Ezra Klein

Recap: It's really hard to blame job losses on Obama; more on Paul Ryan; and the Bush tax cuts vs. the Obama tax cuts in one graphic.

Elsewhere:

1) In the age of Obama, it's still Bush's world.

2) Is TED the Harvard of the Internet age?

3) Punctuation love letters.

4) The recession has really hammered young workers.

When we talk about gay marriage, we should first be clear about what we're discussing: State-sanctioned marriage is a central element in American life. It includes both legal and substantial, important cultural benefits. Gay couples believe it applies to, and would enrich, their relationships. And as a country, we have already decided that gay relationships are legal, and it is undeniable that there are many of them, and they desperately want access to this institution. So the question is whether we legally -- and in an extremely important way, culturally -- discriminate against a form of relationship that is entirely accepted by the rest of the law. You need a pretty good reason to do that.

And Ross Douthat, as humane and thoughtful a supporter of traditional marriage as you'll find, is not able to present one. In essence, he argues that biology and reproduction charge heterosexual relationships with a unique complexity that necessitates a separate legal -- as opposed to religious -- institution. Or, to quote, "the interplay of fertility, reproductive impulses and gender differences in heterosexual relationships is, for want of a better word, 'thick.' All straight relationships are intimately affected by this interplay in ways that gay relationships are not."

But of course relationships are complex. The question is how thinly the law should slice itself to accommodate that complexity. And our answer up till now has been: not very. Marriage treats first, second, third, fourth, fifth, sixth and seventh marriages alike. It treats the marriages of fertile and infertile couples alike. It treats the marriages of people of different religions, nationalities and ages alike. Douthat tries to wave this away by saying that these couples are all bound together because they have "grown up and fallen in love as heterosexuals," but it's not at all clear why the law should care about that.

I do think it's a bit peculiar to discuss Paul Ryan's seriousness about balancing the budget while simply setting the question of whether his claims to have balanced the budget are valid. But I'm also not sure that the case is as open-and-shut as some have concluded. So let's try to go through this.

Here's the issue, as I understand it: When Ryan and his policy team created the Roadmap, they started with a revenue target in mind. That revenue target was slightly north of 19 percent of GDP. They went to the Joint Committee on Taxation to get some help developing a tax plan that would hit their target, but because the Roadmap needs estimates far beyond the 10-year budget window, JCT turned them down. So Ryan and his team went to the Treasury Department, and working with Treasury staff and Treasury models, they developed a plan that hit the target. Then they went to the Congressional Budget Office for their estimate. All of this is pretty standard.

Enter the Tax Policy Center, which has its own tax-simulation model, and which used it to analyze Ryan's plan: It found that the plan only produces revenues at 16 percent of GDP. Ryan's team wasn't convinced that it should believe the Tax Policy Center's model rather than the Treasury Department's model -- and of course it preferred Treasury's number -- but it continued to say that it was committed to assuring revenues held at 19 percent of GDP and, if needed, it would adjust "the specified rates to hit the revenue targets."

By Dylan Matthews

jkrantz1 asks:

[Ezra] had a post yesterday, "The benefits of a college degree in one graph", saying that the recession isn't being felt among the college educated. But the anecdotal stories of the PhD's who can't find jobs in this climate aside, economists documenting the growing income gap (Saez, Krugman) have shown that the College-High School wage ratio doesn't do much to explain inequality.

So how would you reconcile the fact that, while rising numbers of college graduates can't explain systemic income inequality, it can create a divide between those who feel the recession and those who don't.

The chart Ezra put up shows that college graduates have an unemployment rate of 4.5 percent, far below the 10.1 percent rate for high school graduates, or the 13.8 percent rate for high school dropouts. This seems to suggest that educational attainment contributes to economic inequality.

To be sure, it does. Indeed, some economists, such as Greg Mankiw, Edward Lazear and Daron Acemoglu, credit the increasing wage premium that comes with greater education with most of the increase in economic inequality in recent decades. However, this ignores that income inequality has risen not just because upper -and upper-middle-class people have pulled further ahead, but because the super-rich have pulled ahead of everybody. Here's the median income of each level of educational attainment in 2007:

Beth Marlowe rounds up some of the top candidates. I'd note that two of them (Furman and Farrell) come from Larry Summers's shop, one has clashed a bit with Summers (Goolsbee), and the other (Tyson) led the Council of Economic Advisers for President Clinton and would be a new voice in the White House's internal debate.

You can always read too much into these appointments, but the final choice will say at least a bit about how well the White House thinks it economic policy team is working right now and whether it needs to diversify the major voices or double down on them.

"Obama's America," tweets Republican political consultant Patrick Ruffini, linking to this map of economic devastation.

Fairly or not, Ruffini raises an interesting question: How much unemployment can we blame on the Obama administration? Economist Rob Shapiro dug into some Bureau of Labor Statistics data and came back with the best numbers I've seen on the subject. He separated job losses into two buckets: Those that happened before the stimulus, which was Obama's major effort to deal with joblessness, and those that happened after the stimulus. Here's what he found:

From December 2007 to July 2009 – the last year of the Bush second term and the first six months of the Obama presidency, before his policies could affect the economy – private sector employment crashed from 115,574,000 jobs to 107,778,000 jobs. Employment continued to fall, however, for the next six months, reaching a low of 107,107,000 jobs in December of 2009. So, out of 8,467,000 private sector jobs lost in this dismal cycle, 7,796,000 of those jobs or 92 percent were lost on the Republicans’ watch or under the sway of their policies. Some 671,000 additional jobs were lost as the stimulus and other moves by the administration kicked in, but 630,000 jobs then came back in the following six months. The tally, to date: Mr. Obama can be held accountable for the net loss of 41,000 jobs (671,000 – 630,000), while the Republicans should be held responsible for the net losses of 7,796,000 jobs.

We can argue about how much of the job losses should really be pinned on Republicans or Republican policies, of course. Financial deregulation happened under Bill Clinton, for instance. And it's hard to hold George W. Bush solely responsible for a global financial crisis. But insofar as the job losses go, it's hard to credibly blame this White House for the vast, vast majority of them.

That said, though this wasn't Obama's economic crisis, it is his economic recovery. There's a fair question as to whether another set of policies could've led to faster job growth over the last year or so. And the recent shakiness in the recovery is cause for concern on that front. So it's worth looking at Shapiro's proposal to strengthen the recovery, too:

First, create jobs by expanding an Administration initiative already in place: Deep cuts in the payroll tax for employers who expand their workforce. Second, shore-up the weak housing market and stabilize falling home prices with a long-overdue, new initiative: A loan program for homeowners with mortgages in trouble, modeled on federal student loans, to bring down foreclosure rates. Third, prepare tens of millions of Americans for the jobs the economy will begin to create once it’s back on track: Provide grants to community colleges to fund free computer training for any American adult who walks in and asks for it. And fourth, put in place some long-term deficit reduction to head off higher interest rates when the economy does begin to expand again.

How to make a viral music video:

Speaking of research desk, a reader e-mailed to ask whether we have any actual evidence on the prevalence of "anchor babies" -- children born in the United States so that their foreign parents have a fast path to citizenship.When people hear about anchor babies, they assume the parents of these tiny citizens get automatic citizenship. Not quite. The parents of these tiny citizens might get citizenship -- but it'll take more than 30 years. Politifact explains:

It's important to note that having an "anchor baby" won't do much to help a Mexican mom become a U.S. citizen. Because citizen children cannot sponsor their parents for citizenship until they turn 21 -- and because if the parents were ever illegal, they would have to return home for 10 years before applying to come in -- having a baby to secure citizenship for its parents is an extremely long-term, and uncertain, process.

As for whether we're really seeing what Lindsey Graham called "drop and leave," in which immigrant parents head over and give birth and then head back to their home countries to wait 31 years for citizenship, well, as you might expect, "immigration data and surveys don't provide much support for Graham's notion."

Photo credit: Alex Wong/Getty Images.

Dylan Matthews reduces uncertainty.

Source.

When little Aiden toddled up our daughter Johanna and asked to play with her Elmo ball, he was, admittedly, very sweet and polite. I think his exact words were, "Have a ball, peas [sic]?" And I'm sure you were very proud of him for using his manners.

To be sure, I was equally proud when Johanna yelled, "No! Looter!" right in his looter face, and then only marginally less proud when she sort of shoved him.

More.

In 1993, we had to cut the deficit because the bond markets said we had to cut the deficit. Today, they're not saying anything of the sort, and yet we still have to cut the deficit. Why did the bond markets matter in 1993 but they don't matter in 2010? Stan Collender explains:

Most important, however, what the bond market is saying today is different from what deficit hawks and GOP critics of the Obama White House want to hear. As a result, the echo chamber that amplified and repeated the bond market’s message almost two decades ago doesn’t exist today.

One other poll (pdf) result that I meant to mention:

Which of the following concerns you more?

(A) That the Republicans have offered no specific plans or programs to deal with the issues facing the country so it is hard to know what they would do if they were to win the majority in Congress, OR (B) That the Democrats have offered no changes that they would make to deal with issues facing the country, so it is hard to know what they would do differently from President Obama’s current policies if they were to retain the majority in Congress?

Republicans have offered no plans ........... 43
Democrats have offered no changes ......... 39
Some of both (VOL) ................................. 8
Not sure ................................................... 10

For context, the economy actually lost jobs in July. And that's a problem: Turning 316,000 people out of their jobs means it will be harder for everyone else on the job market to get a new job, as there'll be even more competition for the few openings we have. With about five job-seekers competing for every open position, if one of these state employees gets a new job, that's four other folks who're out of work who won't get that job.

Some people want to use our economic slump as an opportunity to address all sorts of things they don't like in the states. Bill Wilson, president of Americans for Limited Government, "argue[s] that states have hired far too many teachers in the last decade and that they should be downsizing the pool of teachers rather than asking for a federal bailout."

Whatever you believe about how many teachers should've been hired in the first place, this is a bad time to start laying them off. Fire them in a normal economy, and they can find new jobs. Fire them in this economy, and they either can't find new jobs, or in finding new jobs, they make it so other people can't find new jobs. When you've got an unemployment problem, adding to the ranks of the unemployed makes solving it a lot harder.

Graph credit: CBPP.

Want sure-footed polling analysis? Ask Nate Silver. Want a sort of bemused confusion? Well, then you're in the right place.

I was on "Morning Joe" today talking about the new NBC/WSJ poll (pdf), and I don't think we had time to really dig into how weird the results are. You'd think, on the cusp of a wave election, that voters would exhibit a pretty strong preference for the party projected to rack up a historic win. But they don't. Barack Obama is still the most popular politician in the country. Democrats are still more popular than Republicans. The issue is that voters don't like anyone, not that they prefer the GOP.

To begin, voters disapprove of President Obama's performance, 48 percent to 47 percent. That's a bit better than the 48 percent-45 percent he registered in the previous poll, but it's not much of a change either way. What's odd is that voters also say they saw this coming. In fact, 58 percent say he's doing "about as well as expected." Another 12 percent think he's doing better than expected. Altogether, that's 70 percent of voters saying he's performing at or above expectations. It could be that a lot of Republicans figured he'd do a bad job and now feel like they've been proven right, but it's still an odd result.

Then we get to the parties. About 33 percent of voters have a positive impression of the Democrats, and 44 percent have a negative impression. On the other side, 24 percent of voters have a positive impression of the Republican Party, and 46 percent have a negative one. So Democrats are both better liked and less disliked than Republicans. But despite the Democrats' 13 percent advantage, the congressional ballot is essentially tied: 43 percent want Democrats to hold Congress and 42 percent want to hand it to Republicans.

In other words, voters don't like Obama, but 70 percent think he's doing as well or better than could be expected. Democrats are substantially more popular than Republicans -- and Obama, who is a Democrat, is more popular than both -- but they're tied in the congressional ballot. This isn't a very sure-footed electorate with strong opinions about who should be running the country and how. This is a frustrated electorate with strong opinions that everyone involved in running the country right now is doing a poor job of it.

The latest trade deficit data provides yet another unwanted data point that the recovery is slowing; the Obama administration is spending $3 billion to help unemployed homeowners stave off foreclosure; when considering the Obama administration's challenge in the midterms, consider that a majority of Americans don't know that it was George W. Bush who signed TARP; and statewide initiatives against climate change are being tested in 19 elections.

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The trade deficit widened to $49.9 billion in June, reports Neil Irwin: "Ask some of the more optimistic forecasters out there where they see economic growth coming from in the years ahead, and a frequent answer is trade. Higher exports (and a more favorable overall trade balance) should drive job creation, simultaneously helping the U.S. recover more quickly and helping to right long-standing imbalances in the world economy...It seems like every data point that has come out lately has been disappointing, and this is one more in the line."

A large majority of Americans don't know that George W. Bush signed TARP into law: http://bit.ly/9CoZ4n

The Obama administration is providing $2 billion through states, and $1 billion federally for unemployed homeowners, report Nick Timiraos and Meena Thiruvengadam: "The Department of Housing and Urban Development will provide bridge loans to help unemployed borrowers who are delinquent on their mortgages...The initiative, modeled after existing state programs, will offer interest-free loans of up to $50,000 for eligible borrowers to be used to make mortgage payments for up to two years."

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Nineteen gubernatorial elections feature disputes about state-level climate action, reports Darren Samuelsohn: "Nowhere is the battle more intense than in California, where Democratic Attorney General Jerry Brown and Republican Meg Whitman are at odds over the state’s landmark law to reduce heat-trapping emissions to 1990 levels by 2020. Whitman favors a one-year suspension of the law, known as AB 32, to give the state’s economy time to recover from the recession."

British dance-pop interlude: Hot Chip play "Ready for the Floor" live.

Still to come: Home prices are up due to the housing tax credit; green jobs aren't globalization-proof; up to one in twelve American children are born to undocumented immigrants; Scott Pilgrim the comic.

Recap: We're purposefully prolonging our economic misery; a coin worth $500 million; and the economic conditions of a senator's state tells you a lot less than their party affiliation about how they'll vote on stimulus.

Elsewhere:

1) We're still in thrall to Herbert Hoover's ideas on traffic.

2) Some smart thoughts on Google's new net neutrality position.

3) The poetry of Pete Wehner (though, to be fair, this sort of thing could be done to a lot of us).

4) CNN publishes the first poll showing majority support for gay marriage.

Recipe of the day: Green curry cucumber hot dog.

By Dylan Matthews

ManuelMorales asks:

It is always said that the reason Medicare and Social Security are facing such a crisis is that there are will be so fewer young people paying into the system than older people receiving benefits over the next decade. I am wondering if immigration reform would have an impact. How would Social Security and Medicare projections differ if the current batch of undocumented immigrants (who are generally young workers) were suddenly paying into the system via payroll taxes?

Actually, many undocumented immigrants are already paying into Social Security. While illegal immigrants generally do not file income tax returns, or more precisely the few who earn enough to have to pay income taxes generally do not, their employers will more often than not pay FICA taxes for Social Security and Medicare. The Social Security administration estimates that 8.8 million undocumented workers, or three quarters of the total, provide about $9 billion in yearly tax revenue.

These workers do not add to the program's costs, as they do not have Social Security cards and thus cannot claim benefits later on. How Social Security would credit their payments, should a comprehensive bill providing a path to citizenship be passed, is an open question. In 2006, the White House proposed not counting payments made during illegal residences toward eventual Social Security benefits, but that would lead to far lower payments to new citizens when they retire, which is especially problematic because former undocumented workers likely lack years of retirement savings to fall back upon.

In any case, legal immigration, with immigrants receiving benefits later on, still improves the fiscal health of Social Security, by providing more workers and thus improving Social Security's ratio of taxpayers to beneficiaries. The Social Security Trustees' report compared how different immigration levels would affect the program's solvency and found that an additional 285,000 immigrants a year would reduce the shortfall by 26.4 percet, and an additional 590,000 would reduce it by 58.8 percent:

It doesn't say this exactly, but my sense is that Carmen Reinhart and Kenneth Rogoff's latest paper on debt is something of a response to Paul Krugman's critique of their last paper on debt. In short, they find, and have previously found, that growth dampens when debt hits 90 percent of GDP. Krugman and others have responded that with so few data points, and America's situation and position being so different from most of those data points, that you can't really draw any conclusions. I'd say Reinhart and Rogoff's strongest response comes in this paragraph:

Only about 2% of the observations are at debt-GDP levels at or above 120% – and that includes the aforementioned cases. If debt levels above 90% are indeed as benign as some suggest, one might have expected to see a higher incidence of these over the long course of history. Certainly our read of the evidence, as underscored by the central theme of our 2009 book, hardly suggests that politicians are universally too cautious in accumulating high debt levels. Quite the contrary, far too often they take undue risks with debt build-ups, relying implicitly perhaps on the fact these risks often take a very long time to materialise. If debt-to-GDP levels over 90% are so benign, then generations of politicians must have been overlooking proverbial money on the street.

Underlying this argument is a debate that's really about timing, not debt. Rogoff and Reinhart think we should begin debt reduction now. Krugman thinks we need to worry about growth now and begin debt reduction soon. Meanwhile, Congress is planning to add more than $3 trillion to the deficit to extend the Bush tax cuts for another 10 years, and they have no plan for offsets or deficit reduction. If you take that as the real center of this debate, Rogoff and Reinhart and Krugman may not be as far apart as they think.

Update:Krugman responds.

Yesterday, I linked to Kombiz Lasvany's graph showing the difference between the percentage of Republican governors who signed a letter asking for state relief funds (70 percent) and the percentage of Republican congressmen who voted for those funds (about zero).

This got me interested in the degree to which members of Congress are representing their parties rather than their states. So I asked Dylan Matthews to work up two graphs testing this. The first shows how Democratic and Republican senators voted on the relief funding. As you can see, there was virtually no breaking of ranks. If you knew a senator's party, you could predict their vote almost perfectly:

Compare that with this graph grouping votes by unemployment rate. We separated the Senate into two categories: senators from states with less than 8.5 percent unemployment (which is the median state unemployment rate), and senators from states with more than 8.5 percent unemployment. As you can see, there's plenty of crossover. Knowing the unemployment rate of a state wouldn't be of much help in predicting a senator's vote:

Senators, in other words, are representing their parties, not their states. You see this particularly clearly when you look at states with one Republican and one Democratic senator. Kit Bond and Claire McCaskill represent the same state, with the same economic conditions, but they've been on the opposite side of most of these votes.

A reader writes in to say I'm being unfair to Yoda when I liken the Federal Reserve's "doing by not doing" strategy to Yoda intervening in the economy.

Hey, Yoda is a man of action. He saw the Republic getting taken over by Palpatine, and [went] into the well of the Senate to do something about it, like any 3 foot tall 800 year old man would do!

Of course, Palpatine threw the whole Senate at him kicking his [butt], and we are talking about a work of fiction, but my point remains the same! Leave the green guy alone!

It's true. My focus on Yoda's verbal stylings came at the cost of accurately portraying his timely and energetic interventions.

Gotta make money to save money:

The Government Accountability Office estimates that the government could save more than $500 million a year by using the dollar coin exclusively, since it's more durable than the dollar bill and offers the Mint a big profit on every one it makes.

Photo credit: AP Photo, The Huntsville Times, Eric Schultz.

Philip Zimbardo details six ways people conceive of time and how it influences their lives. Plus, it's animated!

Dylan Matthews reduces uncertainty.

Neil Irwin on what the Federal Reserve's decision to not do less says about when or whether it will be willing to do more:

My best guess is that the decision of whether to resume asset purchases and expand the balance sheet is binary, not linear. If growth truly appears to be stalling out, with second half GDP growth coming in somewhere south of 2 percent (forecasts are in the 3 percent plus range now), and/or year-over-year core inflation gets below about 0.8 percent, the Fed starts to talk about the big guns. If they pull the trigger on those guns, it would be an announcement of another asset purchase program in the hundreds of billions of dollars, primarily of Treasury bonds.

What they're not likely to do is do ongoing adjustments to their target for the balance sheet, raising or dropping their goal for balance sheet size based on the latest data (though that's what at least one FOMC member, James Bullard of the St. Louis Fed, would prefer). I base this in part on how they've done these things in the past -- the previous installments of quantitative easing came in one-off announcements of very large numbers that are carried out over time. But more broadly, the exact impact of a larger balance sheet on economic growth and price levels is highly uncertain. It would be folly, many at the Fed would argue, to pretend that the tool is finely tuned enough to be constantly tweaking the size of the balance sheet in response to the latest data.