Not Really

(Political cartoon by Matt Bors and published 3/12/13 at the Daily Kos.  Click on image to enlarge and then kindly c'mon back.)

There's all sorts of news to pick from:  the selection of a new pope, the saber rattling by North Korea, Karzai's temper tantrum, and the "good" economic news in this country.  The stock market is up and unemployment is down.  It's the last item which concerns me today.

Yes, the Dow Jones is up, higher than it's been since Obama took office in 2008.  And, yes, national unemployment figures are down.  As Matt Bors illustrates in his cartoon, however, all is most definitely not well.  Dean Baker explains why (via Eschaton).

More than five years into the downturn, it doesn't take much to get people excited about the state of the economy. The Labor Department's February employment report showing the economy generated a better than expected 236,000 jobs and the unemployment rate had fallen 0.2 percentage points to 7.7% was sufficient to get the optimists' blood flowing. Unfortunately, they are likely to be disappointed.

First off, if the 236,000 jobs number sounds good to you, then you probably are not old enough to remember the 271,000 number reported last February, or the 311,000 number reported in January of 2012. The strong winter job growth in 2011-2012 was followed by a dismal spring, in which job growth slowed to a trickle. ...

The drop in the unemployment rate is also not as good news as it may initially seem. The Labor Department reported that 130,000 people left the labor force during the month – so they are no longer counted as unemployed. The percentage of the adult population that is employed (the employment-to-population ratio, or EPOP) was unchanged at 58.6%. This is just 0.4 percentage points above the low hit in the summer of 2011; and it is unchanged over the last year.  

While the unemployment rate has fallen back by 2.3 percentage points from its peak, reversing more than 40% of its increase, the EPOP is still down by 4.5 percentage points from its pre-recession level. The drop in unemployment is much more the result of people giving up the search for employment and leaving the labor force, than it is of workers finding new jobs. ...

In short, we have an economy that had been growing at a not-very-healthy pace through the second half of 2012 – and which is virtually certain to be slowed by contractionary fiscal policy through the rest of 2013. Unless there is a rapid reversal of policy, the 7.7% unemployment rate is likely to represent a low we may not see again for some time.    [Emphasis added]

Yes, some folks are doing well, but most of us aren't, and won't be if we fall into even more austerity-driven cuts.  What we need are jobs, and if takes a budget deficit for a few years to accomplish that, then so be it.  We've seen what the contractionary policies have done to the EU.  There is no reason to believe the US will be any different unless we come up with a different approach.

Congressman Ryan and Senator McConnell don't seem to care (no surprise there, eh?) and will be pushing for steep cuts to programs which would make jobs available.  McConnell is already pushing for a vote to defund Obamacare and Ryan will be pushing for destruction of Medicare for those 55 and younger, all to save money so that the Wall Street Banksters can continue to rake in the dough.

Get your dialing fingers warmed up.  It's time to let your congress critters and the White House know what we think of these plans.

Another Shot Across The Bow

(Political cartoon by David Horsey and published 3/7/13 in the Los Angeles Times.  Click on image to enlarge and then return.)

Yesterday, I posted on Horsey's second cartoon on the morass which is the 113th Congress, so I thought it would be appropriate to give you the first, especially given the news since he posted both.  If he does post the Last Supper cartoon, you can count on seeing it on Sunday.

Since then, Congressman Paul Ryan has returned to the fray, suggesting that what the country needs is the repeal of Obamacare.  Yes, I know he's not a senator and therefore wasn't invited to dinner with the president, but the effect will be the same.  From the Los Angeles Times:

Rep. Paul D. Ryan of Wisconsin, last year's Republican vice presidential nominee, said Sunday his forthcoming budget proposal will include repeal of "Obamacare," as his party calls it. That position puts tea-party conservatives at odds with others in the GOP who want to find common ground with Obama on the nation's fiscal woes after the U.S. Supreme Court upheld the health law.

In the Senate, conservatives will press for a vote this week to delay funding for the health law as part of a bill that must pass to keep the government running beyond March 27.

"We say we get rid of 'Obamacare,' " Ryan said on "Fox News Sunday." ...

Key to Ryan's blueprint, to be unveiled Tuesday, is a return to a proposed Medicare overhaul that would create a voucher-like system for the next generation of seniors – when those who are now 55 or 56 become eligible for the program at 65. Under Ryan's plan, seniors would be given a set amount to apply toward the purchase of private health insurance or toward the cost of Medicare.   [Emphasis added]

Ryan claims his stance is not an attempt to wrest Boehner's speakership away, and that may very well be true.  It's more likely that he is stirring the pot in anticipation of running for his party's nomination in 2016 and he wants to keep his credibility with his Tea Party backers. 

But the effect in the here-and-now is to put both House and Senate in the position of having to deal with the issue, which means both Obamacare funding and Medicare will be on the agenda.  It will, once again, push the discussion to the right, and that means our President (not the world's finest negotiator) will probably find a way to cave.

I grow old, I grow old.  I shall wear my trousers rolled.

Contractions

(Click on image to enlarge and then kindly return.)


Wow!  David Horsey is on a tear.  I found absolutely no nits to pick in his latest column, this time on the sequester debacle.

Unwisely, during one of the manufactured budget crises of 2011, President Obama and House Speaker John A. Boehner agreed that the penalty for failing to reach a comprehensive budget agreement by the end of 2012 would be automatic, across-the-board budget cuts. Their foolish assumption was that no one would be stupid enough to let such a thing happen. As it turns out, plenty of our elected officials are, indeed, that stupid.

Much of the stupidity – though certainly not all – has been exhibited by the most conservative members of the Republican caucuses in the House and Senate, the so-called tea party Republicans. So intent are they on whittling government down to the size it was back in the days of McKinley and the Robber Barons that even the prospect of major cuts in the defense budget did not phase them. Other steep cuts in dollars for scientific and medical research, education, hunger programs, national parks, infrastructure maintenance, food inspection, airport security and a host of other small but useful governmental activities caused them zero concern since, in the tea party version of reality, all those things are simply more big, bad government. ...

Too ignorant to understand the damage they are doing, zealots on the right are congratulating themselves for being so bold and principled. Yet, as irresponsible as Republicans have proven to be, Democrats are not without blame. There are more than a few on their side of the aisle who are pleased that the military budget has taken a big whack. Never before would Republicans have allowed such a thing to happen, so Democrats who have long wanted to reduce the Pentagon’s bloated budget see this as a bit of a gift. ...

If the federal budget is going to be reduced and reallocated, the task needs to be done intelligently and with the full understanding that federal dollars fertilize every aspect of the U.S. economy. Republicans and Democrats in Congress should have been in high gear trying to avoid this self-inflicted damage, but both sides looked way too relaxed as the budget ax fell.   [Emphasis added]

And so we got the worst kind of train wreck, one in which the vulnerable will suffer more than even the Defense Department.  And Horsey is right:  both sides are guilty of deliberate malfeasance.

As Atrios put it, Contractionary Policy Is Contractionary.  Without putting money into the economy in a way that helps put Americans back to work, we'll continue to slide backwards, just as the EU is currently demonstrating.  

I'm old enough to remember a phrase that wasn't considered crazy at the time:  "Prime the Pump."  We could use a little of that pump priming right now.  Not later.

Stupid And Cowardly

David Horsey's cartoon and column on the sequester is a pretty solid piece of work.  While I think he's taking the "cost" of the sequester to the economy a little too seriously, he certainly does a fine job in outlining just what is driving the process.

 The delusions of tea party Republicans are about to create a lot of misery for America. The "sequester" -- the drastic set of budget cuts formerly known as the "fiscal cliff" -- seems very likely to go into effect at the end of this week due in no small part to the fact that hyper-conservative lawmakers, such as Kentucky Sen. Rand Paul, actually think it's a pretty swell idea.

Their obsessive and mistaken belief that the federal deficit is the greatest threat to the republic is leading them to block any compromise with Democrats that would delay or repeal the looming budget reductions.

They want government to get smaller and smaller, even if the cuts will come too quickly and slash too indiscriminately. The supreme absurdity of their position is that this could so damage the American economy that federal revenue will drop and deficit reduction will become even harder to achieve.

The tea party folks may be sincere, loyal citizens, but their notions about how the economy works are exactly that: mere notions. Their core notion is that government needs to do nothing more than get out of the way of business in order for the economy to boom and bloom. ...

Pete Peterson, President Nixon’s secretary of Commerce, has campaigned for years against rising deficits and has earned the ire of liberals who think his insistence on restructuring Social Security and Medicare is too extreme and unnecessary. Yet, even Peterson, in an interview on public radio's "Marketplace" on Tuesday, said many of his fellow Republicans are crazy to think the sequester cuts are a smart idea.

Peterson said the deficit problem is long-term and must be dealt with comprehensively through spending reductions, entitlement reforms and revenue increases, a.k.a. taxes.

What should not happen, Peterson insisted, is a governmental retreat from investing in America’s economic future through funding of things such as education, infrastructure and basic scientific research. Of course, to the tea party Republicans, such talk is heresy.

Now if even Pete Peterson thinks the sequester is bad policy, something is afoot.  It's going to be interesting to see how that plays out.

Horsey's main point, that the Tea Partiers are wrong in this scenario (as they are in every one I can think of), is what is driving more than half of the recalcitrance from the GOP.  Republicans are still scared to death of the Tea Party, even though the old party regulars are trying to shake their hold on the party loose.  I'm sure Boehner would love an opportunity to cut a deal with Obama, especially since Obama is certainly not the strongest negotiator in the world.  Unfortunately, his own Majority Leader stabs him in the back at every opportunity and Paul Ryan, the rising star, joins him.  As a result, the rest of the Republicans in the House and those in the Senate continue to kowtow to the whackaloons.

Why?  None of them want to be primaried in 2014 or 2016.  They don't want to lose, but they also don't want to have to spend precious campaign money in the primary and then face a Democratic challenger, even in safe districts or states.

It's too bad the Democrats dispensed with Howard Dean's 50-state strategy.  It might actually work at this juncture.

I guess we'll just have to wait and see.  Today and tomorrow I predict a lot of popcorn consumption.

Stupid Is As Stupid Does

(Editorial cartoon by Joel Pett  / Lexington Herald-Leader (February 25, 2013) and featured at McClatchy DC.  Click on image to enlarge and then c'mon back.)

Well, here we are, snug up against the sequester deadline, and there doesn't appear to be much movement by either side.  President Obama has taken his case to the public, the Republicans in the House have called on the Senate to get busy on the issue (even though budget bills are supposed to originate in the House), and the Republicans in the Senate are being, well, Republicans.

In his last two columns for the Los Angeles Times, Doyle McManus looked at the stupidity of the whole issue, noting that both sides are responsible for the issue.  On Sunday, he characterized the situation as stupid.

The sequester, those $85 billion in across-the-board spending cuts scheduled to hit the federal government on March 1, was designed to be stupid.

In 2011, when President Obama proposed the scheme and both parties in Congress embraced it, their thinking was: With a whole year to work on a deal, surely we can figure out a way to avoid a catastrophe.

What Washington did they think they were living in?

With no negotiations under way, it's virtually certain that on March 1, a long list of federal programs will get slashed. But at this point, the only thing Democrats and Republicans agree on is that the mandatory cuts will hurt the economy, the nation's security and the well-being of the American people.

So why has there been no serious negotiation to avoid the train wreck we all see coming? One reason is that both sides think the public will side with them and blame the other party...

In the end, there will be some kind of compromise, probably around March 27, when Congress has to pass a law to keep the government operating for the rest of the year. It will probably include spending cuts that approach what the sequester demands, but with more flexibility— and, if Democrats have their way, a longer delay before the cuts kick in.

Tax increases will be a sticking point, of course. Democrats want them; Republicans reject them. But the recent history of budget showdowns suggests the GOP will compromise at the last minute.   [Emphasis added]

McManus is even less sanguine in his Monday column.

The automatic cuts to federal spending don’t start until Friday, and even then their effects will only be gradual. But Washington is already in a frenzy over a crisis that the two parties have brought on themselves with a scheme that was -- as I noted in my Sunday column -- designed to be stupid. ...

...in television appearances over the weekend, GOP leaders began to repeat their own best talking point. “Surely [Obama] can put forward a plan to cut 2-to-3% from a $3.5 trillion budget,” Senate Republican Leader Mitch McConnell said. “Rather than issuing last-minute press releases on cuts to first responders or troop training or airport security, he should propose smarter ways to cut Washington spending.”

McConnell has a point, of course. If the sequester’s cuts could be spread across the entire federal budget, they wouldn’t be so disastrous. That’s why Republicans are talking about modifying the sequester to give Obama more discretion on where to cut -- a change that would make him responsible for whatever reductions in government services he chose.

Democrats have already denounced that idea as a trap and declared that they won’t fall for it.  They point out that Obama has long offered to enact at least $930 billion in smart spending cuts, almost as much as the $1.2 trillion sequester. (The problem for Republicans, of course, is that Obama wants to pair those spending cuts with $680 billion in new tax revenues.)

And that’s why there’s no easy way out. ... 

So there you have it, folks.  Our government in action.

Elder Belle's Blessing: Atrios

(Photograph by Patrice Carlton and published at National Geographic.)

This edition of Elder Belle's Blessing, an award given from time to time to those who enhance elders' rights and benefits, goes to Atrios, the proprietor of Eschaton, a lefty-blog.  Atrios (whose real name is Duncan Black) is an economist of the Keynesian School and he thinks that the very worst thing to do in this economy is to institute austerity measures.  Among his many suggestions for kick-starting things is lowering the age for Medicare and Social Security and increasing the benefits.  Here's his latest.

The pain caucus, austerity freaks, fix the debt assholes, the Washington Post editorial board, etc... basically exist to scare politicians away from actually promising (and maybe even delivering) nice things to voters. One would think it'd be a nobrainer for politicians, especially in certain parts of the country, to campaign on an immediate across the board 20% increase in Social Security benefits. Some people completely screwed by the great recession could really use it.   [Emphasis added]

 The post was written in response to this New York Times article

In the current listless economy, every generation has a claim to having been most injured. But the Labor Department’s latest jobs snapshot and other recent data reports present a strong case for crowning baby boomers as the greatest victims of the recession and its grim aftermath.

These Americans in their 50s and early 60s — those near retirement age who do not yet have access to Medicare and Social Security — have lost the most earnings power of any age group, with their household incomes 10 percent below what they made when the recovery began three years ago, according to Sentier Research, a data analysis company. ...

The share of older people applying for Social Security early spiked during the recession as people sought whatever income they could find. The penalty they will pay is permanent, as retirees who take benefits at age 62 — as Ms. Zimmerman did, to help make her mortgage payments — will receive 30 percent less in each month’s check for the rest of their lives than they would if they had waited until full retirement age (66 for those born after 1942).  [Emphasis added]

That's a pretty sizable loss. That's one good reason for raising the benefits just by itself.

Lowering the eligibility age for both Medicare and Social Security would also take the pressure of the elders, something which Atrios has also advocated.  The upside of both of his proposals would have a dual effect:  elders could remove themselves from the labor market (whether working three part-time jobs at much lower pay just to pay the mortgage or holding onto a job only because of the need for health insurance) and be able to exist more comfortably; their retiring also would free up some jobs for the rest of the labor market.

We don't need to cut Social Security and Medicare, we need to expand it.