2011's worst economic ideas

The 10 Worst Economic Ideas of 2011

Say it ain’t so, Ron Wyden. The Democratic senator from Oregon has teamed upwith Congressman Paul Ryan to propose an option for Medicare recipients to buy private plans. They would be offered a flat payment to buy private plans if they so chose. Competition for these dollars will supposedly make Medicare and the health insurance companies more efficient. More likely, however, it will result in misleading claims by the health insurance companies or reduced coverage plans. It will raise costs for Medicare as healthy seniors are induced to take cheaper private plans with healthier individuals. Allegedly, the Wyden-Ryan plan would control for all this by setting minimal standards. Forget about that. The Obama administration has already given in on federal standards for Obamacare, letting states set their own. Guess who most of the states will favor. Seniors will probably have to move to New York or Massachusetts to get decent plans.But that’s not even the big rub. It is that Medicare payments will be limited to growing just 1 percent faster than GDP. Health care costs have risen considerably faster than that for a long time. Somehow Wyden thinks that such a limit will force reforms. In sum, it will simply lead to less coverage and more expense for beneficiaries. ___________________________________________________

Capitalism \= Greed and Gambling

Wisdom from across the pond:

Greed is a human motivation, but not a dominant one –and the institutions that most exemplified the philosophy of greed were those that imploded in 2007-08. The goods made by workers whose motivation was purely instrumental were driven out of the marketplace by those of people who took pride in their work and of organisations which understood that complex assembly depends on teamwork. A semantic confusion leads us to use the word market to describe both the process which puts food on our table and the activity of gambling in credit default swaps. That confusion has enabled people to claim the virtues of the former for the latter.

Many of those who preach the doctrine of free enterprise loudest have succeeded by skills more akin to those of backroom politicians than of entrepreneurs. Mobile phone networks grew rapidly because a fortunate interlude of deregulatory fervour wrested a monopoly from incumbent fixed line operators. The inventors of social networking sites resemble the occupiers of St Paul’s Churchyard tents more than the occupants of boardrooms. The besuited Winkelvoss twins, lobbying and litigating for a share of Mark Zuckerberg’s business, embody the deformed view of market economics which confuses business interests with free enterprise.

Perhaps the “something nicer” which should replace capitalism is a more nuanced –and more accurate –account of capitalism itself.

"Bold"

Nein, Nein, Nein

Voices on my teevee today telling me Herman's 9-9-9 plan is ridiculous, half-baked, and sure to bring on a second recession.  But each "analyst" wrapped with a reminder that it was bold.

If there is one thing I've learned from Adam Sandler's career in "film" as it relates to real world politics its that anyone can have an idea and get others on board supporting it (see every director or studio responsible for every movie Sandler has made besides Punch Drunk Love).

Just because an idea is so ridiculous only one moron thought of it doesn't make it bold. Declarations of boldness should be reserved for those ideas that not only stand out but that are also, you know, good ideas.

Utah Democrats File GRAMA Request

Contact:
Matt Lyon
801.597.8888 | mlyon@utdem.org

For Immediate Release: Wednesday, October 12, 2011

Utah Democrats File GRAMA Request on Behalf of People of Utah

Democrats Charge that Republican Leadership is Taking a 2x4 to the Democratic Process
______________________________

SALT LAKE CITY – The Utah State Democratic Party filed an official GRAMA request today with the Utah State Legislature regarding the closed door, secret conversations leading to the current "fiasco" over Utah’s congressional maps.

“Utah’s Republican leadership is forcing our hand. The Utah Democratic Party has been compelled to demand transparency and fairness on behalf of all Utah citizens,” said Jim Dabakis, Chair of the Utah Democratic Party.

“The poster children of closed cronyism in government – Representatives Dave Clark and Carl Wimmer – are working backroom deals to support their selfish political ambitions. They're throwing out months of work and hundreds of thousands of dollars of public money," continued Dabakis. "Someone must speak for the people of Utah. Someone must smash a battering ram through the closed doors. Moral and public pressure has not worked so far -- so today -- the Utah Democratic Party is being forced to file a GRAMA request to ensure our government is acting in a fair, open, and transparent manner.”

“This is not a decision we are making lightly. We don’t want to tie up the legislature and drag on an unnecessary process. BUT THE REPBULICAN PARTY BOSSES ARE TAKING A 2X4 TO THE DEMOCRATIC PROCESS AND THEY MUST REPENT!" Dabakis proclaimed. "They must open the doors, come to the table, and develop a compromise. We are willing to compromise - are they?”

Dabakis concluded: “The GRAMA request is the first step towards preparing a lawsuit on behalf of the people of Utah. We do not want to go the next step of subpoenas, affidavits, depositions, testifying under oath and official legal claims, but today, we feel we have no choice but to begin moving in this direction and we are reluctantly taking this step to ensure that ALL Utahns are represented.”

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Better Know a Super Committee

Crossposted at MyDD.

Super committee member Xavier Becerra (D-CA) says everything should be on the table, and that there are "no sacred cows" as they scramble to cut $1.5 trillion from the deficit (jobs!).  No sacred cows except their campaign contributions and contact with lobbyists as they meet, that is.

Watchdogs have circled on that theme hoping to pressure members to voluntarily disclose campaign donations and contacts with lobbyists.  Politico:

[...] a coalition of government reform and transparency organizations are demanding that supercommittee members voluntarily disclose their committee-related contacts with lobbyists and publicly report any campaign donations within 48 hours of receiving them.

The groups note in the letter that most federally mandated lobbying and campaign finance disclosure reports covering October, November and December – when the supercommittee is slated to conduct the bulk of its work – won’t become public until mid-January.

“Failure to ensure transparency of these fundamental avenues of influence will reinforce the public’s mistrust of the process and risks delegitimizing the committee’s work,” the 14 groups wrote in a joint letter being sent this afternoon to the dozen supercommittee members. “Your critical work on this committee has begun, and yet the public remains in the dark about special interests’ attempts to influence your decision-making process, whether by meeting with you or donating to your campaigns.”

According to Politico only three committee members have agreed to halt fundraising while the committee meets, but so far none have agreed to voluntarily disclose important details about contacts.  Lobbyists see the opportunity here with the concentration of power and no mandate for disclosure until it's too late.  The Sunlight Foundation is hoping that changes with H.R.2860, the Deficit Committee Transparency Act.  Sunlight's Ellen Miller, via email:

Without transparency around this process, we don’t know who the committee members are listening to. But we can take a guess: Money speaks louder than words in Washington.

The committee members could easily take measures to increase transparency on their own: Disclosing their campaign contributions and meetings with lobbyists or powerful interests in real-time would be one way. But while the Committee has at least taken steps to have a few open meetings, it’s business as usual when it comes to campaign fundraising and secret meetings with powerful special interests.

This legislation can change that, but it needs your help. The bill has been introduced, but it needs cosponsors to gain momentum while it still counts -- the Super Committee has already started its work, and it has to make its recommendations by December, right around the corner.

Open the Super Congress. Ask your representatives to cosponsor the Super Congress transparency bill!

I sat in on a conference call with Sunlight policy wonks and staffers from  sponsor Rep. Loebsack's office last week that detailed the bill and the campaign.  Recording posted here.

Most of us are hoping this committee, like the Catfood Commission, just goes away.  But their recommendations in December might not.  Without this legislation, details on who influenced the committee won't drop until it's too late.  This may be an atypical disclosure ask, but this is an atypical committee about to make recommendations that could effect programs like Medicare and Social Security for the next generation.

Call your reps.

"Democrats' Nightmare Candidate"

AHAHAHAHAHAHA!

To: The SideTrack
To: Phillis Schlafly
Subject: Democrats' Nightmare Candidate

Dear Fellow Conservative,

I'm asking for your urgent help.

I've been fighting for our shared beliefs for well over 40 years. I understand the liberal mindset and what makes them tick. And I can tell you that the only thing that they dislike more than an outspoken conservative -- is an outspoken conservative woman.

Radical feminists and their allies in the "mainstream media" take absolute delight in trying to rip apart any woman who dares not walk in lock-step with their anti-family, secular-progressive agenda. Today I am writing to tell you about their nightmare candidate.

Cherilyn Eagar was there with me back in 1977 when she helped us stop the feminist-driven "Equal Rights Amendment." Today she is running for Congress in what is shaping up to be one of the most important races in the country. But for Cherilyn to be successful, she is going to need the support of conservatives just like you.

Like you and me, Cherilyn understands that our Constitution is under vicious attack. Once elected, I promise you that she will take the lead in repealing Obama's destructive agenda and stand firm against the radical agenda of the Far Left.

As a wife, a mother and grandmother, Cherilyn brings good hardworking "real world" experience to the table. And that's something that is sorely needed in Washington, DC these days. I hope you'll stand with me and follow this link to make the most generous donation you can.

Faithfully,
Phillis Schlafly

Most Likely To...

Ars Technica:

For many in the US, expertise has taken on a negative cultural value; experts are part of an elite that thinks it knows better than the average citizen. (This is accurate, for what it's worth.)

The mentality behind the anti-intellectual, anti-expert phenomenon is human nature. And I don't mean to imply all experts are equal or even all worth listening to (Sarah Palin is probably an expert at something...maybe). But the current push back against expertise -- from climate science to economic analysis -- is coming from the same crowd who think Sen. Duh-Mint is a luminary hero for petulantly refusing to attend Obama's jobs speech, and herald Bachmann for saying she'll shut down the EPA.

There's no thought behind it, it's just frustrated people with little information seeing rebellion of any kind against the things that confuse them as a noble move.

In this state, they don't want education or even policy that makes sense, they want a characature (Lee, DeMint, Bachmann, Paul) to rally behind who will fight whatever they've decided is the cause of all of their problems.

Don't challenge them with your uppity thinkin' and 'splainin', just tell them how you're going to prank the high school principal and get all the math classes canceled.

And these people are the most likely to answer public opinion polls.

Jobs Speeches vs. Jobs Plans

Crossposted at MyDD.

I'm on board with those upset over the infuriating optics of the President asking for a speech, Republicans shouting we don't wanna, and the President backing down.  Again.  First reaction, for some reason it riled me more than Democrats rolling over in the debt-ceiling debate.  Second, the win here was nil, save a few -- admittedly too rare -- headlines like "The President Actually Tells Republicans No."

Republicans don't want to detract from their debate.  Fine.  The President shouldn't want to detract from that debate either.  It's Rick Perry's big moment, and smart money says that's comedy gold.  No one outside the beltway is going to care about the reschedule, or who looks like the adult in the room by next week.

In fact the speech itself will be a minor blip on the radar compared to any jobs plan itself, if -- a big if -- the President gets real.  AFL-CIO President Richard Trumka, via LA Times:

Who knows what's politically achievable until we try?" Trumka said. "The president should articulate a solution of the size and scale necessary to solve the problem. We have a jobs crisis. … If you do only what you think the other side and the 'tea party' will agree to, then they control the agenda." 

[...]

For those worried about the deficit, Trumka insists that job creation and deficit reduction go hand in hand.

"They complement one another," he said. "You want to get rid of the deficit? Put 25 million people back to work and you won't have a deficit problem."

Trumka gives the Times a detailed plan worth reading, but the point here is behind the details: Set the bar on a jobs plan as high as you can, and use that as a starting point.

Just like was said in the stimulus debates.  And the health care debates.  And the Bush Tax Cuts debates.  And the debt ceiling "debates."  And...

Republicans will oppose and roll out the hyperbole cannons, Rick Perry and Michele Bachmann will say dumb things.   But economically this is a chance to set an agenda and begin addressing an actual problem.  Politically this is the Democrats' last chance before the 14 month circus is in full swing to reset the narrative ceded the teaGOP.

Voters have already reset, Republicans have shown their hand with Bush's Cantor's jobs plan deregulatory orgy which managed to be even more sucktastic than his last "jobs" plan.  It's not going to take a committee to find a more popular and effective first step:

Over much of the 20th century, America's strong infrastructure investment was a major factor attracting global corporations headquartered in other countries to invest and create jobs here. Rising U.S. standards of living were fueled by a strong infrastructure system that facilitated the growth of companies in America, both global and domestic alike: transportation systems to move people and products, electrical systems to power plants and offices, communications backbones to drive computers and creativity. By 2008, the U.S. subsidiaries of foreign companies employed over 5.6 million Americans -- nearly 2 million in manufacturing -- and exported $232.4 billion in goods. That's 18.1% of America's total.

(h/t Think Progress)

Getting Texas Wrong

Yesterday on #utpol a discussion errupted about TX Gov. Rick Perry's jobs "miracle," with several people were pointing to Irrational Optimist's Matthias Shapiro's breakdown of the numbers at PoliticalMath as proof of Perry's claims.  While Matthias deserves credit for pointing out Perry (or any governor for that matter) had little to do with Texas job markets, he first serves up a very lazy and incomplete analysis to say that everything is, indeed, rosy in Texas. 

His four main conclusions, and why they're wrong...

Unemployment Rate. Matthias: Even at 8.2%, Texas has performed better than other states, and in fact has a ballooned unemployment rate due to increased migration.  The Whole Story: Actually, he got this one.  But his analysis goes downhill from here.  Read on.  Also worth noting: Massachusetts and New York mirror the Texas rate and pre/post recession trend, and Nevada is seeing the complete opposite effect due to exodus.

Low wages? Matthias: No. Median income $15 (28th, nationally), and fast wage growth post recession, so everything's super.  The Whole Story: Median income isn't an accurate indicator, especially in "top heavy" Texas. Median income in Texas is skewed by a uniquely large gap between high skill workers (oil engineers, for example) with salaries well above national averages, and hourly wage workers (service industry, retail, etc) well below.  According to the US Bureau of Labor Statistics -- the same place Matthias gets his median numbers -- service industry salaries in Texas fall 10.3 - 13% below the national average, and nearly 10% of these workers are at or below minimum wage.  That leaves Texas tied for the top spot in the nation for population making nothing more than minimum wage.  While this may attract business chasing cheap labor to the state, it hardly positions Texas as a solid wage mecca as Matthias concludes.

Unique Energy Sector "Boost"? Matthias: No. Even if you take the energy sector out, Texas job market is growing fast.  The Whole Story:  What?  Matthias displays here the ancient axiom that being a (self professed) whiz at math doesn't give you an edge in common sense. The energy sector in Texas has dwindled greatly since the 1980's, but it still brings with it supporting sub-sectors that are themselves substantial chunks of the market makeup of the state.  Short:  Energy sector employees eat lunch, buy toothpaste, get their cars fixed, go to movies, shop at malls... you know, all the things that you do in your average day with your money.  Even Shorter: Vernal, UT, without an energy industry, is a road sign and a porta-potty (some will argue it's not much more than that now, but you get my point).  It's impossible to conclude that without the energy industry there would be the same rate of growth in Texas.  Im.  Poss. Ible.  To use an example Matthias himself will understand:  Say you have a two foot tall column of pennies that represent your state's job market, each penny dependent on the one below and above for stability.  You decide to grab a fistful in the middle of the column and just yank them out.  The result?  Pennies everywhere.  You simply wouldn't see the same productivity in Texas without the energy sector, and in mid-recession Texas this sector was booming.

Texas Jobs # Inflated by Public Sector?  Matthias: Nope. Public sector grown 70,000.  High but not off the charts.  The Whole Story:  Texas workforce commission reports:

Dec 2007 - 1,781,000 jobs
May 2010 - 1,920,000 jobs

Net increase: 140,000.  While Matthias is right +70,000 public sector jobs is the number now, why ignore the much higher number just one year earlier? Well, my friends, because that number is off the charts.  And in the end it has to do with those tangential job market relationships again.  Just as energy jobs have their supporting industries, so too the public sector.  With the loss of 1/2 of these public sector jobs in just the last year, it's likely that supporting industries are -- as is typical -- slow to respond, but sure to respond (in fact, they're already seeing it), but Matthias would have you believe reaching this high water mark had no effect on the job market then and ongoing.  He's wrong.

And there's one final glaring omission from the Political Math post: $11 billion of stimulus spending in 2009 alone, in addition to federal $ for infrastructure projects.  I'm sure he just forgot to mention it.

Finally, relish Gov. Perry touting the notion which Republicans and teabaggers have labored against for oh so long: government does, indeed, create jobs.  Texas -- though obviously not the jobs "miracle" Matthias, Gov. Perry, Erickson, and NRO would have you believe -- is sitting in a better spot than all but two other states.  How?  Immigration, consumer protection (housing), and government spending.  They balanced the budget with fed money, spent fed money, and cut taxes amidst that government optimized spending, while taking nothing away from the people, at least at the same time (Texas has a few health care and education funding challenges... but that's another post).  Yay, Keynes!  And Perry will be campaigning against all of this while seeking the TeaGOP nomination.  

Some other great reads on this:  Kevin Drum, Yglesias, Wall Street Journal, and David Dayden.

Mittens! Chilean UI Privatization Scheme

I don't expect privatizing unemployment insurance to get much traction, just Mittens! throwing Koch Bros. red meat to the Bachmann lovin' crowd in Ames. But it's worth taking a look at the consequences of the "ideas" that Romney is willing to sign onto to head up the GOP trainwreck:

A couple of quick thoughts on this. First, the whole thing is yet another way to wrest workers' safety nets away and hand them to Wall Street. Can you imagine being a worker with money in these accounts and having it subject to the whims of these markets? Please. And second, the Chilean model purports to get those "deadbeats" back to work, but there is absolutely no evidence it decreases the unemployment rate or protects workers. None. All it does is create a situation where a worker will do whatever they can with no job security or benefits simply to make ends get closer to each other even if they don't actually meet. It was started in 2002. In 2009, Chile's poverty rate rose for the very first time in 23 years. And guess what? It was attributable to joblessness and the global economic crisis. Oh, and here's some more detail on Chile and the student protests over student debt, access to education, and income disparity from yesterday. Ah, yes, the Great Conservative Experiment.

Guess that didn't work out so well for them.

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