Monday 28 November 2011
great republican depression
Monday 23 May 2011
99ers and the Long-term Unemployed Are the Elephants in the Economic Recovery Room ☀
The Congress, the Obama administration and most media outlets are silent about long-term unemployment. How do they reconcile the fact that 244,000 jobs were created, but 21,000 additional workers have been unemployed for more than 99 weeks? How do they put on a happy face when a near record 5.893 million or (this language is not supported, see … for more info) have been jobless for more than 26 weeks? How do they rationalize their cheerful statements of job improvements with the facts that job creation is very weak considering the trillions of dollars pumped into the economy to support Wall Street and fund tax breaks? How do they high-five the economic recovery when the labor force participation rate — the share of people over age 16 who are either working or actively seeking work — is at a low rate of 64.2%, a rate not seen since 1985? They can’t. They generally ignore the issue; long-term unemployment is the elephant in the economic recovery room.
What is being done legislatively to address this elephant in the room? To date, nothing. The GOP controlled House has been busy attempting to cut the deficit, repealing healthcare funding, and restarting offshore oil drilling. The Republicans, with the help of some Democrats, are working to weaken Wall Street regulation legislation, end net neutrality, and are arguing the Defense of Marriage Act. They are pandering to their base, acquiescing to their corporate overlords and obliging their big-wallet campaign contributors.
Congressional leaders are more concerned with ideology than reality. They have not presented a jobs bill or employment training legislation, conducted investigations on how to solve long-term unemployment, or offered tax incentives for companies to hire the long-term unemployed. They have ignored legislation, such as Rep. Barbara Lee’s H.R. 589, that would help millions of long-term unemployed, the 99ers, who have exhausted all unemployment benefits. While most of the blame can be placed at the door of the GOP controlled House, the Democratic controlled Senate and Obama have been suspiciously silent about the long-term unemployment problem.
Long-term unemployment is not only a national tragedy, but it is a personal tragedy as well. Rochelle Sevier was laid off in October 2008 while working as a recruitment coordinator for a biotech firm. Since that time, “I started my job search immediately. In addition to my job search, I attended various workshops at my local career center. As part of my search I attended job fairs, partnered with temp agencies, posted my resume online, and also submitted my resume to various positions.” During the past couple of years Rochelle took part-time temporary positions that included folding sweaters and stuffing envelopes. Her unemployment benefits ended in September 2010 and she didn’t find another job until January 2011 when an administrative position became available. Unfortunately that job ended six weeks later, “I finished out my 6th week and now I am back to square one. This rejection affected my emotional and mental state. I started to feel hopeless and depressed because I now feel like I will never work again.”
Monday 18 April 2011
neightkelly asked: In your previous post you say that Paul Ryan and Republicans are hypocrites for not addressing military spending (I agree). But with that logic wouldn't Democrats and Liberals also be hypocrites for not wanting to address Entitlement Reform since Social Security, Medicare/Medicaid, and unemployment benefits make up 58% of what our government spends?
What would you do to reform medicare/social security?
http://29.media.tumblr.com/tumblr_lhcs78485o1qbogplo1_500.jpg
No. It is a false equivalency.
First, social security, has operated with a $2.6 trillion surplus since 1983. Yes, since the the onset of the 2nd Great Republican Depression, social security is not accumulating such an overage. But the doomsayers and fear mongers, in reckless haste, accept dire predictions as gospel truth. If there is any adjustment needed, measures such as increasing the earnings cap (presently set to ~106K) or removing the extremely affluent from the rolls collecting retirement payouts should be applied.
On Medicare — it could be entirely funded by hitting up the top 1% for about a third of its income. Or, by implementing less costly ways to provide the same or higher quality care. I have not the expertise in this realm, but if it is a given that a large proportion of health care cost is in a person’s final year of life, then there must be some ideas to chop that cost (without the ill fames “death panels”) while still providing for the patient.
But back to the your point on Paul Ryan and the Republicans being hypocrites — let us not forget that it was the Republicans in 2003, including Paul Ryan, that championed the Medicare Prescription Drug Improvement and Modernization Act of 2003, then regarded as the most reckless giveaway of public funds in human history.
In case you are a little foggy on the whole 2003 GOP Medicare fiasco:
Then there’s the small matter of public policy itself. From its inception, the Republicans’ Medicare prescription benefit was designed to fail. With its confusing and costly “donut hole” limiting payments for beneficiaries and its prohibition on direct government price negotiations with pharmaceutical companies, Medicare Part D was a headache for recipients and a windfall for the drug companies.
For starters, the White House and its GOP allies on Capitol Hill insisted that the final December 2003 Medicare Drug bill prohibit the government from negotiating prices directly with drug companies, a key demand of the pharmaceutical lobby. The same price leverage enjoyed by the Veterans Affairs Department and its program beneficiaries was surrendered by Medicare, with the predictable results described in a 2006 House analysis.
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Wednesday 28 April 2010
I fear that George Santayana was right and that we are doomed to repeat the Great Depression over and over again because we appear to have forgotten the lessons it taught us. I fear that Milton Friedman is right and that this is a “game” to some. I fear that Adam Smith is right and that “as merchants their interest is directly opposite to [the public] interest.” And I fear that misplaced tea bagger rage, unlike misallocated capital, is more newsworthy, more interesting and more understandable than CDOs and the ways in which Gyges gains unearned power and wealth, hidden behind the opacity of complex investment instruments. The rules of the game must be changed. They must be changed now. And they must be changed in ways that serve the public interest. Investment banks and bankers must be regulated. Leverage, transparency, size. I’m sure there is more. Toxic assets, toxic instruments, and toxic casino-like speculation are no different from toxic patent medicines. They harm us all. Maxine Udall ☀
Tuesday 25 August 2009
Don't Let the Stimulus Lose Its Spark ☀
In a recent column in Forbes magazine, the economist Lee Ohanian of the University of California, Los Angeles, a stimulus opponent, explained why he believes that increased government spending wouldn’t help the situation. The problem, he says, is that “the higher taxes on incomes or expenditures that ultimately accompany higher spending depress economic activity.” Because the short-run stimulus program has been financed with borrowed money, not higher taxes, Mr. Ohanian must have in mind future taxes needed to pay off stimulus-related debt.
His argument, and that of stimulus opponents generally, thus boils down to this striking contention: As the government spends borrowed funds, consumers will start to realize that the resulting debt spells higher taxes in the future, which will lead them to curtail their current spending. Those cuts will offset increased government spending, leaving no net stimulus.
Although there may be people who would actually spend less now to hedge against uncertain future tax bills, it’s unlikely that you know any of them. As behavioral economists have been saying for decades, that’s just not the way most people act. Hardly any consumers even know how big the national debt is, much less how it will affect future taxes.
MORE important, there are good reasons for believing that stimulus spending will make people’s future tax payments lower, not higher. Yes, government borrowing adds to the national debt. But if the stimulus also hastens the downturn’s end, it will accelerate the growth of future incomes and tax revenue. In that case, the net effect would be to reduce future taxes, compared with what they would have been without the stimulus.
And even if we run with the notion that stimulus spending will increase future taxes, it doesn’t follow that consumers will cut back on spending now. After all, we know that most people already fail to save enough for their retirement. Why would they alter their behavior to hedge against uncertain future taxes?
Wednesday 22 July 2009
The Great Tax Con Job ☀
Beyond fairness and holding back the Landed Gentry the Founders worried about (America had no billionaires in today’s money until after the Civil War, with John D. Rockefeller being our first), there’s an important reason to increase to top marginal tax rate, and to do so now.
Novelist Larry Beinhart was the first to bring this to my attention. He looked over the history of tax cuts and economic bubbles, and found a clear relationship between the two. High top marginal tax rates (generally well above 60%) on rich people actually stabilize the economy, prevent economic bubbles from forming, prevent economic crashes, and lead to steady and sustained economic growth (and steady and sustained wage growth for working people).
On the other hand, when top marginal rates drop below 50 percent, the opposite happens. As Beinhart noted in a November 17, 2008 post on the Huffington Post, the massive Republican tax cuts of the 1920s (from 73% to 25%) led directly to the Roaring ’20s stock market bubble, temporary boom, and then the crash and Republican Great Depression of 1929.
Rates on the very rich went back up into the 70-90% range from the 1930s to the 1980s. As a result, the economy grew steadily; for the first time in the history of our nation we went 50 years without a crash or major bank failure; and working people’s wages increased enough to produce the strongest middle class this nation has ever seen.
Then came Reaganomics.
Reagan cut top marginal rates on millionaires and billionaires from 74% down to 38% and there was an immediate surge in the markets — followed by the worst crash since the Great Depression and the failure of virtually the entire nation’s savings and loan banking system.
Bush I cut taxes, and the nation fell into a severe recession while debt soared and wages for working people fell.
Things stabilized somewhat when Clinton slightly raised taxes on the very rich, but W. Bush dropped them again - including taking taxes on unearned income (interest and dividends - the “income” that people like W. born with a trust fund “earn” as they sit around the pool waiting for the dividend check to arrive in the mail) down to a top rate of 15%. (That’s right - trust fund babies like Bush and Scaife pay a MAXIMUM 15% federal income tax on their dividend and interest income, thanks to the second Bush tax cut.) The result of this surge in easy money for the wealthy, combined with deregulation in the financial markets, was the “froth” Greenspan worried about and led us straight into the Second Republican Great Depression, ongoing today.
The math is really pretty simple. When the uber-rich are heavily taxed, economies prosper and wages for working people steadily rise. When taxes are cut for the rich, working people suffer and economies turn into casinos.
Tuesday 10 February 2009
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