Economy

Enter Yellen

AP Images/Eugene Hoshiko
With President Obama’s belated decision to name Janet Yellen to chair the Fed, several questions arise. First, is Yellen likely to be confirmed? Almost certainly. The Republicans have lost a lot of public support by shutting down the government and playing chicken with the debt ceiling. They are not likely to trifle with the one functioning branch of government. Despite the Republicans’ intermittent uses of the filibuster, I’d be surprised if they went to the barricades to block Yellen. Second, there is the question of whether Yellen will have the same working majority on the Fed’s board of governors and open market committee that Ben Bernanke has enjoyed. There are now three vacancies on the Fed. One will be filled by Treasury Undersecretary for International Affairs, Lael Brainard, a woman who is close to both Larry Summers but also to Dan Tarullo, the progressive Fed governor responsible for banking regulation at the Fed. However, the shift of Fed Governor Sarah Bloom Raskin to be...

The She-covery that Wasn't

Press Association via AP Images
AP Photo W hen the government shutdown ends and September’s jobs report is released (it was supposed to appear last Friday), careful readers will notice that women are holding a number of jobs either at or just above their all-time high (which came in early 2008), while men are still millions short of their own pre-crash milestone. Hailing a successful she-covery, however, obscures the fact that women still face an elevated unemployment rate and that the barriers that kept that them from earning as much as men before the recession are still in place. Women are millions of jobs short of where they would be if the economy was at its full potential. Many of the new jobs they have are low-paying. The main causes of the pay gap, like gender segregation in the labor market, have not gone away. That women are gaining jobs is a good thing, but policymakers should not be convinced their work is over. Quantity Even though women hold about as many jobs now as they did before the crash,...

Dancing with the Shutdown Spin that Brought You

AP Photo/Pablo Martinez Monsivais
AP Photo/J. Scott Applewhite S pin is overrated. Alas, it’s never going away. If there’s one thing that political scientists try, repeatedly, to convince the reporters and correspondents who cover politics of, it’s that fundamentals tend to matter a lot more than they think, and opinion manipulation matters less. Not none—but in many cases, not very much. That’s why, for example, it was easy to predict that Republicans would lose the polling battle over the shutdown. If spin mattered, then that wouldn’t be the case; we would have to wait to see how well each side developed and delivered their “messaging” and their “narratives.” Oh, they do that; it just doesn’t matter nearly as much as structural elements, such as the advantage that a president has over congressional leaders in these sorts of situations or the fact that going into this particular battle, Democrats were united while Republicans were split. When this is over and you read a behind-the-scenes story about how the White...

Michael Bay Blows Up Detroit

Cal Sport Media via AP Images
I t's a morning in early August when Detroiters awaken to find a piece of Hong Kong rising in their midst. Beneath the shuttered skyscrapers of Grand Circus Park, the multi-story setpiece for Michael Bay's Transformers 4 buzzes with work crews painting balustrades and roofing life-sized tong lau . It has been little more than a week since Detroit became the largest city in the United States to declare bankruptcy. Under the People Mover, a monorail loop newly outfitted with sleek Chinese-language Red Bull ads, a group of professionals commute to work as if nothing were amiss. They take sips from covered cups of coffee and frown at the news on their smartphones, look towards the river and shake their heads at the distant rainclouds. To them, it's just another morning, off to the law office or accounting firm or the mortgage superbank. They aren’t incurious. It’s just that this isn’t the first time the Motor City has played host to China as a cinematic fabulation, though it may be the...

Racing to Run a City without a Motor

AP Photo/Paul Sancya, File
This piece is the second in a two-part series about the Detroit mayoral race. Read part one on Mayor Dave Bing's legacy here. P erhaps the most amazing story of the Detroit mayoral race is that the candidates are running like it matters. The city is in the throes of bankruptcy, with nearly $20 billion in debts and long-term liabilities. It’s too soon to tell what settlement or terms Detroit will have to abide by in the years to come. Meanwhile, emergency manager Kevyn Orr, a lawyer appointed by Governor Rick Snyder in March, has the authority of both mayor and council for at least another year. He’s using that authority, too, leaving Mayor Dave Bing ( who is not running for re-election ) with little decision-making power in his final months in office. Facing this new governance, several city councilmembers opted to resign, or to not run for re-election this year. The president pro tem left for a $225,000 a year job in Orr’s office. One couldn’t be blamed for thinking that this year’s...

Dave Bing’s Detroit

AP Photo/Carlos Osorio
Cal Sport Media via AP Images This piece is the first in a two-part series about the Detroit mayoral race. Check in tomorrow for part two, about the Democratic candidates currently campaigning. Y ou could say that Dave Bing is a celebrity politician. But Detroit’s mayor is so mild-mannered, it’s easy to forget that he’s a Hall of Fame basketball star who was drafted second overall in 1966, earned Rookie of the Year honors, and played in the NBA for 12 seasons—most of them, naturally, with the Detroit Pistons. The league chose him as one of its 50 greatest players in 1996, and the Pistons retired his number. But that’s all history. When Detroiters elected Dave Bing to the city’s top office four years ago, it wasn’t because of his fame. It was because he was boring. When the 65-year-old Bing declared his intention to run back in 2008, Detroit had become something of a spectacle. Kwame Kilpatrick, the city’s young and talented two-term mayor, had resigned as part of a plea bargain for...

Budget Roulette: The Uncertain End Game

AP Images/Carolyn Kaster
AP Images/Carolyn Kaster This budget crisis, weirdly, has nothing to do with the budget. It is the expression of the Tea Party Republicans’ animus against Obamacare, their general loathing of government, and their willingness to resort to wildly destructive tactics. As Senate Majority Leader Harry Reid, one of the few heroes in this mess, put it so aptly, “They’ve lost their minds.” A fine irony is that one of the few things that the government shutdown doesn’t affect is the Affordable Care Act, which takes effect today. The Act is a mandate to purchase affordable insurance via hybrid “exchanges,” which are not closed by the failure to approve a budget. In a just world, the extremist Republicans would take the fall. Republicans as conservative as Dana Rohrabacher of California, who came to prominence as an ally of the John Birch Society, and arch conservative Karl Rove, have warned that the Republicans are courting political suicide. “What we’re doing here is shooting ourselves in the...

Pandora's Box

AP Images/Austin American Statesman/Jay Janner
AP Images/Austin American Statesman/Jay Janner O n a clear day this past May, Cody Wilson stood at a firing range just south of Austin, Texas. The BBC crew he’d invited stood a few feet away as the 25-year-old University of Texas law student adjusted his earplugs and sized up his target—a mound of dirt off in the distance. He raised a small handgun, pulled the trigger, and a .380 caliber shot rang out, kicking up a cloud of dust. The pistol Wilson held was made of black-and-white plastic and looked like a cheap children’s toy. What had drawn the BBC was that the gun, which Wilson dubbed the “Liberator,” had been created with an $8,000 3-D printer bought used on eBay. A self-described “techno-anarchist,” Wilson is on a quest to prove that new technology is rapidly changing what we can hope to regulate—from information and ideas to physical objects. The proof is that anyone with an Internet connection, a computer, and a 3-D printer can now manufacture a gun. Three-dimensional printing...

John Boehner Has Speaker Tenure for Life—If He Wants It

AP Photo/Cliff Owen
AP Photo/Molly Riley D on’t worry about John Boehner. Yes, there seem to be near-constant rumors and suspicions of a revolt against him, and Republican members of the House have been conspiring with Texas senator Ted Cruz. But it’s unlikely to actually cost him his job. He’s probably going to survive and remain as speaker of the House just as long as he wants to. At least, as long as divided government and the Republican House majority last. Over at The New Republic , Noam Scheiber argues that Boehner’s job will “ almost certainly ” be lost if he allows the debt limit to be raised with mostly Democratic votes. That’s probably wrong. To see why, however, we need to step back. See, the reasons that Boehner has seemingly been five minutes from getting ousted throughout his speakership have nothing to do with Boehner; they’re structural. Which means that any possible speaker—Boehner, Majority Leader Eric Cantor, Michele Bachmann, or Ronald Reagan risen from the dead—would have pretty much...

Five Reasons Food Stamps Work Just Fine

Melanie Stetson Freeman/The Christian Science Monitor L ast week, House Republicans passed a bill that would cut the food stamp program by about $40 billion over the next ten years. They’re drawing on headline numbers—the program serves about 47 million people each year and has the biggest price tag of any program in the farm bill, $80 billion—to drum up support. The aid, technically known as the Supplemental Nutrition Assistance Program, or SNAP, is still known as food stamps to nearly everyone who receives it. There’s little chance that the bill will be enacted, given the more moderate makeup of the Senate, although it’s likely that some cuts will end up on the president’s desk. (The Senate is cutting $4.4 billion from the program.) Still, food stamps are one of the most robust federal entitlements for the poor we have left, so it’s always going to be a target for cuts. It’s worth looking beyond those bold-face numbers in the news to see how the program is performing—and why it’s...

The Day after Shutdown

AP Photo/Carolyn Kaster
AP Photo/Denis Paquin, File S o it’s October … or maybe it’s six or ten weeks later, after a short-term continuing resolution has come and gone. The clock strikes midnight, Congress has failed to fund the government, and the next day it shuts down. What happens next? There’s been plenty of talk about the possibility of a government shutdown, along with the potential ways it could be avoided. But what happens after the shutdown? I don’t mean how the government operates or doesn’t operate; the Congressional Research Service has a good explainer on that. I’m talking about how the bargaining situation changes. Because remember: Government shutdown or not (I'm on Team Probably Not, for those counting at home), sooner or later a deal will be reached. 1. It’s Getting Hot in Here People will be inconvenienced, directly, by a shutdown, whether it’s vacations ruined (thanks to national parks closing), Social Security applications postponed , or government grants and contracts not awarded. Which...

Playing Hunger Games with Food Stamps

When the House voted yesterday to cut $40 billion from the food-stamp program, they doubled the cuts the House had previously considered. The Congressional Budget Office estimates that 3.8 million people will be taken off the program, primarily because the House is removing some of the flexibility states have to meet the needs of their communities. They are restoring strict federal rules to the program. That’s an odd move for a bunch of Republicans. Most of the people who will be removed from the Supplemental Nutrition Assistance Program’s (SNAP) rolls are adults in high unemployment areas who don’t have children and can’t find jobs, and families with gross incomes that are slightly higher than the poverty line, but whose disposable incomes fall below it. These changes were introduced a few years ago to meet a rising need. The poverty line is low, and doesn’t take into account how much families spend on the costs of necessities like housing and childcare. More than half of all food...

The Conservative Plan for Medicaid Expansion

AP Photo/Osamu Honda
AP Photo/The Columbus Dispatch, Chris Russell A number of policymakers on both sides of the aisle cheered when, in April, the Arkansas Legislature passed a law both expanding Medicaid and transforming it into a service available in a marketplace of insurance options, a move known as the “private option.” Similar cheers erupted in June when Iowa Governor Terry Branstad approved a similar measure. The legislation marked a major accomplishment—not because the policies are necessarily improvements over traditional Medicaid but because they establish politically palatable paths for conservatives who want to increase access to health care. In Pennsylvania, GOP Governor Tom Corbett—who was against Medicaid expansion and this week announced he is is tepidly for it—has pointed to the these new plans as a model he might consider (among other, more controversial changes.) The private option may be a way to make comprehensive health-care coverage viable in other Republican states—but that depends...

The Fed Stays the Course

AP Photo/Susan Walsh
F inancial markets rallied when the Federal Reserve defied the rumor-mongers and resolved to continue its program of keeping interest rates very low until the unemployment rate improves. There was only one dissenting vote on the Fed’s policy-setting open market committee. What’s going on here? Ever since the run-up to the collapse of 2008, what’s good for Wall Street hasn’t exactly been good for the rest of the economy. Are these ultra-low interest rates just pumping up more financial bubbles, as critics fear? Or does a still weak economy need this form of stimulus? Think of it this way. There are risks to continuing a policy of very easy money, but premature tightening would be even worse. The markets and the pundits got this one wrong because the hawks in the Fed system had been leaking rumors that they had the votes and that the Fed would soon be “tapering” (pulling back) its program of $85 billion-a-month in bond purchases. Chairman Ben Bernanke, to appease the hawks, lent...

The Obamacare Is Falling! The Obamacare Is Falling!

AP Photo/Charles Dharapak
AP Photo/Steve Browne, Valley City Times-Record As we approach the full implementation of the Affordable Care Act at the end of the year, confusion still reigns. Most Americans don't understand what the ACA does or how it works, which is perhaps understandable. It is, after all, an exceedingly complex law, and from even before it passed there was an aggressive and well-funded campaign of misinformation meant to confuse and deceive Americans about it, a campaign that continues to this day and shows no sign of abating. To undo uncertainty and banish befuddlement, we offer answers to a few questions you might have about Obamacare. What's happening when? The next important date is October 1, when open enrollment for insurance plans on the new exchanges begins. Those who sign up will begin their new insurance on January 1, when the rest of the high-profile components of the law take effect. The individual mandate, requiring everyone to carry insurance or pay a fine, takes effect, as does...

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