A First: Fed Chair Presser

Posted: April 27, 2011 | Author: | Filed under: Economy, Federal Budget, Federal Budget and Budget deficit, financial institutions, Global Financial Crisis, jobs, U.S. Economy, unemployment | Tags: , , , , , | 10 Comments

I’m watching Bernanke do a presser.  Wow.   (It’s a live blog … updates and explanations will be provided.)  I can’t believe the press sent political reporters to this.  What an amazing number of really rotten questions!!!

Some key points from the morning’s congressional testimony.

On Unemployment: We do see some grounds for optimism, including a decline to the unemployment rate, declines in the new unemployment insurance claims and improvements in firms’ reported hiring plans. But, even so, it could take quite a while for unemployment to come down to desired levels at current expected growth rates and, in particular, the FOMC projects unemployment still to be in the range of seven and-a-half to eight percent by the end of 2012. Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established.

On Inflation: “I want to go back over this whole line of interventions, including today quantitative easing. And there have been a series of criticisms that have been made and negative predictions, and my view is that none of them have come true. And I think it is important for us to — to note that. And — and I know you’ve talked about this. I know you mentioned in your statement some of the points. But we were told, for instance, that it was going to be very inflationary. And I know it is your view as of now, and I think supported by the facts, that inflation is not now a problem, and we do not see inflation, certainly not one caused by any of what’s been done going forward. We were told this was going to be extraordinarily expensive, that it was going to cost a lot of money. I believe the answer is that on many of these things the federal government has made a profit by the — by the intervention.”

On Crude Oil: “The relative price of oil, again, is primarily due to global supply and demand. I think it’s important to note that the United States is consuming less oil today, importing less oil and producing more oil than it did before the crisis. That all the increase in demand from outside the United States, particularly in the emerging markets. And so there’s limited amount of what the Fed can do about oil prices alone. Again though, we want to be very sure that it doesn’t feed into overall inflation. We will make sure that doesn’t happen.”

On the Dollar: If the dollar was no longer reserve currency there would – it would on the margin probably mean that we would have to pay highest interest rates to finance the federal debt, and that would be a negative obviously. On other other hand, we might not suffer some of the capital inflows that contributed to the boom and the bust in the recent crisis. But again, I know there was also a countervailing argument in the Journal this morning as well. And I – I just don’t see at this point that there is a major shift away from the dollar.

On the Consumer: We understand the visibility of gas prices and food prices and we want to be sure that people’s expectations aren’t adversely affected. I think it’s important to note that, according for example, to the Michigan survey of consumers, that long term inflation expectations have been basically flat. I mean, they haven’t moved, notwithstanding ups and downs in gas prices, for example.

On the U.S. Fiscal Situation: While I understand these are difficult decisions and we certainly can’t solve it all in the current fiscal year, I do think we need to look forward and I know the House Budget Committee and others will be setting up a 10 year proposal. It’s very important and would be very constructive for Congress to lay out a plan that would be credible that will help bring us to sustainability over the next few years. In particular, one rule of thumb is cutting enough that the ratio of the debt to GDP stops rising. Because currently it’s rising relatively quickly. If we could stabilize that, I think that would do a lot to increase confidence in our government and in our fiscal policies.

Obviously, Bernanke needs to drill baby drill to get rid of inflation … so simple!!!

or this:

ezrakleinEzra Klein
Bottom line: Congress is embracing austerity. The Fed is going to start tapping the brakes. Sucks to be you, unemployed people. #fedpresser

Background information on the Fed Presser from NYT and David Leonhardt.

On Wednesday at 2:15 p.m., Ben Bernanke will do something that previous Federal Reserve chairmen considered a terrible idea. He will hold a news conference.

Mr. Bernanke spent much of his academic career arguing that the Fed should be less opaque, and, as chairman, he has put his ideas into action. Now it’s time for those of us in the media to hold up our end of bargain. In the spirit of democratic accountability, we should ask hard questions — and we shouldn’t let him get away with the evasions and half-answers that members of Congress too often allow Fed chairmen during their appearances on Capitol Hill.

One question more than any than other is crying out for an answer: Why has Mr. Bernanke decided to accept widespread unemployment for years on end, even though he believes he has the power to reduce it?

Here’s Paul Krugman’s take on the presser:  Bernanke Wimps Out. He’s got the same questions I do about the inflation v. unemployment .  (See my comments in the thread below.)

So Bernanke did get asked why, given low inflation and high unemployment, the Fed isn’t doing more. And his answer was disheartening.

As far as I can tell, his analytical framework isn’t too different from mine. The inflation rate to worry about is some underlying, inertial rate rather than the headline rate; the Fed likes the core personal consumer expenditures deflator; and this rate has actually been running below target, indicating that inflation isn’t a concern …


Monday Reads

Posted: April 18, 2011 | Author: | Filed under: jobs, Labor unions, morning reads, Reproductive Rights, Women's Rights, worker rights | Tags: , , , , , , , , , , , , , | 43 Comments

Good Morning!

I’ve almost gotten shy about going out to search for links these days.  Most of the political and economic news is disheartening so I thought I’d try to mix it up today with some good stuff and disheartening stuff.  Hopefully, you can find some things to share with us too.

You may want to start out your day arming yourself with “Five Myths about Planned Parenthood” in case any one in your sphere of influence starts spewing some of the ridiculous memes passed around by the right wing. This was in WAPO over the weekend and was written by Clare Coleman worked for America’s best known provider of family planning and health services.  I liked number five.

Three million patients each year visit Planned Parenthood’s more than 800 health centers in every state, in big cities and small towns. In some areas, Planned Parenthood and the Title X-funded system are the only sexual health providers for hundreds of miles.

We screen people for high blood pressure, anemia and diabetes; we counsel them about smoking cessation and obesity; we connect them to other primary-care providers and social services. The huge response to the attack on family planning and on Planned Parenthood — hundreds of thousands of Americans signing petitions, showing up at rallies, calling Congress – is extraordinary. But it doesn’t surprise me. One in five American women has gone to Planned Parenthood at some point in her life, for respectful, compassionate, quality care. And now those Americans are going to have our back.

I feel like I’ve turned into an IMF groupie by putting up yet another link to them shortly after featuring one of their studies on the dominance of the finance sector, but here I go again.  I do spend time gleaning data from their site so maybe it’s just that I keep bumping into things.  The IMF says we have a Global Job Crisis.

At the end of his magnum opus, The General Theory, Keynes stated the following: “The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes”.

Not everyone will agree with the entirety of this statement. But what we have learnt over time is that unemployment and inequality can undermine the very achievements of the market economy, by sowing the seeds of instability. In too many countries, the lack of economic opportunity can lead to unproductive activities, political instability, and even conflict. Just look at how the dangerous cocktail of unemployment and inequality—combined with political tension—is playing out in the Middle East and North Africa.

Because growth beset by social tensions is not conducive to economic and financial stability, the IMF cannot be indifferent to distribution issues. And when I look around today, I am concerned in this regard. For while recovery is here, growth—at least in the advanced economies—is not creating jobs and is not being shared broadly. Many people in many countries are facing a social crisis that is every bit as serious as the financial crisis.

Unemployment is at record levels. The crisis threw 30 million people out of work. And over 200 million people are looking for jobs all across the world today.

The jobs crisis is hitting the young especially hard. And what should have been a brief spell in unemployment is turning into a life sentence, possibly for a whole lost generation.

In too many countries, inequality is at record highs.

As we face these challenges, remember what we have accomplished. Under the umbrella of the G20, policymakers came together to avoid a financial freefall and probably a second Great Depression.

Today, we need a similar full force forward response in ensuring that we get the recovery we need. And that means not only a recovery that is sustainable and balanced among countries, but also one that brings employment and fair distribution.

This is part of a speech given by Dominique Strauss-Kahn, Managing Director, International Monetary Fund. He argues that financial sector reform is central to the problem of getting back on track.  It’s worth reading the entire thing or you can watch the video here.  Occasionally, I remember why I thought it was important to study economics.  This is one of those times.

The so-called “Gang of Six” is still anxious to put social security on the bargaining table. I still can’t figure out why every time some politician wants to talk about the Federal Deficit--in this case Senator Mark Warner–they mistakenly include the stand-alone program.

Including Social Security in the Gang of Six package appears to be a concession by Democrats made in exchange for agreement to raise some revenue by Republicans. But liberals in the Senate and House have made clear they will not stand for any cuts to benefits.

The 2012 budget passed by the House on Friday does not include reforms for Social Security. House Budget Committee Chairman Paul Ryan (R-Wis.) instead called for a trigger in the budget whereby the president and Congress would have to propose solutions once the Board of Trustees certifies the program is in trouble. Presidet Obama in his 2012 budget and in a speech last week did not lay out plans to reform Social Security.

Warner said the Gang is “very close” to an agreement that includes spending cuts and tax increases such as be eliminating the home mortgage tax deduction.

“We are going to make everybody mad with our approach,” he said.

Warner made clear he is opposed to the House Republican 2012 budget’s reliance on cuts to Medicare—he called it a “massive transfer of responsibility onto our seniors”– but he did not say how the Gang of Six will approach the massive entitlement program.

Please join me as I scream.  How stupid do they think we are?

Ninety-one year old Pete Seeger will be joined by David Amram, 80, and Peter Yarrow, 73 on the stage to inspire young people to be active in political and social justice movements.  Yarrow had just returned from a series of rallies in Wisconsin.

The three artist-activists say they are fired up by recent protests — from Egypt to Wisconsin — and by the enthusiasm of their youthful kin, who will join them onstage.

“I do have the feeling that the kind of energy we felt in the ’60s is in the air now,” Mr. Yarrow said. “That energy seems to be reigniting itself.”

That concert should be a treat.  It’s nice to see these guys seem to never tire of singing songs of justice. It’s important that a new generation hear these truly American songs.  I was interested in reading that many kids and grandkids of these folk singers are now in the family business and may show up on stage with them now and then.

Okay, this is something that kinda surprised me from the WSJ: “Greenspan Steps Up Call to End Bush-Era Tax Cuts”.  I still haven’t figure out why any one thinks he’s still relevant, but oh, well.  At least, he’s on the right side of this one.

Former Fed Chairman Alan Greenspan is stepping up his call for Congress to let the Bush-era tax cuts lapse.
In an appearance Sunday on ABC’s “Meet the Press,” Mr. Greenspan used his strongest words yet to urge lawmakers to let them expire. The risk of a U.S. debt crisis, he said, is just too big. Mr. Greenspan, who retired from the Federal Reserve in 2006, had endorsed the cuts back in 2001 championed by then-President George W. Bush.

“This crisis is so imminent and so difficult that I think we have to allow the so-called Bush tax cuts all to expire. That is a very big number,” he said, referring to how much the U.S. government could save from letting income taxes go back up to levels last seen under former President Bill Clinton.

Mr. Greenspan was talking about re-imposing the taxes for all Americans. The Treasury has estimated that a permanent extension of all the Bush tax cuts would cost $3.6 trillion over the next decade. Allowing taxes to increase on those in the top income brackets would take the cost to the government down to $2.9 trillion, according to White House estimates.

CBS news has done some data gathering on taxes as part of its Tax Day coverage: Wealthy Americans see drop in federal taxes; High-earning Americans pay less in taxes than in previous years; nearly half of U.S. households will pay no income taxes at all.

The Internal Revenue Service tracks the tax returns with the 400 highest adjusted gross incomes each year. The average income on those returns in 2007, the latest year for IRS data, was nearly $345 million. Their average federal income tax rate was 17 percent, down from 26 percent in 1992.

Over the same period, the average federal income tax rate for all taxpayers declined to 9.3 percent from 9.9 percent.

The top income tax rate is 35 percent, so how can people who make so much pay so little in taxes? The nation’s tax laws are packed with breaks for people at every income level. There are breaks for having children, paying a mortgage, going to college, and even for paying other taxes. Plus, the top rate on capital gains is only 15 percent.

There are so many breaks that 45 percent of U.S. households will pay no federal income tax for 2010, according to estimates by the Tax Policy Center, a Washington think tank.

The sheer volume of credits, deductions and exemptions has both Democrats and Republicans calling for tax laws to be overhauled. House Republicans want to eliminate breaks to pay for lower overall rates, reducing the top tax rate from 35 percent to 25 percent. Republicans oppose raising taxes, but they argue that a more efficient tax code would increase economic activity, generating additional tax revenue.

The row of shotguns featured on the first season DVD set of Treme are set to be demolished as blight.

New Orleans is abuzz with the second season of Treme about to start up on HBO.  I have to admit that I have not watched it since I’m still working through my dose of PTS from Katrina and the aftermath. However, for those of you that are fans of the show, you can get it now on DVD and you can get a bit of a taste in what’s in store for you in season two from this story from the TP.  The show evidently ended last season with the city’s evacuation.  That’s something I will NEVER forget.  The show has been great for the city, overall and it’s producers have taken on a lot of causes around here including a fight to save some historic properties featured in the series’ promotions.  Just thought I’d add some insight into what the production brings to the city including its musicians.  Here’s a little drama from Hollywood South.

… production money is being spent daily in New Orleans for locations, for equipment, material, labor and talent. In the first two seasons, for example, about $2 million in music licensing money was paid for the rights to songs by New Orleans artists, alone. Such expenditures — with or without any charity component — are the crux of the real economic relationship between a film company and the community in which it works. It is a straight-up transaction. We come here to shoot a movie. We pay a variety of local vendors, government fees and individuals to do it. And for virtually every other movie shot in Louisiana, that is it — end of story.

Thought I’d end with a treat from Pete Seeger to get you through your coffee:


What’s on your reading and blogging list today?

Unemployment Details

Posted: March 4, 2011 | Author: | Filed under: jobs, U.S. Economy, unemployment | Tags: , , , , | 12 Comments


Here’s the details on the current BLS job survey for February.  It came in pretty much as anticipated.  The nifty graph and the following analysis come via Calculated Risk. We can say definitively that this is the worst job market since World War 2.  The recovery path has created far few jobs than any of the previous post WW2 recessions.  You can’t judge a jobs market by the unemployment rate alone.  The devil is definitely in the details so let’s get into the report’s finer points.

This wasn’t a great report. Heck, it wasn’t a “good” report. But it was a little better than most recent reports.

If we average the last two months together, the 63,000 payroll jobs added in January and the 192,000 payroll jobs in February, that gives 127,500 payroll jobs per month. And that is a barely enough to keep up with the growth in the labor force. Private payrolls were a little better at an average of 145,000 per month, as state and local governments continued to lay off workers (something we expect all year).

The decline in the unemployment rate from 9.0% to 8.9%, was good news, especially since the participation rate was unchanged at 64.2%. Note: This is the percentage of the working age population in the labor force.

The decreases for the long term unemployed, and for the number of part time workers for economic reasons, and the decline in U-6 to 15.9% is all welcome news – although the levels are still very high.

The average workweek was unchanged at 34.2 hours, and average hourly earnings ticked up 1 cent. Both disappointing.

You can see the details here at the BLS site. The details that are most overlooked by people that don’t know how to view unemployment statistics representing people that have become so discouraged they either leave the labor force or become what is known as ‘marginally attached’.  Another tell tale sign of problems are the underemployed, workers who can only find part time jobs when they really want to work full time, and workers that are stuck working as temporary workers.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 8.3 million in February. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)

In February, 2.7 million persons were marginally attached to the labor force, up from 2.5 million a year earlier. (These data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

Among the marginally attached, there were 1.0 million discouraged workers in February, a decrease of 184,000 from a year earlier. (These data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.7 million persons marginally attached to the labor force in February had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities. (See table A-16.)

This is a very sluggish recovery that suggests policymakers are just letting the recession take its ‘natural path’ to recovery. We definitely have do-nothing economic policy right now. What really frightens me is the forthcoming do-damage austerity policy coming from states and the federal government. We wouldn’t have the size of budget deficits that we know have if the government had spent last time healing the capital positions of Wall Street shadow banks and more time healing the jobs and household situation. After all, the real wealth and well-being in an economy comes from actual goods and services produced that add-value. There is a lot more economic well-being derived from better roads, households with modern cars and appliances, and more thriving small businesses than paperwork mills that stand between buyers and sellers of goods and services and financial gambling that drives prices of things unrealistically high through speculation.

What we need is some real leadership with knowledge of economic policy. It’s obvious from these sluggish numbers that we don’t have that at all.

There’s a good article up at Truth Out that you may want to check out. It’s called “How the Rich Soaked the Rest of Us”. It’s got some nifty graphs too. It basically explains how hoarding of money in the hands of a very few has cut off the kind of growth in industries, jobs, and commerce that would allow every one to share in a robust economy.

Over the last half-century, the richest Americans have shifted the burden of the federal individual income tax off themselves and onto everybody else. The three convenient and accurate Wikipedia graphs below show the details. The first graph compares the official tax rates paid by the top and bottom income earners. Note especially that from the end of the Second World War into the early 1960s, the highest income earners paid a tax rate over 90 percent for many years. Today, the top earners pay a rate of only 35 percent. Note, also, how the gap between the rates paid by the richest and the poorest has narrowed. If we take into account the many loopholes the rich can and do use far more than the poor, the gap narrows even more.

One conclusion is clear and obvious: the richest Americans have dramatically lowered their income tax burden since 1945, both absolutely and relative to the tax burdens of the middle income groups and the poor.

It’s obvious this tax policy has contributed to this horrible middle class against middle class anger that is contributing to the current war on teachers, firefighters, and police.   The wealth accumulated from the last few decades of economic growth has shifted to the top while the burden of taking care of everything has shifted to the middle and bottom.  This has fueled this dangerous resentment.  Many people are clearly mad at the wrong folks.   The old conservative adage is that these rich people create businesses and jobs. Evidence shows that this clearly isn’t the case.

How do the rich justify and excuse this record? They claim that they can invest the money they save from taxes and thereby create jobs etc. But do they? In fact, cutting rich people’s taxes is often very bad for the rest of us (beyond the worsening inequality and hobbled government it produces).

Several examples show this. First, a good part of the money the rich save from taxes is then lent by them to the government (in the form of buying US Treasury securities for their personal investment portfolios). It would obviously be better for the government to tax the rich to maintain its expenditures, and thereby avoid deficits and debts. Then, the government would not need to tax the rest of us to pay interest on those debts to the rich.

Second, the richest Americans take the money they save from taxes and invest big parts of it in China, India, and elsewhere. That often produces more jobs over there, fewer jobs here, and more imports of goods produced abroad. US dollars flow out to pay for those imports and so accumulate in the hands of foreign banks and foreign governments. They, in turn, lend from that wealth to the US government because it does not tax our rich, and so we get taxed to pay for the interest Washington has to give those foreign banks and governments. The largest single recipient of such interest payments today is the People’s Republic of China.

Third, the richest Americans take the money they don’t pay in taxes and invest it in hedge funds and with stockbrokers to make profitable investments. These days, that often means speculating in oil and food, which drives up their prices, undermines economic recovery for the mass of Americans and produces acute suffering around the globe. Those hedge funds and brokers likewise use part of the money rich people save from taxes to speculate in the US stock markets. That has recently driven stock prices higher: hence, the stock market recovery. And that mostly helps – you guessed it – the richest Americans who own most of the stocks.

It’s obvious that we’ve basically slowed the US jobs and growth machine down with policy that siphons off economic growth to wealth hoarding instead of job-creating businesses and infrastructure.  It’s time to find some leaders that realize this and will do what it takes to get us off the ‘natural’ sluggish path and on the path to a better future for every one.  Until we actually have real commerce producing real goods and services being serviced by people with real jobs, we’re not going to see much of a change.  Shuffling paper, creating exotic financial instruments and bubbles, and devastating people’s home values and savings through speculative quagmires isn’t getting the majority of us anywhere.  It’s time for the  majority of us to stand up and demand that our tax dollars and policies represent improvements for all.  It’s time to end privatization schemes, excessive speculation, and captured regulators and move back to the days of when our economy benefited more than just the privileged few.

update: You may want to check out this study at Brookings Institute:  Have Earnings Actually Declined?

This analysis suggests that earnings have not stagnated but have declined sharply. The median wage of the American male has declined by almost $13,000 after accounting for inflation in the four decades since 1969. This is a reduction of 28 percent!

Friday Reads

Posted: March 4, 2011 | Author: | Filed under: GLBT Rights, jobs, Marriage Equality, morning reads, U.S. Economy | Tags: , , | 33 Comments

Good Morning!

I’ve turned into a bit of broken record on the inability of the U.S. economy to produce not only jobs, but well-paying jobs.  This article at The Nation basically says a lot of the same things I’ve been saying and thinking for several years.  It’s called ‘Why Washington Doesn’t Care About Jobs’.

This disconnect between the jobs crisis in the country and the blithe dismissal thereof in Washington is the most incomprehensible aspect of the political moment. But I think there are two numbers that go a long way toward explaining it.

The first is 4.2. That’s the percentage of Americans with a four-year college degree who are unemployed. It’s less than half the official unemployment rate of 9 percent for the labor force as a whole and one-fourth the underemployment rate (which counts those who have given up looking for work or are working part time but want full-time work) of 16.1 percent. So while the overall economy continues to suffer through the worst labor market since the Great Depression, the elite centers of power have recovered. For those of us fortunate enough to have graduated from college—and to have escaped foreclosure or an underwater mortgage—normalcy has returned.

The other number is 5.7 percent. That’s the unemployment rate for the Washington/Arlington/Alexandria metro area and just so happens to be lowest among large metropolitan areas in the entire country. In 2010 the DC metro area added 57,000 jobs, more than any in the nation, and now boasts the hottest market for commercial office space. In other words: DC is booming. You can see it in the restaurants opening all over North West, the high prices that condos fetch in the real estate market and the general placid sense of bourgeois comfort that suffuses the affluent upper- and upper-middle-class pockets of the region.

What these two numbers add up to is a governing elite that is profoundly alienated from the lived experiences of the millions of Americans who are barely surviving the ravages of the Great Recession. As much as the pernicious influence of big money and the plutocrats’ pseudo-obsession with budget deficits, it is this social distance between decision-makers and citizens that explains the almost surreal detachment of the current Washington political conversation from the economic realities working-class, middle-class and poor people face.

It is unbelievable we could be facing such a serious level of unemployment and underemployment at this time in our history.  We have full knowledge of what it takes to deal with this problem and yet our policy makers do nothing.  No less than Ronald Reagan would’ve found this situation intolerable who once said:

“Idle industries have cast workers into unemployment, human misery and personal indignity.”

Our economy is seriously under-performing.  At the same time, our politicians are slashing both taxes and budgets which have been shown by nearly 70 years of economic data and history to be a short road to disaster.   Our politicians are only responsive to their political donor base and to their own personal whims.  Christopher Hayes’s continues this theme in his article cited above in The Nation.

In a 2007 paper titled “Inequality and Democratic Responsiveness in the United States,” Princeton political scientist Martin Gilens analyzed 2,000 survey questions from 1981 to 2002, looking for the relationship between public opinion and policy outcomes. He found that “when Americans with different income levels differ in their policy preferences, actual policy outcomes strongly reflect the preferences of the most affluent but bear little relationship to the preferences of poor or middle income Americans.”

There is only so much social distance a society can take. The social science literature shows that as social distance increases, trust declines and aberrant and predatory behavior increases. The basic mechanisms of representation erode, and the social fabric tears. “An imbalance between rich and poor,” Plutarch warned, “is the oldest and most fatal ailment of all republics.”

I’ve posted a graph from FRBSF Economic Research that shows our ‘output’ gap and its trajectory.  I don’t think you have to be a mathematical genius to extrapolate how many years it’s going to take before we close the gap and return to our potential. It looks at least between 6 -8 years just from eyeballing that graph.  The output gap represents what our economy should be producing–implying more jobs–and our production shortfall.  We not only have a huge output gap but a measurable and significant income gap between those who actually produce something and those that skim money off of transactions or gamble themselves into a profit via arbitrage.  It is never a good sign when wealth goes to gamblers and third party payers who drive a wedge between buyers and sellers and distort market prices and quantities.  I continue to be amazed at the callous disregard for history, economics, and people that characterize our policy makers. We have too many lawyers and not enough economists at the helm.

Agent Orange is promising “GOP cover” for slashing “entitlements”.  I still hate the way  that benefits that I have paid for since I was 14 years old and held my first job down as a docent at a museum could be called an “entitlement” .  They spit that word out with the implication that only lazy and shiftless people collect THAT kind of money.  We’re entitled to it because we paid for it dear Speaker!  Anyway, raise you’re hand if you think this is a honey trap of sorts!  This is from The Hill.

Moreover, Boehner has personally promised Obama that he will stand side-by-side with him to weather the strong political backlash expected from any proposal to cut entitlement costs.

So far, Obama has not taken Boehner up on the deal, as Democratic strategists have warned the White House not to cut payments from the Social Security trust fund or to reopen the acrimonious debate over healthcare.

Social Security reform has been prominent in behind-the-scenes talks about entitlement spending because it is relatively easy to reduce its cost projections — at least, compared to the complex morass of healthcare policy reform.

Social Security has been known traditionally as the “third rail” of politics, because grappling with the issue is considered as deadly as touching an electrified subway rail.

President George W. Bush saw his post-election political capital plummet in 2005 after Democrats led by Sen. Max Baucus (D-Mont.) excoriated his administration’s proposal to divert a portion of Social Security revenues into private retirement accounts.

Boehner has promised that Republicans will not exploit entitlement reform for political gains if Obama shows leadership on curbing the cost of Social Security and other mandatory spending programs, according to sources familiar with the offer.

An interesting post has shown up at Politico implying that many Democratic Senators have decided to retire.  It’s a rather long bit but I’d like to concentrate on one senator I will not miss.

Five senators from the Democratic side of the aisle have already decided to hang ’em up after this term. Each has his own reasons, but it mostly boils down to this: For some senators, a job in the “most exclusive club” is not worth the hassle anymore.

“It’s about campaigns,” Sen. Joe Lieberman (I-Conn.), a retiring member of the Democratic Caucus, told POLITICO. “It’s about both the unremitting — that’s a bad word to use — about the constant pressure to raise money and travel all over the country doing that and the nastiness of the campaign. … I have no second thoughts about it.”

Here’s the list of the five retirees:  Kent Conrad (ND), Joe Lieberman (CT), Daniel Akaka (HI), Jeff Bingaham (NM), and Jim Webb (VA). Does this make life easy or difficult for Patty Murray who gets the job of funding and re-electing Democratic Senators?

“As Republicans face a brutal primary between a flawed Washington establishment candidate and a right-wing extremist who is raising money at a good clip, Democrats will field a strong candidate,” promised Democratic Senatorial Campaign Committee Chairwoman Patty Murray (Wash.). “The 2012 Virginia Senate race will be competitive but Democrats will prevail there just like we did in 2006 and 2008.”

Given Democrats’ near-certain difficulties in holding the North Dakota open seat and its incumbents representing Republican-leaning states like Nebraska, Missouri and Montana, the party has to hope Murray is right.

So, I’ve got one last item to leave you with before I turn the comments and the reading suggestions over to you.  It comes from WAPO columnist Jonathan Capehart.  It seems GLBT activists are having a difficult time holding on Congressman to his promise on the issue of marriage equality.  Congressman Sam Arora from Maryland holds a key vote in the Judiciary Committee and is being noncommittal after accepting a lot of dollars and support from GLBT groups.

According to the Baltimore Sun, Arora has said he will vote for the marriage equality bill in the judiciary committee, but has yet to commit to voting for the measure when it hits the floor, possibly next week. “This bill deserves an up-or-down vote, so I’m voting to send it to the floor,” he told the Sun. That sudden reluctance to say he will vote for a bill he co-sponsored has friends mystified and former supporters fuming, at best, calling him a liar and demanding their donations back, at worst.

Even Arora’s friends from Democratic Party politics and Hillary Clinton’s presidential campaign are mystified. Democratic strategist Karen Finney called his apparent change of heart “[v]ery disappointing” in a post on Arora’s Facebook page. And Neera Tanden, policy director for Clinton’s campaign and then the domestic policy adviser on the Obama-Biden campaign, is among those who wants her contribution refunded.

This brings me back to my neighbor Antwoine’s sage advice on politicians.  It doesn’t matter who they are or where they come from, you elect them and then they turn on you.  That about sums it up for me.

What’s on your reading and blogging list today?

Unemployment is still the Nation’s Number 1 problem

Posted: March 3, 2011 | Author: | Filed under: jobs, unemployment | Tags: , | 16 Comments

The Gallup unemployment survey shows U.S. unemployment back up to 10.3% in February.  It finds underemployment to be 19.9%.

The percentage of part-time workers who want full-time work worsened considerably in February, increasing to 9.6% of the workforce from 9.1% at the end of January. A larger percentage of the U.S. workforce is working part time and wanting full-time work now than was the case a year ago (9.3%).

This is undoubtedly due to the austerity budgets of states and municipalities combined with the inaction on the part of the Federal Government.   The original Obama stimulus was 40% tax cuts and the recent tax cuts enacted and extended in December continue to prove to be worthless in terms of stimulating the economy and creating jobs as many economists–including this one–have warned.

The labor market continues to show mixed results for job creation depending on which study you read.

The report from ADP (.pdf) also shows continued improvement. It says that 217,000 jobs were added to the private sector in February. That’s the second best result, after it’s tally for December of 247,000, since the recovery began last year. It’s also slightly higher than the 189,000 it recorded for January. Of course, the Bureau of Labor Statistics only indicated 50,000 private sector jobs added that month, so the divergence between ADP and the BLS could continue.

Next, there’s the Challenger, Gray & Christmas report (.pdf). It doesn’t provide good news. The report says planned job cuts rose to 50,702 in February — the most since March 2010. This also marks the second straight month of rising planned layoffs, according to the firm. A big chunk of February’s layoffs came from government and non-profit employers, which reported 16,380 planned cuts — up 154% from January. If firings are increasing, then they will make it more difficult for the economy to add net new jobs.

Calculated Risk added two points to consider

• Remember that the weak payroll report in January (only 36,000 jobs added) was blamed on the snow. Usually I don’t buy the weather excuse, but it did appear weather played a role this time. If there is a bounce back, it will be useful to average the last two months together to estimate the current pace of payroll growth. If there is no bounce back – that would definitely be bad news.

• Even if the payroll report shows improvement, the employment situation remains grim. There are 7.7 million fewer payroll jobs now than before the recession started in 2007 with almost 14 million Americans currently unemployed. Another 8.4 million are working part time for economic reasons, and about 4 million more workers have left the labor force. Of those unemployed, 6.2 million have been unemployed for six months or more.

The official rate as measured by the BLS comes out tomorrow morning.   Given the ongoing mixed signals in various labor and job statistics, it seems clear that we need some kind of jobs program.   NFL negotiations are going down to the wire.  Perhaps, a potential NFL lockout will get some people to at least notice what’s going on with jobs, jobs losses, and collective bargaining.  We have to do something to get policy makers to realize that what they’ve been doing isn’t working because it’s not getting people back to work.

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