March 02, 2004

Why Oh Why Are We Ruled by These Fools? (Special Cheney-Is-Badly-Underbriefed Edition)

We know that a major briefing paper on Social Security to George W. Bush took the form of a 630 text word Powerpoint presentation. But I had not known that Cheney had not gotten any memos at all about job losses during the Bush-Cheney administration:

Yahoo! News: The vice president also took a shot at... Sen. John Kerry... [and] Sen. John Edwards... who have skewered Bush over lagging job growth even as the economy improves. "If the Democratic policies had been pursued over the last two or three years, the kind of tax increases that both Kerry and Edwards have talked about, we would not have had the kind of job growth that we've had," Cheney said.

Does Cheney really not know that payroll employment today stands 2.3 million lower than it stood in January 2001?* That we have not had any "kind of job growth," but rather job loss to the tune of 2.3 million? That "the kind of job growth that we've had" during the Bush-Cheney administration--i.e., less than zero--is not something to be proud of?

Sheesh! Talk about being way out of touch with reality...


*Don't talk to me about the household survey. Listen to Alan Greenspan instead:

DemSEC | A Political Weblog: "We have concluded that the data on so-called payrolls survey is surely the most accurate of the two and our suspicion is that at the end of the day there will be revisions to the household data," Greenspan said in response to a question from the House of Representatives Budget Committee. The Fed chief said recent official estimates of immigration are likely "grossly overestimated", which in turn overestimates employment growth as measured by the household survey.

Posted by DeLong at March 2, 2004 02:29 PM | TrackBack

Comments

When the jobs dry up the immigrants stop coming?

Or did the immigrants stop coming because of new HS proceedures.

Given that a very large percentage of Silicon Valley Tech companies were started by Indian or Chinese nationals, not allowing them into the country is not good for creative new enterprises in the US.

As for the tax cuts, there has been so little demand stimulus that one wonders if there really was much economic stimulation by Bush policy. Yes Bush has given tax cuts and deficit spent, but Treasury has also soaked up $800 billion in potential econmic investment in the form of new treasury bonds. I understand that one can deficit spend to create jobs and that creates demand. However, I don't see how tax cuts to the wealthy in a overcapacity economy is going to do much more than transfer dollars collected as tax revenue to dollars borrowed as Treasury bonds. If we were collecting surplus taxes, then a tax cut would give more money for investment, but not when we are in deficit. Am I missing something? Where in this transfer of wealth is the economic stimulus???

Posted by: bakho on March 2, 2004 02:59 PM

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Regarding the household survey vs. payroll employement question:

While preparing my taxes yesterday I got to the part where, as a self-employed person, I got to deduct my health insurance as a business expense.

It seems like one way to test Kaus, Postrel, et al's claim that the unemployed are really just turning to self-employment would be to see how many people are now taking that deduction compared to previous years.

As a voluntary contract worker I've been taking the deduction for a number of years. In that time insurance premiums have become very large -- large enough that it would be unusual that anyone buying insurance would fail to claim the deduction.

It seems likely that some kind of rough corroboration/refutation to the theory ought to be avaliable from the IRS well before the November elections.

David Innes (The 80/20 Club)

Posted by: David Innes on March 2, 2004 03:19 PM

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LOL @am.
Cheney's words speak for themselves.
As a matter of fact, I think that Kerry's people could make a great campaign ad using that clip of Cheney.

Posted by: marky on March 2, 2004 03:45 PM

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am> Cheney means that had the tax cuts returned less money into the economy, the current employment situation would be worse.

By this logic, it would seem obvious that Cheney should also be boasting about the "cuts" in defense and homeland security spending the administration is advocating, the growing "surplus" in the Federal budget, and the ongoing rate of "resurrection" among coalition troops in Iraq.

Or would it be reasonable to assume that Cheney always knew all along that there has not been an active nuclear weapons development program in Iraq since UNSCOM dismantled it, but that he simply "spoke awkwardly" about it in the aftermath of the final Kay report?

If we're going to expect the Vice President to be prone to misstatements, then it would be nice to have a consistent theory of explaining which things the Vice President says that we should interpret as him intending to say precisely the opposite thing, and which things are just silly and stupid mistakes that we should disregard as the irrelevant ramblings of a White House official who hasn't been getting the timely distribution of all the right memos.

Oh wait— having a theory for explaining things would mean applying some kind of Reason to the process. And that would be doubleplusungood, wouldn't it?

Posted by: s9 on March 2, 2004 03:48 PM

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"Brad, Cheney means that had the tax cuts returned less money into the economy, the current employment situation would be worse. He simply spoke awkwardly."

He didn't. He tried to create the impression that the tax cuts improved the employment situation, so t-zero for him is the day of enactment, while Brad's is the day of GWB's inauguration. Cheney wants to stress the recent uptick in order to mask the overall poor showing of the administration on employment. The partyline is clearly "We can't be held responsible for the 3-year downturn [see discussion on re-dating the start of the recession], but the recent upturn is all our doing." Nice idea, but it falls apart quickly if you just compare the GWB recession with the GHWB recession, which was half as long and half as deep.

Posted by: ogmb on March 2, 2004 03:50 PM

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get real. How many times do I have to repeat this

Up is down

1=2

truth=falsehood

Everything is true

I am the Pope

Now beat it 'cause I gotta go to da poll

Posted by: CSTAR on March 2, 2004 04:03 PM

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Oh please, AM
Cheney didn't fluff his lines---he said exactly what he intended to say.
Was he going to say "If Kerry had been president, we would have lost MORE than 2.3 million jobs"?
Of course not. Get a grip.

Posted by: marky on March 2, 2004 04:15 PM

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Sorry, , no such luck.

Witness the ever dwindling jobs predictions coming out of the Bush administration. In 2002, they told us they could make employment reach 138.3 million in 2004. In 2003, they downgraded to 135.2 million. And in 2004, they tell us they only meant the economy would make 132.7 jobs. Even this thrice revised forecast seems woefully absurd (it would mean adding around 465k jobs per month for the rest of the year).

When the administration made these forecasts, they already knew about the effects of 9/11; they already knew in 2002 that a huge tax cut had passed in 2001. In 2002, they knew about the wave of fraud sweeping corporate America and Wall Street. In 2003, they knew about even more tax cuts.

From my vantage, there are two ways to read this. The administration is either ridiculously incompetent and out of touch with reality or incompetent they are unrepentant liars. Given they way people like Brad, Krugman, and scores of others have been howling about this all along, I wouldn't invest much in the former explanation.

Posted by: Adam on March 2, 2004 04:18 PM

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The rightwing blogs have been putting out all sorts of stories about employment growth and I bet these stories get repeated on Fox News. Of course, we know that fact checking is not their forte. If Cheney is getting his information from National Review and FNC - this could explain a lot.

Posted by: Harold McClure on March 2, 2004 04:24 PM

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during the last prez campaign, the Dems proposed a tax cut that was about half what the Repubs proposed. This was labeled a Dem tax increase though the Repubs didn't dwell on the logic.

Posted by: cj on March 2, 2004 04:56 PM

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Cheney: "We would not have had the kind of job growth we had. . ."

Wishing will make it so. Saying it over and over will make gullible and inattentive people think it's so. . .
Thus Cheney continues to claim a link between Iraq and Al Qaeda.

Posted by: sylny on March 2, 2004 05:50 PM

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If there is a tape of this, it should run in a Democratic ad. The intro could be "The worst thing about the Bush and Cheney's poor economic record is that they seem to be proud of it.

Then, go to the Cheney quote. Show a graph of jobs lost. Perhaps Kerry can say "Negative job growth. I have to agree with Dick -- that is not the type of job growth you would get from a Democratic administration." Finally, show a graph of Clinton job growth.

Posted by: EdSez on March 2, 2004 07:08 PM

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RE Harold McClure's comment:
Can even Fox and rightwing blogs spin this recovery? If they can, then the emphasis of the forces of Truth and Knowledge (that's us) need to emphasize the relative weakness of this recovery versus other postwar recoveries. That story is impossible to spin, whichever employment survey you prefer.
It also directly addresses the new new ultra-improved extra-deluxe reason that the tax cuts should be kept in place exactly as is forever. If you can provide convincing empirical evidence that the cuts did nothing much in the first place, it is hard to argue that modifying them in a sensible way will do any harm. That is better than ticking of the half dozen contradictory justifications for the cuts given by the US admin.
And if it is presented in a way that a congressman can understand, the evidence might be put to Greenspan in a hearing. And if he cannot respond in a straightforward way, then some of his oracular pronouncements may be exposed for what they are --BS.

(I am not a Greenspan basher, and I think it is good that his recent testimony on SS and Medicare was straightforward enough so that people could understand it. But I think his habit of issuing oracles can get out of hand, and the net effect is bad for policy making.)

Posted by: jml on March 2, 2004 07:24 PM

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"We can't be held responsible for the 3-year downturn [see discussion on re-dating the start of the recession], but the recent upturn is all our doing."

Another part of that party line is "The massive deficits during Reagan's Administration weren't a result of Reagan policies; however, the boom of the 1990's WAS Reagan's doing, and definitely had nothing to do with Clinton, who IS responsible for the "poor" economy under Bush II."

Get it?- I think the shorter version is: All good comes from Republicans, all bad from Democrats.

Posted by: marty on March 2, 2004 07:40 PM

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According to Suskind's book, O'Neill maitains that in private Greenspan is much more straight-forward, clear, and initially opposed the tax-cuts unless they had triggers to prevent implementation in the event of revenue shortfall. His recent testimony can be evaluated as the result of a political calculation about what the powers that be want to hear, and how best to approach them. He's been against these deficits since the beginning.

Posted by: Oldman on March 2, 2004 08:25 PM

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And HH survey still indicative of a *very* weak recovery compared to previous ones.

This reinforces my point -don't fall into the trap of arguing over which survey bumps this way or that way over the short term. Emphasize that by almost every measure, this recovery is very very weak compared to other postwar recoveries, and this is not ALL explained by 9/11 or the war in Iraq, by a long shot. It is certainly not explained by the "Clinton Bubble" since one of the research papers kindly provided by one of the rightwingnuts who post here, pointed out that job destruction was weak during the latest downturn.

With all the puzzling macro stuff happening in the last few years, what is one of the very few accurate predictions made by mainstream macroeconomists? Well, I think it was the prediction that the Bush tax cuts would be a lousy stimulus package and it wouldn't do much of anything at all. Mayb Prof D. should post a few things from his archives. I would enjoy reading them again.

In the Prof's recent post on monetarism, he pointed out the estimates of the fiscal multiplier during recessions has fallen from 4 or 5 (or was it 3 or 4) down to maybe 1.5. What is the fiscal multiplier of this admin? 0.8 or 0.9?

Posted by: jml on March 2, 2004 08:28 PM

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Oldman, there is a disconnect somewhere. If AG is against the deficits, why is he in favor of extending tax cuts that create more deficit??

Posted by: bakho on March 2, 2004 10:14 PM

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David -- insurance deductions a good idea but
it may be distorted by many self employeed
individuals depending on their mates health
insurance.

Been self employeed for 18 years and always got
health insurance through my wifes job.

Posted by: spencer on March 3, 2004 05:45 AM

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Bakho- immigration has always been sensitive to the business cycle -- even in the 1800s.

Posted by: spencer on March 3, 2004 05:47 AM

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Lying works. For the same reason advertising works. It works because most people are not informed! THIS is the reason that 50% of Americas STILL believe that Iraq was responsible for the 9/11 attack, why they think that Iraq used chemical and biological weapons in this last war, why Bush repeats over and over and over again the words freedom, giving your money back, war on terra, all that crap he repeats – because what news the uninformed DO hear is just like advertising. The Republicans are like the people who sold tobacco – people so skilled they convinced others to kill themselves and to hand over their money in the process. In short, lying is their m.o.

Posted by: russ tahir on March 3, 2004 06:24 AM

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You have to wonder what planet Cheney's secret bunker is on, it obviously insn't Earth.

Posted by: Ron in Portland on March 3, 2004 07:48 AM

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You have to wonder what planet Cheney's secret bunker is on, it obviously insn't Earth.

Posted by: Ron in Portland on March 3, 2004 07:48 AM

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Oldman wrote: "According to Suskind's book, O'Neill maitains that in private Greenspan is much more straight-forward, clear, and initially opposed the tax-cuts unless they had triggers to prevent implementation in the event of revenue shortfall. His recent testimony can be evaluated as the result of a political calculation about what the powers that be want to hear, and how best to approach them. He's been against these deficits since the beginning."

So does that just mean that Greenspan is a spineless panderer who says whatever he thinks his political mentors want to hear? Why does he have such a great reputation then? I would have thought he would be financially and professionally secure enough to say what he really thinks.

Posted by: wvmcl on March 3, 2004 08:20 AM

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"According to Suskind's book, O'Neill maitains that in private Greenspan is much more straight-forward, clear, and initially opposed the tax-cuts unless they had triggers to prevent implementation in the event of revenue shortfall. His recent testimony can be evaluated as the result of a political calculation about what the powers that be want to hear, and how best to approach them. He's been against these deficits since the beginning."

Posted by: Oldman on March 2, 2004 08:25 PM

However, Greenspan spoke in favor of the Bush tax cuts, and warned against the dangers of surpluses, even though those projections were written by Rosy Scenario herself. So in the end, he didn't mind that much.

Posted by: Barry on March 3, 2004 08:45 AM

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Russ Tahir gets it.

Folks, this is not accidental, not rash and not unconsidered. Cheney knows damn well what he's saying, and he's doing it because it works.

There doesn't have to be a recovery. We don't have actually find any WMDs. Iraq doesn't have to be a democracy. He just has to say these things are so often enough for 51% of the electorate to believe him.

Posted by: Doctor Memory on March 3, 2004 09:47 AM

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