Terribly Lackluster


For the third month in a row, job growth has been lackluster. In June, the number of new net jobs came in at 80,000—slightly below the 90,000 to 100,000 expected. Likewise, revisions for previous months were a wash—April’s numbers were revised from 77,000 to 68,000, and May's were revised from 69,000 to 77,000. There simply isn’t much news in this jobs report, which is another way of saying that our sluggish economic growth is grinding to a halt.

Romneyland on the Mediterranean

What does having a Bain-style CEO do to a country? Israel has run the experiment, and the results are ugly.


If Mitt Romney visits Israel this summer, it's a safe guess that his tour will avoid demonstrations against the government's economic policies. When Mitt and Bibi dine together, the Israeli prime minister probably won't show clips of riot cops dragging away Daphni Leef, the woman who ignited the economic protests, as she tries to re-establish a tent encampment in downtown Tel Aviv.

Where Work Disappears and Dreams Die

In Gary, Indiana—the former “Magic City” of industrial might—jobs have left, and so has almost everything else.


Not all teenagers are as lucky as J’Len Glass. He trusts his parents. He knows they will always tell it to him straight. Yet the 15-year-old, who wants to be a doctor, can’t help being skeptical of his elders’ veracity—or at least of their memories—when they tell him that his shrinking, economically depressed hometown of Gary, Indiana—Steel City—was, once upon a time, a wonderful place to raise a family. That it had good public schools and well-maintained city parks and streets. That there were department stores, restaurants, movie theaters, nightclubs, and crowded office buildings up and down Broadway, its main thoroughfare. That a young guy could go outside, play some ball, flirt with girls, and not worry about getting killed in a drive-by shooting.

Can European Leaders Go Big?

With Spain, Italy, and Cyprus reeling, the stakes are high for the Brussels summit—but Germany stands in the way of broad reform.

(AP Photo/Philippos Christou)

The European Summit today and tomorrow in Brussels is the latest in a series of make-or-break moments for the European project. On many occasions since May 2010, when Greece was first cut off from market access, European leaders have been called upon to make a bold leap forward in the policy integration of the Eurozone—the only way to convince investors of the iron irrevocability of the common currency. Under constant pressure from the ongoing crisis, they have often seemed to be making the big decisions to reform the flawed architecture of the monetary union, only for initial perceptions to give way to a much more underwhelming reality. Markets have grown increasingly savvy and cynical in interpreting summit communiqués. They know that behind grand words and large headline numbers, the political will to come together has yet to be demonstrated. Is this summit meeting—in the week when Cyprus became the fourth Eurozone member to ask for an official rescue and Spain confirmed that it would need 100 billion euros to shore up its banks—going to change all that?

Tax Reform Silliness

Flickr/401K 2012

Barack Obama did a bunch of big things in his first term—passed health care reform and ended the war in Iraq, most notably. If he wants to do something big domestically in his second term (especially since he seems to have lost any inclination to do anything about climate change), one natural area to try would be tax reform. It might actually be possible to arrive at something both Democrats and Republicans could live with, if we put aside Republicans' desire to make sure he never accomplishes anything, ever (which will continue into his second term). Republicans already have their own tax plan, which lays out some goodies they'll give people (especially wealthy people, you'll be shocked to learn) while conveniently avoiding any specificity on how the goodies will be paid for.

Some analyses have been done on the Republicans' plan, and they don't look too good:

Welfare for the Wealthy

When conservatives rail against redistribution, it’s important to understand what they mean by the term. It’s not that they are opposed to removing resources from one sector of the economy and moving them to another, but that they’re opposed to taxing funds from rich people, and directing them toward the poor. If you go from the other direction, taxing money from ordinary Americans and giving it to the rich, then there isn’t a problem.

A Paralyzed G-20

All the bland platitudes coming out of the Group of 20 Meeting in Mexico can’t disguise the absence of progress on the European crisis. German Chancellor Angela Merkel is totally dug in on the proposition that Greece, Portugal, and Spain need to stick to the austerity medicine that will only deepen the collapse and embolden more speculative attacks on government bonds.

School for Success

Capital Idea, an innovative long-term job-training program in Austin, helps lift the working poor out of poverty.

Students trail into the Austin Community College classroom in ones and twos, taking seats in pale plastic chairs behind long narrow tables. Some wear scrubs, fresh from shifts at the hospital, while others are in street clothes. A few are middle-aged, but most are in their late twenties or early thirties. The only man in the room wears shoes so battered the soles have almost separated. It’s just days before spring exams begin, and a few of the students discuss an upcoming test.

Economic Hearts and Minds

Image from Obama ad; Obama campaigning.

The term "hot button issue" first appeared in the mid-1980s, but came into common usage during the 1988 presidential campaign, when the nation soberly contemplated such questions as whether Michael Dukakis was planning to unleash a horde of dusky criminals to prey upon our precious white women. Alas, this year's campaign is nearly devoid of hot buttons for the candidates to push. God? Mitt Romney is the last person who wants to talk about religion. Guns? The Obama administration has done nothing to restrict their ownership, and the NRA's fevered warnings of government confiscating your weapons grow ridiculous even to gun owners themselves. Gays? Just a month and a half after President Obama surprised almost no one by announcing his support for marriage equality, Republicans haven't bothered to make it an issue, probably because they understand that the public has little taste for their past demagoguery.

So aside from the occasional temporary flare-up over things like contraception or immigration, we're left with a campaign mostly about the economy, with nary a hot button in sight.

The State of the Economic Debate


Today, President Obama is going to roll out a new speech laying out his case on the economy. From the previews, it looks to be a contrast between what the economy will look like in a second Obama term, and what it will look like in a first Romney term. Essentially, he'll be trying to make this a "choice" election instead of a "referendum" election. Which is exactly what it should be. After all, we wouldn't be replacing something with nothing if we elected Mitt Romney, we'd be replacing something with something very, very different.

And as I'm sure Obama will argue today, we have some experience with what Mitt Romney is proposing. Obama will characterize Romney's policies as "exactly what got us into this mess" or some such, but you don't even have to tar him with the 2008 catastrophe to make the case.

Europe’s Tragic Farce

(AP Photo/Daniel Ochoa de Olza)

Europe’s top politicians, led by German Chancellor Angela Merkel, seem determined to repeat the same mistakes over and over again. Last weekend, the financial crisis seemed to be contained for the moment when the Germans and the European Central Bank agreed to commit 100 billion euros through the European Union’s (E.U.) rescue funds to recapitalize Spain’s faltering banking system. The Spanish government bargained hard, and won an agreement that the bailout would not be tied to new austerity demands of the sort imposed on Greece and Portugal.


President Obama says something horrible.

If you don't follow a bunch of conservatives on Twitter, you may have missed the fact that in a press conference this morning, Barack Obama said the most horrific thing any president has ever said, an extemporaneous utterance so mind-boggling, so vile, so earth-shatteringly awful that it will forever transform the way all Americans look at him and make it plain that he should not be re-elected. What was it? "You know, Hitler had some good ideas," perhaps? "I saw Milli Vanilli on tour three times and every show was awesome"? No such luck. Behold:

Germany's Tightrope Act

BERLIN—Germany, uniquely, is prospering while the rest of Europe sinks deeper into recession. And the recession is substantially the result of the very austerity that Chancellor Angela Merkel is imposing on the other member nations of the European Union.

Why is Germany spared? One good reason and two bad ones.

The good reason is that Germany promotes manufacturing, with sensible training and technology policies. Its industries have partnerships with effective unions. So Germany’s huge export surplus means that it can have tight budget policies at home and still have plenty of good jobs. 

Sabotage Makes Sense!

Over at Talking Points Memo, Sahil Kapur reports that Senate Majority Leader Harry Reid has pulled the “sabotage” card on his House counterpart, Eric Cantor:

“You have heard, as I’ve heard, that there’s a battle going on between Cantor and [House Speaker John] Boehner as to whether or not there should be a [highway] bill,” Reid told reporters. “Cantor, of course — I’m told by others that he wants to not do a bill to make the economy worse, because he feels that’s better for them. I hope that’s not true.”

What's Next for Economic Policy?

Today's Balance Sheet

It's three days after the dismal May jobs report, and now that politicians are done trying to frame those 69,000 jobs added in their favor, it's time for them to figure our how to get the economic ball rolling again.