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Friday, September 03, 2004

OBVIOUSLY, THE TAX CUTS AIN'T WORKING

After four days of dementia and historical revisionism at the RNC convention, this morning's job numbers from BLS are enough to jar us back into reality.

Here, EPI economists show how Bush's promise of job creating tax cuts compares with reality.

And here is what the president had to say about his tax cuts:

"we unleashed the largest tax relief in a generation. Beacuse we acted our economy...is creating jobs."

"To create jobs my plan...will make the tax relief permanent.

And the Veep:

"President Bush delivered the greatest tax reduction in a generation, and the results are clear to see. Businesses are creating jobs. People are returning to work...The Bush tax cuts are working."

¶ 9/03/2004 03:12:21 PM

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JOBS, NO JOBS

What to make of this morning'sEmployment Situation Report from the BLS.

The economy added 144,000 jobs in August. Hey, that's better than the upwardly revised 73,000 created in July, but still far short of the level needed just to keep pace with the number of new people looking for work or to draw back into the labor market people that gave up looking in despair. As a result of the still anemic jobs outlook for most people, 152,000 people bowed out of the labor force.

EPI will have more on this shortly (see here).

¶ 9/03/2004 09:42:11 AM

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CALL ME CRAZY...

But if I didn't know better, I'd say G-d wants to flush the Bushes out of Florida.

¶ 9/03/2004 08:25:08 AM

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Wednesday, September 01, 2004

LAND OF OPPORTUNITY

This morning Fox News is hyping today's RNC convention theme as "The Land of Opportunity." In Globalize This' ongoing counter-RNC coverage, I am replaying two posts that illustrate this theme.

Republican Senate Majority Leader Bill Frist believes in opportunity...shameless, dastardly, hypocritical opportunity. And he never misses an chance to seize these opportunities.

Reaching way back now to 12/8/03:

WHAT I'M READING: Dastardly Republicans

I don't use the word messianic lightly, and I wouldn't use it to describe Al Franken's latest opus, Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right. I will say that Franken, with the help of a dozen research assistants and a remarkable wry wit, has written a masterful dissection of the "vast right-wing conspiracy"--which, by Franken's measure, combines shameless, avaricious and evil geniuses with a confedarcy of dunces.

It's hard to decide which incidence of right-wing forked-tongue malfeasance described by Franken is most offensive to my American values of common decency and fair play, but I'll try. Franken on the 2002 Minnesota Wellstone-Coleman Senatorial campaign (I'm sure Al Franken won't mind me quoting part of his book here, hope the good people at Penguin Publishing are as understanding--from p. 179-80 of Lies, book excerpt in my italics):

The Wellstone-Coleman campaign had been considered one of the most negative in recent memory...But mainly it was Coleman's proxies who played it dirty. The National Republican Senatorial Committee (NRSC) ran an ad called "Pork" that hit the hypocrisy jackpot. It savaged Wellstone for voting "to spend thousands of dollars to control seaweed in Maui," claiming that he prioritized seaweed control over national defense. In fact, Wellston did vote for S.1216, as did Strom Thurmond, Trent Lott, and eighty-four other senators. That bill did appropriate the seaweed control spending--but it also provided $21 billion for veterans' health care, $27 billion for veterans' compensation and pensions, and block grants to assist NYC's recovery from 9/11. The NSRC was chaired that year by Bill Frist, who later replaced Trent Lott as Senate majority leader. Before the [Wellstone] memorial, Frist spoke with the Wellstones' older son, David, who later recounted the conversation to me.

"I'm sorry about your parents and your sister," Frist told David.

"Did you authorize the seaweed ad against my dad?"

"Yes."

"And did you vote for the seaweed bill?"

There was a pause. They both knew that the answer was yes. Finally, Frist said, "It wasn't personal."

"My dad took it personal. Thanks for coming to my family's memorial"

...And so on for about 350 pages. Not to be outdone by Franken's research team, I wanted to check the facts before I posted. So I went to Thomas, the online repository of the Congressional record hosted at the Library of Congress. It's really slow because it contains millions of pages of documents, so be patient.

Following the historical track of legislation is tricky even for seasoned researchers-- Navigating the absurdities of parliamentary procedures, the renaming, renumbering, tabling, conferencing and sending to committee of bills, etc. Conferences occur when the House and the Senate version of a bill are in discord. A bicameral group of legislators get together to reconcile the two bills. This is where a lot of horse trading takes place away from public view. Legislative items that have nothing to do with the disputed bill are tacked on and core components of the bill are stripped out. Sometimes conferences are usefully employed to get legislative work done that would be arduously time consuming in the larger legislative bodies, and sometimes they are used to strongarm pork, pet projects, and grotesquely egregious legislative items.

For example, say they are debating a bill to appropriate money to give flags to widows of Marines killed in Iraq that will most certainly pass unanimously. A legislator could, say, tack on a rider that cuts off appropriations for overseas funding of family planning centers that distribute condoms--a highly polarized issue that is difficult to raise in open session. But no one will dare vote against giving flags to war widows, so the anti-choice measure passes into law. If legislators succeed in reporting a bill out of conference, all likelihood is that it will pass resoundingly (as members of both parties have just come to an agreement). Since there is no conflict, there is no news story, and the bill passes to law without public scrutiny (usually when this happens).

As far as I can tell, the thread through S.1216 disappears when the bill is sent to the Senate Commerce Committee on 6/10/99. Go figure. I'm not saying Franken is wrong; I just don't have more time to spend on this goose chase.

In conclusion, this is a must read for all political persuasions. Intellectually honest conservatives will want to know what is behind the "facts" and people who are shaping their beliefs. And, if you can bite your tongue through the comedy routine, you may be surprised at what you learn. Intellectually cowed liberals will discover new resolve.

This is a good one for the book shelf.

And also to 5/6/2004 for more of What I'm Reading:

Hearings Before the Senate Banking Committee on The Mexican Peso Crisis and the Administration's Proposed Loan Guarantee Packagfe to Mexico.

Senator Bill Frist, March 9, 1995:

"I am deeply concerned that the American taxpayer is going to be stuck with billion-dollar losses from an ill-conceived plan based on false assumptions."

American taxpayer? Deeply concerned? Okay. But where the hell has Frist been for the past three years?!?

Let's recap some of the current administration's ill-conceived plans based on false assumptions: Tax cut. Enron energy policy. Deficit-bloating tax cut. Iraq War. Tax cut for corporations and +$300k earners. PhRMA-HMO Medicare Bill. Tax cut. Navy-Boeing lease deal. No-bid reconstruction contracts. Agriculture subsidies.

Yep, he really said it: "I am deeply concerned that the American taxpayer is going to be stuck with billion-dollar losses from an ill-conceived plan based on false assumptions."

¶ 9/01/2004 11:37:34 AM

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Tuesday, August 31, 2004

LIES OF THE BUSH ECONOMY

As Republicans pat their collective backs in NYC this week, let's look back at the real economic record. Originally posted 4/29/04:

This snappy little Flash piece propagandizing the Bush economic record flashed across my desk yesterday. I'm uncertain of its origins, though it does not appear to be connected with the official Bush-Cheney '04 campaign.

A quick survey of right-of-center blogs and other websites shows that Republican-leaners are going ga-ga over this piece as, on its face, it seems to validate what they have long believed, but have never seen substantiated in the public dialogue (most likely because of that pesky liberal media bias): that George W. Bush's economic policies are not a miserable failure and are not a royal screw job for most Americans, but that Bush has done as well as or perhaps better than Clinton.

It's a great, powerful spot. But unfortunately its almost all bunk. The economic "facts" it boasts are either simply not true, disingenuously misleading, or entirely irrelevant. But all of it is disturbing, for it reminds us of the viral characteristics of mis-(or dis-)information. So let me take a crack at it.

GDP:
This spot claims private sector GDP grew 2.5% in the two years before Bush's tax cut and 5.3% after the tax cut. My first question: Which tax cut? There have been successive rounds of tax cuts in each year of Bush's presidency. I have no idea how this foolio is calculating these numbers (if in fact s/he attempted to calculate anything legitimately at all).

I don't know why you would only be interested in looking a private sector growth rates, rather than the growth of the overall economy, unless perhaps you are some market fundamentalist ideologue who thinks government is bad for the economy, and you believe government spending reduces growth even when it is for such economically important public investments as education, transportation and telecommunications infrastructure, basic science and applied R&D, etc. But I can tell that the numbers are not so kosher--their either using nominal figures, not accounting for compound growth rates, or making some other rookie mistake.

So let's assume s/he means one occuring after the first two years, and before the third year. Since the 2004 Q1 GDP numbers only came out today, we're talking about the growth in the economy (private economy) that occured between Jan 1, 2001 and Dec 31, 2002, compared with growth between Jan 1, 2003 and Dec 31, 2003. In real terms, GDP grew $266 billion in the first period (or $150.7 in the private sector). This is a simple total growth of 2.7% (1.9%) or average annual growth of 1.3% (0.9%). In the latter period, real GDP did grow 3.12% (3.07%). This shouldn't be too aurprising because the economy was in recession for most of 2001.

Dividing the periods like this really tells us nothing about the effects of the Bush tax cuts. More importantly it doesn't tell us why or why not Joe Citizen should vote for George Bush. As the Maestro said, (paraphrasing) zero wage growth and strong productivity growth means huge growth in pre-tax profits. Economic growth does not necessarily mean that people's actual living standards are improving.

Which brings us to Jobs:
I've written a lot about this topic, and Job Watch pretty much has this subject covered and debunked. This particular piece touts "500,000 new jobs created in the first three months of 2004." Of course, it says nothing about the more than 2 million jobs lost even after the end of the recession, nor does it tell us what effect the here lauded tax cuts have had on job creation (which, on balance, is a zero to negative-gain, see Job Watch).

Unemployment:
True, after three years the unemployment rate stood at 5.6% in both the Clinton and Bush administrations. Most people get the reason that the unemployment rate is so low under Bush is because so many people have given up looking for work (exiting the labor force) in frustration over the worst job market this country has seen since the Great Depression. Right now there are some 8 million people out of work in this country. If we put back in those phantom unemployed, those who are no longer being counted as unemployed because they are sooo despondent, Bush's unemployment rate jumps up to a whopping 7.1%. YIKES!

Stock Market:
I calculate an increase of 24.7% in the DJIA between April 28, 2003 and April 27, 2004, not the 45% reported in the Flash. Of course, the DJIA only covers 30 out of thousands of stocks. In searching the web for other references to this Flash piece, I found that most postings were dated around March 30, 2004. Fair enough. From March 28, 2003 to March 30, 2004, the DJIA was up 27%.

How about this...Bush came to office as the 1990s stock market bubble was bursting, then 9/11 threw the stock market into a tail spin and the DJIA fell to a way, way low 8,235.81 pts. before climbing back 25% to today's closing price. Then came a wave of corporate accounting scandals beginning with Enron and trickling throughout much of corporate America. The Dow plunged to a low of 7,286.27 on Oct 2, 2002. From this nadir, the DJIA has climbed back 41% to today's price. Now matter how you slice it, the DJIA has not gone up 45% during Bush's presidency.

In any event, I'm wondering why stock prices should be an explicit goal of a president's economic policies rather than, say, the livelihood and living standards of regular Americans...

On that note, I'll wrap up with Poverty:
The average poverty was lower in the Bush reign than under Clinton (9.6 vs 10.5). This is untrue and stupid. It's untrue because the annual poverty numbers are calculated from the March CPS. That means, for example, that the 2001 number is calculated on March 2001, or only a little over a month after Bush took office. It's unreasonable to think that Bush should be responsible for could have influenced the poverty rate in such a short time. So whoever cooked up these numbers is using the wrong endpoints. The Census Bureau only recently released the data for 2002, so there is really only one year of data showing how poverty fared under Bush. If s/he used the right endpoints, the average poverty rate under Clinton would be 9.9% and Bush's would be 9.6%.

It is stupid because who cares what the average poverty rate is over time? The reason we calculate rates is to see the direction of the trend. When Clinton assumed the presidency in 1994, the US poverty rate was 11.6%. After three years, where Bush is now, it had fallen 1.3 percentage points. By the time Clinton left office and Bush usurped the election, the poverty rate had fallen from 11.6% to 9.2%. In the one year of poverty data that is available for the Bush era, the rate increased 0.4 percentage points to 9.6%.

'Nuff said.

¶ 8/31/2004 11:00:14 AM

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