More on that Recovery

Thanks for mpbulletin for sending me This link to a CNN report on the jobs recovery. It’s an important read but contains a misleading statement:

But only about half of those job losses — or 4.3 million — happened under his watch.

The statement is true enough, but it should come with an explanation that most of that “half” was lost while the economy was still in the same free-fall it was in at the end of the Bush years, and the jobs loss started to turn around when Obama’s plans had a chance to take effect.

It reminds me something Al Franken wrote in Lies and the Lying Liars who Tell Them, that it was Clinton’s military who won in Afghanistan even though Bush was president at the time. That’s because none of Bush’s military policies were in place by then. Similarly, a statement which suggests Obama’s responsible for the millions of jobs lost before his economic policies were in place is misleading.

There will be a Recovery

I say in my ‘about’ page that I don’t just parrot other people’s writings, but this is exactly something that I’ve been thinking lately:

(Ezra Klien via Keven Drum )

Because a recovery is likely within five years, whichever party wins the White House in 2012 is likely to get the credit, and so too will its policy agenda. You can see how this will work. If Romney wins the presidency and the economy begins to rebound, Republicans will argue, and America’s experience will seem to show, that they were right all along: The stimulus was useless and the regulatory uncertainty the Obama administration created with its health-care plan and its talk of cap-and-trade and all the rest kept businesses from investing.

I believe that the economy will recover. I believe that we would have recovered eventually no matter what fiscal policies we pursued, but the President’s policies have kept us from crashing much harder than we already have. It would be a shame if credit for the recovery goes to people who tell us that the thing to do during an economic crisis is slash taxes for the wealthy and cut services for the poor.

Lying about Employment with Charts and Numbers

In response to Mitt Romney’s boldface lie that Obama is a “job destroyer”, Greg Sargent has been calling on Romney to explain himself. The truth is, as soon as the stimulus took effect, the hemorrhaging of jobs that occurred as a result of deregulation and lack of oversight started to turn around, and jobs have been created; not destroyed. How can so many people be fooled when the numbers are readily available and how can pathological lier like Mitt Romney be hailed as the Republican candidate most likely to beat Obama?

Take a look at these two charts:

Series Id: LNS11300000
Seasonally Adjusted
Series title: (Seas) Labor Force Participation Rate
Labor force status: Civilian labor force participation rate
Type of data: Percent or rate
Age: 16 years and over

Series Id: LNS12000000
Seasonally Adjusted
Series title: (Seas) Employment Level
Labor force status: Employed
Type of data: Number in thousands
Age: 16 years and over

Both are from the Bureau of Labor Statistics. One was pointed to in a Hot Air article to suggest that Obama’s policies, specifically health care reform, destroyed jobs (The article is titled “ObamaCare, the Job Destroyer”). The other is similar to a chart in Paul Krugman’s blog demonstrating that Obama has created jobs.

How can two charts about employment data look so different? Because only the second chart, “Employment Level”, shows whether jobs have been created or destroyed after the President’s fiscal policies took effect.

The other chart represents a problem and is concerning, but it does not indicate what Hot Air wants you to believe and does not undermine the fact that after the stimulus passed, the job decline turned around and our economy created over two million new jobs.

What the first chart, titled “Civilian Labor Force Participation Rate”, shows is the percentage of U.S. population who are either employed or looking for work. Employed or looking for work means you’re part of the labor force. How does a person fail to be counted as employed and also fail to be counted as looking for work? Certainly, when someone gets fed up after weeks of not finding a job and becomes discouraged, that person drops out of the labor force. Like I said, it’s concerning. But also people who stay in school rather than finding a job, stay at home parents, and retirees are not in the labor force.

The baby boomers are retiring, and that’s having a real effect on labor force participation, as are discouraged workers.

To get a feel for the meaning of employment level vs labor participation, and whether a drop in labor force participation makes Obama a “job destroyer”, imagine a group of 10 people. 8 are working, and 2 are looking for jobs. One new job appears and one of the job-seekers snatches it up. The other gets discouraged and stops looking. Has employment improved or have jobs been destroyed?

When someone says that Obama is a Job Destroyer, they are mistaken or lying. And you cannot trust any news source or presidential candidate that promotes such a fallacy.

Update: I had the first chart labeled incorrectly, and incorrectly referred to the second chart in the text when I was talking about the first chart. I had mislabeled it “(Seas) Civilian Labor Force Level” instead of “Civilian labor force participation rate”

A Day in the Life of a Video Post about the Occupy Movement

I recently came across a video that was first posted back in October. It’s titled “A Day in the Life of an Occupy Wall St. Participant” by Matt, in Portland Oregon. This post is so full of misinformation I wish I could be surprised about it’s many thousands of facebook likes and comments of approval. Unfortunately, accurate information is less important than sarcastic rhetoric.

In the video, Matt describes Dakota, Marin, and Simon, a group of young, mindless, consumers, as they plan for a day of protesting while purchasing and using products sold by big corporations. Matt says that they are hypocrites for being compulsive consumers while protesting the evils of “corporate greed” and asks, “If you really wanted to change the system, wouldn’t you want to boycott these evil corporations?”

Well, no. Generally, what the occupiers hoped to accomplish was financial regulations to prevent the kind of investments which create great risk to people not making those investments. The target of the protest were primarily financial institutions, hence “Occupy Wall Street”. Since most of companies that Matt lists in his video aren’t financial institutions, the Occupy movement, though diverse, wasn’t generally targeting those corporations. As it turns out, many of the protesters did put their money where their mouths where, and closed accounts at large financial banks and moved them to local banks and credit unions. But even if they were protesting Verizon, Dell, and Cisco, boycotting isn’t the only way to voice displeasure and sometimes isn’t event he best. A massive boycott of dozens of major corporations would cause an even greater financial crisis than the one we’re recovering from now. That would be hypocritical.

Thus, Matt uses the activities of his three characters (I don’t know if he completely made them up ) to describe the entire movement as a bunch of “Self righteous, morally indignant hypocrites”, even though their activities, real or not, don’t demonstrate hypocrisy (thoughtlessness and consumerism, perhaps).

Towards the end of the video, Matt starts to sound a little bit like a liberal. He chastises his three characters for not giving money to homeless people, then he talks about Chinese slave laborers and Vietnamese children who make all the products that we mindlessly purchase. He actually says, “It’s your consumerism that’s driving the social inequality that you’re out protesting”.

So true. Interesting that the occupy movement was started by an anti-consumerist organization called
Adbusters (according to Wikipedia). Perhaps Matt and the occupiers have more in common than he realizes.

Matt doesn’t seem like a really bad guy, and I won’t chastise him for not telling us if Dakota, Marin, and Simon are real people, amalgams of stories he’s heard or read about, or just three dopes he dreamed up. He wasn’t expecting his little video to go viral.

The problem isn’t Matt, so much, as all the people who took this little story seriously, despite all of its irrelevancy, and hailed it as proof that the occupiers were all just a bunch of hypocrites.

Fact Checkers are Under Assault. As They Should Be.

Glenn Kessler, AKA The Fact Checker, bemoaned that “Fact checkers are under assault!” and defended his colleagues at Politifact in Politifact’s decision to give Democrats the Lie of the Year award for saying Republicans voted to end Medicare. Mr. Kessler makes a good argument but I don’t buy it.

According to Politifact’s Bill Adair (via CBS News), the house “voted to protect Medicare on people who are 55 or older, but to privatize it and restructure it in a dramatic way for people who are younger”. Saying they voted to protect Medicare is less accurate than saying they voted to end it. All they did was vote not to “restructure it in a dramatic way” for people 55 and over. For the rest of us, Medicare would be a new program with an old name. The old program will have ended.

Politifact is trying too hard to seem fair and balanced. Five of their finalists for lie of the year were things that right wingers said and five were things that left wingers said. What are the chances of such an even split? Almost nil. But in order to seem unbiased, they came up with a list of five each. One of the items on the list was something Debbie Wasserman said but immediately retracted and admitted was a mistake, on the same day she said it. Politifact explains:

At PolitiFact, we do not typically fact-check statements that are quickly retracted by the speaker. However, we made an exception in this case because we expect voter identification laws and other election-process issues to remain a significant and divisive issue in the 2012 election.

That doesn’t ring true to me. Wasserman’s mistake was saying “… literally drag us all the way back to Jim Crow” when describing Republican tactics to restrict voters. She shouldn’t have said “Literally” but was ( pretty obviously, I think ) just exaggerating for effect, not to actually mislead. That’s supported by her immediate retraction. Just because Politifact feels that voter identification will be an important issue doesn’t give them the right to call Wasserman a liar.

Another item on that list is, of course, the one that got the prize. That statement is at best debatable, since the program will still have the same name. But it’s not a lie to say that something has “ended” when, as Igor Volsky says, “everything that has defined the program for the last 46 years” has been eliminated.

None of the right wing lies were such flimsy candidates as Wasserman’s statement or even the Medicare characterization, but obviously Politifact didn’t want to seem biased by including fewer left wing lies than right wing lies.

And since a right wing lie was the winner last year, it was obviously time honor the left. And that’s the truth.

Uncertainty

So let me get this straight: The payroll tax deal which was passed with bipartisan support in the Senate and would guarantee that the payroll tax cut will be in place for two months until a more permanent deal can be secured, will probably be scuttled. But, according to Boehner, it might be saved by a conference that will secure the deal for a year. But we don’t know what Republicans will demand in exchange for that deal or how Democrats will react to those demands.

All this to protect us from “Uncertainty”.

More Water for the Fire.

Kevin O’Rourke (via Paul Krugman):

One lesson that the world has learned since the financial crisis of 2008 is that a contractionary fiscal policy means what it says: contraction.

In other words, if government cuts spending during an economic downturn, it will deepen the economic troubles of its nation. That’s textbook. Literally. If you take an introductory course in macroeconomics, you learn the same thing.

President Obama’s handling of the U.S. Economic downturn has, pretty much, been textbook. We haven’t solved our employment troubles yet, but we have remained on top during an economic crisis that started here and has affected the entire world. Not only have we remained on top, those nations that have employed similar strategies have, overall, done better than those who haven’t.

Republicans are correct in saying that after three years, we can’t put all of the blame on George Bush. Bush was like a fire chief who decided that fires should be allowed to put themselves out. But when a fire raged out of control, he was replaced by a new fire chief who decided to use water. Three years later, the fire is still burning and with the benefit of hindsight we can see that more water would have been better. But that doesn’t mean we should go back to letting the fire burn.

The out-of-control fire is a world-wide economic downturn fostered by an environment of hands-off economic policies. There are two false economic arguments that might keep us from doing what’s necessary to put the fire out.

The first is the argument that stimulus spending doesn’t create jobs. That’s completely false. If we hire people to fix roads and bridges, then those people will have jobs. They’ll also hire subcontractors, and purchase supplies and services. With improved roads and bridges, entrepreneurs will have more opportunities to create even more jobs in the future.

The second argument is that we’re so deep into debt that we shouldn’t spend more. But no amount of tax cutting or government-shrinking is going to take care of our enormous debt. What we need is growth. Imagine a factory undergoing a financial crises because the machinery is broken and they can no longer produce the products that they have to sell. Now imagine the owner refusing to replace the broken machines because he doesn’t believe in spending money when times are tough. That’s what Republicans are advocating.

Just because we can’t put all of the blame on Bush doesn’t mean we should go back to the policies that sparked a world-wide economic crises. Expansionary economic policies, which means stimulus spending and tax cuts for the middle class and small businesses, have held our economy steady while the economies of nations that employed contractionary policies, like firing government workers and withholding aid for the poor, have only gotten worse.

If the fire’s still burning, it’s time for more water, not less.

More Data about Corporate Tax Rates

In an earlier post I pointed out that many countries with high corporate tax rates are doing well compared to countries with lower rates. I admitted that it’s not perfectly linear but it’s true enough for a reasonable person to conclude that lowering the corporate tax rate will not speed up our recovery.

Today, Keven Drum showed another chart which shows just how “high” our corporate tax rate actually is. It may be high compared to other nations, especially those suffering the worst effects of the world wide economic downturn, but it’s very low compared to what it used to be during any time in the last sixty years, even during Reagan’s administration.

What the chart also shows, as pointed out by readers, is that recessions seem to follow periods of lowering corporate taxes. It happened too often, in my opinion, to be a coincidence. Perhaps, as I’ve said before, what corporations do with all the money they save is invest in labor reducing technology or build factories overseas.

On the other hand, there might be a more indirect link between lowering corporate taxes and recessions. Low corporate taxes probably accompany other right wing policies such as cutting unemployment assistance or cutting funds for public transportation.

Either way, we have more than an abundant amount of evidence to show that cutting taxes for corporations isn’t the job-creating strategy that our Republican candidates say it is. The only reason they keep pushing that philosophy is they are getting paid to do so by corporate executives hoping to increase their profits by reducing their American workforce.

Tim Kaine’s Loyalty Arouses Obama Bashing Commenters

The Pilot’s report, “Kaine says he’ll stand by Obama in Senate bid”, generated predictable comments from on-line readers. One commenter said, (in part)

President Obama raised the debt to 14 TRILLION dollars.
Let’s give credit where credit is due-but of course, our AAA bond rating has been cut to AA with Obama in office, too.

I’m amazed that the bond rating loss can be used as a club to beat Obama with. My reply:

With Obama in office
Submitted by bnmng on Tue, 11/15/2011 at 7:29 am.

the debt reached 14 trillion. But it was already 10 trillion when Obama took office and half of the debt is due to tax cuts and wars. Even if you support both wars, don’t say “14 trillion” without acknowledging how much wars and cutting taxes for the rich during war time has cost the nation.

According to the S&P report the bond rating drop was due to Republican obstructionism in Congress.

It’s going to be a tough race for Obama and his supporters if people don’t read past the headlines and one-liners and see what’s really causing our economic troubles and how much has been done to hold our economy steady during a world-wide economic crises which started here.