Avdat

The GOP jobs market

For you, is Labor Day 2011 a well-deserved day off from work? Or is it another tedious day of puttering about the house, sending out resumes and hoping that one day you'll rejoin the workforce? Either way, it's a good day to look back at how we got in this mess and take stock of what may get us out of it.

To make things easy we can compare two very different approaches to job creation, lying almost side by side in time and place. There's the liberal approach, which would have the government prop up the labor market with deficit spending, either by hiring people directly or by letting bids for all sorts of government-funded projects. We tried that in 2009.

And then there's the conservative approach, which favors cutting taxes, regulations and government spending in order to create a friendly environment for private sector job creation. Conservatives distrust fiscal stimulus because they believe that deficits and bureaucracies crowd out private investment. This is the approach we're trying right now.

And to make things even easier we have charts! From the Bureau of Labor Statistics, here's the unemployment rate from January, 2008 to June of this year:

From the Lehman Brothers collapse in September, 2008 to President Obama's inauguration the next  January, the unemployment rate jumped nearly two percentage points. Remember, unemployment was already an intolerably high 8% the day he set foot in the White House.

Then came a series of typically liberal moves: the stimulus bill in February, Cash for Clunkers and the GM takeover in the spring. Allowing a bit of time for the pig to move through the python, when the full force of Obama's plan hit, the unemployment rate was flirting with 10%. And there it leveled off and began to dip a bit.

Then the Republicans won control of the House, and forced a more conservative approach. In late 2010 Congress extended the Bush tax cuts and cut the payroll tax. This year Republicans have forced budget cuts at the federal level. And what has the unemployment rate done? It's edging back up again.

Here's another chart that's useful for evaluating conservative economic policy. It compares private and public sector job creation so far this year:

As the stimulus money petered out, state and local governments began laying off people. But the private sector has failed to add enough jobs to keep up with population expansion, much less reduce unemployment . Not to put too fine a point on it, but the lousy job market is a job market designed by conservatives. Shrinking the bureaucracy hasn't kicked off a surge in private sector hiring. 

But we knew that, didn't we? This is what John Maynard Keynes taught us: markets are not self-correcting. At times they need government intervention to get them back on track.

On the other hand, the best we can say about the liberal approach was that it was a kind of triage for an critically wounded economy, but by no means a cure. This is because the stimulus was not big enough. We now know that in late 2008 the economy contracted far more than economists or politicians were aware of at the time.

We don't need more tax cuts, because people will just save the extra money or pay off their debts. Indeed this is what they ought to do, but that won't put people back to work. Since neither consumption nor private investment is resulting in new hiring, the government needs to put people to work. In a big way.

And there's a big need. Our nation's roads and bridges are in terrible shape. Our schools are crumbling. We need a new electrical grid that will transport clean energy to homes and workplaces.

And we can afford it. On Friday, the real interest rate on the ten year bond fell to 0%. Bond purchasers are basically giving the U.S. an interest free loan. We've heard Republicans say so often, If the nation's households have to tighten their belts, so should the government. Well, if the nation's households were offered interest free loans they'd take them, wouldn't they? So should the gubmunt. Spend. Put people back to work.

And that's exactly what President Obama needs to tell Congress this week. Normally, he would have benefited from this clear contrast between two very different plans, but since he's acquiesced to GOP demands, he's on the hook for the economy, without the option of running against a do-nothing Congress. That can change, if he wants it to.

The year that nothing happened

Ethan turned 14 last Friday. As we were celebrating his birthday it occurred to me that his arrival is about all that I remember of the year 1997. I scratched my head, but all I could recall was that the comet Hale-Bopp appeared in 1997--that plus the accompanying cult mass-suicide. And I'm sure that the only reason I remember the comet is because of something personal--in this case, work-related. I had to attend an Easter sunrise service at 6:00 AM that year, and the comet in the eastern sky was breathtaking.

Was 1997 really such a forgettable year? Or do memories of my petite wife's swelling belly crowd out all other memories? I've looked up 1997 on Wikipedia and it turns out that yes indeed, it was the year that nothing happened.

True, there was a plane crash, but there always is. Gianni Versace was gunned down, but somebody always gets murdered. Bill Clinton attended his second inaugural, but someone always gets inaugurated every four years.

Ah! How could I have forgotten? That was the year that Princess Diana died! (I'm scanning the Wikipedia article while I write this post). I know. That was 26 days after Ethan was born. I must have been sleep-deprived.

We need another year like 1997. 2011 is barely half-over, and look at the toll it's taken:

• Earthquake, tsunami, and nuclear disaster in Japan.
• U.S. credit rating downgraded.
• Eurozone on the edge of collapse.
• No jobs, no jobs, no jobs.
• Partisan paralysis in Washington.
• Tornadoes destroy Joplin, Missouri, Tuscaloosa, Alabama, and plenty of other places.
• War in Libya, Syria, Yemen, Bahrain, Afghanistan, Iraq.
• Mass shooting of teenagers in Norway.

On the other hand, if the Arab Spring and the death of Bin Laden put Arab despotism and militant Islam to bed, perhaps 2011 will look better in retrospect than close up.

Nevertheless, 1997 can not possibly be "the year that nothing happened." Why, that's the year we procreated! The advent of our firstborn! A year of magic and portent!

Suicide bombing the economy

It's almost worthless blogging about the debt ceiling crisis. No sooner does someone propose a plan than it's shot down. Your brilliant thoughts on Plan X are already obsolete.

I will say this: until last week it seemed inevitable that the Republicans would cave. After all, the President's a Democrat; he has a veto pen, and he's demanded new revenues. But this week it seems inevitable that Democrats will cave.

What changed? Until last week I assumed that the Republicans were only using the threat of a default as a bargaining chip. But now it looks like a lot of them in the House really do want a default.

This is madness.

And yet, as somebody somewhere on the internet said, If you're negotiating with somebody and you say, "If you do that you will destroy the world," and they say, "So what?" Guess who's in the stronger bargaining position?

I heard a GOP Congressman from South Carolina on the radio saying that default was no big deal because the government would continue to collect a whole lot of revenue. No. Not by a long shot.

Megan McArdle, no socialist, has composed a list of all the stuff that we can't pay for next month if we prioritize Social Security, combat pay, and Medicare--as the Tea Party would have us. It's like, everything. No salaries for federal prison guards or border patrol agents, no bullets for the troops, no disaster assistance and no FDIC insurance for your bank account. For starters.

I expect a certain amount of venality and corruption from Congressmen, but I don't expect them to be dumb as a bag of hammers. What can you do with such willed ignorance combined with a suicide bomber's negotiating mentality?

You probably cave.

I think that the best that Democrats and the progressive movement can hope for now is that the Republicans, flush with victory, will nominate an extremist like Bachmann, Perry or Palin. Obama can beat any of those three, but he'll have to abandon his post-partisan persona and run a brass knuckles campaign that makes the election all about the challenger, rather than the incumbent. That's the way Harry Reid beat Sharon Angle last year.

He can't let it be a referendum on his record because the economy will certainly be in the toilet next year--precisely because of whatever cuts he agrees to in exchange for raising the debt ceiling. Boehner's plan (and Reid's is much the same) try to address our long term debt by cutting programs in the short term. All that will do is deliver the coup de grâce to this jobless, anemic recovery. Do people realize that cutting government spending means laying off government workers and ending programs that help needy people? Is that what we need right now?

Let's make a deal

This could be very good news:

President Obama is pressing congressional leaders to consider a far-reaching debt-reduction plan that would force Democrats to accept major changes to Social Security and Medicare in exchange for Republican support for fresh tax revenue.

Rather than roughly $2 trillion in savings, the White House is now seeking a plan that would slash more than $4 trillion from annual budget deficits over the next decade, stabilize borrowing, and defuse the biggest budgetary time bombs that are set to explode as the cost of health care rises and the nation’s population ages.

That would represent a major legislative achievement, but it would also put Obama and GOP leaders at odds with major factions of their own parties. While Democrats would be asked to cut social-safety-net programs, Republicans would be asked to raise taxes, perhaps by letting tax breaks for the nation’s wealthiest households expire on schedule at the end of next year.

Silly me. I thought that this was what they were already working on. How can you address the nation's long term debt without addressing the federal budget's most expensive programs? But I am glad that they are finally getting down to brass tacks.

This is what I hoped would happen when the Republicans took control of the House. After the stimulus, health care reform, an ultimately failed bid to do cap and trade, a new arms control treaty, and a ton of other legislation, my sense was that Democrats were exhausted. Even though I'm not a Republican, I believed that if the government were to make any progress on the nation's problems, the energy would have to come from the other side of the aisle.

We don't have two political parties because half the country is good and the other half is evil. We have two parties because given the size of this country and human fallibility, no one political party is going to be able to adequately address all the legitimate needs the country faces.

My only concern, and it is a big concern, is that I can never tell whether the Republicans are against the size of the government or the size of the debt. They tend to conflate the two. And in fact, the extremists like Grover Norquist actually want the debt to balloon so that one day, America will face a situation like the Greeks have faced this summer, and we'll be forced to privatize Social Security and end Medicare. So they cut taxes and increase spending, like during the Bush years. There's nothing conservative about that.

But maybe there are legitimate conservatives in the GOP who, given the choice between a big government in the red and a big government in the black, would choose the latter. I'd be happy if President Obama negotiated a deal with those folks.

I'm not talking about a deal like signing onto the Ryan plan. The Ryan plan actually ends Medicare and replaces it with a voucher system called "Medicare."

What I'm talking about are cuts in the form that we've already seen in the health care reform legislation--"cuts" that reward doctors and hospitals for best practices, cuts in the form of changing Medicare from a fee for service system to a fee for outcome system.

Liberal reaction to this trial balloon has ranged from measured (Kevin Drum) to paranoid (Talking Points Memo.) I'm disappointed with this. In fact, I've been disappointed with the conventional wisdom in the liberal blogosphere about the debt negotiations. It ranges from dread of Republicans for threatening to default on the nation's debt if they don't get their way to contempt at Obama for getting rolled in these negotiations.

As if a fair amount of brinkmanship isn't part and parcel of politics. Liberals sound like they did in the Bush years, whining about how mean the Republicans are. Frankly, I can't blame the Republicans for playing this card. It really maximizes the power of House Republicans, outnumbered as they are by the Democrats in the Senate and at the other end of Pennsylvania Avenue.

I only wish Democrats had played the same card first. In 2002, they could have held the debt ceiling hostage in exchange for the White House pulling the plug on any plans to invade Iraq. I would have supported that.

As to the President getting rolled, look at what he's shepherded through Congress so far. This is not a man who gets rolled. This is a man who gets stuff done.

The modern welfare state is a good thing, but it is always going to need tweaking to respond to demographic and fiscal changes. If Obama can ensure the long-term solvency of these programs with some tax increases and smart cuts, liberals should jump all over that.

I am a sinner

So, I was listening to American Family Radio yesterday. And this guy was saying that the modern welfare state is premised on class envy, which violates the 10th commandment ("Thou shalt not covet.")

Not only that, the welfare state takes hard-won earnings from some and gives them to others who haven't earned them. This violates the 8th commandment ("Thou shalt not steal.")

Thus, the social welfare state is rooted in an unbiblical worldview. (Religious right types are always going on about "worldviews," so this is a serious charge indeed.)

Now, says our host, surveys show that 70% of Democrats support redistributing wealth, while only 30% of Republicans support redistributing wealth. You do the math, and you'll know which political party is more biblical.

Geez; can't my politics just be wrong? Do they have to be sinful too?

Now if you read this blog you know that I am a pretty big fan of both the Bible and the modern welfare state. So you might expect me to mount a defense of the redistribution of wealth on biblical grounds.

But I don't want to do that. That would concede to much to the "world view" of the radio host. What I'd like to do is mount a defense of the welfare state on empirical grounds.

What I mean is that our religious principles should inform our politics in a general but not specific sense. Religious principles are effective for determining one's vision of the good life and a good society. They are not as effective for dictating the specific policies to get there. The details need to be hashed out on practical grounds; they are not articles of faith.

A few years ago I saw an anesthesiologist for back pain. He took a shine to me because I was a minister, and he was the son of a Methodist clergyman. In one visit he told me about a patient who asked him, "Are you saved?" The implication was that he wasn't going to let an unbeliever work on him. The doctor said he replied, "Saved from what?" The doctor shook his head at the memory. As if the Bible tells you how to go to heaven, AND how to put people under.

Both the radio host and this patient are good example of how, in an increasingly secular society, the religious right is overreacting by denying the secular its appropriate sphere of influence. There is a body of knowledge out there, available to all, regardless of creed, which can be tapped and used for the benefit of all, regardless of creed. Abraham Kuyper, no secularist, called this "common grace."

Human beings disagree on the facts and the interpretation of the facts embedded in this common grace, but that makes them right or wrong. That does not make them saints or sinners.Much less elect or damned.

That the religious right fails to get this accounts for some of the intransigence you see on the GOP side of the aisle these days. Of course the Chamber of Commerce types are going to fight a health care reform bill that's paid for with tax increases. They stand to lose a lot of money. Self-interest dictates that they will go to the wall over that. When you put them in a coalition with people who think that progressive tax rates are on the level of murder, adultery and idolatry, well, where's the room for compromise?

This is not how our government was set up to operate. Religious right mythology notwithstanding, the framers were men of a variety of theisms who, far from setting up a theocracy, created a government cumbersome enough to force compromise as a way of preventing tyranny.

We aren't in danger of tyranny. But we are in a situation that makes the gridlock of yesteryears look like a well-oiled machine. What's at stake is the full faith and credit of the U.S. government, and probably your job.

Is a little compromise worth your job? (And that's all that's at stake--not your soul). Isn't your job worth a little compromise?

Debt

My senior Senator, in concert with some Senators across the aisle, is proposing a plan to address the nation's mounting debt. This is all well and good, but I think that the debt problem is a lot like the Israeli-Palestinian problem: everybody basically knows what the solution is; all that's lacking is the will to do it.

Consequently, we don't need a new plan. We need a crisis that will provoke action. When Congress and President Reagan restructured Social Security in 1983, they did so because the Social Security Administration was less than a year away from not being able to write checks. When Congress and President Clinton balanced the budget in the late 1990s through a combination of tax increases and spending cuts, they were responding to the electoral shock of Ross Perot and his obsession with the debt.

No crisis means no action. And make no mistake, the budget cutting that's unfolding on Capitol Hill is not meaningful action on the debt. The programs that House Republicans have in their sights are thin slices of the budget pie compared to military spending and Medicare.

Actually there is a crisis today--a jobs crisis. Unemployment is still unacceptably high. Unfortunately, given the weakness of the economy, the budget trimming that Congress is getting ready to do will actually make the jobs crisis worse. The government recently revised down the GDP figures for the fourth quarter of last year. The lower growth was due to... wait for it... wait for it... reduced government spending.

Sigh.

Union busting's raison d'être

The draconian cuts in the House GOP budget is what you'd expect given what Republicans were campaigning for last fall. But this move at the state level to strip unions of collective bargaining rights--where did this come from? Granted Republicans and unions have never been BFFs, but why settle this score now?

Howard Fineman has a theory (ht):

"The GOP strategic aim is simple enough. If they can abolish union collective-bargaining rights, they can undermine the automatic payment of dues to the public-employee union treasuries. Shrinking those treasuries and reducing the union structure and membership will make it harder for Democrats and their allies to communicate directly with workers.

And under the infamous Citizens United Supreme Court decision, unions -- like corporations -- are free to spend as much as they want directly advocating for a candidate. That makes the math even more urgent as the 2012 election season approaches."

We've known for a while that this wasn't about balancing the budget in Wisconsin, or anywhere, since the unions already agreed to wage and benefit concessions. What it's about is building a structural, electoral advantage for the GOP. With Republicans running so many state houses, they can gerrymander Democrats out of Congress. And if they break the unions, they can gerrymander the cash away from Democratic coffers, so to speak.

Politics is a contact sport, so I suppose that I can't blame them for trying. But looking at what Republicans go to the mat over, it's hard to see how they stand for anything other than raw power. In the last Congress, they never offered any serious counter proposals to the Democrats. And why should they? They weren't there to solve problems. They were there to wound the President. And this year, it's wash, rinse, repeat. Only with majorities they can do more than obstruct. They can stick it to the opposition.

I know; I know. You didn't elect them to punch anybody in the mouth. You elected them because there were no jobs, and the Democrats had had their chance, and it was time to let the other side have its chance. But I warned you...

 

Bang your head

Republicans have flogged Democrats for years for plotting a government takeover of the health care system. So Democrats took them to heart. Last year they effectively passed Mitt Romney's health care reform. It leaves the private system intact while using a new mix of regulatory carrots and sticks to achieve universal coverage.

Well, imagine my surprise when I read last week that, upon further review, Republicans think a bona fide government takeover of health care would be... OK. From the Times-Dispatch editors:

The Times-Dispatch shares the opposition to the individual mandate. On several occasions we have explained our discomfort with a policy that permits the federal government to compel people to buy a specified product. A single-payer system that relied solely on taxes to pay for medical services probably would pass constitutional muster, although we would oppose relying on Britain's National Health Service as a model.

(Sound of me banging my head against the keyboard).

Well, that non-NHS system you think would sparkle in the eyes of the Founders is what they have in Canada, a program called...wait for it... wait for it... Medicare. Only it's open to everyone, not just those over 65. But hasn't your side spent the last two decades assuring us that Canadian-style health care is on par with, say, Haiti?

I think Jesus prophesied about these people when he said:

‘To what then will I compare the people of this generation, and what are they like? ³²They are like children sitting in the market-place and calling to one another,
“We played the flute for you, and you did not dance;
   we wailed, and you did not weep.”

For when the Daily Kos and Fire Dog Lake people came screaming for the insurance CEO's heads you said, "They're crazy socialists," but when the Messiah Obama came with no public option you said, "This man is overthrowing our law!"

At this point there's not much left to say. You will never, ever please these people.

At best, they seem to acknowledge that there's problems in the system, but their a priori opposition to any government action to address inequalities prevents them from endorsing anything more than wishful thinking as a solution. If markets and charities should solve this problem, they will, won't they?

At worst (and this seems less true of the Times-Dispatch editorial board and more true with the GOP leadership in Congress), it seems to be a case of, To hell with logic or coherent arguments. The only coherence on their side is, "If the Democrats are for it; we're against it, even when they adopt our positions."

Glum

For a while there I was relieved that Democrats had lost the House, relieved in that way you were relieved when your father finally got home after being threatened all day with, "Just wait 'til your father gets home." After a while there's no more dread, just an eagerness to get it over with.

But today I am glum because, as Kevin Drum points out here, it wasn't just the economy, stupid. The wretched economy probably cost Democrats 40-some seats, but they lost 60-some. So to some extent this election was a repudiation of Democratic policies. And this makes me sad because the policies were basically sound.

Nobody liked TARP; it wasn't even Obama's creation; it was President Bush's idea, but if Bush hadn't done it, global capitalism would have ground to a halt. Maybe in a few centuries people will have no more stake in keeping capitalism alive than we do keeping in feudalism alive, but we aren't there yet. Meanwhile, we're blaming the wrong guy for prescribing the right medicine for a serious, acute illness.

And then there's health care reform. The GOP didn't have the votes to stop it, but it looks like they had the moxie to demonize it. It's been said before, but it bears repeating: the bill the President signed was basically Mitt Romney's version of health care reform, the GOP alternative to HillaryCare in 1994, and yet the Republicans threw their own policy under the bus just to have something to run against. The cynicism is breathtaking, and you know what? It worked!

I know; I know; I sound like I'm shocked that there's gambling in Casablanca. Politics is a sordid business full of venal people. Being a student of history, I should not be surprised. LBJ signed the Civil Rights Act, and southerners have been punishing Democrats ever since.

I am sure that one day the outcry over being forced to buy health insurance will sound as petty as the outcry over being forced to serve all comers in one's business establishment. I just wish that good politics and good public policy aligned better, that public servants didn't have to wait for history to vindicate them. Maybe then we'd have better public servants.

P.S. Drum's chart does show that the Democrats were bound to lose the House anyway, simply on the weakness of the economy. So given the choice between doing nothing and losing, and doing something and losing, they chose the latter, and that was certainly the right choice. Evan Bayh is full of it.

Democrats perfect the b****slap

The following is not an Onion ad. Nor is it something some frat boy poly-sci majors cooked up while on a bender, as my wife insisted it must be when I first showed it to her. This is an actual ad from the U.S. Senate race in Kentucky:

 

A few years ago Josh Marshall coined the phrase "bitch-slap politics" to describe the Bush campaign's Swift Boats ads against John Kerry. Those ads made Kerry look weak in two ways: one, by casting doubt over his war record and two (and more importantly), by hitting Kerry below the belt and betting on the fact that he wouldn't hit back. I can remember reading embittered diarists at Daily Kos who ached for a Democratic Karl Rove to step forward and give the Republicans as good as we were getting.

Well here it is! The above ad is equal to anything Rove could come up with in terms of contempt for the facts, the opponent's humanity and voter intelligence and incredulity.Ya like it?

Sure, the chutzpah of a Democrat getting to the right of his wingnut opponent on religion is breathtaking. Sure, the schadenfreude of seeing Republicans hoisted on their own petard of populist bigotry is sweet indeed.

But I'm not happy with it. Not happy at all. I have no idea what Ron Paul's religion really is, but it ought to be tested in the crucible of the confessional or at the Lord's table, not in the three-ring circus of a political campaign.

In the meantime, Kentuckians need to take to heart the fact that there is a body of secular wisdom, available to all, regardless of religious belief, the mastery of which is sufficient for the art of statecraft. Your city councilman doesn't need to be saved in order to get the potholes filled. Your Senator doesn't need to be sanctified in order to approve cabinet secretaries. Your President doesn't need to be orthodox in order to negotiate an arms control treaty.

It doesn't reflect well on the Bluegrass state that this ad has gotten Jack Conway back in the race. You mean that you were thinking about voting for a guy who wants to dismantle Social Security, Medicare and the Civil Rights Acts, who wants to turn the clock back to 1896, until you found out he was involved in a fraternity prank that offends your piety? I don't get you, Kentucky. Maybe a Rovian contempt for the voter is sometimes justified.

If Conway wins, and the President finds himself ten points down two Octobers from now, maybe the Obama campaign will hire the architect of this ad to save the day. How about a 30 second spot on the secret Republican plan to let Cylons serve openly in the military? AND to adopt children! Or maybe Obama and his buddy Rick Warren will give the invocation at high school football games in swing states to preempt Aqua Buddhists from getting a shot at the mic.

If this is the only way we can win, then I don't want to win.