Jobless Recovery (aka Purgatory)

Matt Yglesias posted about the BLS report today. It was interesting so I read the report. I guess this is what Paul Krugman has been talking about.

“Nonfarm business sector labor productivity increased at a 6.6 percent annual rate during the second quarter of 2009, the U.S. Bureau of Labor Statistics reported today. This was the largest productivity increase since the third quarter of 2003, and reflects declines of 1.5 percent in output and 7.6 percent in hours worked.”

That means we worked a lot less but only made a little less. We pulled the slack out of the economy. This doesn't bode well for adding jobs to the economy. The only question is, what will the new normal be???

If previous demand was artificially high because of artificially high wealth (incomes were certainly not up) due to an artificially inflated stock market (tech bubble) and housing market (housing bubble) and easy credit (low interest rates and expanding credit card debt), then consumption was 'artificially' inflated and the labor market was also 'artificially' inflated. The new normal could be high unless consumption rises (economically unlikely), or government spending remains elevated (politically unlikely).

Now, I'm a self-described progressive democrat, small d, which basically means I'm a socialist. I don't know if I buy the new normal. I'm no fool, I realize full employment is nearly impossible, but that's not what we're talking about. We're talking about agreeing to a new normal that could be between 6% and 9% (that's U-3, let alone U-6). That's simply unacceptable.

Do-Over??? or Redo???

So the Republicans are calling for obstruction and a re-start on health insurance reform. I also heard Moynihan acolyte Larry O'Donnell on Left, Right and Center warn Democrats against a Dems-only approach to reform (I assume he means reconciliation), saying that the late Senator Kennedy advised Clinton to do a Dems-only bill and we all know how that ended. Side point: why do Republicans get do go with reconciliation (see Medicare post) but not Democrats?

These calls for a do-over/re-start and threats to obstruct and delay are part of a long-standing strategy by the GOP to kill health insurance reform and to re-animate their own political future, and according to the polls it might be working. We're seeing slipping numbers for Democrats up and down the ticket for 2010. And, I'm guessing Republicans are walking with a spring-in-their-collective-step hoping to turn 2010 into a 1994 redo.

Truth is no one sees 2010 getting as bloody for Dems as 1994 (when they lost 54 seats), however, many a prognosticator has gleaned an upcoming route by Republicans from their chicken bones and tarot cards. Republicans have found their rallying cry, and you can hear the bellowing begin.

What is important to remember is that in 1994 you had low turnout (as you might expect from a mid-term election), but an energized right (fighting the illegitimate Clinton Administration) and a scared geriatric crowd (Hillarycare and all that) voted in large numbers while a demoralized Left/Center-Left stayed home, depressed by President Clinton's NAFTA policy and his failure to reform health care. To quote a previous entry...

First, let's get one thing straight, 1994 was not a revolution. The midterm elections saw a paltry 38.8% nationwide turnout, and the Republicans only received 19% of the eligible vote. The number of Dems voting declined across much of the nation, while Republican turnout increased. The nation saw a 21% drop in the reported participation rates of those with incomes of $15,000 and lower, while there was a 33% increase in the share of the vote cast by those whose incomes were $50,000 and over. African Americans turnout saw a decline of 2 percentage points and turnout among young people declined to 14.5% of eligible voters. And men only slightly increased their share of the electorate (disproving the "angry white guy" myth). The 54 seat pickup for Republicans in the House and 8 seat pickup in the Senate has been seen as the culmination of a decades long realignment in the states of the old Confederacy. Even as Democrats had a significant registration advantage (37.8% to 22.4%) the region had been voting for Republican Presidential candidates since Nixon. This "realignment" has often been cast as a revolt at the base of the Democratic Party because of the "race issue," i.e. the Democratic support of the 1964 Civil Rights Act and the 1965 Voting Rights Act which essentially destroyed much of the legal infrastructure of Jim Crow. This "southern strategy" mythology has been widely discredited, in fact there was little or no significant shift at the bottom rungs of the socio-economic ladder from support for the Dems to the GOP. Once again, the myth of the disaffected, poor, angry white man was true in anecdote only. The real "realignment" happened much further up the economic ladder. Which makes it not much of a realignment since Americans with upper incomes typically vote Republican. The depressed turnout among Democratic loyalists (the poor, the young, and black folks) accounts for the 1994 turnout.

That said, there is a lesson to be learned here, but it's not what David Brooks or Sen. Mitch McConnell says it is, the real danger is not in promoting a government take over of health care, the real danger is in NOT PASSING REAL REFORM. The right is energized, grandma and grandpa are scared, this was always going to happen. The Right, as Kevin Drum wrote today, authorized a 'scorched earth counterattack to Obama's entire agenda.' They lied. And, as the Wire reminds us, the bigger the lie the more they believe it. The real test for President Obama is whether he'll be able to stand up and energize the Left by actually passing reform, and whether he can win back Independents by not giving in to the craziness of either side and pass reform that doesn't smell of ideology or capitulation. He won't have much help from the grassroots. The grassroots has had a hard time getting energized, because the President has been so far removed from the process, because the process is complicated (five bills, each of which is hundreds of pages) and because we have a mainstream media that reports process and conflict, not substance and nuance (see the WaPo Ombudsman's column from this Sunday) resulting in a population that just doesn't understand the legislation. In retrospect, The grassroots should have been energized for a single payer option by the unions and MoveOn.org, which would have created a pressure from the Left that would have made the 'public option' the sensible compromise that it is, and not the baby in the bathwater for the Left.

The point is, the Right doesn't want a do-over they want a redo, a redo of 1994. If all those Democratic Congressmen want to win, they need to pass health insurance reform. Energize the Left for once. It's time to dance with the one that brought you and pass reform. Do it like you mean it, Mr. President, and maybe the Left won't stay home in 2010. And show some leadership by standing firm to both sides and maybe some of those independents will remember what they liked about you in the first place.

'My Parents Bought me an SAT Tutor on our Trip to Europe'

Yes, I once overheard that statement.

Last week NYT's Economix blog had some interesting graphs on the correlation between parental income and SAT scores. In a nut shell: yep, you guessed it, the more your parents make, the better the kids do on the SAT.

UPDATE: Matt Yglesias has a post on these numbers, but adds some interesting OMB data.

The MSM, the Left, and the Problem of Being RIGHT

By 'right' I mean correct.

It seems that being wrong will almost never harm your career in the MSM (mainstream media). However, being right, and being right early almost never helps, in fact, being right can really hurt you.

Case in point. CNBC's uber-annoying, I-wanna-cuddle-with-CEOs Maria Bartiromo appeared on CNBC today to 'debate' health insurance reform with Rep. Anthony Weiner. In the course of the interview he praised Medicare as a very popular 'public' insurance system in the US. Bartiromo then asked Rep. Weiner, "How come you don't use it [Medicare]? You don't have it. How come you don't have it?" Weiner is 44 years old.

Matt Yglesias has a great post about this very problem, that is the problem with being right and Left in America. Yglesias discusses a report from Dean Baker (Center for Economic and Policy Research) from 2002 which called a spade a spade, or in this case, a housing bubble a, well, housing bubble. And for his heroic prescience, does he get a new plush job and does he get hailed as a hero? Nope. He's just that nutty crank on the soap-box on the Left who says the sky is falling while everyone else says 'It's great beach weather!'

As Mr. Yglesias writes: 'if you start warning about something and then it doesn’t happen, and then you keep nagging people, and then you keep complaining about how nobody’s listening to you, you start getting dismissed as a crank. And when you’re proven right, you’re still that crank nobody wants to listen to. You don’t get hailed as a hero.'

The Republicans and Medicare

I love politics. It makes the thing you hate into the thing you love, well, so long as it polls well.

Remember when Republicans were ideologically consistent and opposed Medicare? It wasn't that long ago. Now you have the Chairman of the Republican Party, Mr. Michael Steele saying that retirees need a 'bill of rights' for Medicare. Just a few years ago you had President Bush passing the Medicare Prescription Drug, Improvement, and Modernization Act.

I was thinking about that this weekend, and found a post by Matt Yglesias that answered my questions. So, I'll just let him tell you...

When thinking about health insurance reform, it is worth looking back at the Medicare Prescription Drug, Improvement, and Modernization Act. For one thing, in its final form it passed the United States Senate by a vote of 54 to 44. For another thing, unlike the House or HELP health care bills, it added hundreds of billions of dollars to the 10-year deficit window. And it contained nothing that even purported to “bend the curve” over the long term.

No 60 votes necessary for the Republican Congress. No pay-go requirements for the Republican administration. To make matters worse, Senators Baucus and Grassley both vote FOR the expansion. Now they're all like, 'well, I just don't know if death panels and cost controls are a good idea.'

WHY?!

What's with Tom Ridge?

I was pressured, no I wasn't. Yes I was, no I wasn't.

Tom Ridge is confusing me. He's on Rachel Maddow, denying that 'politics' influenced anyone's decision making process regarding the decision to raise the threat level prior to the 2004 elections. I get why people on the Left have a problem with the threat-level being raised before an election, the incumbent President had, on average, gotten a bump in the polls any time there was a decision to raise the threat level. I also get why the White House may have HONESTLY thought they should raise the threat level, it was an election. It's a great day to attack (from the perspective of a terrorist). The real issue is not whether the Bush Administration 'politicized' the process, but rather, whether the process made any sense to begin with. I can picture some lonely political appointee sitting around trying to discern what day Al Qaeda might attack. Maybe there were tarot cards involved, or chicken bones or something. I can just picture him/her, 'well, July 4th, that's kind of an important day, I bet that would be a day a terrorist might like to attack us.' There was probably more to it than that, but I bet that was at the root of a lot of the threat level increases.

The other issue at hand is, what was the point of the color coded threat level thermometer? Am I supposed to stay home the day we go to yellow? Cancel my flights? Just get irrationally afraid, even though I'm living in rural Arkansas and have a 0.0 likelihood of ever being targeted by any terrorist, minus our local right-wing militia member or abortion bomber? That's the real issue. Did they ever politicize it? Who knows? How could you tell the difference?

NTSB Report an excuse for union busting???

So Fox is reporting that the NTSB Report on the helicopter-plane crash in New York City was the result of incompetence on the behalf of the air traffic controllers. Fox didn't come out and blame unions, but I wonder if it will be much time before Glenn Beck, Bill O'Reilly, and Sean Hannity make this an argument against unions in general.