Wednesday, June 22, 2011

Political Posturing Versus Reality

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This morning (Wednesday, June 22) David Dayen at FDL News reports that the entire Senate Democratic leadership is getting behind a jobs/stimulus push:

The Senate Democratic leadership – all of them, Harry Reid, Chuck Schumer, Dick Durbin, Patty Murray, Debbie Stabenow and Mark Begich – planned a morning press conference today where they will call for job creation measures, or stimulus, to be included in any debt limit deal.
This follows a report from Politico on Sunday:
Fearing the economy may be getting worse, Democrats plan to soon unveil what they’ll call a “Jobs First” agenda — and the stakes are high. A bleak economic outlook, like the May jobs report, could cost Democrats their thin Senate majority and even the White House if they can’t make a strong case to an anxious electorate that their policies will create jobs.

Senate Democrats are now grappling with ways to gain an edge in the economic debate dominated by budget talk. For instance, in an attempt to woo Republicans, Sen. Chuck Schumer (D-N.Y.) and the White House are open to extending a payroll tax break to stimulate the economy, but that has spawned unease from Democratic senators such as Maryland’s Ben Cardin who worry that it would drive up the deficit and unnerve liberals such as Vermont’s Bernie Sanders, who are concerned it would deplete the Social Security trust fund.
While the Politico piece reinforces for me the idea of the Dems actions as just so much posturing, so does this, also from the Dayen piece:
There’s a sense that this is mainly rhetorical. Democrats have seen Republicans obstruct even the most piddling of jobs bills in the Senate. Yesterday the reauthorization of the Economic Development Administration, an old Great Society program, failed to break a filibuster.
This article from today's Washington Post on Senate Budget Committee Chair Kent Conrad's claim that $2 trillion in spending cuts is not enough tends to reinforce the believe that it is posturing:
The debt-reduction package emerging in talks between the White House and congressional leaders would not “fundamentally change” the alarming rate of growth in the national debt, the chairman of the Senate Budget Committee said Tuesday.

Sen. Kent Conrad (D-N.D.) said the goal of slicing more than $2 trillion from the federal budget by 2021 falls far short of the savings needed to stabilize borrowing, reenergize the economy and avert the threat of a debt crisis.
As we all know, Conrad is one of the Gang of Six Five Thieves Deficit Hawks who doesn't quite seem to comprehend that creating jobs would go a long way to addressing those long term deficit problems through increased tax revenues across all aspects of the economy. Even Wall St Journal and Bloomberg/Business Week columnists have come out this week and stated that jobs are the most serious issue of all today. Now, I don't know of anyone who would perceive that the folks at either of these as being "card carrying members of the professional left" yet both are pointing out the fallacies of the current political discourse. The WSJ piece especially:
No, that's not a typo. House Speaker John Boehner and other Republicans regularly rail against "job-killing government spending." Think about that for a minute. The claim is that employment actually declines when federal spending rises. Using the same illogic, employment should soar if we made massive cuts in public spending—as some are advocating right now.

Acting on such a belief would imperil a still-shaky economy that is not generating nearly enough jobs. So let's ask: How, exactly, could more government spending "kill jobs"?

...snip...

For example, the large fiscal stimulus enacted in 2009 was not "paid for." Yet it has been claimed that it created essentially no jobs. Really? With spending under the Recovery Act exceeding $600 billion (and tax cuts exceeding $200 billion), that would be quite a trick. How in the world could all that spending, accompanied by tax cuts, fail to raise employment? In fact, according to Congressional Budget Office estimates, the stimulus's effect on employment in 2010 was at least 1.3 million net new jobs, and perhaps as many as 3.3 million.
Please do read all the Blinder column (if the whole thing does not come up at the link, just use Google and the column title which should be available.)

CNN this morning had this article on a report showing that cuts to public sector jobs hurt metro areas:
Twelve of the 20 weakest-performing metro areas in the first quarter shed public sector jobs since the recession ended, according to the report, published Wednesday.

...snip...

The loss of government jobs also drove many metro areas deeper into the recession. Thirteen of the 20 areas that suffered the most since the start of the nation's economic troubles lost government jobs after hitting their economic peaks.

...snip...

Conversely, many metro areas that have done well in recent years have experienced growth in government jobs, the report found.
DeeCee area job growth and strength seems to bear this out as well.

Today's LA Times has an article on Commerce Secretary nominee John Bryson:
John Bryson, the former Southern California utility executive nominated to be Commerce secretary, promised senators that he would have a "relentless focus" on job creation as he tried to ease concerns that his environmental views were too liberal.

...snip...

As part of that, he said, he would work to simplify the tax code and eliminate unnecessary regulation.
That is a good news/bad news promise since it seems to continue all the same failed ideas that the problem is in the tax code or regulations.

McClatchy on Monday had a good news/bad news report that the Rust Belt is leading the recovery:
Of the 10 states where unemployment rates dipped the most from May 2010 to May 2011, Rust Belt states — Michigan, Indiana, Ohio, Pennsylvania and Illinois — account for half, according to Labor Department figures.

Locally, metropolitan areas in the five Rust Belt states accounted for 30 of the top 34 declines in regional unemployment rates since last year, as well.

While these industrial Midwest states and towns have made the biggest strides in reducing their jobless rates, their progress is limited. Many had some of the nation's highest jobless rates during the recession, so their declines reflect not only more people finding jobs, but also the labor-market loss of older manufacturing workers who gave up the job search.
The Boston Globe reported yesterday that extra jobless benefits in Massachusetts would be dropping but at least this time because of a mild improvement in the state's economy and not due to misguided legislative actions which so many other states have done.

I guess I should feel sorry for the wannabe MOTUs (via NY Times DealBook) - after all I really don't want to tear down others as that makes me no better than all the folks who want to destroy unions and public sector workers benefits. But sometimes it is difficult to be gracious, I will admit.

And because I can:

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