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Tuesday, May 29, 2012

NY Times: U.S. Winds Down Longer Benefits for the Unemployed

In February, Congress phased in a reduction of the number of weeks of extended aid and made it more difficult for states to qualify for the maximum aid, adding a financial burden to the long-term unemployed.

The full story is available on nytimes.com. Also, please see Mitchell Hirsch's excellent 2012 UI Extension Q&A

Sunday, May 27, 2012

From the "I Wish I Said It..." Department

From The Washington Monthly's Political Animal blog, the discussion about Paul Ryan's plan to use a filibuster-proof procedural tactic, reconciliation, to pass his budget, led to this comment:

Peter C on May 23, 2012 11:27 AM:

It wasn't just 1981. The Republicans passed both of the Bush tax cuts using reconciliation; that's why they had to automatically expire. They used their razor-thin (1-vote) margin of victory in the presidential race of 2000 to declare a 'mandate' at that time too and governed from the hard right edge with no concessions to any moderate or consensus opinions.

They don't play fair. They don't want to cooperate. They don't even want to govern. THEY WANT TO RULE. If they get a chance, they will empty the cash register (again) and feel like they've earned it. You remember Cheney telling Paul O'Neil, "You know, Paul, Reagan proved that deficits don't matter. We won the mid-term elections, this is our due."? This is how they think; it's who they ARE.

Read Jon Chait on Paul Ryan and Mitt Romney's long game - this is what we're up against, and this is why we have to win the next elections on every level possible: Federal, state and local. If Romney and Ryan have their way, the disparities in the chart below will only accelerate.

 

Source: Congressional Budget Office

Wisconsin, Vote Lori Compas on June 5th

Mann and Ornstein - Extremism In Congress: 'Even Worse Than It Looks'?

Wisconsin, Vote Barrett on June 5th

Friday, May 18, 2012

The Most Interesting Secretary of State in The World?

Consider this a shout-out to my friends at The Fogbow - where birthers go to have a sad.

Thursday, May 17, 2012

Nick Hanauer on Job Creators

Update: Here's the video of the speech:

Nick Hanauer, a Seattle businessman we've referred to earlier, gave the speech, transcribed below, to a TED University audience on March 1 of this year. TED chose not to post the video of the speech, for reasons that I find less than satisfactory. You can read more about the issue on the National Journal website and Chris Anderson's Posterous page.

It is astounding how significantly one idea can shape a society and its policies. Consider this one:

If taxes on the rich go up, job creation will go down.

This idea is an article of faith for Republicans and seldom challenged by Democrats and has shaped much of today's economic landscape.

But sometimes the ideas that we know to be true are dead wrong. For thousands of years people were sure that earth was at the center of the universe. It's not, and an astronomer who still believed that it was, would do some lousy astronomy.

In the same way, a policy maker who believed that the rich and businesses are "job creators" and therefore should not be taxed, would make equally bad policy.

I have started or helped start, dozens of businesses and initially hired lots of people. But if no one could have afforded to buy what we had to sell, my businesses would all have failed and all those jobs would have evaporated.

That's why I can say with confidence that rich people don't create jobs, nor do businesses, large or small. What does lead to more employment is a "circle of life" like feedback loop between customers and businesses. And only consumers can set in motion this virtuous cycle of increasing demand and hiring. In this sense, an ordinary middle-class consumer is far more of a job creator than a capitalist like me.

So when businesspeople take credit for creating jobs, it's a little like squirrels taking credit for creating evolution. In fact, it's the other way around.

Anyone who's ever run a business knows that hiring more people is a capitalists course of last resort, something we do only when increasing customer demand requires it. In this sense, calling ourselves job creators isn't just inaccurate, it's disingenuous.

That's why our current policies are so upside down. When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer.

Since 1980 the share of income for the richest Americans has more than tripled while effective tax rates have declined by close to 50%.

If it were true that lower tax rates and more wealth for the wealthy would lead to more job creation, then today we would be drowning in jobs. And yet unemployment and under-employment is at record highs.

Another reason this idea is so wrong-headed is that there can never be enough super-rich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the median American, but we don't buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. Like everyone else, we go out to eat with friends and family only occasionally.

I can't buy enough of anything to make up for the fact that millions of unemployed and underemployed Americans can't buy any new clothes or cars or enjoy any meals out. Or to make up for the decreasing consumption of the vast majority of American families that are barely squeaking by, buried by spiraling costs and trapped by stagnant or declining wages.

Here's an incredible fact. If the typical American family still got today the same share of income they earned in 1980, they would earn about 25% more and have an astounding $13,000 more a year. Where would the economy be if that were the case?

Significant privileges have come to capitalists like me for being perceived as "job creators" at the center of the economic universe, and the language and metaphors we use to defend the fairness of the current social and economic arrangements is telling. For instance, it is a small step from "job creator" to "The Creator". We did not accidentally choose this language. It is only honest to admit that calling oneself a "job creator" is both an assertion about how economics works and the a claim on status and privileges.

The extraordinary differential between a 15% tax rate on capital gains, dividends, and carried interest for capitalists, and the 35% top marginal rate on work for ordinary Americans is a privilege that is hard to justify without just a touch of deification.

We've had it backward for the last 30 years. Rich businesspeople like me don't create jobs. Rather they are a consequence of an eco-systemic feedback loop animated by middle-class consumers, and when they thrive, businesses grow and hire, and owners profit. That's why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich.

So here's an idea worth spreading.

In a capitalist economy, the true job creators are consumers, the middle class. And taxing the rich to make investments that grow the middle class, is the single smartest thing we can do for the middle class, the poor and the rich.

Thank You

Richard Wilkinson: How economic inequality harms societies

Monday, May 14, 2012

Romney Economics: Bankruptcy and Bailouts at GST Steel

This is what Governor Romney said in his speech after the Wisconsin primary:

"Free enterprise has done more to lift people out of poverty, to help build a strong middle class, to help educate our kids, and to make our lives better than all the programs of government combined. "

This is what Mitt Romney's Bain Capital did to GST Steel. Is that his version of free enterprise?

After the Pennsylvania primary, Governor Romney said this in this speech:

"It's still about the economy… and we're not stupid."

You're exactly right, Governor. We're not stupid. We can see the results of your vulture capitalism. We can see the effect you would have on the economy by signing the Ryan budget into law. And we're going to fight, every step of the way, to make sure that does not happen.

Update: Governor Romney had one other noteworthy quote in that primary-night speech:

"…you might have heard that I was successful in business. And that rumor is true. But you might not have heard that I became successful by helping start a business that grew from 10 people to hundreds of people. You might not have heard that our business helped start other businesses, like Staples and Sports Authority and a new steel mill and a learning center called Bright Horizons. And I'd tell you that not every business made it and there were good days and bad days, but every day was a lesson."

What lesson did Mitt Romney learn from GST Steel? Was that one of Bain's good days or bad days?

If you ask the candidate, you'll literally get no substantive response. The Romney campaign launched a Tumblr site, supposedly for the purpose of refuting the charges against the candidate. The GST Steel page doesn't mention a single thing about the company Bain leveraged out of business.

Sunday, May 13, 2012

New York Times: The Human Disaster of Unemployment

Dean Baker is co-director of the Center for Economic and Policy Research. Kevin Hassett is director of economic policy studies at the American Enterprise Institute. They've authored this op-ed piece published in Sunday's New York Times:

Policy makers must come together and recognize that this is an emergency, and fashion a comprehensive re-employment policy that addresses the specific needs of the long-term unemployed. A policy package that as a whole should appeal to the left and the right should spend money to help expand public and private training programs with proven track records; expand entrepreneurial opportunities by increasing access to small-business financing; reduce government hurdles to the formation of new businesses; and explore subsidies for private employers who hire the long-term unemployed. Those who hire for government jobs must do their share, too: managers who are filling open positions should be given explicit incentives to reconnect these lost workers.

Every month of delay is a month in which our unemployed friends and neighbors drift further away.

Friday, May 11, 2012

Washington Post: Unemployment insurance is vanishing, even as jobs are scarce

Brad Plumer, writing in today's Washington Post:

All told, some 409,000 workers have lost benefits in 2012 — and most of them have been unemployed for longer than 70 weeks.

These days, fewer and fewer jobless workers are receiving government aid. According to NELP, two-thirds of all jobless workers qualified for state or federal unemployment insurance in 2010. Last year, that number shrunk to 54 percent. This year, it will go below 50 percent. If Congress lets all of its extended-unemployment programs lapse at the end of this year, says NELP, then only a quarter of jobless Americans will be receiving unemployment insurance.

Divide and Conquer?

Thursday, May 10, 2012

Denver Post: Colorado jobless benefits to fall to 73-week maximum

Help the 99 93 86 73 63 54-ers

Update - Add Illinois, Georgia, Minnesota and Washington State to the list, too.

The Denver Post, reporting on an imminent reduction in unemployment benefits for Coloradans:

At one point, the long-term unemployed in Colorado could collect up to 99 weeks of benefits under state and federal programs, earning them the nickname "the 99ers."

But in November, Colorado lost eligibility for Tier 4 of the federal Emergency Unemployment Compensation program, which kicked in when a state had an unemployment rate of 8.5 percent or higher.

The duration of benefits fell to 93 weeks, then in early April dropped to 86 weeks when Tier 2 of the state extended program ended, affecting 11,000 people who were eligible.

The maximum available after May 12 will be 73 weeks. And come September, changes in the federal program will cut another 10 weeks off, bringing the maximum down to 63 weeks.

If the state's unemployment rate falls below 7 percent for three months, another nine weeks will come off the maximum, bringing the maximum to 54 weeks.

Keep in mind that, nationwide, there are about 2.8 million Americans who have been out of work for 60 weeks or longer - and who are still actively seeking employment. There are untold more people who have given up the search and exited the workforce.

Finally, people who have been out of work for 27 weeks and longer? Over 5 million:

Wednesday, May 9, 2012

"I’m looking to keep the roof over my head"

Reported by NBC Nightly News: after two years of unemployment, Kevin Kalmes is at risk of losing her home.

Sunday, May 6, 2012

CBS News: How are the long-term unemployed faring?

The Guardian: Long-term unemployment remains virtually unchanged in economic recovery

(via The Raw Story)

"You mention 99ers today and people say 'what?'", he said. "The Hunger Games brought in $1.3bn in three weeks. This nation just wants to be entertained."

Eichelberg, 54, worked on a farm until he was 40. He'd always worked with engines, and when the farm was sold he decided he'd better get a qualification to prove his expertise. He got a certification in automotive technology at a local college and found a job at Buell, the motorcycle company. After 9/11, the recession bit and he was laid off. Suddenly, he found his qualification was working against him. "I'd go to a lot of places and they'd tell me I was over-qualified, that I'd get bored. So what! I don't mind. Just hire me," he says. "What are you people looking for?"

He keeps looking for work but feels his age is working against him. "I walk in with this salt-and-pepper beard and I think they look at me and think: no," he said. "All the politicians say is that jobs are being created, that we created 120,000 jobs last month. Divide that over 50 states."

More than that, argues Betsey Stevenson, professor of business and public policy at Wharton business school, the US has been creating fewer jobs even in the good times.

"In the 1990s under Clinton we were adding 300,000 jobs a month. We had very poor jobs growth under Bush," she said. "The ratio of employed people to the population has been trending down since 2000."

Stevenson said the hangover from the so-called "jobless recovery" after the previous recession and the depth of this recession had combined to leave a worrying legacy for the long-term unemployed.

"We are very much in danger of creating a large group of people who are never able to fully recover from this," she said.