Cause and Effect?

Of course the recent job num­bers now reveal that Oba­ma has destroyed the econ­o­my (at least accord­ing to some con­ser­v­a­tive voic­es). Here is a reveal­ing chart:

This chart shows pri­vate sec­tor job growth. Red is dur­ing the last year of the Bush admin­is­tra­tion and blue is the Oba­ma admin­is­tra­tion. The blue line to the far right is May of 2011. April 15 was when the 2011 bud­get was final­ly passed. The bud­get that cut spend­ing. What is the fal­la­cy? Post hoc ergo propter hoc. And, let us admit, the bud­get did not cut all that much spend­ing. But there is this:

About $8 bil­lion in imme­di­ate cuts to domes­tic pro­grams and for­eign aid were off­set by near­ly equal increas­es in defense spending

But cuts in gov­ern­ment spend­ing are not the only thing the Repub­li­cans have man­aged to do that might influ­ence eco­nom­ic and job growth.

There is the dread­ed “uncer­tain­ty”. This con­cept is a favorite of Repub­li­cans when, for exam­ple, there is a pos­si­bil­i­ty that the top tax rate might or might not go from 35% to 38% and job cre­ators sit on their mon­ey instead of cre­ate jobs with it since they do not know what the tax rate will be. I think that “uncer­tain­ty” is bunk, but…

What of the uncer­tain­ty of whether the US is going to pay its debt or not? Ever since the 2011 bud­get passed, the Repub­li­cans have made all kinds of noise that they will let the gov­ern­ment go into default if they do not get their way. Does this not cre­ate uncer­tain­ty? I sug­gest this cre­ates a hell of a lot more uncer­tain­ty than the pos­si­bil­i­ty that the top tax rate might go up!

Cause and effect? Ithink things were going along pret­ty good there until the Repub­li­can house final­ly start­ed influ­enc­ing what was happening.

Indoctrination Camps

Steve Benen at the Wash­ing­ton Month­ly has a post up about the Repub­li­cans who want to do away with pub­lic schools. He quotes Rick San­to­rum talk­ing about Mussolini’s Fas­cist Italy. His uncle

used to get up in a brown shirt and march and be told how to be a good lit­tle fascist.…I don’t know, maybe they called it ear­ly pre‑K or some­thing like that, that the gov­ern­ment spon­sored to get your chil­dren in there so they can indoc­tri­nate them.

The upshot here is that there are sev­er­al Repub­li­cans who are increas­ing­ly will­ing to talk about doing away with pub­lic schools alto­geth­er. This amounts to a will­ing­ness to do away with uni­ver­sal edu­ca­tion (since they would even­tu­al­ly want to cut the vouch­ers to less than what schools charge).

What’s fun­ny here is when have the schools not been about indoc­tri­na­tion as well as edu­ca­tion? When I was in school, we said the Pledge of Alle­giance (“under God”) every day. What is that if not indoctrination?

Con­ser­v­a­tives have lost the bat­tle over con­trol of the indoc­tri­na­tion mes­sage and their final last ditch effort is to do away with pub­lic edu­ca­tion alto­geth­er in hopes that the vast major­i­ty of pri­vate schools will indoc­tri­nate the way the Con­ser­v­a­tives want.

To recap: when the com­plaint is that the schools are indoc­tri­nat­ing, they mean the schools are indoc­tri­nat­ing the wrong thing.

When they want to do away with pub­lic schools, they want to do away with uni­ver­sal education.

What Were They Thinking?!?

My nor­mal response to the ques­tion “What was he think­ing?” (or a vari­a­tion there­of) is that there was no think­ing involved. But is it pos­si­ble there was no think­ing involved on the part of the Repub­li­can House mem­bers when they passed the Ryan bud­get? If there was think­ing, what could it be?

All but four of them vot­ed to destroy Medicare, slash lots of spend­ing that peo­ple like, and low­er tax­es on the wealthy! They did this even though there was not a chance in hell of the bud­get becom­ing law. Next year they have to run for reelec­tion while defend­ing this vote. I assume the pri­ma­ry defense will be “There was no way it would become law, so it was safe to vote for it” which, I am sure, will make every­one feel bet­ter about it.

The inter­est­ing thing about the Ryan bud­get is that if it actu­al­ly passed the Sen­ate and the Pres­i­dent signed it, it would make the deficit worse. Why? Because there is no way the “end medicare as we know it” por­tion would remain intact. The spend­ing cuts the bud­get lays out would not remain intact. But you can bet your boots the tax cut for the wealthy would stay.

And the deficit would explode.

The deficit is a seri­ous issue, but it can not be solved by pre­tend­ing that polit­i­cal real­i­ties no longer exist.

Government Shutdown Avoided and Guaranteed

As I write, the news is that an agree­ment has been reached for the bud­get for the fis­cal year (or what’s left of it). This is good news, though it was pur­chased by the Democ­rats giv­ing up far more than they should have.

Appar­ent­ly, the House will not be able to pass the com­pro­mise with­out Demo­c­ra­t­ic votes as the Tea Par­ty mem­bers feel House Speak­er John Boehn­er gave up too much (he got more than his open­ing bid!). Which brings up the ques­tion, is Boehn­er an his­tor­i­cal­ly weak Speak­er, or an excep­tion­al­ly clever one?

I can not decide if the Democ­rats should give just enough votes for it to pass or if they should vote for it unan­i­mous­ly (or as unan­i­mous­ly as they can).

Now comes the hard part: next year’s bud­get. I see just two pos­si­bil­i­ties. One, no agree­ment is reach­able and the gov­ern­ment shuts down. I think this out­come is guar­an­teed. There is one alter­na­tive. Boehn­er could pass a bud­get with the 192 Demo­c­ra­t­ic votes and 25 Repub­li­can votes (includ­ing his own). This requires Boehn­er to be will­ing to lose his job as Speak­er. It also requires that he and the oth­er 24 Repub­li­cans face a Tea Par­ty oppo­nent in his pri­ma­ry. I see this as the only hope of avoid­ing a shutdown.

If we get through this fall, with or with­out a shut­down, then we have just one bud­get left for this con­gress, and that would be on the table dur­ing the elec­tion! That will be interesting!!

Seventy Three Billion

On this morn­ing’s Face The Nation, Sen­a­tor Har­ry Reid says that a num­ber has been reached for the amount of cuts to make in nego­ti­a­tions to pre­vent a gov­ern­ment shut­down. The num­ber he gives is $73 bil­lion. This is the first time I’ve heard that num­ber. I’ve been read­ing all week that the num­ber is $33 bil­lion. This num­ber would make the Repub­li­cans very hap­py since they’ve been want­i­ng $61 bil­lion. Of course, they would still want the cuts to be where they want them to be!

My guess is that Reid mis­spoke. I am dis­ap­point­ed that Bob Schi­ef­fer let that num­ber pass with­out ask­ing about it. In the blogs I read I do not see any imme­di­ate reac­tions to that number.

Reid comes up with the num­ber at the 5:55 mark of the video.


A com­menter, Joe Fri­day, at Steve Benen’s blog at The Wash­ing­ton Month­ly explains that Reid was sim­ply using a dif­fer­ent base­line and the $78 bil­lion and $38 bil­lion dol­lars are the same.

Assum­ing this is cor­rect, this then is a con­tin­u­a­tion of the seem­ing­ly eter­nal prob­lem the Demo­c­ra­t­ic Par­ty has with mes­sag­ing. I pay a rea­son­able amount of atten­tion and Rei­d’s num­ber con­fused me. I guess I could be the only one who was (is?) confused…but if the same base­line was used con­sis­tent­ly, maybe more peo­ple would understand.….



Where Would It End?

I have been think­ing about a post pon­der­ing just how far today’s Repub­li­cans would go if allowed. What year of the cal­en­dar they would like this to be? 1950? 1920? Maybe 1890?

Crush the unions, erect bar­ri­ers to vot­ing, deeply cut the reg­u­la­to­ry “bur­den”, elim­i­nate pub­lic schools…

But to get to 1920 they would have to dis­en­fran­chise women. Sure­ly THAT would be a bridge too far…

And maybe it is.

But I would have thought that the weak­en­ing of and/​or elim­i­na­tion of child labor laws would be a bridge too far. Wrong! Among oth­er fun ideas at the link is this:

Mis­souri State Sen. Jane Cun­ning­ham ® intro­duced a bill which would “elim­i­nate[] the pro­hi­bi­tion on employ­ment of chil­dren under age four­teen. Restric­tions on the num­ber of hours and restric­tions on when a child may work dur­ing the day are also removed.

It is a bit unfair to lay the blame for all of these pol­i­cy ini­tia­tives at the feet of ALL Repub­li­cans. But at the same time, when is the last time you heard a Repub­li­can leader or nation­al fig­ure stand up against any of these ideas.

Political Battles Never End

I was just read­ing Steve Benen’s blog at The Wash­ing­ton Month­lyHe has an entry com­plain­ing about those Repub­li­cans who are work­ing on how they might rein­state Don’t Ask, Don’t Tell. I dis­agree with his com­plaint on two counts.

First, his­to­ry, espe­cial­ly recent his­to­ry, teach­es us that polit­i­cal bat­tles nev­er end. Wis­con­sin has passed the law strip­ping pub­lic ser­vice work­ers of almost all their col­lec­tive bar­gain­ing rights, but the oppo­nents of that law are still work­ing hard to over­turn it. I do not believe I have seen any com­plaints from Steve about that.

Sec­ond, polls have shown that the major­i­ty of Amer­i­cans want­ed Don’t Ask, Don’t Tell repealed. So I say let the Repub­li­cans go on record as want­i­ng to repeal it. As Amer­i­cans want jobs, the Repub­li­cans con­tin­ue to pur­sue agen­das that either have no effect on jobs or would cost jobs. If the Democ­rats come up with any decent mes­sag­ing at all, they should storm back to large majori­ties in 2012.

Why the Deficit Does and Does Not Matter

Sat­ur­day night I was at a char­i­ty casi­no night. Buy a tick­et, get an assort­ment of chips and try and increase them. I got my ini­tial chip allowance of “$30,000” and head­ed for the roulette wheel. At the end of the evening I had “$740,000” in chips.

This was not entire­ly luck. I used a sys­tem. One chip on odd. When I won, I bet one chip on odd again. When I lost, I dou­bled the bet. So two chips, then four, then eight, etc. Soon­er or lat­er the ball was going to land in an odd num­ber and I would win. (Try this with real mon­ey at your own risk). After a while, instead of start­ing the process with a “$1,000” chip, I start­ed with a “5,000” chip. I raised the ini­tial amount once I felt com­fort­able that I had enough mon­ey to sur­vive a like­ly (i.e. short) los­ing streak. Even­tu­al­ly, I was start­ing with a ““$15,000” bet.

I believe the clos­est I came to bust was when, start­ing with a “$15,000” bet, I did not win until I had bet “$120,000”. So I had lost three times in a row. If I had lost that fourth time, I would have been start­ing over. I did not have any­where near “$240,000” in chips left to dou­ble my bet with again.

What does this have to do with the deficit? As long as there are var­i­ous enti­ties ready and will­ing to buy bonds from the Unit­ed States, then the deficit is not a prob­lem. But when there is no more mon­ey to put back us.…

This years deficit is irrel­e­vant. It might be made rel­e­vant if the gov­ern­ment decid­ed to spend three or four more tril­lion this year (maybe a lit­tle less, maybe a lit­tle more), but giv­en the prob­a­ble deficit, even with no cuts from con­gress, the deficit is irrel­e­vant. Next year’s is too.

The peo­ple mak­ing the deci­sions on whether to buy or not buy our debt are ful­ly aware of the pro­ject­ed deficits. But even so, they still loan us mon­ey. This tells us that the mar­ket­place (where con­ser­v­a­tives usu­al­ly wor­ship) believes that our present deficits are not that much of an issue.

How­ev­er, it is rea­son­able to assume that at some point the total debt com­bined with the pro­ject­ed deficit will become too much for those deci­sion mak­ers and they will start putting their mon­ey else­where. Then we are screwed (just as I would have been screwed if the wheel came up even four times in a row). The mon­ey will no longer be there.

In the mean­time, the eco­nom­ic recov­ery con­tin­ues, slow­er than we would like, but con­tin­ues none the less. Some of the rea­son for this growth is a large fed­er­al gov­ern­ment spend­ing deficit. That deficit is stim­u­la­tive. Con­tin­u­ing eco­nom­ic growth is very impor­tant for the deficit/​debt issue as a strong econ­o­my will do much to ame­lio­rate the problem.

The Repub­li­cans want to slash cur­rent spend­ing which will have a depres­sive effect on the econ­o­my and cost jobs and will have a small effect on the cur­rent deficit and might eas­i­ly increase the deficit over the next cou­ple of years (due to the slowed econ­o­my). It is dif­fi­cult to under­stand exact­ly what the Repub­li­can objec­tive is oth­er than they want to hand­i­cap the eco­nom­ic recov­ery hop­ing for a dou­ble dip reces­sion and that the vot­ers blame Obama.

It is their only hope for win­ning the white house in 2012.

Delegating Powers to the Vice President in the Mubarek Administration

OK, that does not roll off the tongue as nice­ly as rear­rang­ing deck chairs on the Titan­ic. But either metaphor serves in the case of our elect­ed fed­er­al offi­cials and the deficit.

Let us begin with an old chart from the Con­gres­sion­al Bud­get Office via our, ahem, good friend Ross Perot:

This chart is a bit dat­ed, but the curves have not changed much. Future deficits are the result of medicare/​medicaid and inter­est. The last being the same as say­ing future deficits are the result of future deficits. If future deficits can be brought under con­trol, then the inter­est pay­ments will take care of themselves.

Want some­thing more recent?

This is from Feb­ru­ary 25th, 2011. It assumes that the Bush tax cuts will expire and that the Oba­ma stim­u­lus tax cuts also expire. Note that the growth of health spend­ing goes from over eight per­cent of GDP to 12% of GDP while the total deficit at that point is 3.2 per­cent of GDP. So the entire pro­ject­ed deficit in 2021 could be attrib­uted to the growth of med­ical spending.

The Afford­able Care Act (Oba­macare) actu­al­ly includes sev­er­al mea­sures intend­ed to bring down med­ical costs. The CBO grades the Act as low­er­ing the deficit even though they did not take many of the cost sav­ing mea­sures into con­sid­er­a­tion on the grounds that the mea­sures had not yet shown they would work (they were not even law at the time…).

So the only seri­ous deficit reduc­tion effort in Wash­ing­ton today is the Democ­rats defense of health reform. Oba­ma freez­ing spend­ing and the Repub­li­cans talk of cut­ting spend­ing amounts to noth­ing more that del­e­gat­ing pow­ers to the vice pres­i­dent in the Mubarek administration.

Oh yes. If you want to clear up the short term deficits, this chart might prove useful:

For good or for ill, the spend­ing that the Repub­li­cans want to cut is there for a rea­son. Peo­ple like it. That spend­ing is pop­u­lar. War, the Bush tax cuts, and the reces­sion dri­ve the short term deficit.

Even if the wars end tomor­row, the sav­ings there will be min­i­mal. Some­thing else will come along. It always does.

Many of the cuts the Repub­li­cans pro­pose would actu­al­ly weak­en the eco­nom­ic recov­ery and so increase the deficit.

The Bush tax cuts should be allowed to expire. All of them.

Everybody’s Scratching Somebody’s Back

Some of the mes­sage com­ing from var­i­ous Repub­li­cans late­ly is that the pub­lic employ­ee unions give the Demo­c­ra­t­ic Par­ty an edge since the Democ­rats are sup­pos­ed­ly hap­py to give the unions what­ev­er they want and then the unions pro­vide the dol­lars and the votes to elect the Democ­rats. A fine cir­cle of back scratching.

In the first place, if this was such an effec­tive dynam­ic, how did a Repub­li­can get elect­ed to the Wis­con­sin gov­er­nor­ship? Why are there any Repub­li­can office hold­ers any­where? And, why is it that

over the last fif­teen years the pay of pub­lic-sec­tor work­ers, includ­ing teach­ers, has dropped rel­a­tive to pri­vate-sec­tor employ­ees with the same lev­el of edu­ca­tion — even includ­ing health and retire­ment benefits.

(Yes, I just used that a cou­ple of posts previously…)

I sup­pose it is all hunky dory that big busi­ness and the wealthy give loads of cash to Repub­li­cans who vote to give them tax deduc­tions and tax cuts, and to ease the reg­u­la­to­ry bur­den. It is so much eas­i­er to make mon­ey when one is free to pol­lute the envi­ron­ment, treat employ­ees as expend­able assets, and cus­tomers as peo­ple to swindle.