August 29, 2011
Ezra Klein et al add some commentary to the above chart:
Last week, the Congressional Budget Office put out its revised GDP forecasts and predicted that the economy would expand at a healthy clip between 2013 and 2016, about 3.6 percent per year. That’s curiously upbeat, and even if the U.S. economy gallops along at that pace, we’ll only reach full employment by 2017—right in time for Rick Perry’s second inaugural.
And what happens if we grow at a slightly more sluggish rate, which is hardly implausible? Dave Altig, senior vice president and research director at the Atlanta Fed, has designed a chart of different growth scenarios, looking at how long it will take real GDP (what the economy is actually producing) to catch up to potential GDP (what the economycould be producing, given existing resources) under each.
The current economy is as bad as expected and shouldn’t be expected to rebound (as noted) for almost half a decade.
July 30, 2011
“For those who insist that the center is always the place to be, I have an important piece of information: We already have a centrist president. Indeed, Bruce Bartlett, who served as a policy analyst in the Reagan administration, argues that Mr. Obama is in practice a moderate conservative. Mr. Bartlett has a point.
The president, as we’ve seen, was willing, even eager, to strike a budget deal that strongly favored conservative priorities. His health reform was very similar to the reform Mitt Romney installed in Massachusetts. Romneycare, in turn, closely followed the outlines of a plan originally proposed by the right-wing Heritage Foundation. And returning tax rates on high-income Americans to their level during the Roaring Nineties is hardly a socialist proposal.
True, Republicans insist that Mr. Obama is a leftist seeking a government takeover of the economy, but they would, wouldn’t they? The facts, should anyone choose to report them, say otherwise.” -Paul Krugman
July 29, 2011
As I read over Ezra Klein’s post that described the recovery-less recovery (more found here), a few words and phrases stuck out to me.
As Wolfers suggests, these numbers solve the mystery in the labor market. This isn’t about confidence or uncertainty or regulations or any of the other bankshot explanations we’ve been using to explain why unemployment seems stuck even as the economy rebounds. The economy isn’t rebounding. Demand isn’t returning. And without demand, there can’t be jobs.
Emphasis from here on out is from me. In terms of demand, is it all that bad for a country to scale back it’s purchases, it’s expenditures, and possibly live more within their means? Banks, for one, are not giving out loans as easily. I found this out over the past week. With a proposed deal I negotiated with Wells Fargo, I would of been facing a 40% mortgage payment to income ratio. The banks today want that ratio to be between 20% and 30%. Five years ago, I could have easily gotten a loan with a 40% ratio. I speak on this based on friends and family who have in fact received loans before the Great Recession with roughly 40% ratios. Banks are being more careful, people are not selling because the housing bubble has burst, and those willing to make moves have to cross their t’s and dot their i’s to prove that they truly will make x in a given year, not just think or hope they will.
Meanwhile, we’re in an economic crisis in which the main problem is too little spending.
Cutting spending and budgets in a recession does hurt an economy but, again, too little spending is not inherently bad. If anything, this Great Recession has helped us feel the purchases we make (credit cards numb the feeling of purchases. We do not see the actual money come out of our wallets or purses but only flash a piece of plastic. We delay this feeling from hitting us until later on).
I stand by less spending and lower demand as good signs for simplicity and understanding our behaviors. Whether these signals are actually making cognitive connections with fellow Americans, I cannot say for sure.
One final note: yes, over 9% unemployment nationwide (with that 2-3x the case for minorities – cry me a river white America) is bad. I will not deny that reality.
June 14, 2011
I would disagree with Auth on this one. If you track the past year month by month, the economy (and job creation) under Obama has been at a slow (but expected) rate. Any Democrat or Republican can only do so much. Obama’s “government assisting the private sector” approach is not the full answer and cutting taxes is certainly not (look at the last 10 years and the 9.1% unemployment rate and tell me why tax cuts for the rich have allowed this rate to shoot up). Obama is open to both of the above. Unfortunately for the GOP as seen last night, insanity will continue if they take the White House in less than a year.
June 5, 2011
This is updated every month by Business Insider.
June 4, 2011
Most analyses of the kind of recession we are having—the kind that follows a massive financial crisis and an asset-price bubble that led to too much leverage throughout the economy—indicate that things should be pretty bad right now. They’re correct. The IMF, for instance, warned as far back as 2009 that the “combination of financial crisis and a globally synchronized downturn is likely to result in an unusually severe and long-lasting recession.” Economists Carmen Reinhart and Ken Rogoff, who have studied 800 years of recessions and panics, concur. “I would say we’re right on track,” Reinhart says. “Yes, the recovery looks long, but that’s because we haven’t had a financial crisis this severe since World War II.” –Annie Lowrey on the recession being as bad as the experts predicted.
May 10, 2011
When the economy is bad, everyone blames the president. This goes back, at least, to Martin Van Buren and the Panic of 1837, but recently happens time and time again with Barack Obama.
Obama is blamed when the job reports come out and all looks gloomy. When the unemployment rate hovers around 9%, it’s Obama’s fault. Obama is the president and is the only one who can answer to the criticisms. Past presidents are out of office and have handed over the torch to Barack.
Where I have issue is when Obama is solely blamed and the Bush Tax cuts for the rich (which Obama extended for 2 years) are given no blame at all. They have been in effect for almost a decade, have nothing significant to show for (in terms of job creation, as wishfully hoped by the rich on the Right), and are a form of an immoral domination system (even more so since they are not accomplishing their purpose).
Why are these tax cuts never criticized but often irrationally praised as the panacea to save American jobs?
October 14, 2010
That is what Debbie Wasserman Schultz said on FOX News:
“On the pace that we’re on with job creation in the last four months — if we continue on that pace — all the leading economists say it is likely that we will — we will have created more jobs in this year than in the entire Bush Presidency.”
As easy as it is, and often tempting, to spar back and forth with your partisan opponent, it often is much more complex than we think and the numbers we see may be cherry picked.
None of [Schultz's view] factors in that more than 400,000 of the new jobs are temporary jobs created to complete the 2010 U.S. Census.
Wasserman Schultz gets her numbers right in saying that the U.S. in 2010 is on a pace to add more jobs to the economy than during the eight years George W. Bush was president. But the comparison is misleading because it ignores the job losses in 2009, and compares one year to eight. In fact, you can take the same statistics and reach an entirely different point.
September 19, 2010
Bill O’Reilly decries contemporary spin yet spins a lackluster football op-ed in an elitist (or more so a non-populist, therefore not of Fox News) direction:
We are living in a time of incredible spin and gross dishonesty in the public arena. Propagandists are everywhere and they’re spitting out so much bilge it is sometimes hard to even breathe. Football is an honest game. The toughest, smartest team usually wins. There is something pure in it.
At the end of his “praise-complain” piece, Bill finally brings into this equation the word money. Sure, he mentions that watching football is free, which is economical and involving money. But to mention absurd ticket prices in the final paragraph and to leave out the industries outrageous salaries in a piece attempting to relate the flimsy economy to foosball is sad.
As I Googled around, I came across this article. I assume that the sports industry is not hurting that much. I would have to dig even more to see a comparison between a CEO and a working level worker’s financial losses over the past few years. Richard Sandomir describes the hurting sports industry: “In the past year, five of the nine major professional sports teams in the United States that were sold or are being sold were saddled with substantial debt or operating losses. Another dozen in the four biggest leagues, which have a total of 122 teams, may soon change hands.” Even though these teams are making big bucks, they for the most part have been losing money over the past few decades.
I see Bill O’Reilly as more enjoyable to watch on the Factor, in small portions, than in writing. Bill still writes this article up in his own style: highly political and somewhat pious while unable to level with those not making millions off of their “no spin zone’ TV show.
August 15, 2010
Brendan Nyhan and John B. Judis analyze the ups and downs of Ronald Reagan’s and Barack Obama’s presidencies:
It’s possible that Judis is right that Obama’s numbers would improve if he used more populist rhetoric, but tactics alone are extremely unlikely to change the dynamic Obama faces. He’s mired in a terrible economy and is likely to suffer large midterm election losses. Different tactics might make a small difference on the margin, but as Judis previously put it, “Obama’s fortunes, like those of so many of his predecessors, are tethered to the economy.”
This is a fine piece that is extensively put together. I am looking forward to reading his new front cover piece at The New Republic.
This is a very complex issue (as is every issue in politics). You have to consider who Obama is up against. I wish I was a political scientist and payed attention to politics in the 1980s because I do not know how the Democrats were to Reagan then. The Republican majority today serves as an uncompromising band that is being drowned out by Rep’s and Senators’ vitriolic comments, talk radio and TV personnel “news”, the Tea Party offshoot, Christianist mouthpieces, resulting in the push not to change or reform, not to care for the orphans or aliens but in some cases to take them into the middle of the country and fence them in: Japanese concentration style.
This is a mighty foe for Obama – not because they are right or superior but because their invective is contagious. It is sneaky and hides under patriotic guises and Christian labels. I see Obama as fair and balanced and have really begun to value him as a leader after the Arizona vs. Washington flare up and his speech for Ramadan.
For Obama to keep pushing forward with a populous that doesn’t agree with him is a tough road to walk. I, again, wish I was a political scientist because then I would have more of a clue of what to do. I see that it is political suicide in some cases for Senators or Rep’s to diverge greatly from their base. I just have a feeling that a President is suppose to lead and guide us. It isn’t until now that I see and value Obama as the leader he is and not by what he isn’t doing or is being depicted as by the polls.
August 9, 2010
I remember a history professor talked about his push for Pennsylvania to adopt more railway construction. That was in a history of Pennsylvania class. I came across today an article about high speed rail construction in the USA and its comparisons to abroad rail programs in Europe and Asia. This article is part of a four-part series:
A recent analysis by the U.S. Government Accountability Office concluded that building high-speed rail service in this country “is a difficult, multiyear effort” that hinges on financing that goes “far beyond the funds provided by the Recovery Act in a time of continuing federal and state deficits.”
The GAO also noted that states would have to cooperate with one another and with freight railroads, and that the Federal Railroad Administration would have to “transform itself from essentially a rail-safety organization to one that can make multibillion-dollar investment choices” while still taking care of its original responsibilities.
Obama’s take on the benefits of rail: Construction jobs. Manufacturing jobs. Cleaner air. Less gridlock. Reduced dependence on foreign oil. And no herding in airport security lines, with all its attendant little indignities: “I mean, those [trains] are fast, they are smooth. And you don’t have to take off your shoes.”
July 3, 2010
Newitz responds to Rosin:
It’s unlikely that the female dominance of the working class will last very long. As Ann Friedman points out, the aspirations of job-seekers will shift with the market. Men who want a respectable working class income can certainly tackle nursing, child care, and food preparation with as much aplomb as women. What we’re likely to see over the next decade is a shift not only in how many women are part of the working class, but what kinds of jobs all working class people do.
Male nannies and nurses, in the minority now, are likely to become more common. The question is really whether female engineers will become more common too – especially since engineering jobs are among the most highly-valued in the market.
July 2, 2010
The new Citizen Cohn blog puts out a great piece addressing the myth that government handouts make people lazy:
In fact, a 1990 study of unemployment benefits by Lawrence Katz and David Meyer suggested as much: They found a significant link between how long people could receive payments and how long people stayed unemployed. (For each five to six weeks of extra benefits, people would stay unemployed one additional week.) Katz and Meyer also noticed that people stopped being unemployed at the same time as their benefits ran out—proof, it would seem, the more generous benefits encourage people to stay jobless.
But subsequent research showed otherwise. A 2007 study from David Card, Raj Chetty, and Andrea Weber took a closer look at what happens to people when their unemployment benefits run out. They don’t magically find jobs, it turns out. Rather, they simply stop submitting the information that would cause the government to count them as unemployed.
According to the Economic Policy Institute, there are about five job-seekers for every job opening right now. In December 2007, when the recession officially began, there were only two job-seekers per opening.
I don’t have a full belief on this yet beyond knowing that it is not a cut and dry situation. No ones case is black and white and in each case we need to reflect on the stigmas WE BRING to each into the discussion (e.g.- every person on welfare sits around and is lazy, every person on welfare buys luxuries they don’t need, every person on welfare needs to be shunned and not trusted, and the list goes on).
I was able to attend a Poverty Simulation almost 2 weeks ago in my area. We were given a name, a family, and a life situation. Many of us had little to no education, typically 1 of us had a job for the whole family, lines were long to pay bills, transportation and food costs were high, stress was heavy, and we didn’t think one bit about stopping to care for each other; we were focused on how we could pay our bills or steal from each other to make that happen (others found it ordinary to skip work to go take care of other things).
July 1, 2010
Barack Obama goes with focusing on jobs over debt:
But with fears alive of a double-dip recession, Obama warned he won’t slash spending at the expense of an economic rebound – and he lashed out at Republicans for blocking the extension of unemployment benefits and opposing a Wall Street financial-overhaul bill in Congress.
He called the GOP out of touch with the daily problems of Americans.
Obama promised that the matter of trimming deficits would be a priority over the next couple of years, with help from a panel studying how to cut costly safety-net programs.
Still, the president defended as essential both the big stimulus spending and the massive aid given to big banks and auto companies.
House Minority Leader John A. Boehner’s comment that the financial-regulation bill Obama supports amounts to “killing an ant with a nuclear weapon.”
Isn’t it safe to say that both sides of the political aisle are to some degree out of touch when it comes to the daily life of American denizens? I wish I could see into the future or see today how all of the jobs/financial reforms/boosting will pan out.
June 29, 2010
Chait wonders what they are really up to:
What you fear is that the economy will improve, salvaging Democratic hopes for this November’s midterms. And that will lead to more Democratic policies than otherwise, which – in your view — will be very, very bad for the country.
So of course you want to “sabotage” any economic recovery over the next few months, because you believe that any temporary improvement will pale in comparison to the medium- and long-term damage that Democratic policies will cause. That’s a hard calculus, but it’s a pretty straightforward one, and perfectly reasonable if you accept Republican assumptions.
It’s not a terrible argument. Of course, it requires imposing a great deal of economic hardship on the public in order to bring about more distant and uncertain relief in the future.