Economy

The GOP's Broken Record

For the eight years of the George W. Bush presidency, economic policy in the United States had as its lodestar the view that we needed to lower taxes. Liberals objected that Bush-era tax-policy proposals were regressive, tilting the majority of their benefits to high-income taxpayers who had the least need for additional funds. The retort at the time was that this was a misleading way to think about it: The lower taxes weren't simply designed to bolster individual incomes; they were supposed to bolster overall economic growth. Higher growth rates would result in higher incomes for people up and down the economic ladder. The results of this policy have been disappointing, to say the least. Even those who claim that the economic health of the middle class is being understated are producing charts that show ten years of flat incomes for the median American household . In response, Republican presidential candidates are uniformly proposing new rounds of regressive tax cuts. The right's...

Rick Perry Promises Four Years of Abysmal Job Growth

Texas Governor Rick Perry has released his first television ad, and in it, he makes a big promise. “As president, I will create at least 2 and half million new jobs.” The problem, as Steve Benen points out , is that this is a lot less impressive than it sounds. Since the recession officially ended a year and a half ago, the economy has added 2.56 million private-sector jobs . Unfortunately, thanks largely to public sector layoffs, net job growth comes to 2.1 million jobs. Even still, President Obama’s record of 2.1 million jobs in eighteen months – lackluster as it is – is far preferable to Perry’s promise of 2.5 million jobs in four years.

Doomed to Fail

Once again, the Obama administration has announced a plan to shore up housing prices and underwater homeowners—and once again the plan is very likely to fail. This latest effort will try to use Fannie Mae and Freddie Mac, now wards of the government, to help homeowners refinance mortgages at lower interest rates. The premise is that with interest rates at record lows, homeowners can save hundreds of dollars a month in their mortgage payments by refinancing. For example, by refinancing a 5.5 percent mortgage to a 4.5 percent mortgage, a homeowner with a $300,000 loan could save about $250 a month. In theory, as many as 1.6 million people could qualify for this kind of refinancing, putting more money in their pockets. So this new program would be a source of economic stimulus as well as housing relief. But the devil is in the details. Fannie and Freddie lost a ton of money in the subprime disaster. That’s why the government had to take them over. So the last thing they want to do is...

Steve Jobs and the Chinese Wall

Walter Isaacson’s biography of Steve Jobs hit the bookstores on Monday (or, worse, the websites that have replaced bookstores as the place where people go to buy books), and the more piquant details have already started popping up in the press. Among those details—actually, it’s a good deal more than details—is Jobs’s Manichean view of humankind (at least, those elements of humankind with whom he came into contact). As Michael Rosenwald summarizes it in Monday’s Washington Post : In his personal life, [Jobs] was capable of seeing people in only two ways – as enlightened or as bozos. There was no in-between, and he would ruthlessly cast aside whoever he deemed a bozo…. Those who were deemed enlightened were granted the right to work with Jobs in his binary world where products were either ‘the best’ or ‘totally [expletive],’ Isaacson writes. Isaacson’s description may make it easier to understand Apple’s production process, in which its products were designed to a fare-thee-well in...

Occupy Wall Street's Race Problem

Young protesters at an Occupy Wall Street demonstration in New Jersey Oct. 6 with a debt=slavery sign.
The economic crisis has disproportionately affected people of color, in particular African Americans. Given the stark economic realities in communities of color, many people have wondered why the Occupy Wall Street movement hasn’t become a major site for mobilizing African Americans. For me, it's not about the diversity of the protests. It's about the rhetoric used by the white left that makes OWS unable to articulate, much less achieve, a transformative racial-justice agenda. One of the first photos I saw from the Occupy Wall Street protests was of a white person carrying a flag that read “Debt=Slavery.” White progressive media venues often compare corporate greed or exploitation to some form of modern-day slavery. But while carrying massive amounts of debt, whether in student loans, medical bills, or predatory balloon-payment mortgages is clearly a mark of a society that exploits poor and working-class people, it is not tantamount to chattel slavery. In...

Occupy the Web

AP Photo/John Minchillo
This is a guest post from sociologists Neal Caren and Sarah Gaby of UNC -Chapel Hill. The paper they are discussing is available here . While Occupy Wall Street has received most of its attention for its sustained public displays of numbers and commitment in New York City and many other locations, the movement also has an impressive online infrastructure. In addition to individual websites, multiple Twitter hashtags and dozens of Livestreams, more than 400 Facebook pages have been established in support of various US Occupy mobilizations. In order to begin to understand how activists and their supporters are using Facebook, we have been creating an archive of all the posts and comments shared on these pages since the movement began. In our working paper, we detail the data we have collected, including trends by location and major categories of posts; here we highlight some of the basic trends we have identified. The data here includes information collected up until October 17th. A...

Businesspeople Don't Always Make Good Politicians

The Huffington Post has early access to the Walter Isaacson biography of Steve Jobs, which – among many other things – reveals the Apple CEO’s distaste for President Obama and his policies: When he [Jobs] finally relented and they met at the Westin San Francisco Airport, Jobs was characteristically blunt. He seemed to have transformed from a liberal into a conservative. ‘You’re headed for a one-term presidency,’ he told Obama at the start of their meeting, insisting that the administration needed to be more business-friendly. […] Though Jobs was not that impressed by Obama, later telling Isaacson that his focus on the reasons that things can’t get done ‘infuriates’ him , they kept in touch and talked by phone a few more times. [Emphasis mine] You should count this as a data point in my contention that business makes a poor training ground for lawmaking. Governing is messy, difficult work, and requires people with a willingness to make deals and sacrifice the perfect to the good. The...

The Wrong Kind of Government Subsidy

Matt Yglesias notes that the city of Seattle is putting up $4 million to subsidize the operations of a downtown public parking garage. This is on top of $1.5 million the city already lent the garage last year. Apparently, when one subsidy wasn't enough to create sufficient demand for the parking spaces, a second was thought a good idea. An even worse example of this kind of government subsidization occurred in the Bronx, where the government paved over neighborhood baseball diamonds to facilitate heavily subsidized parking garages for the new Yankee stadium (even though it is smaller than the old one). Just as in Seattle, the city is going to lose a fortune on this, as very predictably not very many people want to pay $35 to park near a stadium serviced by two subway lines, a commuter railroad, and numerous cheaper parking alternatives. Why New York City taxpayers should be paying to provide parking spaces for some the wealthiest Yankee fans was always unclear. If the market can't...

"The Romney Rule"

Priorities USA, the Democratic consulting firm backed by former Clinton staffer Paul Begala, is out with its first ad attacking former Massachusetts governor Mitt Romney. It’s a good one: Like the The Washington Post ’s Greg Sargent , I think that this will be a potent line of attack should Romney become the Republican nominee for president. As the wealthiest GOP candidate for president, Romney is uniquely ill-suited to press against higher taxes for the richest Americans, and for an overall low tax burden on the wealthy. Indeed, given the current popularity of higher taxes on the rich – and the growing popularity of Occupy Wall Street – an election fought on these grounds is bad territory for the Romney campaign. I should say that there is a practical policy danger in devoting so much attention to taxes for the rich. In the medium-term, middle-class taxes will have to go up. Unless we return to Clinton-era rates, there is no way – other than new taxes on consumption or carbon – to...

Blame and How to Give It

That Senate Republicans used the filibuster to kill a Democratic stimulus bill isn’t a surprise – at this point, Republicans have all but announced their plan to keep the economy from significantly improving, and as a result, slash the tires on President Obama’s bid for re-election. What comes as a surprise is the extent to which the press isn’t playing along. In the past, reporters would describe yesterday's event with “balanced” language that obscured Republican responsibility for the obstruction. For example, here’s how The New York Times described last week’s failed vote on the full American Jobs Act: In a major setback for President Obama, the Senate on Tuesday blocked consideration of his $447 billion jobs bill, forcing the White House and Congressional Democrats to scramble to salvage parts of the plan, the centerpiece of Mr. Obama’s push to revive a listless economy. The legislation, announced with fanfare by the president at a joint session of Congress last month, fell short...

Occupy the Rules Committee

For last two months, we’ve been engaged in something of a natural experiment to see if presidential speechifying—in this case, a consistent focus on jobs—is enough to move public opinion in a progressive direction and create avenues for legislative success. So far, that hasn’t been the case. Instead, Republicans have taken their usual position of staunch opposition, and moderate Democrats have given them cover by opposing the administration’s modest efforts to raise taxes and offset the costs of new stimulus. What has changed the direction of public opinion is Occupy Wall Street, so much so that majorities of Americans agree with the goals of the movement, and conservative figures like House Majority Leader Eric Cantor are driven to acknowledge America’s extreme inequality. Of course, even if Occupy Wall Street grows in size and influence, there’s still the question of institutional barriers. As long as a political incentive for the filibuster exists, for example, there’s a real limit...

The NYPD: A Movement's Best Friend

Occupy Wall Street's confrontations with police and politicians have only fueled the protest's growth.

NYPD clashes with Occupy Wall Street protesters have made the demonstration a national story. AP Photo/Mary Altaffer
Tensions at Zuccotti Park in lower Manhattan mounted last week after New York City Mayor Michael Bloomberg announced that Occupy Wall Street activists would need to vacate the premises temporarily for cleaning. In response to the threat, occupiers cleaned the park themselves and said that, come morning, they would hold brooms, link arms, and peacefully refuse to leave. Bloomberg backed down, and once more, Occupy Wall Street confirmed that it could endure in the face of resistance from politicians and police. A better question is whether the movement could have endured without the attention and momentum it's gained from confrontation. “Seeing what happened at the Brooklyn Bridge ... that was a wake-up call," says Armando Serrano, referring to the arrest of 700 protesters on the bridge earlier this month. The number of arrests, and allegations that police lured protesters to the area where they took place, inspired a new wave of activists and catapaulted the movement to the forefront...

Must-See OWS Clip

This you gotta see. Really. ... in which Alec Baldwin very nicely talks with an Occupy Wall Street whacko and explains that what we really need is an active SEC, not one that's in the pocket of the banks.

More Reagan than Reagan

The two leading stories on the nightly news for the past week have been the Occupy Wall Street protests and the Republican primary race, a contrast so vivid that the reports could be coming from two different planets. First, we see thousands of citizens so frustrated and angry with economic inequality in the U.S. that they have organized to protest in hundreds of cities around the country. Then we see a group of contenders for president agree that the only economic problem we have is that wealth and influence are not sufficiently concentrated at the top. For the GOP, the protests renew an old dilemma. When Ronald Reagan became president, Democrats charged that he would was guided by the theory of "trickle-down economics," in which benefits are bestowed upon the wealthy, and the blessings eventually trickle down to the rest of the country — i.e. , the 99 percent. Republicans replied indignantly that this phrase misrepresented Reagan's agenda; they preferred "...

Homeowners Alone

I f you couldn’t pay your debts in the 19th century, you went to jail. Debtors’ prison seemed an appropriate punishment for what was then considered moral laxity. The problem was that when debtors were locked up, they couldn’t work off their debts or be productive citizens. That’s why bankruptcy was invented. We seem to have forgotten this history when it comes to the biggest debt burden still hobbling most Americans—their home mortgage. Home values continue to drop. Since 2005, they’ve plummeted more than 30 percent on average and are expected to drop another 2.5 percent this year. That leaves one in five American homeowners “underwater”—owing more than their home is worth. The result is a new form of debtors’ prison. Underwater homeowners can’t refinance at today’s rock-bottom interest rates, because they’re considered bad credit risks. They can’t move to where jobs are more plentiful or the pay is better, because if they sell their home, they end up owing the banks a bundle. But if...

Pages