Thursday, August 18, 2011

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.

Saturday, August 13, 2011

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.




Sunday, August 7, 2011

Destabilizers and Laying Blame

Crossposted at MyDD.

Set aside S&P's credibility problems and their $2 Trillion oopsie (also, somewhat credible defenses from Ezra Klein and Felix Salmon), and what they're saying is we don't care exactly how you do it, as long as everyone agrees to do it for longer than the next election cycle.  Cuts are super, no revenue increases = unrealistic, and someone we aren't serious enough to name specifically used the prospect of default as a bargaining chip, and that's just crazy.

The reasons for the downgrade, in a nutshell: dysfunctional politics.  And NYU's Jay Rosen nails it in a tweet:
If we are to credit S & P's clear thinking, as says, then the opinion should have read: the Republicans destabilized the system.
But saying that directly in a report that could (probably not) further weaken the US economy would be uncivil! Let's just dance around it, fan the flames of dysfunction, and scurry back before Goldman Sachs yells at us again.

In the end, the downgrade may be useful in elevating a legitimate point from progressive circles to, oh, say, the White House and Senate Dems:  The House of Representatives is held hostage by a pack of simple minded zealots who don't give two shits about governance, economics, or reality. The Daily Beast profiles 19 freshmen who'd like to see it all burn:
If there is one thing clear from the Tea Party caucus’ first triumph, it is that its members don’t adhere to Washington convention or care about public sentiment. The greater the criticism, the more they stiffen. Their singular focus is collapsing the size of government, at any cost.
No tactic is too extreme, no issue too small (debt-ceiling votes used to be routine before they came to Washington), and no offer of a federal project for their district or a glitzy committee assignment can lure them from the stubborn line they intend to hold against spending.
“So you’re sitting down with [Speaker] Boehner and [House Majority Leader] Cantor, and they’re offering you stuff for a vote,” Walsh, the Illinois Republican, recalls. “They can help you and do some things, you know, committee assignments and help moving up the chain.
“But whew,” he says, making a whistling sound and sweeping his hand over his head. “You’re talking beyond me. I just don’t care.”
Calling this a mere lack of adherance to "Washington convention" is like calling Charlie Manson a "free thinker."  It's clear, for what it's worth, that S&P puts a lot of the reason for the downgrade on a handful of lawmakers with a near-religious fidelity to an American history they've re-imagined in their own image.  It's not just that the President shouldn't be open to negotiating with the lowest common demoninators, it's that you can't negoatiate with them, and they rule the GOP. 
 
Also via Tweet, Robert Reich sees a way around it for Obama:
Mr President: Put forth bold jobs plan, challenge Rs to support it, and if they refuse make it center of your 2012 campaign.
Keyword: bold.  Drew Westen writes today that the President's problem is messaging.  He didn't tell a story with clearly defined villains, Westen says.  I agree.  But while the blame for the downgrade itself may be clear, blame for the situation right now should be spread on Democrats across the board.  More from the Daily Beast:
This time the geometry of triangulation is different. Obama is hunkered in one corner with House and Senate Democrats, who are increasingly alienated by the president’s willingness to compromise with the conservative wing of the GOP.
House and Senate Democrats are alienated?  Valid criticism -- and important going forward -- but Democratic lawmakers get a pass now considering their track record and the Legislative Meh they've served up again and again?  The POTUS and Democratic lawmakers shoulder the blame for the 2010 outcome.  Sure the story could have been better told by Obama. Also true, legislative agendas under a Democratic majority haven't lent themselves well to defining a compelling narrative. For every legislative success there is a contradicting backstory.  For every bold challenge, a walk back.  Where's the inspiration in running away from a pre-election Bush Tax Cut fight? Where's the vision in letting Max Bacchus wander health care reform through the woods for months?  NYT's Timothy Egan wrote in August 2010, foretelling Democratic losses, "[Democrats] have been terrible at trying to explain who they stand for and the larger goal of their governance."

The public has long been soured on the tea party, even in conservative meccas.  They support tax reforms and increased contributions from the nation's most wealthy.  They've cooled on the overly-simplistic Republican slogans and warmed to blaming them for failure to solve our country's problems.  They want Social Security and Medicare strengthened not shredded.

Now if they could only find a party that stood for those things!

Friday, August 5, 2011

Jobs Report and the Age of Austerity

Crossposted at MyDD.

Republican voters are more sour on the debt deal than Democrats, and Nate Silver says polls show House Republicans owning the debt ceiling deal, creating an opportunity for Obama:
Voters’ Pavlovian reaction may simply be that fiscal austerity equals pain, which could complicate Republican messaging in the long-run.
In the short-run — depending on what happens with the markets over the next several trading days as well as with tomorrow morning’s jobs report — the question becomes whether Mr. Obama attempts to exploit the crisis by calling for stimulative measures that were lacking in the deal he signed with Republicans.
And speaking of that job's report for July: Hiring increases, expectations don't.  Via NPR, Brookings' William Dickens isn't impressed:
The July report also revised figures for the two previous months. The economy added 53,000 in May, up from an earlier estimate of 25,000; and 46,000 in June, up from 18,000.
Even so, the economy expanded at a meager 0.8 percent annual rate in the first half of the year, the slowest pace since the recession officially ended in 2009. Those figures, combined with financial troubles in the eurozone in recent days, have ratcheted up talk of a double-dip recession and put markets on edge in the past week.
"If Europe gets its act together and we don't have any more brinkmanship in the political arena here, I can see us just limping through without a double-dip recession," Dickens said.
Surely we've seen the end of "brinkmanship" hostage taking.  Dickens argues that the Fed is out of options, but Dean Baker says not so quick:
... the Fed could pursue a path that Bernanke himself had advocated for Japan when he was still a Princeton professor. It could target a higher rate of inflation, for example 4 percent. This would have the effect of reducing real interest rates. It would also lower the debt burden of homeowners, which could allow them to spend more money.
That could relieve some pressure on consumers, but the numbers today are still a little good news in a sea of bad.  Private sector growth is almost -- but not entirely -- negating public sector cut backs.  Until something different than what we're doing is done, we'll be applauding "not as bad as it could have been" right into the double dip and President Mittens!/Bachmann/Perry's first term.

Thursday, August 4, 2011

Recess Appointments?

Crossposted at MyDD.

Jonathan Bernstein says it could help the President's credibility.

I argued over at the Plum Line yesterday that Barack Obama should fight back against Republican obstruction by making a recess appointment right now, even though House Republicans are preventing a proper recess through procedural gimmickry, and even though George W. Bush respected precedent and did not make any recess appointments when Senate Democrats used similar tactics in 2007-2008 (details there, and in this earlier post; see also Ari Berman's arguments). The argument I made over there, which I think is a reasonable one, is that there's a huge difference between action to block appointments taken by a majority of the Senate compared to action taken by the House, which has no Constitutional role in confirmations.
Bernstein argues that a handful of recess appointments despite creative House GOP obstruction could lend credence to Obama's willingness to fight back, without much takeaway from the "reasonable one" image he seems obsessed with maintaining above all else.

Simply put, House Republicans will squawk, and Obama could use recess appointments to show he isn't afraid of that.  In March 2010 he made 15 recess appointments to "send a message" to Republicans to stop stalling. Confirmations to offices at the Federal Deposit Insurance Corp, Office of the Comptroller, commerce secretary, a long list of federal judicial positions and of course the director of the Consumer Financial Protection Bureau are still held up by what amounts to a procedural farce.

Both Clinton and Bush Jr. made more than 100 recess appointments each, despite facing less opposition from the Senate.  Today's Republicans have made it clear they'll stall for two full terms if they can.  And as Bernstein points out, this is the House holding things up now, not the Senate.

It's hard to see what the President is waiting for.