Fed might as well have single mandate

By Frank Moraes

Matt Yglesias is very insightful about the Federal Reserve. Last year, he asked an incredibly important question, "If the unemployment and inflation rates were reversed, would the Fed do something about it?" The point is that the Federal Reserve has a dual mandate to keep both inflation and unemployment low. Yet all the Fed seems to care about is inflation. At the time he said that, inflation was 2% and unemployment was 8%. If it were the other ways around, the Fed would be working hard to cool the economy down. But they are perfectly happy with the way things were (and are).

There is some talk among conservatives that the Fed should have a single mandate: keep inflation low. The idea is that the Fed shouldn't worry about employment at all. Note that this is an idea that is designed to help the rich. Inflation hurts people who have a lot of money. Unemployment hurts people who have to work for a living. By saying that the Fed should only worry about inflation, the conservatives are telling us everything we need to know about them: they are policy hacks for the rich.

But today, Minnesota Senator Amy Klobuchar asked the Federal Reserve Chairman Ben Bernanke how the Fed would act differently if it did have the single mandate. Yglesias rightly noted that after much bobbing and weaving, the Fed chair said that he wouldn't do anything differently. And that's important, if not surprising. We have long known that the Fed didn't seem to think that 8% unemployment was anything to worry about. After all, none of the members of the Fed even know anyone who is out of a job.

Read more »

It's the jobs, stupid

By Frank Moraes 

In December, the economy added 155,000 new jobs. As usual, the private sector job growth was better (168,000), but we lost government jobs (13,000). These are not great numbers. The government really ought to do something about this. And contrary to what many people believe, there is much that the government could do. Unfortunately, the Republicans are in favor of policies that make both the economy weaker and the budget deficit worse. The Democrats have some decent ideas. President Obama's American Jobs Act would help quite a lot. But it is only a start.

I don't think that people understand just how big a problem we face. The problem is largely due to the media. While the base unemployment rate was as high as 10%, all we heard about was the budget -- as though that was the most important thing in the world. If it hadn't been for the police abusing Occupy Wall Street protesters, we'd never have talked about jobs. And now, it seems we are back to fretting over the budget again.

So how big is the unemployment problem?

Read more »

Good jobs report because Obama was re-elected

By Frank Moraes 

The jobs report was released this morning. The headline is good: 146,000 jobs were created and unemployment dropped to 7.7%. But you really can't trust the headline. I start most mornings by reading Paul Krugman, but this morning I went directly to Dean Baker. In a sense, Baker is the most important economic writer we have. He is a total buzzkill. So on the one hand, if there's bad news hidden in the jobs report, he will know it. On the other hand, if he's optimistic, it's time to sell those government bonds and buy some real estate! (Or something. Don't take investment advice from me or you'll end with my portfolio: .)

Unfortunately, there is no word yet from Baker. So I went elsewhere. I knew WonkBlog would not let me down, and indeed, Dylan Matthews provides the usual competent overview of the numbers (Brad Plumer also has a good overview):

• 146,000 jobs created in November;
• Unemployment dropped to 7.7%;
• September-October jobs created revised down by 49,000 total;
• Labor force participation is generally stable at 63.6%;
• Job creation is all in the private sector, public sector losses.

Read more »

7.8%

By Mustang Bobby

The September jobs report came out on Friday, and it looked pretty good:

The nation's unemployment rate dropped below 8 percent in September to its lowest rate since the month President Obama took office, the Labor Department said Friday.

While employers added only a modest 114,000 jobs last month, the jobless rate declined to 7.8 percent from 8.1 percent, even though more people entered the labor force.  Adding to the positive news, job gains were revised upward by 40,000 for July (to 181,000) and by 46,000 for August (to 142,000), which had been considered a disappointing month, casting a slightly rosier hue on the summer slowdown.

The private sector, which has been adding jobs since March 2010, grew by 104,000 workers in September. Governments, where cuts have been a drag on the recovery, added 10,000 jobs.

And of course the immediate reaction from the Republicans and the low-information section (which is redundant) was apoplectic:

The economy added 114,000 jobs in September and unemployment declined to 7.8 percent. Not great numbers, but paired with major upward revisions to previous monthly reports and taken in the context of a slowly recovering economy, the report was viewed as good news for America.

Unless, of course, you were hoping for bad news. And apparently quite a few of President Obama's critics were — so much so that they suggested the Bureau of Labor Statistics was part of a vast conspiracy.

The leader of the "job truther" movement: former GE CEO Jack Welch.

"Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers," he said on Twitter.

He had some friends in Congress too. Rep. Allen West (R-FL) tweeted "I agree with former GE CEO Jack Welch, Chicago style politics is at work here." He added on Facebook that the jobs report was "Orwellian to say the least and representative of Saul Alinsky tactics from the book 'Rules for Radicals.'"

FOX News' Stuart Varney apparently sensed where his audience was going. Within minutes of their release he told viewers that "there is widespread mistrust of this report and these numbers."

"How convenient the rate drops below 8% [for the] first time in 43 months, five weeks before the election," he added later.

Okay, let's let a little logic prevail. (Yeah, I know that's a fool's errand when you're talking about dealing with frothing freaks, but what the hell...)

First, if the Obama administration was cooking the books at the BLS to make them look good for the election, why did they wait until now? Why didn't they start messing with them back in May when they started to look crappy, or through the rest of the summer? It's not like this is some Aaron Sorkin script where the president comes in in the last five minutes and roasts his opponent just so the audience would keep watching past the last commercial. (Ezra Klein explains it all for you.)

Second, all the months that the unemployment numbers have been stubbornly north of 8%, all the Republicans and Romney folks have been pointing to the BLS numbers as gospel, proof that Obama's economic policies and stimulus efforts were an abject failure. The BLS has been the Absolute Proof.  Now they're all a sham? Nuh-uh. Or, as Steve Benen put it, "you're clearly an intellectually lazy hack. No serious person can credibly argue this way."

There is a bit of karma here; the better unemployment numbers story is going to step all over the bad debate performance by Obama and throw a split-finger fastball at the Romney campaign, which is already swinging in the dirt at the news: "This is not what a real recovery looks like." Oh yeah, like you'd know, Mr. $5 Trillion Tax Cut Bullshitter.

If the Republicans were real patriots, they would be cheering the good news about the economy and the fact that things are getting better. Rooting for bad economic news just for political gain is despicable. And utterly predictable from these clowns.

(Cross-posted at Bark Bark Woof Woof.)

Obama Panic and the new Republican "jobs truthers"

By Michael J.W. Stickings

I'm not sure what to call it. Obama Panic?

Whatever the case, Republicans have never met an anti-Obama conspiracy theory they didn't embrace with all their venomous, fearful hearts.

The same was true with Clinton, of course, lest we forget just how crazy the Gingrich-led Republicans were back then, but with Obama it has odious racism at its core, along with a sense that Obama is the all-powerful puppetmaster singlehandedly turning America into the socialist paradise of their ridiculous, delusional nightmares.

Birtherism is the most notorious of these discredited theories, with Donald Trump leading the way, but it hardly stops there. And today -- yes, today -- we encountered a new group of anti-Obama crazies:

The jobs / job-report / unemployment truthers.

Today, President Obama -- and America -- got some great news, with the Bureau of Labor Statistics (BLS) reporting that the unemployment rate had fallen to 7.8 percent in September and that there was a gain of a modest but still significant 114,000 jobs ("total nonfarm payroll employment"), along with a revised total for July and August that showed 86,000 more new jobs than originally reported.

It was expected that Romney would throw some cold water on the news, claiming that the increases have declined over the past three months and blaming the president for the loss of manufacturing jobs, but the numbers speak for themselves. The 7.8 percent unemployment rate is the lowest since January 2009 and so the lowest of Obama's presidency.

This isn't to say that the economy is charging ahead at full steam, but, as Kevin Roose wrote at Daily Intel, "[t]oday's numbers are a clear win for the Obama campaign's recovery narrative... It's not a perfect recovery, and it's not as quick a recovery as we should hope for. But it's a recovery, clear as day." And that contradicts the Romney narrative, one he pushed hard in the debate, of an economy in stagnation.

But it wasn't really Romney who made news with his criticism today, it was those "truthers," people like former GE CEO Jack Welch, who tweeted: "Unbelievable jobs numbers..these Chicago guys will do anything..can't debate so change numbers."

Yes, Welch, once one of the country's most prominent CEOs and still a highly-respected business leader -- if also, of course, a Republican -- actually accused the president and his "Chicago" team of tampering with the numbers, of controlling the BLS and making sure today's numbers would help the president after a poor debate performance.

Which is a simply outrageous, and entirely unfounded, charge.

And it wasn't just Welch. (Think Progress exposes the truthers.) As WaPo's Greg Sargent wrote:

So the unemployment rate truthers are in a panic this morning. Some conservatives are angrily claiming that the new Labor Department stats finding unemployment below eight percent were cooked to help Obama win reelection.

The Tweet from former General Electric CEO Jack Welch is gaining the most attention... The refrain has been picked up by conservative Republicans in Congress and CNBC contributors. Fox News's homepage blares: "Jobless rate dips under 8 percent, but...IS THE NUMBER REAL?"

It's all completely crazy, but it's also really bad for Romney:

Ezra Klein debunks the whole thing, as if it needs debunking. But it's also worth noting that it's hard to see how the unemployment truthers are helping Mitt Romney here. By launching into a full blown angry panic about improving jobs numbers, they only draw attention to, and reinforce, the idea that the economy is, in fact, improving — and, worse, that the prospect of economic improvement is terrible news for Romney's presidential prospects.

The numbers themselves make Obama's own job of getting re-elected a bit easier (and Romney's use of a still-struggling economy for his political benefit that much tougher).

These "truthers," pushing another crazy conspiracy, are helping out, further discrediting their party -- and its candidate -- and serving as a very public reminder that Obama Panic is very much the way of things on the right these days.

It all comes down to this, America: Don't be cruel.

Guest post by Ramona

Ed. note: I'd like to welcome a new guest blogger to The Reaction -- Ramona of Ramona's Voices, an excellent blog that I recommend highly. I first came across Ramona while I was doing the blog round-up at Crooks and Liars a while back and since then I've become a big fan. There's just something about her. She's serious but without pretension, providing perceptive commentary with both depth and levity. In addition to the post below, check out recent posts on Erin Burnett and Occupy Wall Street and on the religious test in American politics, as well as her regular "Friday Follies" feature, a round-up of the week that was. Go read her blog and look forward to more guest posts from Ramona down the road. But let's start with this one. It is, if I may say so, outstanding. -- MJWS

**********

Ramona is a freelance writer based in Michigan's Upper Peninsula. Her blog, "Ramona's Voices," is liberal-leaning, with such a small amount of navel-gazing you'll hardly even notice. She is also on the masthead at dagblog, a gathering place for dissidents and reprobates and other friendly people.

Sabrina Tavernise, The New York Times, September 14, 2011:

WASHINGTON -- Another 2.6 million people slipped into poverty in the United States last year, the Census Bureau reported Tuesday, and the number of Americans living below the official poverty line, 46.2 million people, was the highest number in the 52 years the bureau has been publishing figures on it.

And in new signs of distress among the middle class, median household incomes fell last year to levels last seen in 1997.

Economists pointed to a telling statistic: It was the first time since the Great Depression that median household income, adjusted for inflation, had not risen over such a long period, said Lawrence Katz, an economics professor at Harvard.

''This is truly a lost decade,'' Mr. Katz said. ''We think of America as a place where every generation is doing better, but we're looking at a period when the median family is in worse shape than it was in the late 1990s.''

The bureau's findings were worse than many economists expected, and brought into sharp relief the toll the past decade -- including the painful declines of the financial crisis and recession -- had taken on Americans at the middle and lower parts of the income ladder. It is also fresh evidence that the disappointing economic recovery has done nothing for the country's poorest citizens.

The report said the percentage of Americans living below the poverty line last year, 15.1 percent, was the highest level since 1993. (The poverty line in 2010 for a family of four was $22,314.)

When all is said and done, if we can ever get beyond the grand-standing, the bloviating, the harumphing, and the chest-pumping, the awful truth is that millions and millions of American citizens are now among the chronically hurt because of the current no-fault-of-their-own economic crisis, exacerbated by the current we'll blame them anyway political climate.

Families are hurting. Our elders are hurting. Children are hurting. Future generations will be hurting. We've let yesterday slip by and tomorrow shows no great promise. The time to do something is now.

Everybody knows that something must be done, but what keeps the wheels from turning, from moving us forward, is an ongoing, time-wasting argument about how best to appear to be saving the country while saving face, saving precious personal skins, saving the privileged elite.

There is no point wasting time talking about past history -- a couple of centuries worth of the same mistakes, the same indulgences at the top, the same misery at the bottom -- when nobody is in the mood to learn from it.

We have now become one of those countries known throughout the world for deliberate cruelty to its own citizens -- the kind of despised country whose citizens we ourselves would have taken pity on not so long ago.

It's cruel to pretend that, while it may be true that unprecedented numbers of America's children have experienced hunger or homelessness, or a desperate, unrequited need for health care, no single sweet child of ours is affected. We're masters at shutting our eyes to real, live, scared, and suffering kids.

It's cruel to play games with needed unemployment benefits by pretending they're one more example of undeserved governmental handouts to the lazy or misbehaving.

It's cruel to humiliate the jobless even more by pretending that anyone without a job isn't looking hard enough.

It's cruel to pretend that outsourcing and off-shoring have nothing to do with the loss of millions of life-sustaining jobs.

It's cruel to pretend that workers don't need or deserve representation when the need is so much greater now.

It's cruel for the richest country in the world to give private insurance companies the power to deny anyone health care and pretend that people aren't dying because of it.

It's cruel to allow profiteers to attempt to kill off one major historic source of national pride -- public education for every child without regard to race, creed, or income level -- and pretend that a) the public schools did it to themselves, and b) no child is being left behind because of our negligence.

It's cruel to divert our national treasure, including and especially our young men and women, to foreign wars that don't concern us or affect us nearly as much as our own at-home social and economic wars.
But the cruelest reminder is that we almost had it in our grasp -- a fair and prosperous country we could be proud of -- and we let it slip away.

There's no pretending it didn't happen. There are enough of us still around who remember a different country, where it looked as if the American Dream would actually become a major possibility. It was taken away from us, not by happenstance but by the mean and deliberate actions of politicians and power brokers.

You can say it a million different ways, but what it comes down to is cruelty by a thousand cuts. There was a time when we all would have fought against that sort of thing.

I'll say it again: This is some strange new century...

(Cross-posted at Ramona's Voices.)

President Obama's cold hard assessment of his chances for reelection

By Richard K. Barry

I'm trying to process what I think about President Obama's comments that he believes the odds are against him in 2012, given the state of the economy. I'm not surprised that anyone would think such a thing, I'm just wondering what I think about the president using this as a strategy.

In an interview with ABC News' George Stephanopolous, he admitted, in essence, that his reelection bid would be a challenge and that the American people were "not better off" than they were four years ago, saying that "the unemployment rate is way too high."

Clearly, he is trying to take away as many GOP attack lines as possible. I understand.

Then, to give a hint of how he would respond to such criticism, he said that while he was used to being the underdog, "at the end of the day people are going to ask -- who's got the vision?"

He then went on to outline all the great things he had done and would do, like his proposed American Jobs Act.

And, as if to support Obama's contention, ABC News reported that:

The latest unemployment figures for the month of September will be released Friday, [with] the jobless rate not expected to significantly improve. And next year, leading up to the fall elections, the unemployment rate is expected to climb to its highest level since 1940.

So, I would agree with Obama and his campaign team that it would be unwise to argue with the facts, or what the facts are likely to be come election day 2012. I would agree that they are really doing the only thing they can do, which is to try to convince voters that Obama is still the one with the best vision for the country and the best plan to get us out of the mess we're in.

I just don't know how much patience Americans are going to have for a president who will be going around saying that after four years in office things are still really, really bad, and that this will make it hard for him to get reelected -- that he is the "underdog."

I get what he's trying to do, that this is supposed to set up his pitch. And I guess he has no choice, but it still makes me uncomfortable.

Maybe I'm just from the school that says no matter how bad things are you still go as upbeat as you possibly can. You act like a winner. People are drawn to hope and run from despair. They don't follow underdogs.

Maybe that's not possible this time around. I don't know. Not sure. But I don't like it.

(Cross-posted at Lippmann's Ghost.)

Unemployment matters, but Romney is still an idiot

By Nicholas Wilbur

I hate when Mitt Romney... speaks.

If he's not lying about a lie he lied about not lying about, he's either making shit up or flailing around like a walrus in a triple lindy competition.

Last Friday, he blessed us with this statement: "Just this week, President Obama's closest White House adviser said that 'unemployment rates or even monthly job numbers' do not matter to the average American."

The funny thing about Romney's crazy talk is that "Obama's closest White House adviser," David Plouffe, never said "unemployment rates or even monthly job numbers" do not matter. What he said was this:

The average American does not view the economy through the prism of GDP or unemployment rates or even monthly jobs numbers. People won't vote based on the unemployment rate, they’re going to vote based on: "How do I feel about my own situation? Do I believe the president makes decisions based on me and my family?"

For the 90.8 percent of the American labor force that is employed, I think this statement is pretty accurate. And yes, it's still accurate even for the 9.2 percent who aren't. (Especially if they're Republicans, because Republicans don't believe it's the government's job to find Joe Six Pack a job.) But even Plouffe is only telling part of the story.

Everyone likes to cite facts and figures showing that no incumbent president (except for the Gipper and FDR) has ever been re-elected with an unemployment rate above 6 percent.

Unfortunately for stupid people who believe the stupid shit other stupid people say, the unemployment rate actually isn't a dominant factor in the big picture of national elections.

What matters, as the Political Animal Steve Benen pointed out a month ago, is progress. If things are improving, if unemployment is falling, statistics are irrelevant.

Unemployment peaked at 10.8 during Reagan's first term, but it fell to 7.2 by the 1984 election. Unemployment grew to 7.8, up from 5.2, when George H.W. Bush sought re-election. That's why Reagan was re-elected and H.W. wasn't. And that's why Obama will glide to victory in 2012 while Romney will be stuck in the unemployment line during the day and burning unsold copies of his shitty book to heat his home at night.

After peaking at 10.1 in October 2010, unemployment fell to 8.8 percent by March 2011. Then the GOP took over.

We were promised big changes when Republicans won majority control over the House of Representatives in the 2010 midterm elections. For six months now they've bitched and moaned and done everything they could to overturn every bill Obama has signed. What they didn't do, and what Democrats will surely highlight throughout the 2012 campaign, is create a jobs bill – or a job. Unemployment declined consistently for a year and a half until Republicans took over the House. Now, for two consecutive months, it has risen.

The obstructionists have entered the building.

Expect mass evacuations sometime around November 2012. 

(Cross-posted at Muddy Politics.)

Mitt Romney insults every single unemployed person in America

By Michael J.W. Stickings

Campaigning in Florida yesterday, supposed Republican presidential frontrunner Mitt Romney had this to say about himself:

I should tell my story. I'm also unemployed.

He meant it as a joke and the people at the table with him, all unemployed, also laughed.

Oh... so... hilarious.

Is this really his shtick, and is he really trying to break the ice on umemployment by telling this stupidly unfunny joke?

Is it his multi-millionaire way of connecting with the suffering, struggling American people? He made his money mostly by destroying jobs. He has no idea what it means to be unemployed, to suffer through genuinely hard times, to struggle to pay the bills and put food on the table. And yet he makes a joke like this as a way to seem like he's actually in touch?

I'm sorry, but evidently he's an asshole.

**********

I would also note, following Jon Chait, that Romney is hardly as moderate/sensible/reasonable as he is being made out to be.

Responding to Romney's claim that Obama is some sort of un-American Europhile, Chait calls him "an ignorant demagogue," very much in line with other Republicans "exploiting cheap sentiment and playing upon fears of Obama as foreign, un-American, and working to undermine free enterprise," all of which, of course, it utterly baseless. Chait sums Romney up nicely:

I agree that somewhere, in his heart of hearts, Romney is an intelligent technocrat who's better than his campaign. But the plain fact is that the Mitt Romney who's running for president is sane and rational only by the standards of his crazed opposition -- which is to say, he isn't one.

Don't let him fool you. And don't let the media play along with his fooling.

Your call has been disconnected

By Carl 

Well, this is good news, right?

Fewer Americans filed applications for unemployment benefits last week, a sign the labor market is firming heading into the second quarter.

Jobless claims fell by 6,000 to 388,000 in the week ended March 26, Labor Department figures showed today in Washington. The government also issued its annual revisions to the seasonal- adjustment factors, which caused a “mild upward shift” in the number of applications, an agency spokesman said as the figures were released to reporters.

A slowdown in firings and growing payrolls may bolster further gains in consumer spending, which accounts for about 70 percent of the world’s largest economy. Companies added 210,000 jobs in March, while the unemployment rate held at 8.9 percent, economists project a Labor Department report to show tomorrow. 

A sidenote: there is some reason for concern for the Obama camp, in that high unemployment is usually a harbinger of defeat in an election. The latest number, 8.9%, is notably down from the near-10% of this time last year, but more has to be done. Fortunately, these things have a way of gaining momentum.

Employment is like Sisyphus' boulder: once it starts up the hill, it becomes easier and faster, but when it falls, it plummets.

Americans getting jobs. Sounds like a sign of a healthy economy. 

You'd think.

As  I write this, the markets have just opened for the day. Mind you, nearly every index is up for the year at or near record paces not seen since the tech bubble of 1998, but today, when finally it looks good for an American middle class worker, the toilet lid flies up and the markets sink. The Dow is off 13 points, and S&P 500 and NASDAQ are both struggling to stay even.

What is it with corporate America that they can't sync up with Main Street Americans?

In a nutshell, there is no more Corporate America any more than there are American cars. So many companies have become multinational conglomerates that their fortunes no longer rise or fall along with those of you and I here in the USA.

It used to be "what was good for GM was good for America," but that's no longer the case. GM got bailed out. Americans got HAMPered, the plug having been pulled on the only sensible bailout program in the recession, the one that helped Americans keep their homes.

But I forgot. That program wasn't going to turn a profit for the US. Or a bigger one for the banks. My error.

Just like full employment means the banks can't hold your feet to the fire in interest and late payment charges.

(Cross-posted to Simply Left Behind.)

If you lose your job, John Boehner might just tell you to go fuck yourself

By Michael J.W. Stickings

You may lose your job, but John Boehner doesn't give a shit:

If House Republicans succeed in cutting tens of billions of dollars in discretionary spending over the next six months, some of the most immediate victims will be federal employees, many of whose jobs will be slashed as their agencies pare back.

At a press conference in the lobby of RNC headquarters Tuesday morning, House Speaker John Boehner (R-OH) shrugged this off as collateral damage.

"In the last two years, under President Obama, the federal government has added 200,000 new federal jobs," Boehner said. "If some of those jobs are lost so be it. We're broke." 

As Brian Beutler notes, "Boehner didn't cite a source for the claim that Obama had added 200,000 employees to the federal payroll. And he said he didn't have an estimate of how many jobs would be lost as a result of the GOP cuts." In other words, he doesn't really know anything, he was just talking out of his ass.

But there's nothing funny about people losing their jobs, and Boehner's lack of concern, his utter disregard for real people dealing with real problems, is appalling.

As Steve Benen notes, even with all the talk right now about jobs and unemployment, Boehner "by his own admission, prefers a budget plan that would make unemployment worse, on purpose." He "intends to force thousands of teachers, police officers, medical professionals, and food inspectors from their jobs, and... said he doesn't much care." 

Ladies and gentlemen, your 2011 Republican Party!

Truth in Comics

By Creature


If it's Sunday, it's Truth in Comics.

I regret to give you this legislative update

By LindaBeth

I wrote a post-Thanksgiving blog post about the Republican's big "fuck you" to the disadvantaged in the United States, while insisting on less taxes for those who don't need it and contemporaneously insisting--in a contradictory fashion--that now is the time to address the federal budget deficit. Today we have an update on how the then-pending legislation ended up faring:

• Increased spending on health care for 9/11 first responders: today Senate Republicans blocked the vote to end debate and allow the Senate to vote on it. If that's not anti-American, I'm not quite sure what is.
• Child Nutrition Act: at the beginning of December the House passed the Senate version of the bill, that funded the $4.5 billion bill with a $2.2 billion cut in food stamps funding (a.k.a. robbing Peter to pay Paul--now inadequate nutrition will just be centered in the home rather than schools.)
• Extension of unemployment benefits: blocked by Senate Republicans late last week....because it's not "paid for." Yet...
• Republicans continued to insist on giving tax cuts to the wealthiest Americans. In fact, they went a few steps further, first essentially blackmailing Congress by pledging to block every piece of legislation that came up--including issues of national security like the START Treaty--until they get their tax cuts, and second, going even further than that by agreeing to extend unemployment benefits so long as they get their tax cuts for the rich. Looks like the Republicans aren't actually all that interested in cutting the deficit after all, then, since the $75 billion tax cuts for the rich add billions onto the deficit, are far less stimulative than the $56 billion UI bill (they actually cost more than they stimulate), and there's no good reason to buy the Republicans' claim that the rich will use the cuts to add job, since jobs aren't created out of the goodness of people's heart but are added when they are economically necessary to businesses.

The GOPs true colors are blazing bold and clear--are Americans' eyes opened yet?

(Cross-posted to Speak Truth to Power)

Obama, Republicans reach tentative deal on Bush tax cuts, unemployment insurance

By Michael J.W. Stickings

Well. Let's pause for a moment.

(Pause.)

I still think Democrats, caving when they should have stood firm, lost the Bush tax cut issue to Republicans this year, an issue they could have used to portray Republicans for what they really are, the party of the rich, in the lead-up to last month's midterms, but...

I must admit, the deal President Obama and the Democrats have apparently reached with Republicans to extend all the tax cuts for two years, along with a regressive estate tax adjustment (favouring the super-rich), in exchange for a 13-month unemployment insurance extension and a kind of stimulus boost isn't so bad. As Ezra Klain explains:

There's some new stimulus in the form of the payroll-tax cut and the expensing proposals. The older stimulus programs that are getting extended -- notably the unemployment insurance and the tax credits -- probably would've expired outside of this deal. The tax cuts for income over $250,000 are a bad way to spend $100 billion or so, and the estate tax deal is really noxious.

It's bad news for the deficit, though the White House and Congress are right to make the deficit less of a priority than economic recovery. And speaking of that economic recovery? This isn't enough, and it's not well targeted. The deal amounts to the White House throwing some bad money after good. But the end result is between $200 and $300 billion more in tax breaks, tax credits and unemployment insurance than there would've been if not for this deal (I say $200-$300 billion because of the uncertainty over what would've been extended in the absence of this package). That's better than nothing -- or to be more specific, better than backsliding.

He's right, of course, that the "stimulus" elements are really just "anti-contractionary," as "[m]ost of the money just keeps programs that are currently in effect from expiring," but at this point, with Republicans prepared to block everything, it's tempting to take what one can get.

In this case, something is indeed better than nothing, which is what it looked like Democrats would get before this deal.

And while the Democrats lost the issue this year, the obvious calculation is that they can win the issue in 2012, when they can run on extending middle-class tax cuts while letting the highly unpopular tax cuts for the wealthy expire, forcing Republicans to campaign as the party of the rich.

But here's the thing. If Democrats were too cowardly to make an issue of the Bush tax cuts this year, that is, if they recoiled from challenging the Republicans because they feared they'd be labelled pro-tax, why should we believe that they'll find the courage to do so in two years?

Whether or not the economy improves by then, the politics will essentially remain the same. Republicans will still try to make the case -- and, given how the media roll over for them, they'll be successful -- that a failure to extend all the Bush tax cuts (including for income over $250,000) constitutes a tax increase and, yes, that Democrats are big-government tax-and-spenders. True, there will be fewer Blue Dogs around, but it seems unlikely that suddently Democrats will want to engage Republicans on an issue they're so scared of losing -- and so instead lose by refusing to engage and allowing Republicans to get what they want.

The difference may be that Obama will be running in two years, and maybe he'll be able to make the case in the absence of Democratic fortitude, but, again, how can we be sure of this? If Obama finds himself down in the polls, might he not just abandon even the pretense of progressivism and run ever further to the right in the hope of capturing all those celebrated independents?

As Klein notes in a separate post, the deal "is looking more and more like the White House's opening gambit in the 2012 campaign."

Yes, but at what cost? And is this all just about Obama's re-election bid?

**********

Adam Serwer writes that the deal amounts to "a tremendous capitulation for Democrats and a huge win for Republicans" but that there's another side to it:

The good news is that a deal on tax cuts will pave the way for the Democrats to move forward on other important parts of their agenda -- repeal of don't ask don't tell and the START Treaty, since at least two Republicans have indicated a willingness to vote to repeal DADT if a deal on tax cuts is reached. Passage of the DREAM Act would make turn the lame-duck session into a significant net victory for Democrats, but even with substantial revisions to the bill and a CBO score showing the bill reduces the deficit, passage seems like a long shot.

Well, maybe, but the Republicans may make the case that the deal was more than enough compromise and cooperation and that they're not prepared to do anything more during the lame-duck session.

Given what we know of them, isn't that likely?

Klein suggests that "this process suggests that the next two years might be a bit more productive than some of us have been predicting," but to me that's just wishful thinking at best.

**********

And, again, what have Obama and the Democrats accomplished with the deal? A 13-month extension of unemployment benefits is better than nothing, but it's still only 13 months. What happens after that? Won't Republicans just let the benefits expire again?

As Taylor Marsh points out, it's "one year for workers" but "two years for bosses." The wealthy, as usual, would win out, while those who need help the most, also as usual, would get screwed.

And, meanwhile, there's this horrendous estate tax win for the Republicans -- also another win for the rich.

All Obama and the Democrats have succeeded in doing is postponing having to deal with the Bush tax cuts politically for two years.

You can call that "caving" or not, but it's certainly not leadership.

And won't Obama's takeaway from this just be that the only way to get anything done is to give Republicans what they want? Won't that be his "bipartisanship"?

**********

But perhaps it won't matter. Or, rather, perhaps we'll soon find ourselves back where we started. There may be a deal, after all, but it may not pass.

As David Dayen reports:

Senior Administration officials tried to cast their deal on the Bush tax cuts in a positive light, even as forces on the left and right were mobilizing against it. The deal is so shaky that the White House officials and the President would only call it a "framework." Several Democrats and Republicans in the House and Senate are already either simply opposed, or dedicated to mobilizing for defeat of the package, and the Senate Majority leader delivered a terse one-line statement only agreeing to discuss it with his colleagues. The biggest news here is that this deal isn't done.

So we'll see. I suspect that significant changes will have to be made to appease enough opponents on both the left and right to sign on. And, even here, I suspect that most of those changes will be to appease Republicans, leaving the deal's Democratic opponents -- those progressives Obama doesn't much care for, those with the fortitude to stand up to the Republicans and the decency to stand up for the non-wealthy -- out in the cold.

And the resulting package will turn out to be even more Republican-friendly than this deal.

I don't really need to ask this question -- we've answered it already -- but how is it the Republicans can get what they want, more or less, even without controlling the White House and Congress?

And how is it the Democrats are so utterly lame?

**********

Okay, it's not all bad... not all bad... not all bad... and there are things to like in the deal.

And, yes, something may be better than nothing.

But is that really the new standard? And is that supposed to make us happy?

Ham and Shadeggs

By Distributorcap

In the past two years, the Republicans have said and done so many outrageous and dumb things -- that it impossible to count them, keep track of them or remember them all. I would say the GOP has jumped the shark, but they did that back in 1980 when they nominated Reagan.

But today outgoing Arizona Representative John Shadegg may have actually jumped the Palin -- saying something so outrageous, so stupid, and so wrong it is hard to believe he hasn't been laughed out of Congress (or laughed out of the human race) a month early.

The Republicans are so smug and arrogant right now they actually think they can say ANYTHING can just get away with it. We are witnessing the modern day version of Pavlov's Dogs behavior -- if you are never punished or admonished for doing or saying the wrong things, then you will continue to do or say the wrong things. With no one in the media calling them out on their utterly ridiculous statements (e.g. "death panels") you end up with Pavlov's Elephants invoking Goebbel's big lie -- create a lie big enough and pound it in long enough AND not get called out on it -- and you end with a new reality.

From ThinkProgress:

BARNICLE: What about the fact that unemployment benefits pumped into the economy are an immediate benefit to the economy? Immediate...

SHADEGG: No, they're not! Unemployed people hire people? Really? I didn't know that.

BARNICLE: Unemployed people spend money Congressman, 'cause they have no money.

SHADEGG: Aha! So your answer is it's the spending of money that drives the economy and I don't think that's right. It's the creation of jobs that drives the economy... Actually, the truth is the unemployed will spend as little of that money as they possibly can. Job creators create jobs.

BARNICLE: Have you ever been unemployed? Have you ever been unemployed?

SHADEGG: Yes, I have.

BARNICLE: What did you do with the money? Save it?

It hard even to start on this one. Job creators create money as well as jobs and unemployed people hoard money!

I would think even an idiot like Shadegg would understand that someone who is unemployed will spend whatever they have (from savings or unemployment insurance) to keep their family fed and clothed. Shadegg seems to think that these people are headed to the craps table in Las Vegas or the roulette wheel in Monte Carlo -- or better -- stashing their newfound wealth in an offshore bank on the Cayman Islands.  How about the fact that many families are suffering greatly during this holiday season -- and would like to make sure their kids can find a little joy. Not John Shadegg -- these are leeches on society. 

Let's go to Shadegg's second corollary -- that the money the freeloaders will spend won't help the economy, but tax cuts for the idle rich job creators will boost economic output. If more and more people are out of work (some estimates say true un/under-employment is nearly 20%) and more and more of those people are losing their final safety net -- where is this great demand going to come from? 70-75% of the U.S. economy is based on consumer spending -- for groceries, gas, kid's toys etc. NO demand -- no need for goods and services. The trickled down money to the wealthy is not going to get invested in new businesses and increase production because the rich have an extra $50K in their checkbook. Corporations will create jobs if and when they have a need to -- MORE DEMAND.

Even fucking Milton Friedman and Ayn Rand would admit to that.

Tax cuts do NOT create jobs, because tax cuts do not create demand. Tax cuts create more cash for people -- they DO NOT make people spend. Giving the rich more money will not up their demand -- how many BMWs do they need? Do the beneficiaries of this tax cut largesse save that extra cash? Sure they do. Remember from basic economics 101 that savings = investment. Well, with the banks not lending to create growth, that theory is as good as a bad egg. When people and businesses have a need for something they spend -- not when they are given a free flow of cash.

Memo to Dodo Shadegg -- people living paycheck to paycheck and new businesses need to spend. The Koch brothers do not need to spend.

John Shadegg may be an evil and corrupt (hence typical) Republican, but even John Shadegg is not stupid enough to believe this (Palin and Bachmann yes, Shadegg no). Shadegg may be spewing the diarrhea (hate of the freeloading unemployed), but even he knows that unemployment benefits go directly back into the economy and that jobs are ONLY created when there is demand for products and services.

Oh, evil and corrupt and heartless John Shadegg wants to extend tax cuts for the rich -- but that was a given. After all the rich are job creators -- not freeloaders off the government dole.

You think the economy is bad now? Let's drop the final safety net for millions of unemployed Americans and watch small businesses -- businesses that cater to basic needs -- suffer. As an added bonus, property values will drop as even more homes get foreclosed.

Those people left without anything -- welcome to your Shadeggville.

This is only the tip of the teabag. When the Teabags really take control in January we are going to see even more "soak the poor" regulations. Remember -- there is a common pledge for all GOP members to abide by for the the next two years -- make things to get worse and blame the Kenyan Muslim socialist.

Why do people continue to fall for this crap?

GOP screws 9/11 responders, unemployed, and poor: Happy holidays to the rich and corporate elite!

By LindaBeth

I'm really struggling to prevent my head from exploding over the very revealing juxtaposition of bills, policies, and positions swirling around the end of the 2010 legislative session.

The economy is still bad. There is only one job opening* for every five people looking for work, which means that even if all jobs were filled and none were lost, unemployment would only decrease by 20%.

After spending over a trillion on our wars in the Middle East, the GOP is suddenly concerned with deficits.

So what's on the table right now?

Extending Unemployment Insurance: The clock is ticking on extending unemployment benefits; the bill must be passed next week or unemployed workers' benefits will begin to stop. The unemployed are accused of being lazy even though there are objectively not enough jobs for everyone looking. In fact, there usually aren't -- 100% employment is bad for capitalists because then the employees, not the owners, have the leverage. But typically there are 1-2 people looking for every job opening, not 5-6 as we've had in this recession, which makes the negative impact of unemployment on the rest of the economy that much greater. Unemployment benefits are needed not only to help the human beings in need, but to mitigate the negative economic impacts of mass unemployment.

Healthy, Hunger-Free Kids Act of 2010: The Child Nutrition Act gets reauthorized every five years. The Senate version passed in August, only after paying for the $4.5 billion program with program cuts, most of which ($2.2 billion) came from the food stamps program (SNAP). The House version did not include those cuts, and has been stalled for that reason. The cuts in SNAP essential shift the locus of inadequate nutrition from the lunchroom to the dining room. If the bill isn't passed before the break, the process begins all over again.

The 9/11 Illness Payout Bill: A bill providing funds to cover the medical costs for 9/11 first responders. The bill passed the House (even surviving a Republicans threat to add an amendment that would bar undocumented workers from receiving the benefits, as if their suffering from helping our fellow citizens wasn't worth paying for), but the bill is now stuck in the Senate. I can't believe this is even an issue, but the GOP has made it one: the bill will be paid for by closing corporate tax loopholes, and Republican senators are framing it as a tax increase.

So let's sum this up:

• We have Republicans who have spent over $1 trillion on wars this decade wanting to cut the deficit, but refuse to fund the health care of those who risked their life in the events that were the so-called reason d'etre for those wars. They also refuse to cut military spending. 
• Republicans also want to increase the deficit by giving tax cuts to the wealthiest Americans, but refuse to allow more adequate child nutrition--that would lower health care costs and improve cognitive functioning of our poorest children, not to mention their basic quality of life--without robbing Peter to pay Paul.
• Republicans want the wealthiest in the United States to get tax cuts, and are holding middle class tax cuts hostage to do so, while the unemployed, who by definition cannot become employed, are stripped of their poverty-level average UI benefit of $290/week ($15,000/year). Tax cuts for the rich are heralded by the GOP as a economy booster and job creator, even though unemployment benefits and the aforementioned food stamp program provide more economic stimulus than tax cuts of any sort. Businesses do not hire out of the goodness of their heart or because people need jobs. They hire when there is a need for more labor. Giving them a tax break doesn't increase their need for more labor. Unemployment and food dollars being spent does. Those programs are not only right (or just), but they are effective.

What on earth is the logic here? The only one I can find is chilling: demanding to maintain military might by misunderstanding the source of terrorism and adherence to economic ideology despite the facts is worth more than helping those in need. Both GOP positions are self-serving. Especially at this holiday time of the year, this ought to be a stinging indictment of GOP policies and positions, if people would only see the forest, rather than the individual trees.

*The Cato Institute has criticized this number, saying that there are jobs available that aren't advertised, and therefore that that number is misleading. Even still, I highly doubt there are enough unadvertised jobs to even get close to filling the gap. further, these jobs are obtaining through personal networks, or what sociologists call social capital, something largely part of the privilege of one's upbringing, as opposed to human capital, such as one's education. This begs the questions, are these jobs really "available" to the millions of job seekers, or just those who are already well-connected?

(Cross-posted to Speak Truth to Power.)