Brad DeLong's Semi-Daily Journal: A Weblog

I think you have (ii) and (iii) mixed up. The Administration has governed from the orbit of Pluto on the economy - at least there was some semblance of an argument for tax cuts, and it is only natural that he would want those cuts to go to his friends. Where he has governed from the Gamma Quadrant is on national security. Al Quaida attacks us, so we retaliate against Iraq? Huh?

I think you have (ii) and (iii) mixed up. The Administration has governed from the orbit of Pluto on the economy - at least there was some semblance of an argument for tax cuts, and it is only natural that he would want those cuts to go to his friends. Where he has governed from the Gamma Quadrant is on national security. Al Quaida attacks us, so we retaliate against Iraq? Huh?

Can you post a link to a transcript and/or video of the debate?

You know, I was just thinking of a debate between Carnegie Mellon's Allan Meltzer and Paul Krugman of Princeton on the capital gains tax cuts. Krugman said that, yes, most economists agreed a distortion in the tax code was a bad idea and should be removed, but if other actions included spending cuts and/or other tax increases. Now, did Bush do either of those things in an intelligent way?

I rarely see eye to eye with you, Brad, on economic matters, but this:

"I claimed that the Bush administration had governed (i) from the right on culture, (ii) from the orbit of Pluto on national security, and (iii) from the Gamma Quadrant on the economy."

That, professor, is the best line I've read in a while. Maybe we should all brush up on our Klingon. K'plah!

Related --- Bush/Cheney infringes on Burger King ---

DOBBS: ... joined by former Bush-Cheney adviser Ron Christie and [Roger] Altman. ...

CHRISTIE: ... job creation will be higher in the first term in the Bush administration than the Clinton term. But again, the Democrats...

ALTMAN: I am sorry, sir!

CHRISTIE: Excuse me, I didn't interrupt you ... the Democrats continue to demagogue the issue ...

DOBBS: ... we will have to call this even ...

UNIDENTIFIED MALE: I am very disappointed in that judgment.

DOBBS: I am talking about in terms of time. ... Thank you both for being here. ...

( http://www.cnn.com/TRANSCRIPTS/0410/07/ldt.01.html )

http://www.nytimes.com/2004/10/08/opinion/08herbert1.html

Working for a Pittance
By BOB HERBERT

Reality keeps rearing its ugly head. The Bush administration's case for the war in Iraq has completely fallen apart, as evidenced by the report this week from the president's handpicked inspector that Iraq had destroyed its illicit weapons stockpiles in the early 1990's.

Coming next week are the results of a new study that shows - here at home - how tough a time American families are having in their never-ending struggle to put food on the table and keep a roof over their heads. The White House, as deep in denial about the economy as it is about Iraq, insists that things are fine - despite the embarrassing fact that President Bush is on track to become the first president since Herbert Hoover to preside over a net loss of jobs during his four years in office.

The study, jointly sponsored by the Annie E. Casey, Ford and Rockefeller Foundations, will show that 9.2 million working families in the United States - one out of every four - earn wages that are so low they are barely able to survive financially.

"Our data is very solid and shows that this is a much bigger problem than most people imagine," said Brandon Roberts, one of the authors of the report, which is to be formally released on Tuesday. The report found that there are 20 million children in these low-income working families.

For the purposes of the study, any family in which at least one person was employed was considered a working family. Very wealthy families were included.

The median income for a family of four in the U.S. is $62,732. According to the study, a family of four earning less than $36,784 is considered low-income. A family of four earning less than $18,392 is considered poor. The 9.2 million struggling families cited by the report fell into one of the latter two categories. And those families have one-third of all the children in American working families.

Not surprisingly, the problem for millions of families is that they have jobs that pay very low wages and provide no benefits. "Consider the motel housekeeper, the retail clerk at the hardware store or the coffee shop cook," the report said. "If they have children, chances are good that their families are living on an income too low to provide for their basic needs."

Neither politicians nor the media put much of a spotlight on families that are struggling economically. According to the study, one in five workers are in occupations where the median wage is less than $8.84 an hour, which is a poverty-level wage for a family of four. A full-time job at the federal minimum wage of $5.15 an hour is not even sufficient to keep a family of three out of poverty.

Families with that kind of income are teetering on the edge of an economic abyss. Any misfortune might push them over the edge - an illness, an automobile breakdown, even something as seemingly minor as a flooded basement.

For the families in these lower-income brackets, life is often a harrowing day-to-day struggle to pay for the bare necessities. According to federal government statistics, the median annual rent for a two-bedroom apartment in major metropolitan markets is more than $8,000. The annual cost of food for a low-income family of four is nearly $4,000. Utility bills are nearly $2,000. Transportation costs are about $1,500. And then there are costs for child care, health care and clothing.

You do the math. How are these millions of poor and low-income families making it?

Bush inherited a popping stock market bubble; a falling knife. If he had not implemented his aggressive tax plan we would be in even worse shape now. Thank God Bush was in charge instead of Gore. And, the deficit, well, the war in Iraq cost some money, yes, but it was a worthwhile cause -- and Bush has a plan to reduce the deficit by half in X years. So, we will get there, it just takes time. The worst thing we could have right now would be a Democrat in the White House, raising taxes and putting the brakes on ecomomic growth.

(I'm playing "Bush's advocate".)

You mean, just like the 1993 tax package put a brake on economic growth? Or the retreat that Reagan pulled on tax-cutting (was it 1983?) put a brake on economic growth? Go back and do some real-world and academic relationship between fiscal and monetary and macroeconomics writ large and call us in the morning.

You mean, just like the 1993 tax package put a brake on economic growth? Or the retreat that Reagan pulled on tax-cutting (was it 1983?) put a brake on economic growth? Go back and do some research on the real-world and academic relationship between fiscal and monetary policies and macroeconomics writ large and call us in the morning.

An explanation of Bush's poor job-creation record from www.taxwisdom.org:

"Advocates of Supply-Side economics have apparently never realized that when they recommend across-the-board income tax cuts and matching reductions in government spending, they are proposing a policy that---all else equal---is guaranteed to either cause a recession or make any ongoing recession worse. Across-the-board income tax cuts are contractionary (assuming matching spending cuts) because wealthier recipients of income tax cuts will save some of the extra disposable income they are given. Since not all money that is saved is lent out to borrowers, there is a net leakage of money out of the economy whenever money is saved."

"...The truth [tax cut enthusiasts] ignore is that even if an income tax cut were designed to give refunds only to people who would be certain to spend all of it (poor people), it would still not provide any net stimulus to the economy. When spending-cut-dollars match tax-cut-dollars, the money that refunded taxpayers would get to spend would have been spent by the federal government anyway. This means that no net increase in aggregate spending can occur, so there is no net increase in jobs or incomes."

"A fiscal policy initiative can properly be described as expansionary only if it ends up increasing total spending in the economy. Tax cuts by themselves cannot do that. In spite of this fact, nearly every introductory economics textbook in America today mentions tax cuts as one of the federal government's expansionary fiscal policy tools and fails to mention that tax increases are far more effective than tax cuts in stimulating the economy when the money that is collected in taxes would have otherwise been saved. One unfortunate consequence of this educational failure is that we now have politicians in charge of America's federal government who have cut taxes repeatedly over the past few years in the mistaken belief that they would stimulate the economy."

"The only reason why the Bush Tax Cuts did not plunge the economy into an even deeper recession is because the federal government increased its spending after Nine-Eleven using borrowed money to finance it instead of tax revenue. Unfortunately, the stimulative effect of this increased spending was largely offset by the contractionary effect of the tax cuts. Giving the largest share of a tax cut to rich people who are most likely to save a great deal of it is not a very intelligent thing to do when the economy is struggling to pull out of a recession. The result has been a sputtering and long overdue 'recovery' that has created far fewer jobs than almost any economic recovery in American economic history in spite of the added benefit of historically low interest rates."

Seems to account for Bush's job-creation problem rather well, I think.

Linette

Bush may have inherited a recession, but in the words of Max Sawicky:
"The Bushies point to some good job growth numbers over the past year. This is like thanking someone for not hitting you over the head with a hammer, after pounding for a week. The President's job is to alleviate employment downturns, not take credit for inevitable business cycle recoveries that would happen in any event."

Also, this is a very instructive graph comparing this recession to Daddy Bush's: http://angrybear.blogspot.com/2004/10/summarizing-bushs-job-creation-record.html

"We'd be in even worse shape w/o Bush's resolute deficit expansion", my aunt Fanny.

Bush has actually governed from the Bizarro World where it comes to both economics and Iraq.

Deficits Good !! More attacks means situation desperate for insurgents !! War is Peace !!

I understand that there is a fair chance your question may be asked at the debate tonight.

I understand that there is a fair chance your question may be asked at the debate tonight.

Upon dissecting the employment numbers, there is a net loss of 18,000 mfg jobs (Health benefits) and increase in service jobs (Want fries with that?). The overall numbers were boosted by an increase in government employment (GOP = big intrusive government + big deficits- borrow + spend).