents were chosen for them, it seems as if Reagan's best chance to get on a bill would be if there were a new denomination drawn up in the very near future. Next up: Reagan on the three?

I Know Tom Friedman

While I was, oddly enough, on the phone to an outsourced tech support center in the Phillipines, I was on hold long enough to watch Tom Friedman's recent globalization special. (I'm serious - I was on hold fora little over an hour.)

Not much to say on the special itself - it was typical Tom Friedman hope-with-a-dash-of-cliche stuff with a heavy focus on the nuts-and-bolts of the adapting economies and cultures in countries where outsourcers have built up jobs. But I did figure something out.

Have you ever seen a Tom Friedman column where someone in a very non-Western culture uses an idiom that they'd probably never use in real life? Like, Friedman will be talking to his Afghan friend, who feels that the American presence in Afghanistan is "off the hizzle, fo'shizzle".

Watching Friedman interview people, though, it's clear where it comes from - Friedman himself. The interviews were all in English with largely (if not totally) non-native English speakers. When someone would answer a question, Friedman would rephrase it using an American idiom, say it to them, and wait for them to repeat it back to him. Sometimes it would work, sometimes it wouldn't, but it strikes me as an apt enough explanation for why people in Friedman's columns seem to be using his words. It's because they are.

Get Rid Of This Goddamn Subject

Much like David Brooks' insistence yesterday that he had "modulated" views on Bush's tax cuts when he spent most of his time misrepresenting the reality of the case for the tax cuts, William Safire's claim to contrarian status is severely hamstrung that he's not really being contrarian at all.

In college, I had the "abolish the penny" conversation at least once a month, every month, for my entire career. Sometimes it was the teller at the credit union, or someone who had too many pennies in their pocket and not enough quarters, and sometimes it was that deep thinker who sat in the corner of the coffee bar and managed to come to the same conclusions everyone else had, but with a lot more fanfare...and when people stopped caring.

I'm not sure which one of those categories Safire fits in, but you can be the judge of that.

The penny is the bastard currency of American economics. Wanting to get rid of the penny altogether is a natural outgrowth of our relationship to the copperhead (hey, it's a penny - it needs some coolness attached to it) - we encounter pennies in the same way we would lint or trash, little bits of extra flotsam that need to be gotten rid of, even though they're worth something, even if it's a negligible amount.

I'm going to save you the rest of the clever-yet-boring musings on our nation's one-cent piece, because other than Safire desperately clawing at irreverence and barely making a scratch, he only makes one interesting statement:

I'm not sure if he's being facetious or not, but it does correspond to the Reagan Legacy push to get FDR off the dime and Reagan on it. Perhaps more importantly - FDR, of all the people on all the currency, has probably the strongest ties to the one he's on. It's the March of Dimes. Why is FDR's coin the one always singled out for eviction and replacement? (Well, besides the obvious fact that many conservatives just don't like his legacy and would rather see him replaced with the most convenient conservative-friendly figure at the earliest possible date.)

Speaking of all of this, did you know the Mint is supposed to be modifying the nickel for special editions this year?

Want a Job?

For those of you highly literate, socially conscious, unemployed victims of the Bush economy who aren't being sustained by the tax cuts, I've got a job offer for you. A buddy of mine works at Donor Digital, a progressive organization that seeks to help socially-conscious firms develop an online strategy. Their clients include Russ Feingold, the Human Rights Campaign, NARAL and the ACLU. Best of all, they're looking for people. here's the info:

If you're interested, off you go.

Success!

Dick Cheney Luvs Wal*Mart.

I don't know about you, but I don't consider the widespread proliferation of Wal*Marts to be quite the best sign for economic growth. Particualrly considering that the stores tend to create low-wage, low-benefit, low-advancement positions. When combined with the fact that it buys very few American goods, Wal*Mart's economic gains are largely in terms of the stores it opens.

I don't care how you feel about Wal*Mart, but there is no economic figure by which that store has somehow negated the actual impact of the recession and of job loss, or where it serves as a surrogate for many of the jobs lost over the past few years. As the article even says, the store is designed to be recession-proof. If we're going to grow our way out of Bush's economic record through Wal*Mart, we're fucked.

Stark, Huh?

Sometimes a picture really does say a thousand words:

Via Matthew Yglesias

Hunting And Gathering

Not to steal Atrios' bit, but congratulations to the 360,000 new jobless, and the very special achievement this week's bunch reached.

Combine this with this Gallup poll about attitudes on taxation:

As well as this poll, which shows antipathy to tax cuts during tax season, and it's hard to escape the conclusion that Bush's economic plans are not only not working in real economic terms, but also in the public eye. I don't hope that the economy will do poorly...but I'm really afraid that it will.

Reasons for Outrage

Speaking of reasons for insane and total outrage:

So not only is Bush's inability to handle money threatening the world economy but even if he can do the reduction measures he says he can but knows he can't, it's still not good enough.

We had a surplus 4 years ago. Never forget that. We had a goddamn surplus 4 years ago and he turned it into a deficit capable of threatening the global economy. Surplus. Deficit. No Bush. Bush.

And he might actually get reelected.

Taxing My Mind

After coming to realize that the IRS is much more likely to audit individuals than businesses, I'm going to go recheck my return, I think...

Oh, and if anyone was wondering what the Presidential Campaign Fund is, and why it's on your tax return (I was after watching a Judy Woodruff piece that basically read the line on the tax forms and then harassed some people who were filing their taxes), Open Secrets explains it all for you.

Woe Is We

Kerry's going to wheel out an economic "misery index", an idea whose efficacy is, to me, debatable. I'd rather see him attack the philosophical underpinnings of the tax-cut brigade rather than demonstrate in a new and shiny way that the tax-cut plans haven't worked. It's fairly obvious that Bush's economic record hasn't worked, but Kerry needs to be working on the reason why.

I deeply respect Jimmy Carter, but if Kerry is going to use a gimmick for his economic plans, I'd like to see him try something new rather than tied to a one-term Democratic president who got defeated when his own misery index was used against him two and a half decades ago. It's true that, at the time, Carter was president and Kerry isn't, but, at the same time, Kerry's economic policies need a lot more Clinton than they do Carter, if we're going back like that. I also feel like Kerry can only push the "things are going badly in the economy" plan so far before people are just fatigued on it. And issue fatigue is the bane of any campaign.

More Rewards, Please

Neal Boortz, the Libertarian who's actually just a conservative who likes weed and guns, puts forth his grand unified theory of tax rates:

Hm. So, here's my question: we obviously want to "reward" high earners, presuming that their money comes from some activity which employs others, and which will be used to further employ others, directly or indirectly. Now, the "reward" in this case is lower taxes, according to Boortz.

As a thought exercise, if lower taxes reward behavior, and higher taxes punish it, isn't Boortz arguing for a regressive tax? I mean, since the less money you have, the less taxes you pay proportionally, aren't we really just rewarding poor people for being poor. If psychologists are right (and really, when hasn't a conservative opinion columnist's vast generalization of the opinions of a field of professionals been right?), then if we punish low wages, everyone will earn high wages in response!

Now, the evidence that Boortz marshalls in support of his economic theory is as rigorous as the above psychological research. Let's check it out:

Now, the big problem here is that Boortz gives no figures here. The lines that follow this make it seem as if Kerry is raising taxes on *all* small businesses. Is it patently false? Yes. But, you see, that's the power of psychological mathematics. Sure, the median income of small businesses is between $40,000 and $60,000, which wouldn't come within punting distance of Kerry's tax proposal. But in the field of psychological mathematics, it's true because it's *obvious*. Is Kerry raising taxes on small businesses? A very, very few. But, ah...we don't talk about that.

Most small businesses with five employees (and by most, I mean the vast majority) are not going to be earning enough profit over the course of a year to be affected by Kerry's tax plan, let alone pay $35,000 extra. From the Reuters article:

Yes...lots of businesses being crippled by rescinding tax cuts for those who earn over $200,000. Now, on to "double taxation":

If you treat the corporation as a person (as, well, it is treated), then I shouldn't get taxed for my salary, either. Double taxation is the Halley's Comet of tax policy - it only appears once every 87 forms of taxation.

(There's also a sweet little bit where he says removing the tax on dividends has caused more people to invest, ignoring the fact that investing was trending up before dividends or income taxes were ever cut...but, then again, psychological mathematics.)

The rest is just more inane Boortzian "logic" that comes to the conclusion that somehow, facts which show no such thing show that John Kerry will cripple the American economy by still maintaining lower overall tax rates than we had during the Clinton boom.

Did I mention he voted to raise taxes over 350 times? That comes from the same source as the "double taxation" thesis, so you *know* it's trustworthy.

Preemptive Class Warfare

Ohio is run by Republicans. Totally, completely run by Republicans. Which is why an idea this blatantly bad is actually being seriously proposed, and why there are no partisan denunciations in the article.

Part of what's weird about the whole thing is that it would cut taxes for married joint filers under $20,000...then completely change the way that the Ohio tax code is applied, and penalize you if you go over that amount. Not by taxing the extra amount...but by taxing the entire amount at the same rate for people who cross over the threshold.

In short, it's the absolute caricature of Republican policy - slashing taxes on the rich by more than half and shifting the burden almost entirely to the middle class. This crap is why Ohio is such an important pickup for Kerry, and, hopefully, Democratic challengers to the Republican in-state hegemony.

Tax Help

Just to remind people: tax day is the 15th, and if you earned under a certain threshhold (generally under $30,000), you can file for free.

Don't say I never did nothin' for you.

Enforce

Although the idea of underfunding the IRS probably makes a lot of people on any side of the debate happy, it is, in the end, a Really Bad Idea. Particularly if you want to look good in fighting corporate crime. (Or, you know, fight it - but let's just go one step at a time here.)

Despite animosity that tax-cut Republicans (and everyone) feel towards it, the IRS is one of the most important tools in government, both from a funding and an enforcement standpoint. If the IRS misses tax cheats, can't serve the public in an efficient fashion, etc., government not only loses out on revenue - and regardless of how much you think government should spend, the government does need to spend, and it needs money to spend with - but it also fosters an attitude that it's possible to cheat on your taxes, your balance sheet, etc.

I have no doubt that Bush will rectify this as soon as is possible, because it would be beyond stupid not to, but you would think he would have learned his lesson after the summer of '02.

Get That Paper

The Bush campaign rolled this one out a couple of days ago on the economy, and it's struck me as incredibly strange since I first heard it. Bush has started taking focus off of how his tax cuts supposedly encourage entrepreneurship because they put more money in the hands of businesses and entrepreneurs (which doesn't really help with startup costs, a business plan, or earning the money in a stagnating economy, but we'll ignore that for now) into how the amount of paperwork supposedly involved in correcting his policies will turn away businesses.

Republicans have a strong message at times when it comes to reducing bureacracy and the redundancy of some regulations. But paperwork in and of itself isn't a particularly strong issue. If I have to fill out a couple of extra forms to pay a lower tax rate, I'll do it. Besides Bush's record on this (has he instituted any significant reform in any bureaucratic structure?), paperwork alone seems like a really desperate last gasp for an economic plan that's not working. He's not even really arguing against onerous regulations, in general or in specific - he's simply talking about how onerous the process supposedly is, in a really vague manner.

Sure, his economic policies aren't really creating many jobs, there's no real wage growth, and Americans are more in debt than ever...but at least there's less paperwork to fill out to perpetuate the cycle! Whee! Vote Bush!

To All Economists

Can someone make a coherent case for "double taxation" that doesn't require one to either say that the exact same phenomenon is different because it happens to different people, or that wouldn't essentially include all taxation?

Double taxation is like that old saw about recessions and depressions: it's taxation when it happens to you, it's double taxation when it happens to me.

Tears of the Right

If you're a fiscal conservative and this doesn't make you want to cry, than you be lyin', dawg:

What's a deficit? Is it something shiny?

Toss Up

If you're wondering why our robust economy isn't creating very many jobs, you appear now to have one of two lines of reasoning to explain it.

1.) "Well, uh...uh...employment is a lagging indicator and, ah, the economy is robust, growing, you know. It'll pick up once the tax cut kicks in and people start getting more faith in this president's policies on taxes and trade - remember, these tax cuts have only been out there a couple of years, at best. People know that this president has the right vision on jobs."

2.) The "recovery" ain't so strong.

Robust! Bold! Booooooooold!

It's hard to say employment is lagging if it's not lagging behind anything...

An Embarassment Of Riches

The Republican tendency to mask all references to the rich as if they're simply covert references to anyone with two dollars in their pocket tends to backfire under close examination. And by close, I mean "any".

One has to ask where class warfare starts - the person who addresses policies based on who they affect, and actually talks about how much money people have and addresses them and the situation accordingly, or the person who immediately charts out a paranoiac fantasy wherein the person is secretly talking about you...and you...and the entire system of American prosperity?

(As Praktike points out in comments, a good response to this is to simply use specific numbers. Although I do think that the best response is to turn the attack on its ear - you know some intrepid member of the WSJ page will be able to find someone worth $200,000.01 who's really strugging to get by. Instead of keeping the debate in the "who's rich and who's not" mode, use the specific numbers, which Democrats have been very disciplined about, but also bring small business owners into the fold. We seem far too willing to let Republicans divvy up the desirable groups, particularly economically, and let them tote them around. Make it clear that the small businesses Bush talks about are generally more akin to Ore-Ida than Ira's Novelty Shoppe of Schenectady, and that his policies aren't actually tailored for the average small business.)

Mmmm...Real Employment

ChoicePoint, the same people who provided that highly accurate list of "felons" to Florida in 2000, is shopping around an employee background check service that I'm sure will live up to their previous high standards. I love this part:

Last I checked, about 4 out of 5 small businesses fail within their first year. And ChoicePoint is saying this is due to nine percent of workers who don't list a criminal conviction. Nine percent of workers take down the majority of small businesses?

ChoicePoint is showing the same stringent attention to detail and quality that disenfranchised so many "felons" in 2000 - the program itself is designed to let anyone with a business license and the money for the software access criminal background information on anyone they want, as long as they have a few pieces of information to check the person's identity. Now, besides the fact that we're dealing with a Choicepoint database, which strikes me as about as reliable as Andrew Sullivan's personal account of his medical history, we're also dealing with the fact that anyone with a business license (which, in Ohio, costs $125.00) and 40 bucks can run criminal background check on whoever they want - while also relying on ChoicePoint for the validity of the information they get back.

It's not that employers shouldn't be able to do criminal background checks - it's that anyone with a couple hundred bucks to spare shouldn't be able to do criminal background checks on anyone they want.

Thank You, Alma Mater, I've Learned So Much

I'd just like to thank Swarthmore and MNBA for sending me the following note:

There's more after this, mainly about how my Alumni Association gave them the list of recent alumni so that they could convince them that opening up new credit lines is a great thing for people who are largely underemployed with a mountain of debt.

You know, I can carry more than one credit card...it's just not a very good idea. I've already got two, one of which I got to pay off the first one with a much lower APR - and I really don't need any more. Carrying debt makes me feel physically bad - I stress about it, I stress about paying it off, I stress about what happens if I miss a payment, I stress about what happens if I need more credit.

Debt already defines the lives of most college graduates. I'd just like to thank my near-$40,000 a year school for affording me the outlet to go further into debt and raise money for them.

Bam! Kick It Up A Notch

This article is so deeply dishonest in so many ways that it just makes me want to drown my sorrows in some french fries with some ketchup from the company that neither Kerry or his wife has any control over.

Understated Unemployment

One thing that worries me is that the unemployment numbers are drastically understated. To give just one unnoticed factor, if young people weren't dropping out of the work force and were instead participating at the same rate they were in March 2001 (just 3 years ago), the unemployment numbers would be 6.6 percent. But they're not, the media doesn't dig deeper into them and meanwhile, there are millions and millions of Americans who could be working and could be productive but feel frozen out by the tough job market.

Needless to say, that ain't good.

Math is Hard

Just in case you forgot which party was serious about fiscal responsibility:

It's all one big ideological game for them; even the budget is just another way to score some points. They're trying to bleed the government dry and mandate that the only way to close the deficit gap is spending cuts.

If you have a huge deficit and then you give a tax cut, then you give another tax cut, and then you disallow tax raises or "pay as you go" on anything but entitlement spending; you're going to have to dismember the government to bring its fiscal house into order. You simply can't close a revenue gap if you keep decreasing the revenue stream. It's an absolutely insane way to manage the economy. Contrast that approach to what we did in the 90's:

The arrogance and disdain with which the Republicans treat the public increases every day; if America actually knew what was going on in these budget negotiations, there would be a landslide against the Party so unconcerned with running government efficiently. Instead they call us the Party of tax-raises and big-spending and attempt to wrap themselves in the cloak of fiscal restraint. It's sick.

A Divisive Budget

Looks like senate Republicans have found Bush to be a bit of a divider as well:

To have his budget fail would be a HUGE slap in the face. His campaign is going badly and now his priorities are being rejected; Bush's presidency is not going well.

A Real Pro-Growth Agenda

This week's edition of Charlie Cook's newsletter is an important read. The bottom line is that this week's job report is different from the other ones; the other's have shown growth not reaching the expected levels or barely surpassing them, this week's says that the necessary growth actually isn't happening.

This is a real problem and it's not going to get better simply by waiting it out. The advent of a globalized economy connected by the internet means that every job is up for grabs and we're going to need to stay economically competitive with workers the world over. in the past, that's been a recipe for protectionism, but we're too dependent on the global economy for that to be a realistic alternative. Instead, the Government is going to have to begin making American workers more attractive. One way to do that is to decrease the cost of hiring workers in America;Not only is that good policy, it's good politics. We need to sell national health care not as a nice thing or a moral responsibility, we need to sell it as a way to keep America's businesses competitive. Dean was almost right when he compared us to all those other countries who grant their citizens health care. But he framed it as a morally enlightened policy and tried to shame us into providing it. Kerry needs to compare us to those other countries, and countries with no worker rights or standards, and explain how it is a business imperative.

One way to do it is to make national health care a piece rather than a policy. Put out a major package called "The American Advantage" or something similarly patriotic. The package should have 3 main components:

Incentives for businesses to stay in America and hire here. Unveil a logo that businesses who make X amount of goods stateside and treat their workers well can put on their products. Make sure Americans know about it and they can decide who they wish to support. Roll out tax breaks for businesses who move back to America and create jobs here.

Create disincentives for businesses that move offshore (either for tax or labor purposes) but whose primary market is America. If you're making money off this country, you should be contributing something to our revenues. You don't have to be overly protectionist here; simply ending the practice of allowing businesses to open a P.O Box in Bermuda would be helpful.

A Worker Competitiveness Plan - This should be the centerpiece. It will have the health care plan, tax credits for job training, and any other policies we can think of that'd make American workers more competitive in the global marketplace.

That's a real pro-growth plan that'll contrast very favorably with Bush's pathetic tax cuts. In addition, it's full of good and overdue policies that should help to address some facets of the jobs crisis. By reframing the health care initiative, you get businesses on your side and end the idiotic cries of socialism -- this is about keeping American workers competitive, why are you anti-American? You want all our jobs to go to France?

It's also a plan American workers deserve. Globalization will beat them if the Government doesn't step in and keep our workforce a few steps ahead of the wave. A proposal along these lines could help do exactly that.

Who Needs 'Em?

Jobs? We don't need no steenkin' jobs! And you know what? We're not gonna get any either.

The Free Ice Cream Caper

A few days ago, I theorized that the era of free tax cuts ice cream might be coming to an end, or at least slowing down. It looks like that's panning out, as GOP lawmakers prepare to research ways to either rescind tax cuts/tax cut extensions, or, perhaps, cut spending and raise other taxes.

I think one of the legacies of Bush's tenure as president will be Republican legislative exhaustion. Bush has had a frenetic, indulgent presidency, jumping from point A to point M and back to point B, all the while denying he was ever at point M, and if he was, it wasn't really point M to begin with.

Much of the dissension between Bush and his party has to do with the fact that Bush is basically governing for himself and for his reelection. Bush has shown repeatedly that he's willing to sell out his Congressional allies to get his agenda passed (on the budget in particular, he treats Congress like they were aliens acting completely separate from his input) - Bush has driven a wedge between him and the rest of his party for his own benefit, and as negligible as the benefit's been for him, it's even more adversely impacted Congressional Republicans who now have to answer for what's become *his* agenda.

I'm certainly hoping that Bush's coattails will be rejected, as it's a net loss for both Bush and Congressional Republicans who were under his leadership the past four years - if Republicans can't stand behind Bush's agenda, how can the rest of America?

No Sense Of Proportion

This would almost be smart, if it made any sense. When unemployment was 5.6% in the Clinton Administration, it was down more than two percent from his predecessor. (Plug in the years for Bush Sr.)

Bush's unemployment rate as it stands not is nearly a 1.5% rise in the overall rate, but a nearly 38% increase over the rate he inherited from Clinton. So yes, it is actually relative, particularly since part of the political criteria is judging a president with regards to the situation he inherited. The comments are funny, too - it's like nobody ever looked at unemployment statistics until Tim Blair brought them up (and they still don't know anything about the statistics, just that the damn liberal media used unfair. Rather than actually read what's being said and critically assessing, you know, the history of unemployment figures, economics is reduced to bitching about adjectives nonsensically. Bush lost jobs from his predecessor, but even though none of the articles actually referred to the unemployment rate as historically high, the media should be covering millions of net jobs lost as a good thing...because the figure is still low, relatively speaking.

It's all so unfair - when did conservatives become political Jan Bradys?

Massage It Out

There's so much wrong with this article (including the fact that it reinvigorates Virginia Postrel's strange "I got a massage, so everyone's a masseuse!" thesis, also discussed here) that I don't actually know how to address it.

"In a sense" a massage job is a replacement for a manufacturing job if A.) the people who lose manufacturing jobs are switching to personal-care fields to replace their jobs (for which there's no proof other than the fact that Reynolds notices more massage therapy shops around); B.) you presume that there are no new entrants into the job market; and C.) you presume that there are millions of new self-employed people that employment surveys still haven't managed to count.

Obviously there are new fields opening up. But it makes no sense to say that since you notice a field (or fields) expanding, that all the people without jobs are simply going to transfer into the fields you happen to notice are expanding (particularly when your data points are 1980 and 2004). Someone opened a new Subway downtown - that means that there's no jobs problem, because all those jobs are transferring to the sandwich artists at Subway!

Lies And The...Fuck It, You Know The Rest

When castigating Democrats for attacking Bush's jobs record, Robert Samuelson seems to have conveniently forgotten that Bush has been predicting job growth specifically tied to his economic policies for the past three years, and Democrats are reacting to his promises.

One would think that you could remember that the President promised job creation based his policies when complaining about Democrats attacking the President's policies for not creating jobs.

Another Goodie

Bush is now saying that the unemployment rate is a "good number".

Okay, this is the same session at which Rod Paige called the NEA a terrorist group. Bush made a series of lame excuses to call his job record good in what's quickly becoming his reelection mantra, "It coulda been worse!" Who else from the administration was there? Did Gale Norton call the forests "nature's toothpick repository"? Did Elaine Chao call factory workers "gonorrhea on the nation's economic hoo-hah"?

By the way, did you know that we don't have an official Housing & Urban Development Secretary?

Lay And Spray

Sometimes the Bush economic program reminds me of a bunch of guys standing around a locker room, none of whom can actually tell the truth about anything they've done and for whom all failures all the fault of some invisible hand conspiring against them.

"Man, we're gonna have economic growth like, like, this big, yo!"

"Daaaaay-um!"

"Well, yeah, yeah, you know, we- we would, but, uh...we had, like, September 11th and stuff, and all them scandals...but we could!"

"Yeah! And what about that Congress, man?"

"Yeah, dawg...you know, exactly."

As far as I can tell, the jobs projection for this year is somewhere between significantly less than 2.6 million to 3.8 million - or more. In addition, the deficit is $521 billion, or nearly $700 billion, when everything is added in, or, maybe more, but it'll go down in the future, or go up if Bush's projections are married to Bush's policies, or do the shuffle to the left, to the left, to the right, to the right.

I really would like to get rid of locker-room economics.

Success Begets Success

A rising tide lifts all boats - particularly one called the U.S.S. Unemployment Rate.

It brings up an interesting point about the unemployment rate that I honestly hope Democrats pounce on in the upcoming election. The unemployed in our country are vastly undercounted, and the true legacy of the Bush administration's "economic stimulus" is convincing more and more Americans that they simply can't find work.

The thing that's so remarkable about Bush's economic record is that all of his promises are based on either lamely rectifying or continuing his own failures. The only thing he has to run on is "I lowered your taxes, and I'm gonna keep doing it until I'm satisfied or out of office."

In short, everything that he did right is what's important, and everything else will be fixed through the magical panacea of "Stop worrying about it." Man, am I looking forward to this race.

Oh, What A Sight

Nick Confessore brings up the Lou Dobbs/James Glassman slapfight from last night, and I have to say that I was cheering on Lou Dobbs as I watched this.

I have no idea how anyone can sit opposite Glassman and not break down in comedic tears from the unadulterated screw-up that was Dow 36,000.

(By the way, I'm not necessarily advocating either man's viewpoint. I just like Glassman a lot less than I like Dobbs.)

A Little Bit Gassy, At Times

OPEC announced a surprise cut in oil production starting April 1st. It's possible that the decision could be reversed, but higher oil prices are not what we would call the "political hotness" in the upcoming election.

We Will Bring Them Back Like Jesus

Sweet gosh, man. We're gonna be gettin' us some new jobs! At...well...I guess...some point...?

Now, all we have to do is wait for the tax cuts to create jobs so that we can take advantage of this trade! Anyone got any marshmallows? This burning hot economy will translate into great s'mores!

At Your Discretion

Giles Ward contends that Bush's discretionary spending isn't out of control, because it's only increased one percent as a proportion of GDP.

What he ignores is the government's overall receipts during the same period. Government receipts as a percentage of GDP, according to the CBO, have fallen 4.4%. That rise in discretionary spending, besides going against a nearly 40-year pattern of falling discretionary outlays, is also coupled with a massive reduction in government receipts.

The rise may not be that much by itself...but when coupled with the fact that you have less money to pay for the current level of spending, let alone any increases, that rise looks bigger and bigger.

Zoned Out

Brad DeLong notes that the plan for the Bush administration isn't to add 2.6 million jobs this year - it's to add 5.3 million.

Keep in mind that would be the single greatest period of job growth since, ah, we became the United States of America.

UPDATE: The estimate was revised by Brad to 3.8 million. Still pretty ludicrous, given the circumstances (Bush being in charge).

Another Jobs Promise

Well, now we've got a new jobs number - 2.6 million. That's the number of jobs we're now supposed to create in 2004. Keep in mind that the original number for this year was supposed to be 3.672 million.

Amazingly, that's very close to the number of jobs the tax cuts were supposed to add to the economy this year...

How To Rob An Industry Bushie

An overlooked facet of the Bush/Actual President '04 campaign is that he's going to try and run a strong incumbent campaign (look at everything I've improved!) from a position of weakness. The watchwords of this election are "would've been worse".

The economy would've been worse, if not for the tax cuts. Healthcare would've been worse, if not for the prescription drug plan. Our national security would've been worse if Bush hadn't shown bold leadership and gotten us into an optional war. On every issue - the dividends of a Bush presidency aren't good over the alternative bad, the dividends are bad over the alternative worse.

It's framing decisions like this which make the Presidency look like an ever more attainable goal for the Democrats (and perhaps even part of Congress, provided we retain at least 3 out of our 5 Senate seats in the South). Inherent in an "it could be even worse" is the implicit acceptance of things as bad. So long as Bush does this, he's doing half the job for the Democratic Party without us lifting a finger.

The Right To Fair Taxation

An idea for the eventual Democratic nominee:

No matter who's running as the Democratic nominee for president, George Bush's "uniter, not a divider" comment will run front and center

As a campaign ad, run on stories like this. In Virginia, Alabama, Ohio, and numerous other states, Republican elected officials have either presided over or advocated tax hikes totalling in the billions. You can make two ads from this.

The first would simply be a recitation of emblematic figures - Republican Senator from Virginia endorses $1 billion tax hike. Republican Governor of Alabama endorses tax hike as a Christian imperative. Republican Governor of Ohio passes 1% sales tax hike, so on and so forth. Dean's Bush Tax plan was the right idea, but with poor execution. This way, you tie the systematic deficiencies that Democrats are alleging to a bridge that crosses partisan divides. The "Bush Tax" is an idea which is true and vitally relevant, but still seems partisan in nature. Instead of portraying it as a partisan issue, portray it as an issue which crosses partisan lines and ideologies.

The second ad might be even more effective, and another takeoff on the Bush Tax Idea. Have a generic, clean cut family of four argue with the camera - middle-aged parents, kids that could be in high school or college. "The Bush tax cuts helped us a great deal. According to George W. Bush, we pay X amount less in taxes." (X would be whatever Bush declares the "average" tax cut is.)

The model would actually be the Total cereal ads. "Did you know that your average property taxes have risen X percent? On your house, that's about X number of dollars. Do your kids go to college? Tuition hikes at state schools average X percent, and increase of X percent over the Clinton era. Do you pay sales tax?" Repeat ad nauseum as the family starts looking ever more worried and uncomfortable with what's actually happened to their tax bill. Get some number crunchers on your staff, figure out the total value of tax hikes in the Bush era, and figure out the gap between Bush's tax cuts and state and local tax hikes. Whatever's left (and it won't be much) is the actual value of Bush's tax "relief".

The problem with a lot of the attacks on the Bush tax cuts is that they focus on larger structural problems that make the issue too abstract. "It cost the government several trillion dollars" is a poor counter to an issue that is framed by the Bush Administration as giving money back to individual taxpayers. Democrats need to personalize taxes like Republicans do, because that's how voters approach the issue. Intellectually, I understand that Bush's tax policies will create massive structual problems that are eventually going to have to be remedied by tax raises. But, personally, I understand that Bush says less tax, and his opponent says more taxes. Taxes are an intensely personal issue, something that Democrats have been missing out on for a long time.

Employment

This would be great. Except, you know, that whole it not being great thing.

Unemployment fell but nowhere near enough jobs were added to explain the fall in the rate - 112,000 jobs was not only tens of thousands below what was expected, but even the expected number wasn't enough to get Bush anywhere near what his tax cuts promised.

We were supposed to have 5.5 million new jobs from the passage of the tax cut through the end of 2004. In seven months, we've seen 333,000 new jobs. We were promised 306,000 new jobs each month. In seven months, he's managed to do what he was supposed to do in one month. At that rate, his sixteen-month plan for creating 5.5 million jobs should have us at that point in roughly nine years and four months from last July.

And people wonder why there's so much animus towards Bush on the economy.

By Any Other Name, It's Not A Recession

If the Dayton Daily News is any bellwether, the new line is that the recession started in February 2000...because that's when the stock market started falling. If anyone else sees something like this a local paper or editorial, let me know. It's a bit too suspicious that there's two comments about this today.

Employment

Okay...the number of unemployment claims surged, as worker productivity decreased. Long story short, we have one indicator that says that employment should be rising (the productivity), and one indicator that says it isn't.

Well, congrats to the extra 19,000 jobless who couldn't take advantage of all of our soaring economic indicators. By the way, any bets as to how many jobs the rebounding economy created in January?

Oh, Bill Thomas

Rep. Bill Thomas (R-CA) is on Lou Dobbs being extolled for his non-Pollyannish virtues.

This, shortly after Thomas comments that we can grow our way out of the deficit by making the tax cuts permanent. He's also managing to answer all of Lou Dobbs' questions by answering with an economic figure that has nothing to do with the question.

"This economy isn't creating jobs. How do we solve that?"

"We need to support the president as best we can by restraining spending, Lou. Then, we'll see people add one person, two people here and there."

Republicans are seen to be credible on the economy largely because they give out lots of tax-cut ice cream, and otherwise garrison horrible economic arguments with various references to complicated-sounding figures and phenomena that people otherwise tune out.

Either that, or they secretly own the Hypnotoad.

Too Funny For Words

I just got a news alert from Newsmax telling me that Kenneth Timmerman and Donald Luskin have jointly theorized that George Soros will unleash an "October Surprise" and destroy the stock and/or currency markets to get Bush out of office.

Seriously.

Fun With Deficits

Considering these guys work for the Congress, who work with the President, how were they not consulted on the State of the Union speech:

I mean, he can't have simply ignored them, could he? Well, at least he won't make things any worse:Oh. We're screwed.

It's Layoff Friday!

Kraft cutting 6500 jobs. Wilson cutting over 1000 jobs.

I really wish we had evidence of job creation-program related activities.

As A Dedicated Non-Economist

Would someone with the proper background please explain for the benefit of the reading audience, as well as the writing audience, what this means?

Fiscal Liberals

Now that's a change:

And it looks like it's having the desired affect:We're going to hit them hard on this issue, and we're going to win it. This is one issue that we should rightfully reclaim.

Comparative Poverty

Tarek has a good rebuttal to the new Conservative meme arguing that the poor really aren’t poor. I think that what we come to is simply that poverty is comparative. A poor American is orders of magnitude better off than a poor North Korean, but they are still far from the comfortable middle class. Using reductive arguments that show the poor have a car, or a flushing toilet, or a space heater gets no one anywhere.

The fact of it is that capitalism is a comparative, or, as it is usually said, competitive system that uses the relative positions and abilities of others to decide success or failure. As such, a car that breaks down is still a car but the many days you find yourself late to work because your Taurus overheated won’t help you get a promotion and the inability to enroll your children in a good after school care program won’t help them get ahead, particularly when wealthier parents are putting their child in Score! Tutoring (where I used to work).

That’s why the poverty argument is a non-starter, what we face in America isn’t poverty as much as an inequality of opportunity. Liberals would be better off fighting that than anything else, as trying to help every American get ahead and have the ability to succeed through hard work is a position that the Right will have a hard time fending off (“But Wendy’s wages are higher than in 1972!”).

Debt, Debt, Always Debt

The most disturbing part of this article is that the credit industry has turned to a business based on self-perpetuating debt.

Has any Democrat thought of going back to pre-Reagan rules, where credit card debt was tax-deductible, in whole or (more likely) in part? There are, of course, problems with this proposal - first, that current attitudes would credit might encourage a people with very little debt to view the exemption line as a credit limit of sorts - stay under $500 (or whatever the limit is), and your credit is "manageable", even desirable.

The second problem (and the worse one) is the inevitable one-upping it would entail. Any reasonable proposal is immediately going to get superceded by a rival plan (whether Democratic or Republican) that promises twice as much exemption room and a similar exemption for corporate credit and a free gubmint pony.

So, I guess that's not really a great solution, in the end.

The Future is a Scary and Debt-Ridden Place

Oh, well this is comforting:

Fantastic, everyone is screwed. On the bright side, we can just keep pretending that the deficit doesn't exist, right?Nuts. Social security is the most upsetting "third rail" in American politics today. I don't much care if political expediency wins out and no one ever talks about abortion again, but SS is going to force a day of reckoning and it's not too far off. The solutions, of course, are in front of our faces. We're going to have to raise the retirment age, institute means-testing, and swallow a number of other bitter pills, but it's doable. Unfortunately, the longer we wait to reform the system, the worse the crisis will be when it hits. It's like a big wave, get it while it's building and you can float right over, catch it when it's large and you can probably dive under, but wait too long and it'll crash down on you. We're waiting far too long and no party wants to suffer the backlash that'll come from the dirty work of reforming the system.

In truth, one could summarize this whole post in two words: We're screwed.

The Conscience Of A Capitalist

There's a quote of George W. Bush's that has bothered me ever since I heard it:

While it sounds good...it makes no sense. Capitalism is an amoral system of wealth generation and accumulation bound mainly by the personal and communal morality of those participating in it and the ability of a government to place sensible restrictions upon it. Nike is a capitalist enterprise. Some hospitals and schools are capitalist enterprises. Slavers ran/run capitalist enterprises. Pepsi, Nintendo, Target, Mars - all capitalist enterprises.

This isn't to villify capitalism (it's the best possible economic system, when run properly and responsibly), but simply to say that capitalism doesn't particularly care about the extrinsic morality of profit-generating enterprises. There is plenty of capitalism without conscience, and it works just fine as capitalism.

In fact, it is precisely the amoral nature of capitalism that allows for its excesses and offenses, and the restraints and regulations on it that force moral considerations into the system.

The idea that there is no wealth without character dovetails precisely with the nature of capitalism. If capitalism has no intrinsic moral character, neither do its fruits. There are, believe it or not, bad people who have lots and lots of money, and who will continue to have it, George W. Bush's exhortations aside. Money does not make you a good person, and being a good person does not mean you will have money, or that bad people won't.

Something tells me Bush has never seen Wall Street or Scarface.

Weak Dollar

It might just be me, but the weakening dollar seems to be one of the most symbolically effective economic issues to use against the Bush Administration. Though I'm aware that there are valid economic reasons to weaken the dollar (just like running the deficit), the reasons are complex and often unconvincing. If Dean does become the nominee, launching an attack accusing the Bush Administration of weakening our real power around the world (our ideals, our allies, our aid, our diplomacy) and using the weak dollar as the symbolic centerpiece seems like it would work pretty damn well from a rhetorical angle, particularly in light of the fact that the Clinton Administration kept our dollar strong.

Who You Gonna Trust?

The President...or eBay?

Tough decisions...

The Opt-Out Economy

The L.A. Times says that the employment scenario is worse than we might imagine, but they fail to mention that the people who voluntarily become underemployed or who opt out of the job economy are opening up plenty of low-wage service jobs for the people who don't have that option, which is just like job creation.

Elitist?

On This Week, George Will just said that losing your job isn't a "calamity" anymore.

Certainly not for Will, who's invested his career earnings in gold and bow-ties, two recession-proof commodities.

Meat Hacks

I'm a little bit freaked out by how quickly meat-industry shills jumped up to defend the entire industry from Mad Cow concerns. Not just the rapid-response of the industry, but the vehemence of the defense.

In our local paper, response from meat-industry folks has ranged from the "worrisome liberal media" excuse to the responses that insinuate you need to continue eating beef to prove you're a Real American. Maybe it's being in the Midwest, but some of this response has the distinct tenor of a nasty partisan fight.

Speaking As A Common Person

Shorter Suzanne Fields:

Hey everybody! Well, not everybody, but the rarefied group of monied people donating large amounts to colleges and universities.

Anyway, endow but verify! Us monied people have to watch out. For the other 288,000,000 or so of you, go read Jeff Jacoby or something.

I'm not sure why this story has received so much attention, particularly from the right. Robertson has a right to make sure that his endowment is spent in the manner he sees fit, but the nature of a multi-million dollar endowment founding a scholastic department . It's like there's a movement to indict charitable giving based upon a difference in academic goals at Princeton.

Robertson didn't give his old workout gear to Goodwill. He didn't drop a few dimes in a Salvation Army bucket. He set up his own educational foundation at a school. It does make sense to be careful about who you give to, and to make sure that they do what they say they do. But not meeting the employment-field target of the foundation that you endowed out of your personal fortune is not really what most people are concerned about when they look into the charities they donate to.

Nailing It

You know, when I'm right, I'm right.

Shopping truly will defeat the terrorists.

Walmart's Power

(Via Boom Nation) This article on WalMart is fascinating. I had no idea the magnitude of Walmart's impact on American retailing. And even if I had some clue that they were this huge, I never really considered how their actions, through the economic influence they wield, affects other actors down the line:

So the prices are low but the workers don't have jobs...

The free market uses low prices as a kind of holy grail. That is what the market, and the competition therein, seeks to engender. Better products for lower prices, it has become more as much a creed as an end. But this article raises the question of whether or not prices can be too low, whether what seems good on the surface can subtly come around and hurt all consumers. It's hard to make a determination based on this piece, which is profoundly vague on the answer, but its worth thinking about.

One other part I want to highlight, just showing WalMart's insane power:

Wow.

Job Losses

SBC to cut 3-4,000 jobs.

Washington Mutual to cut 5,400 jobs.

Gartner to cut 200 jobs.

J.C. Penney to close 12 stores.

Yaaaaaay...