From the Wall Street Journal, columnist Justin Lahart takes a look at how state and local job losses drove up the unemployment rate. Let's remember that the states run by Republican governors insisted on paying for tax cuts by laying off government workers, and that the Republicans in Congress and their Blue Dog enablers who blocked government spending to the states did their part, too. (Remember "jobs, jobs, jobs"? Thanks, Grand Old Piranas!)
One reason the unemployment rate may have remained persistently high: The sharp cuts in state and local government spending in the wake of the 2008 financial crisis, and the layoffs those cuts wrought.
The Labor Department’s establishment survey of employers — the jobs count that it bases its payroll figures on — shows that the government has been steadily shedding workers since the crisis struck, with 586,000 fewer jobs than in December 2008. Friday’s employment report showed the cuts continued in April, with 15,000 government jobs lost.
But the survey of households that the unemployment rate is based on suggests the government job cuts have been much, much worse.
In April the household survey showed that that there were 442,000 fewer people working in government than in March. The household survey has a much smaller sample size than the establishment survey, and so is prone to volatility, but the magnitude of the drop is striking: It marks the largest decline on both an absolute and a percentage basis on record going back to 1948. Moreover, the household survey has consistently showed bigger drops in government employment than the establishment survey has.
The unemployment rate would be far lower if it hadn’t been for those cuts: If there were as many people working in government as there were in December 2008, the unemployment rate in April would have been 7.1%, not 8.1%.
Ceteris is rarely paribus, of course: If there were more government jobs now, for example, it’s likely that not as many people would have left the labor force, and so the actual unemployment rate would be north of 7.1.
these are real jobs by real people of the type you see everyday when you drop your kid off at school, get a speeding ticket (whoops…bad e.g., but you know what I mean), or pass a firehouse. You see their work when you go to a soccer game at a public field that’s in decent shape or stroll in a public park.
there’s a significant multiplier to state and local spending, both in terms of contracting out work to private entities and spending by public workers in their communities (Zandi puts it at 1.4–for a dollar of state fiscal relief, GDP grows $1.4).
The WSJ is the voice of the DC-New York GOP establishment, and that voice was crackling with anger and tears on Tuesday.
Let's just say right now what voters will be saying in November, once Barack Obama has been re-elected: Republicans deserve to lose.
Well, yes. They deserve to lose because they've learned nothing from spectacular failures of the Bush/Cheney years and are doubling down on every right-wing fetish: Even lower taxes! Even more wealth inequality! Even more war! Even fewer regulations! Let's deport 12 million people! Let's bring back child labor!
But I digress.
Above all, it doesn't matter that Americans are generally eager to send Mr. Obama packing. All they need is to be reasonably sure that the alternative won't be another fiasco. But they can't be reasonably sure, so it's going to be four more years of the disappointment you already know.
But won't Newt beat Obama in the debates?
A primary ballot for Mr. Gingrich is a vote for an entertaining election, not a Republican in the White House.
Ouch. But...but...don't we need a businessman to create jobs?
On the evidence of his campaign, Mr. Romney is a lousy CEO.
Oh, snap! And the big finish!
...the U.S. will surely survive four more years. Who knows? By then maybe Republicans will have figured out that if they don't want to lose, they shouldn't run with losers.
Just brutal.
Cheer up, WSJers! There's got to be a Bush lying around somewhere for 2016. In the meantime, please note that Newt and Willard are advocating exactly the same policies you've cheered on for decades.
This holiday season, let's spare a kind thought for the decent people who toil inside Washington's legislative machinery. These good folk must live and work inside the dreamlike bubble that is today's policy and media world. Each day they strain to see reality through the reflected light of the false but colorful narratives projected against the bubble's surface.
Or would it be a better metaphor to say they're prisoners in some cold underground cell? No matter how many polls are conducted, no matter how many economic analyses are performed, no matter how many bitter lessons are taught and re-taught, there are those who hope to deny them even a glimpse of reality.
Instead these good people are forced to stare into the harsh glare of synthetic reality, hour after hour, as if were a naked lightbulb in windowless room. Only a few precious slivers of genuine sunlight penetrate the dank basement of illusion that imprisons them.
Well-intentioned staffers in Washington need good information to do their jobs well. Instead they're being inundated with confusing pseudo-facts and empty fear-mongering. This week's case in point? The Congressional "Super Committee." Did you know that unless they come up with their cuts there will be no Christmas this year? You didn't? Then you haven't been reading the Wall Street Journal.
Unfortunately, that kind of distortion isn't the exception. It's the rule.
In June of this year, AlterNet quietly published an article about Herman Cain's deep ties to Americans for Prosperity. At the time, no one paid close attention because most people had no idea who Herman Cain was or why they should care. But now that Cain is the current frontrunner of the day in the Republican primaries, it's worth revisiting and re-examining Cain's close relationship to the Koch brothers and Americans for Prosperity.
From the AlterNet article:
Not only is Cain a frequent speaker at AFP Foundation events, he was also, by his own account, tapped by [Mark] Block to be one of the faces of Prosperity 101, a workplace seminar program, designed for employers to present to their employees at "voluntary" workplace gatherings where they are told that the legislative initiatives typically embraced by Democrats -- health-care reform, energy reform, higher taxes for the wealthiest Americans -- could so hurt their employers as to force layoffs. The program was set in motion during the lead-up to the 2010 elections. (AlterNet, working in collaboration with the Investigative Fund at the Nation Institute, published an expose on Prosperity 101 last week.)
Mark Block is Herman Cain's campaign manager now. And about Prosperity 101? Here's an excerpt from that expose published in June:
The idea behind Prosperity 101 is simple: Employers gather employees for a "voluntary" seminar where nervous workers, already sweating in an economy that is shedding jobs, are told that government regulation, unions and tax increases -- even if only on the wealthy -- are bad for their employers, thereby threatening the workers' own livelihoods. Then they're reminded to vote -- for example, in last year's midterm elections. (The Prosperity 101 textbook includes a sample voter registration form from the State of Wisconsin.) And in the program textbook, employee participants are urged to join Americans for Prosperity, which has a history of alliances with GOP candidates.
In the textbook's introduction, Hansen, Prosperity 101's creator, plays on workers' fears of economic insecurity, stirred up by the lingering recession:
'You go to work every day, giving your best efforts in hopes of keeping your job through every economic cycle and every corporate downsizing…Will you be included in the next round of layoffs?… Do you know your job security is not just dependent on your performance?...Prosperity 101(TM) is designed to empower you, the employee, to go beyond your paradigms and look at job protection in a new way.'
It isn't just Herman Cain involved in Prosperity 101, either. The Wall Street Journal's Stephen Moore and John Fund were also involved.
In addition to workplace "education", Prosperity 101 is actively involved in voter registration drives in the workplace. From The Nation Institute:
"A key component of Prosperity 101 is working with employers to help them encourage voter registration among their employees," Hansen, trim and stylish at 52, explained to the crowd. "So when Herman [Cain] first heard the concept here, he said, 'You've come up with the answer to ACORN!'"
Hansen then played the Prosperity 101 promotional video, which features Cain and the Journal's Stephen Moore.
Moore's segment confers a crucial air of legitimacy upon Prosperity 101 by virtue of his post at the world's premier financial newspaper, an affiliation that is highlighted both in the video and in the program's other promotional materials. "Washington is working against employers," Moore tells viewers. "It's working against people who are trying to create wealth and are trying to employ workers."
Each audience member received a copy of the program's textbook, a slender paperback that features material by Cain and Moore, among others.
Suddenly Herman Cain's "surge" begins to fall into place. The combination of workplace indoctrination and voter registration last year means many workers have a clear idea of who he is, as compared to others. At this point, he may be the single candidate with name recognition.
There's an even larger strategy at work here, coordinated with tea party groups and others who seek to drive a wedge into the African-American community and shave away some of Barack Obama's popularity. They do this by playing the "Cain would be the first 'REAL' black President" card. That initiative has begun and is spreading via conservative radio talkers and tea party groups, who see it as an opportunity to push back on the perception that they're racists.
That notion, however, spurred Ingraham to contemplate the GOP’s African-American presidential candidate Herman Cain. In comparing the “blackness” of the two African American politicians, Ingraham wondered whether Cain would actually be 'the first black president' because he doesn’t 'have a white mother, white father.' Therefore,isn’t he the real black candidate?:
INGRAHAM: And what happened with Obama is that he gets this job that he’s not qualified for… OK, so [Obama is] Constitutionally qualified for but he’s not really qualified for. And guess who pays the price? All of us. Because we had such a yearning for history.Well I have a question. Herman Cain, if he became president, he would be the first black president, when you measure it by — because he doesn’t — does he have a white mother, white father, grandparents, no, right? So Herman Cain, he could say that he’s — he’s — he’s the first, uh — he could make the claim to be the first — yeah, the first Main Street black Republican to be the president of the United States. Right? He’s historic too.
Listen to it here:
By the way, this really is an issue in the African-American community. Mixed race is another layer to the already-complicated race issue, which is why the Kochs hope it will effectively divide them.
As much as I'd like to shrug Herman Cain off as the newest Republican shiny thing, it's difficult to do when he enjoys the corporate backing of Rupert Murdoch, Charles Koch and David Koch. I expect they will throw as much mud and money as need be to get their guy in the front of the pack. The Wall Street Journal is moving full-tilt boogie to attack the President on as many fronts as possible, including this ridiculous editorial published yesterday, which once again begins with the even more ridiculous premise that President Obama is a "loner." Ann Althouse joined the echo chamber with her own laudatory review of Cain's Meet the Press appearance yesterday, practically falling over herself in adoration of his heritage:
Notice how simply and vividly he struck a chord — the classic black American experience — and made it resonate for anyone who works for living. There is a quality of nobility, that fits with the idea of heritage.
The bottom line here is that Charles and David Koch are patient men with a lot of money. Cynical patient men. They will stop at nothing to enrich themselves at the expense of every citizen in this country, including grooming and backing a completely unqualified candidate, extolling his heritage as being "authentic African-American," and positioning him as the guy with the awesome tax plan that will cripple the working poor in this country more than they already are, even as they clamor for it.
David Axelrod may think Cain isn't a top-tier candidate, but David and Charles Koch see that differently. As long as they have the money and resources to pour into his campaign, my suspicion is that he will continue to 'surge', at least until he implodes like the rest of them seem to do.
In the meantime, I expect we will be hearing and seeing a lot more of Herman Cain.
Warren Buffett has answered theWall Street Journal's snarky remarks about his tax returns. Today in an interview with Fortune Magazine editor Carol Loomis, he challenged Rupert Murdoch to release his tax returns to the press. Buffett said he'd release his at the same time. Here's the transcript, via CNBC:
CAROL LOOMIS: Well, one of the centers of criticism has been the Wall Street Journal's editorial page.
WARREN BUFFETT: Oh, really? (Laughter.)
CAROL LOOMIS: And they've asked you to give them your income tax statement.
WARREN BUFFETT: Yeah.
CAROL LOOMIS: What do you think about that?
WARREN BUFFETT: Well, I think it might be a terrific idea if they would just ask their boss, Rupert Murdoch, and he and I will meet at Fortune and we'll both give you our tax returns, and you can publish them. (Applause.)
CAROL LOOMIS: We like it. We like it. (Laughter.)
WARREN BUFFETT: I'm ready tomorrow morning.
So far, crickets from Rupert. But then, he may be preoccupied with how he's going to pull his tail out of Rupertgate's fire.
I wouldn't hold your breath on those tax returns, but maybe it'll shut up the whiners over at the Wall Street Journal for awhile, and it's always amusing to watch a verbal game of chicken between two billionaires.
Responding to allegations from several Washington lawmakers, the FBI has opened an investigation into whether Rupert Murdoch's News Corp. attempted to hack into the telephones of victims of the Sept. 11, 2001, attacks and the families of those who died.
According to federal law enforcement sources, the decision by the FBI's field office in New York to launch the criminal probe came after several members of Congress raised concerns in letters to FBI headquarters, questioning whether reporters for the media empire may have tried to compromise Sept. 11 victims just as they reportedly hacked into the phones of numerous individuals in England.
"We are doing this based on their requests," said an FBI source, who asked not to be identified because the investigation is just getting underway. "But after reviewing the letters and their allegations, and after consultation with the U.S. Attorney's Office in New York, we are proceeding."
At the Department of Justice, officials also acknowledged they are "reviewing" the allegations by Rep. Peter T. King (R-N.Y.), chairman of the House Homeland Security Committee, and others that Sept. 11 victims and families may have been put at risk by News Corp.
"If these allegations are proven true," King wrote in his letter to FBI Director Robert S. Mueller III, "the conduct would merit felony charges for attempting to violate various federal statutes related to corruption of public officials and prohibitions against wiretapping. Any person found guilty of this purported conduct should receive the harshest sanctions available under law."
Maybe Bill O'Reilly can invite King -- a frequent guest -- onto his show to discuss this, eh?
Hoo lordy, Brian Beutler has done us all a grand service today by actually asking Republicans what sacrifices, if any, the rich should make to close the deficit. The answers, as you'd imagine, are quite comical. Here are some of the choicer morsels:
"Millionaires can contribute to deficit reduction by spending part of their millions," said Sen. John McCain (R-AZ). "I agree with the Wall Street Journal editorial this morning: We should cut the corporate income tax from 35 to 25, and close loopholes that are in, and make sure that everything is revenue neutral, and that is a great approach."
I do love how McCain makes sure to cover his ass by saying only that they should spend only "part" of their millions. Wouldn't want to get too pushy, now, lest our sensitive rich folks decide to go Galt, and then we'd be sorry, oh yes yes we would! I also love how simply spending part of their millions counts as an actual "sacrifice" that our Galtian overlords should make. Ergo, going to a high-end strip club and making it rain now counts as a sacrifice, according to John McCain. Or when they blow thousands of dollars on a gold-plated trashcan, they're making a vital contribution to deficit reduction.
Lindsey Graham is even funnier:
"Create jobs, hire more people that pay more taxes, grow the economy, stay in America, don't leave, hire people -- that's how millionaires can help, is create more workers, and if you raise taxes you're gonna make it harder to keep the job you got," explained Sen. Lindsey Graham (R-SC).
If a big-name CEO stepped into Graham's office and said to him, drill sergeant-like, "Graham! Hump my leg on the double, maggot!" you know he'd do it without hesitation.
Graham's jobs plan reminds me a lot of Ohio's attempts at begging LeBron James to shun the beautiful beaches of Miami in favor of the home town that had loved him since draft day:
The point, my friends, is sometimes it seems as though much of our country has internalized "Atlas Shrugged" to such an extent that we've come to believe that it's our fault that our corporate overlords aren't hiring more people. Clearly, the thinking goes, we have not done enough to appease them.
"Another tax cut, m'lord? Oh yes, right away! Those pesky and out-dated child labor laws? You bet, they'll be scrapped tomorrow! You want to... sleep with my spouse? Uh... and you swear you'll consider hiring me to work at the local Taco Bell? Sounds like a fair trade to me!"
At some point I'd like to believe that basic human dignity will kick in and we won't feel the need to kiss rich peoples' asses anymore. But I've been waiting for this to happen for a long, long time now.
Bob Somerby has been running an excellent series over the last week examining how the "greed is good" mentality has taken over American values over the past 40 or so years. Toward the end of his piece last Friday, he made pertinent point:
As income inequality has grown, one side’s heralds have worked very hard to pimp a load of supporting ideology. The other side’s heralds have largely slumbered, dozed, burbled and snored. We haven’t developed the language and the ideation with which we can approach those voters who are currently found outside our own tribe. Nor have we developed the forums in which we can approach such people with some hope of success. We prefer to spend our time insulting those who aren’t in our own tribe. This is lazy, self-indulgent behavior. Beyond that, it just isn’t smart.
What’s wrong with the societal pattern described in Whoriskey’s piece? If athletes and singers can haul in big swag, why can’t CEOs and “financial professionals?” The career liberal world has made little effort to fight back against that forty-year trend—a trend which has indeed driven along by “one half-baked study after another.”
I think there's definitely something to this. Liberals often assume that most of the public sees surging economic inequality as a profound and unqualified negative, but the reality is the public often has no idea just how unequal America has become. And what's more, the public has been fed the idea we should celebrate when the rich get richer because it means they'll just trickle more wealth down on the rest of us unworthy serfs.
So in response to Bob's challenge, I'd like to make the case for why greed is bad that could transcend the standard left-right divide and appeal to people who might disagree with me on a host of other issues. Let's give this a go, shall we?
Before delving too far into this, I'd like to give my general take on money. To me, money is a lot like sex and cupcakes. Meaning that while they're all things that everyone wants to have in one form or another, it's entirely possible to overindulge in all three. The key difference is, we don't stigmatize greedy people the same way we stigmatize people who are cads (i.e., Tiger Woods and Anthony Weiner) or people who are overweight (i.e., Michael Moore). In fact, when we read about somebody who makes an obscene amount of money we normally think, "Well good for them, I hope I can make it like that some day too!" The most classic example was the Wall Street Journal's interview with one of the homeowners whose foreclosure made hedge fund manager John Paulson into a gazaillinaire. Y'see, even though Paulson was literally profiting from the poor shlub's misery, he just couldn't find it in his heart to be upset:
In 2006, Mr. Booket got hit by a car while riding a motorcycle from a late-night party, was unable to find much work and couldn't pay the bank. In October 2008, he lost the house to foreclosure and plans to move out by next week. He says he bears no grudge against Mr. Paulson and Goldman.
"The man came up with a scheme to get rich, and he did it," says Mr. Booket, who had refinanced his mortgage just months before the accident. "So more power to him."
Mr. Booket is presumably a good guy. But he's also clearly bought into the idea that anything rich people do to make money is good for the rest of us too. Here, then, is my concise breakdown of the two biggest reasons why greed and inequality are bad:
First: When people at the top are greedy, workers don't get their just rewards. For a long time in this country, there was a very close relationship between productivity growth and wage growth. Increased productivity is a good thing because it means we've come up with new ways to make more stuff with less effort. Now take a look at this chart:
The next time some finger-waver at the Washington Post op-ed page calls for austerity, someone should point him to, you know, reality.
Because reality right now is telling us that austerity is not only painful but wholly counterproductive. Here's an excellent report from the Wall Street Journal on the wide social unrest that austerity has caused in Greece:
Greece shook global markets, intensifying fears of a default, as tens of thousands of demonstrators protested a new round of budget-cutting plans and its prime minister offered to step down to try to preserve them.
Protests across the capital sometimes turned violent as Prime Minister George Papandreou sought an agreement with opposition parties on austerity measures demanded as the price of a new bailout by euro-zone nations and the International Monetary Fund.
The report also notes that austerity has actually exacerbated the sovereign debt crisis and hasn't made bond holders any more willing to buy Greek bonds at lower interest rates:
Yields on Greek government bonds leapt to new highs, with two-year paper yielding 29%. Bond yields on other troubled euro-zone economies like Portugal and Ireland also moved higher, and stock markets in the U.S. and Europe sank as fears of contagion picked up. The euro plunged 1.9% against the dollar.
Needless to say, it's not only the wacky anarchist college kids who are pissed off about all this. Mama and Papa Greece are none too pleased either:
John Petru, 41 years old, said he had come to block parliamentarians from arriving to debate the budget cuts. "We do not trust them," he said of the politicians. The recession has eaten badly into his cleaning-service business. "Business is down, and prices are up, and we are not sure about anything," he said.
Greeks have already suffered multiple rounds of budget cuts since last year, but they have failed to build confidence in the economy. The budget deficit has turned out to be wider than projected then, with the government failing to cut spending or raise revenues as much as promised. But the biggest gap in its finances has opened up because private investors have refused to buy new Greek government bonds at interest rates the government can afford.
Many protesters said they had gone along with previous budget cuts and wage reductions on the belief that those sacrifices would be enough to right Greece's fortunes. "They have asked us to reduce our wages, to live another standard of life," said Angeliki Kachrimani, a 42-year-old worker for Greece's postal service. She accepted a 15% wage cut; her husband, a history teacher, is unemployed.
And look, this is all pretty simple to understand: Greece is in this mess right now both because its government lied for years about its budget deficits (with an assist from everyone's favorite investment bank Goldman Sachs) and because its monetary policy options are limited by the European Central Bank. In other words, investors know Greece can't print its own money and thus will never be able to pay them back. The problem is exacerbated by the austerity measures that result in cuts to government jobs, cuts to wages and a drop in overall demand. These things aren't exactly making investors feel good about Greece's future economic prospects either.
"Why should I give a damn about this?" you ask. Well, it's pretty obvious that America's own austerity backers, led by Paul Ryan, have similar plans for us as well. And it would behoove us to point to the examples of Greece and Ireland and the U.K. and shout at the top of our lungs, "AUSTERITY DOESN'T WORK, YOU TOOLS!!!!!" Because frankly, I'm not looking forward to widespread social unrest. God forbid the streets of America come to resemble third-world hellhole streets like those of Vancouver.
The Four Wise Men - George Schultz, Sam Nunn, Henry Kissinger, and William Perry - are in the Wall St Journal telling us how they believe we need a new doctrine for strategic deterrence in the post-Cold War era. It's a strange argument - it calls for both reducing the US and Russian nuclear stockpile while retaining nuclear weapons for deterrence against nuclear-weapon states, but everyone else needs to stand down and work out their regional issues. Or as Cartman on South Park would say, "You nah, me nah. Screw you guys, I'm going home."
Fourth, as long as nuclear weapons exist, America must retain a safe, secure and reliable nuclear stockpile primarily to deter a nuclear attack and to reassure our allies through extended deterrence. There is an inherent limit to U.S. and Russian nuclear reductions if other nuclear weapon states build up their inventories or if new nuclear powers emerge.
It is clear, however, that the U.S. and Russia—having led the nuclear buildup for decades—must continue to lead the build-down. The U.S. and its NATO allies, together with Russia, must begin moving away from threatening force postures and deployments including the retention of thousands of short-range battlefield nuclear weapons. All conventional deployments should be reviewed from the aspect of provocation. This will make America, Russia and Europe more secure. It will also set an example for the world.
Fifth, we recognize that for some nations, nuclear weapons may continue to appear relevant to their immediate security. There are certain undeniable dynamics in play—for example, the emergence of a nuclear-armed neighbor, or the perception of inferiority in conventional forces—that if not addressed could lead to the further proliferation of nuclear weapons and an increased risk they will be used. Thus, while the four of us believe that reliance on nuclear weapons for deterrence is becoming increasingly hazardous and decreasingly effective, some nations will hesitate to draw or act on the same conclusion unless regional confrontations and conflicts are addressed. We must therefore redouble our efforts to resolve these issues.
It's a complicated story. I think it's a careful clarification from the Four Wise Men's perceived earlier "Global Zero" endorsements (see 2007, 2008, and 2009). At best, it's a careful retreat from "Mutual Assured Destruction" but not a commitment to give up threatening other countries with nuclear weapons under the concept of "strategic ambiguity."
It's hard to read "Beltway" rhetoric sometimes, but I'm going to call this the "Cartman strategy. We got our nukes, you got no nukes, let's reduce the chance of conflict in which nukes might be used (or where Teh Terrorists might get one) and leave it at that. You nah, me nah.
