2012.02.13
Monday open thread
When you’re down and out, something always turns up – and it’s usually the noses of your friends.
What’s got you down this week?
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For what it’s worth, Virginia made the NY Times editorial pages.
http://www.nytimes.com/2012/02/13/opinion/the-big-money-behind-state-laws.html?_r=1&ref=opinion
They also have an opinion piece on vote suppression which is something we’ve talked about here.
http://campaignstops.blogs.nytimes.com/2012/02/12/the-strange-career-of-voter-suppression/?ref=opinion
Comment by Scott M. — February 13, 2012 @ 8:10 am
Obama’s budget to be released today will merely be an outline of his re-election campaign message and a continuation of his campaign strategy for another clash with Congress.
It is a rehash of proposals he made last year that Congress rejected. Obama does not expect it to pass, on the contrary he wants it rejected so he will have a campaign issue. Obama is no leader.
His budget calls for $1.5 trillion in tax increases over 10 years and no
meaningful spending cuts in programs dear to the Democrats. It ignores the impending bankruptcy of medicare and will result in the 4th straight year of $1 trillion deficits.
Republicans will use Obama’s budget to drive a wedge between Democrats. Obama’s budget has no chance of passage but Senate Minority Leader McConnell (R-KY) plans to force the Dems to vote on it. This will put moderate Dems facing re-election in the difficult position of voting for tax increases in an election year.
I predict that the Dems in the Senate will force the country suffer a 4th year without a budget as required by law which the Dems put in place!
Comment by John R — February 13, 2012 @ 8:30 am
As hundreds die in central and eastern Europe due to frigid temps, the EU is starting to collect a carbon tax on air travel to and from Europe.
Comment by BUD — February 13, 2012 @ 10:11 am
I predict the TP/GOP is gonna “reap the whirlwind”.
Comment by Sandi Saunders — February 13, 2012 @ 10:53 am
In my further quest to point out Christians can be as bad as Muslim fundamentalists I offer the following news story.
http://www.cbsnews.com/8301-201_162-57376359/federal-trial-of-christian-militia-group-begins/
….The government describes the Hutaree, which the militia claimed means “Christian warriors,” as an anti-government group committed to fighting authorities who belong to a so-called “New World Order.” The defendants are accused of conspiring to someday ambush and kill a police officer, then attack the funeral procession with explosives and trigger a broader revolt against the U.S. government…..
Comment by Scott M. — February 13, 2012 @ 12:12 pm
Scott…what church or faith do these people belong? Is it their faith that makes them take the actions claimed or a dislike of government?
Too bad your quest wasn’t begun at the time of the Crusades as you might have had something of value to report.
Comment by BUD — February 13, 2012 @ 1:55 pm
Interesting statistics of the day from http://data.bls.gov/timeseries/LNS11300000:
Back in Jan 2001 (when George W. Bush took office), 67.2% of those aged 16 and above “participated” in the workforce, which means that they either worked or were seeking work.
In Jan 2009 (when George W. Bush left office and Barack Obama took office), 65.7% of those aged 16 and above were in the workforce, a drop of 1.5%.
As of Jan 2012 (three years into Obama’s term), only 63.7% of those aged 16 and above were in the workforce, a drop of 2.0% in less than 40% of the time.
Why are so many people dropping out of the workforce? It’s going to be damned hard to “grow the economy” when the number of people working (or seeking to work) is actually falling…
P.S.: If you exclude “those seeking work” and only look at those actually working, the percentages for Jan 2001, 2009, and 2012 are 64.4%, 60.6%, and 58.4%, respectively. Is it any wonder the government is having trouble paying the bills?
Comment by Brian Lindholm — February 13, 2012 @ 2:06 pm
To #5 (Scott M.): All religions will have the occasion group of nut jobs that take religious “teachings” into harmful directions. If you want to know if one religion is particularly more harmful than the others, you should probably look at death rates.
For example, a Google search on “islamic terrorism death toll” yields pointers to numerous articles that describe the deaths caused by Muslim fundamentalists in considerable detail. I realize that one can argue about exactly what counts as a “death caused by a fundamentalists”, but the death toll is easily measured in the thousands per year.
If you perform a similar search on “christian militia death toll”, there simply isn’t as much carnage. The last big one was a massacre in 2004 in Nigeria. 650 victims. As best I can tell, the Michigan-based Hutaree didn’t kill anybody.
One of the core teachings of Christianity is “love thy neighbor as thyself”, with the word “neighbor” to be interpreted broadly. Now I know that many Christians follow this teaching imperfectly (and the Nigerian “Christian” militias lost sight of it entirely), but it remains a core teaching. Does Islam have a similar teaching?
Comment by Brian Lindholm — February 13, 2012 @ 2:26 pm
We’re out of Iraq!! yea!!!
Part of the newly submitted Obama budget is $4B for Iraq via the State dep’t…for functions such as training police. But we’ve been training police since 2005. Shouldn’t they have “gotten it” by now?
Comment by BUD — February 13, 2012 @ 2:31 pm
yeah Brian..part of Obama’s plan..”An Economy Built to (finish) Last!”
Comment by BUD — February 13, 2012 @ 2:36 pm
@6 BUD, my very limited understanding of the Hutaree come from the wikipedia article. Apparently they think they’re working against the antiChrist, which would make them explicitly Christian. From what I can glean, they are their own church/religion.
http://en.wikipedia.org/wiki/Hutaree
Hutaree is a militia movement group adhering to the ideology of the Christian Patriot movement, based in Adrian, Michigan, in the United States.[1]
The group was formed in early 2008. The name “Hutaree” appears to be a neologism; the group’s web site says that it means “Christian warriors.”[2]
The group was allegedly preparing for what they believed would be an apocalyptic battle with the forces of the Antichrist, whom they believed would be supported and defended by local, state, and federal law enforcement. On their website, all police and military members who would support the current U.S. system of local, state or federal government were described as members of the “brotherhood” who are considered by the Hutaree to be enemies.[1]
more….
Comment by Scott M. — February 13, 2012 @ 2:45 pm
@8 Brian, I’ll agree with a lot of what you said. It’s not my intention to show ALL Christians are bad but to illustrate to some here you can’t paint ALL muslims (or Jews or atheists, etc.) as bad either. It’s really intended to be just a reminder of sorts.
I don’t know enough about the Muslim religion to answer your last question.
Comment by Scott M. — February 13, 2012 @ 2:50 pm
@7 Brian, come on man. That’s a little misleading. Workforce employment had been dropping through the Bush term and the housing crisis hit near the end of it. With so much of our work force tied up in the housing industry, this isn’t really a surprise.
Other things to note and please correct me where I’m wrong. Why is employment so low? Probably because of computerization, industrialization, and the free movement of capital. The computerization and industrialization means we’re producing more with less. In this regards, higher unemployment is a good thing because it means we have more leisure to pursue education and the arts. If full employment is the goal, maybe we should reduce the work week from 40 hrs. to 35 thereby drawing some of those unemployed back into the work force. Also our system of capitalism and the free movement of capital encourages and allows corporations to move their production facilities overseas in search of cheaper labor. Move the jobs overseas, less employment here at home.
Also, companies are seeing record profits (overall) with some sitting on mountains of cash. When you ask, “Is it any wonder the government is having trouble paying the bills?” all this does is point out our tax structure is broken and that we should be taxing corporations more heavily.
Comment by Scott M. — February 13, 2012 @ 3:02 pm
Bud and Brian, this Wikipedia article might interest you.
http://en.wikipedia.org/wiki/Taiping_Rebellion
The Taiping Rebellion was a widespread civil war in southern China from 1850 to 1864, led by heterodox Christian convert Hong Xiuquan, who, having received visions, maintained that he was the younger brother of Jesus Christ,[1] against the ruling Manchu-led Qing Dynasty. About 20 million people died, mainly civilians, in one of the deadliest military conflicts in history.[2]
More…
Comment by Scott M. — February 13, 2012 @ 3:05 pm
#12 “It’s really intended to be a reminder of sorts.”
#5 “In my quest to point out Christians can be as bad as Muslim fundamentalists…”
I dunno, one statement looks to have more of an edge than the other. It’s probably just me….
Comment by BUD — February 13, 2012 @ 3:19 pm
http://www.reuters.com/article/2012/02/13/us-usa-budget-foreign-idUSTRE81C1C920120213
Ron Paul is looking better all the time.
Comment by JimW — February 13, 2012 @ 3:46 pm
#5, yea I know what you mean….all those videos on the Internet of Christians beheading Muslim school girls and flying air liners into buildings really gets to ya…..
Comment by JimW — February 13, 2012 @ 3:49 pm
To #13 (Scott M.): I’m not being misleading. According to the BLS, “participating in the workforce” means either working or seeking work. Unemployment rates have no effect on the size of the workforce if you include those who are seeking work. It’s an important distinction.
If you look at the data, it’s apparent that the economy has effectively taken a double-whammy. The number of people who want to work has dropped (for reasons apparently unknown), and the percentage of those who want to work who actually have work has also also dropped (in this case, for reasons known).
My point wasn’t about the second “whammy”. That’s the increased unemployment rate, which we know was a consequence of the housing crash. My point was about the first “whammy”, which is the fact that a smaller percentage of Americans seek to work in the first place. Why are fewer Americans seeking work?!?
[For a historical perspective, note that participation in the workforce peaked at 67.3% early in the year 2000. Combined with a low unemployment rate, this is one of the reasons tax revenues were so high during Clinton's last year. Today that percentage is only 63.7%. The last time it was that low was way back in 1983, when substantially fewer women worked outside the home.]
The reason I emphasize this point is that if the size of the workforce (both those working and those seeking work) continues to shrink (which I suspect it will), even improvements in the unemployment rate will not be enough to grow the economy or to get our budget deficits under control.
Comment by Brian Lindholm — February 13, 2012 @ 5:23 pm
No doubt we need more jobs, where are the TP/GOP plans for increasing jobs?
Comment by Sandi Saunders — February 13, 2012 @ 9:46 pm
I agree Sandi…where are GOP job creating bills?
It’s claimed over 20 job creating bills are now languishing in the dem controlled senate. Some MIGHT be job creating bills– many are indirectly job creating bills by improving regulation.
Boehner’s latest?
http://www.humanevents.com/article.php?id=49388
We can have all the jobs bills we want but the best would be a healthy economy. How do we create jobs with gas approaching $4/gallon(see the summer of 2008), with excessive and wasteful government spending and an onerous, BS taxcode. THIS YEAR, we are on pace to eclipse $500B just to finance our nation’s debt.
JOBS= WORK and what’s happening now aint WORKing.
Comment by BUD — February 14, 2012 @ 7:33 am
The problem here BUD is one of confidence and perspective. Reality and what people believe are often two different things. Too many people have “bought into” political propaganda and too few realize what is really going on. And the few who think they know the truth, keep the water muddied.
The Moyers/Bartlett interview is especially telling, as he is not even a liberal, just an honest Republican. Until some folks realize that the lower tax meme has past the tipping point of being helpful (if it ever was) and that the hole we are in is bi-partisan, or that winning political points is not more important than solutions, this will continue.
Cases in point:
http://www.nytimes.com/2012/02/12/us/even-critics-of-safety-net-increasingly-depend-on-it.html?_r=1&src=me&ref=general
“Ki Gulbranson owns a logo apparel shop, deals in jewelry on the side and referees youth soccer games. He makes about $39,000 a year and wants you to know that he does not need any help from the federal government.
…Yet this year, as in each of the past three years, Mr. Gulbranson, 57, is counting on a payment of several thousand dollars from the federal government, a subsidy for working families called the earned-income tax credit. He has signed up his three school-age children to eat free breakfast and lunch at federal expense. And Medicare paid for his mother, 88, to have hip surgery twice.”
http://www.truth-out.org/bill-moyers-where-right-went-wrong/1328974045
“I’m not sure if they really know very much about taxation. Back when the Tea Party first came into existence, back in 2009 they had a big demonstration in Washington. And we went around and we surveyed a good percentage of the people in this demonstration about what they knew about taxes, what they thought the top rate was, what they thought their tax rate was. You know, questions of just straight factual knowledge, not opinion.
And it turned out that these people all thought taxes were vastly higher than they really are, and that they were paying exorbitantly high tax rates that would be impossible for them to pay. And so, I think that this is part of what’s going on here, is simple misinformation.
And there have been other polls and things that are showing the same thing. I mean, if you really thought, if you’re a typical middle class person, you really believe the government was taking half your income, you’d be out demonstrating. But the fact of the matter is that the vast majority of people pay less than 10 percent federal income taxes. So they simply have a wrong understanding of what they pay.“
Comment by Sandi Saunders — February 14, 2012 @ 8:33 am
The problem with unemployment has been and remains housing. The construction and real estate industry has about 3.2 million unemployed just over 2% of the workforce. That does not include the loss of employment by those dependent of the mortgage and banking business. The construction and real estate business are the small businesses that traditionally spur employment and grwoth coming out of a recession. However, this recession has been different because these are the industries destroyed by the mortgage crisis. Obama’s attempts are restoring the real estate industry have failed because the banking industry has refused to go along. The most recent agreements between the AGs and the banks provide the best chance at restoring these industries, but it remains doubtful and at best long term. Had the construction and real estate industry recovered as in prior recessions, unemployment would be close to 6% instead of the 8.3 percent today. Unfortunately, there is little Obama or Congress can do to fix these industries except put these people to work with structural improvements to our infrastructure and implore the banking industry to again make mortgages. Obama is working hard to do these things and the GOP continually delays and insists that only time will bring the industries back. The GOP candidates are running on the philosophy that you have to let the industries fail and work their way back. In other words, you have to let the contractors and Realtors stay unemployed until the real estate industry slowly improves. Of course by then the contractors will have used all their capital and the realtors will have given up. That will slow the comeback even more. There are things the US government can do to improve the plight of these industries, but the stalemate in Congress keeps them from happening.
Comment by Richard J Beason, CPA — February 14, 2012 @ 11:53 am
There has been discussion on this blog about the decrease in workforce. The inference has been that it is because of people no longer trying for employment. However, the statistics account for that in establishing the numbers each month. The US workforce is declining and will continue to do so. Two reasons come are the major causes. One, the population is aging, the babyboomers are moving rapidly into retirement. The second is at the opposite end of the workforce. Young people are not entering the workforce at as early of an age. They are staying in school longer, living at home longer, and not beginning employment until a later age. Accordingly the workforce is reducing.
How is the country coping with these losses. Increased productivity has made the difference. Productivity has increased nearly 3% per year since the mid-nineties and has grown at an even greater rate the last 3 years. The upside is that Companies are more profitable as labor costs have dropped and been replaced with relatively inexpensive technology.
To the extent productivity has exceeded growth in GDP and the loss in workforce you have increased unemployment. This has been relatively small,but it certainly has contributed to the unemployment rate. The fact that labor intensive jobs have been moved overseas during the last 15 years or taken by immigrants to this Country and the loss of construction jobs has made this change more painful. Again, the answer to best fix this pain is to bring manufacturing back to this country, slow immigration of these workers, and to fix the construction industry. Congress should close tax loopholes that encourage moving labor overseas, enforce e-verify laws, and jump start construction by working on infrastructure in the US.
Comment by Richard J Beason, CPA — February 14, 2012 @ 12:08 pm
One note that I have seen first hand. Time and again I have heard that we have to have immigrants to do certain jobs because US workers will not do them. IN S.C., Governor Haley has enforced e-verify and established severe penalties for hiring illegals beginning the first of the year. As a result, you can visually see that immigrants of one ethnicity have left and been replaced by workers meeting the e-verify requirements. I know, this is not politically correct to point out, but lets get practical, where one ethnic group gathered at the bus stop two months ago at quitting time, today it is a totally different ethnic grouping that are much more likely to be US citizens. The businesses are still operating and they still have employees to meet their needs. E-verify does work.
Comment by Richard J Beason, CPA — February 14, 2012 @ 12:18 pm
To #22 and #23 (Richard): If the GOP is saying that the housing industry needs to “works its way back up” on its own, then they’re correct. There is nothing the government can do to significantly change the amount of time it’ll take for the housing market to return to normal.
Why? Because there is a huge glut of houses (both “in the market” and “in the shadow inventory”). During the housing boom, the housing industry built approximately 1.75 million homes per year: http://understandingthemarket.com/?p=18. If you assume 2.5 people per household, this is enough to house an additional 4.4 million people per year. However, the US population only grew by 2.7 million people per year: http://www.census.gov/prod/cen2010/briefs/c2010br-01.pdf. The net result was nearly 7 million excess homes.
Evidence of this can be seen in home vacancy rates: http://www.census.gov/hhes/www/housing/hvs/qtr411/files/q411press.pdf. For rental properties, the vacancy rate is currently 9.4% vs. a historical norm of 7.9%, and for homeowner properties, the vacancy rate is currently 2.3% vs a historical norm of 1.7%. Until the population grows enough to fill these additional vacant properties, there will be little reason to build new homes. No amount of beating on mortgage companies or altering of foreclosure rules will change this.
I do appreciate your response on the subject of our shrinking workforce, though. [I was beginning to wonder if anybody realized the significance of it.] I agree that baby boomer retirements (~6500 workers per day) and extended college stays are major contributors. An additional factor you missed was an increase in disabled workers: In 2008, 6% of men and 5% of women were receiving disability benefits. Back in 1988, only 4% of men and 2% of women received benefits. See http://www.washingtonpost.com/opinions/social-security-disability-program-reveals-budget-quagmire/2012/02/10/gIQA261V9Q_story.html for details.
The shrinking workforce is actually a really big deal, at it significantly impairs the ability of the GDP (and associated tax revenues) to grow. However, our need for government spending on retirees is rapidly increasing: http://www.ssa.gov/OACT/ProgData/icpGraph.html. Something’s gotta give somewhere…
Comment by Brian Lindholm — February 14, 2012 @ 9:08 pm
25. I disagree about what the government can do. The problem I speak of is unemployment and the fact that 2% of unemployment is in the construction and real estate industries. First by putting more contractors to work building infrastructure, this industry will begin getting back on its feet. Secondly, by getting banks to again make mortgages and stopping the foreclosure mess, the housing inventory will start mending itself. As houses again start to be purchased, realtors will again go back to work and contractors will begin repairing the many vacant homes for sale. Until this happens, the unemployment rate will remain high.
As for the workforce shrinkage, productivity remains the only solution unless we increase immigration. But, until we put our current workforce back to work this is a problem of the future. Not the distant future, but still not at the top of the list. Productivity allows companies to make more profit, but it does not increase contributions to entitlements. That means the tax code will have to be changed to help cover these costs from the operating budget, which is effectively happening already. That isanother reason why I have supported merging the SSN debt with the operating budget to better reflect our obligations. Just as the US used SSN taxes to pay for its operating budget for decades, the operating budget will have to support entitlements in the future. I agree that some changes will have to be made in entitlements, but I believe, changes to the tax code more equitable and productivity will be able to take care of much of the changes in workforce.
Comment by Richard J Beason, CPA — February 15, 2012 @ 8:02 am
@25 Brian, I see where you’re going with your arguments but I have to wonder if the outputs of a declining workforce aren’t more than made up for by the increased efficiencies Richard mentioned earlier. If that’s true, if the outputs really physically exist, then we should be more concerned with the appropriate distribution of those goods and services. The solution to the declining workforce problem isn’t cutting services to retirees. The solution is a better distribution of our nation’s resources!
It makes no sense to have enough for everyone to lead a comfortable life if it’s so unequally distributed that some have much more than they can ever use while others go wanting.
Not that anyone much cares but me but let me remind everyone with a GDP of about $12 Trillion and a population of about 300 Million, if the money were distributed equitably throughout our society, EVERY man, woman, and child, working, unemployed, homeless, etc. would get $40,000/year. If you limited that distribution of wealth to just those of working age, every worker would get about $60,000/yr.
There’s plenty of wealth in this country. We don’t have to cut funding for retirees, or the sick, etc. We just need to distribute that wealth better.
Comment by Scott M. — February 15, 2012 @ 8:22 am
To #26 (Richard): The housing inventory problem is already mending itself. In Q4 of 2008, the vacancy rate of owned homes peaked at 2.9%. In Q4 of 2011, the vacancy rate had already dropped to 2.3%. If this rate of improvement continues, we’ll reach the historical norm of 1.7% in Q4 of 2014. Three years from now. No special government action required. [Your proposed solution of redeploying contractors on infrastructure projects would help infrastructure. It wouldn't help housing.]
As for the general fund supporting entitlement programs, you’re right. It’s happening already. Since 2010, I believe. And Obama’s budget proposal accelerates this trend with large cuts to discretionary spending while leaving SS/Medicare untouched. We’ll be getting less actual government for our tax dollars than ever before. [A rather curious outcome for an administration that believes in the power of government, is it not?]
To #27 (Scott M.): “Increased efficiencies” have been happening for several decades straight. To make up for 200k baby boomers retiring every month, we’d have to accelerate the rate of productivity growth far beyond what we’ve ever seen in the past. Richard says it’s “the only solution”, but I just don’t see how it’s gonna happen. More realistically, we have to expect very slow GDP (and tax revenue) growth for the next 20 years, and adjust spending plans accordingly.
And one must be careful when recommending “that wealth be better distributed”. If you truly did distribute it absolutely uniformly, you’d pretty quickly discover that people would start dropping out of the workforce (or only working part time) to go do things that are more fun. GDP would plummet, and there would suddenly be less wealth to distribute around. I’m not at all a fan of the exorbitant pay packages that CEOs and hedge fund managers have managed to swing for themselves, but the economy only functions when people work. Paying people regardless of work is a recipe for disaster.
Comment by Brian Lindholm — February 15, 2012 @ 11:57 am