Brad DeLong's Semi-Daily Journal (2004)

Can this possibly be the same Jon Chait who wrote the "I hate Bush" column? Wow.

Maybe this is his desperate attempt to regain some favor with the Bushies. But even that seems like a stretch. Why on earth would he write this? Who or what has taken over Mr. Chait's brain?

Perhaps he's realized that he's on the verge of not being allowed to eat at the Kool Kids' table in the cafeteria.

below is a link to an interesting article which is the first of its kind I've seen (interesting how stories about the realities of the daily lives of women, children, poor people get totally obscured and rendered 'irrelevant' by mainstream media with their focus on the big important stories like WAR, wall street, political Power, deaths and adventures of infamous celebrities, etc)... Anyway, another take on this extremely important story still being whitewashed by the bush administration & missed by the media == I still wish the media would probe even deeper: just what have the changes been to working men's and women's (and their children & families) economic well-being been since shrub took office? I know all members in my family, especially the female folk are worse off....go figure.

http://www.csmonitor.com/2004/0621/p01s04-usec.html
"In a reversal, job growth fades for women workers"
By Alexandra Marks | Staff writer of The Christian Science Monitor

Professor DeLong, you are inspiring

I stopped reading after a couple of lines. The premise is that the voters have the duty to evaluate the sitting POTUS based on effort not outcome. This is bull. By accepting a position at the top of any organizational hierarchy you accept that outcome not effort is the deciding criterion by which your performance is measured.

The New Republic just flat sucks.

Try again, fellas. While it is plausible that Bush could have done a much better job at fiscal policy, that doesn't mean he CAUSED the job losses. Do any of you understand that distinction? As for whether Gore would have done any better, that's just a left-wing fantasy. We have no idea what Gore would have done. For all we know, he would have proposed tax increases to deal with the deficit with no tax cuts at all.

Before you jump on me, please remember that I dislike Bush almost as much as you guys do, I just don't think he's 100% responsible for everything single bad thing that's happened under his watch.

What a piece of utter drivel. Chait way way misunderestimates the ability of Mr. Bush to push through an EXTREMELY radical right agenda through hardball politics. Mr Bush is extremely effective at pushing his unpopular agenda uphill using harball tactics. Chait is an absolute FOOL to believe that Mr Bush has no chance of winning more tax cuts in a second term. I will give 10:1 odds that Mr Bush in a second term would push additional tax cuts and GET THEM PASSED.

Classic liberal is using a bait and switch argument. OF COURSE no one blames Mr Bush for CAUSING job losses. Of course the job losses are not the fault of Mr Bush. HOWEVER, the FAILURE of Mr. Bush to adequately address the job loss situation with a jobs program IS EXACTLY the fault of MR Bush.

No additional money for job training- Mr. Bush's fault

No money to help states to prevent layoffs and cutbacks at State level- Mr. Bush's fault.

Failure to target his tax cuts to stimulate demand instead of wasting it on targeting investment- Mr. Bush's fault.

Failure to increase the minimum wage- Mr Bush's fault

The failure of our economy to grow jobs- Mr. Bush's fault.

I can't think of anything Mr. Bush has done with fiscal policy that is not a move in the wrong direction.

By pouring vast amounts of borrowed money into capital formation at a time when the economy was already generating more capital than could be prudently invested, Bush ran through virtually everything in the Calvin Coolidge- Herbert Hoover playbook in an apparent attempt to recreate the Great Depression. The fact that he failed despite his extraordinary and expensive efforts is due in no small part to the Keynesian reforms enacted by Roosevelt and subsequent administrations.

For clinton and Gore, "it's the economy, stupid" wasn't just a slogan. It was a way of life; the track record speaks for itself. I don't see how anyone could fail to understand that.

Classic Liberal writes: "doesn't mean he CAUSED the job losses."

Since nobody is really claiming that, least of all Professor DeLong, I'm not sure what your point is. *Our* point is that Bush could have, and should have, done much more and much better toward actually addressing the fiscal problems that occurred during his term. He chose to not do so and it is fair to judge him accordingly.

And Chait's claim that if he had moved into the Oval Office in January 2001, "Al Gore... would have been the first president since Hoover to preside over a loss of jobs"? Highly, highly unlikely. Gore's post-911 anti-recession tax cuts would have had much bigger employment multipliers associated with them than Bush's have.

Thank you, thank you Brad Delong.

Now if someone could give a guesstimate of a number of jobs Bush cost us.

A napkin estimate would be fine to start the bidding.

I really want to see the republicans deny that their coddle the rich policies cost the country [3.8] million jobs.

Chait is just another "pox on both their houses" elite journalist, one who cares about cultural matters (and is faintly liberal about them) but doesn't give a shit about real economics, because he's already got his. Witness Slate's Will Saletan article on W.Va., which is mystified by the fact that culturally conservative poor people would vote for Democrats instead of Republicans. Witness Josh Green's reprehensible, dishonest attack on Al Gore in the Atlantic Monthly, in which he continues to peddle lies about farm chores and the internet in order to call Gore a liar.

These people are not worthy of the first amendment, and are killing our country by actively poisoning the well of national discourse, poisoning it with lies, distortions, and massive ignorance.

"No additional money for job training- Mr. Bush's fault

No money to help states to prevent layoffs and cutbacks at State level- Mr. Bush's fault.

Failure to target his tax cuts to stimulate demand instead of wasting it on targeting investment- Mr. Bush's fault.

Failure to increase the minimum wage- Mr Bush's fault

The failure of our economy to grow jobs- Mr. Bush's fault.

I can't think of anything Mr. Bush has done with fiscal policy that is not a move in the wrong direction."

1) There is additional money for job training, the amount spent by the federal government on job training increases every year.

2) Many states overspent because they were run by irresponsible liberals. Why should the federal government support run away spending?

3) Tax cuts were targeted, they lowered taxes for ALL tax payers. It is hard to cut taxes for the 50% of the population that pays no tax. I believe that is called Welfare. Is that what all of you cry baby liberals want...more welfare?

4) Increasing the minimum wage reduces employment and hurts people at the lowest wages by increasing the incentives to out source, hire off-shore workers, and replace employees with technology.

5) The economy is growing jobs.

6) Liberals are the dumbest animals.

http://pep.typepad.com/public_enquiry_project/2004/06/prof_delong_exp_1.html

"Gore's post-911 anti-recession tax cuts would have had much bigger employment multipliers associated with them than Bush's have."

How do we know that? I guess one could have given more tax breaks to the "impoverished"--meaning by far the richest in the world--middle class. But the middle class has continued spending with abandon over the past few years. Or is "bigger" here just a relative term?--just like the probability of 0.000004 is much bigger than 0.000001, only it doesn't make much difference in real life?

Holy Crap. Such a display of unbelievable ignorance (JC and some comments) and good, if muted, realism.

If you gave me a $200 billion surplus, and let me turn that into perpetual $500 billion deficits, I sure as hell wouldn't have presided over a net loss of jobs.

Is this so hard to grasp? Really?

Wtf,

Apparently, “irresponsible” and “liberal” represent two parts of the same lexical item for you, and in your little world “liberal” represents nothing more than a slur. If you should stumble across a comment bemoaning the lack of grown-ups on the right, be aware that the comment refers to you.

While it is not hard to identify Democrat-run states that have gone through a period of budgetary stress, there are plenty of Republican-run states that have gone through similar stress. In the absence of any strong proof that Republican governors and state legislatures have done a better job, in general, of staying out of fiscal trouble over the past half decade than their Democrat counterparts, your claim is pretty much made up out of nothing. Feel free to turn up some data.

The issue you go on to raise, about supporting so-called “run away spending” is just the point – states were laying off workers and contractors at a time that overall employment was falling and a boost to demand through public payrolls could have generated additional private sector jobs. All policies have costs. The argument here is that there could have been a better use of the massive rise in the federal deficit to generate employment. The “run away spending” rebuttal ducks the employment issue by turning it into a test of budgetary manhood. Bush has already forfeit his claim to budgetary manhood. The question is, what did we get in return for fiscal failure?

Tax cuts were targeted by going to all tax payers? Bit of a non-sequitor, isn’t it? Ignoring that bit of silliness, you must be aware that a good bit of ink has been spilled on just this issue, and that there are lots of ways to jigger tax cuts to boost consumption. I believe it was Milton Freidman, by way of Ronald Reagan, who argued for the Earned Income Tax Credit. Payments into the Social Security fund are a very large, regressive, part of the tax bill for those at lower incomes. Boosting the one and cutting the other are both standard proposals from those who wanted more consumption and employment bang for the fiscal buck. Your responses pretend these proposals don’t exist. Do better.

Hiking minimum wage is not, as you point out, a jobs strategy. On the other hand, studies of the minimum wage find little or no impact on hiring during times of good employment growth. So timing matters, but hikes to the minimum wage need not damage employment.

The economy is creating jobs, yes, but isn’t that point already covered in the original post? No points for job growth that is to date far less and far later than would have been the case in a standard expansion. Political job creation points are reserved for those who put job creation ahead of other priorities - priorities such as tax cuts to the rich and a growth-killing-war on a country that did not threaten our security.

"We have no idea what Gore would have done. For all we know, he would have proposed tax increases to deal with the deficit with no tax cuts at all."

As reported in the NY Times, 12-9-99:

---------quote---------
NEW YORK -- After days of lacerating former Sen. Bill Bradley for
acknowledging that he might have to raise taxes, Vice President Al Gore
Wednesday admitted that if the economy took a turn for the worse, he would not
rule out a tax increase either.

"Under current economic circumstances, I have no intention of proposing any
tax increase," the vice president said.

But when pressed by a reporter as to whether he was flatly ruling out ever
raising taxes, he said, "I am ruling them out under circumstances that
approximate what we have today," and added, "Nobody has a crystal ball."

In an interview here Wednesday night, he elaborated, saying he would not
raise taxes "under current circumstances, or anything remotely similar to
current circumstances, so long as we have a surplus, so long as we have a
balanced budget, so long as we don't have a deep economic crisis of some kind
that changes the circumstance."
-------endquote-------

bakho wrote, "Chait is an absolute FOOL to believe that Mr Bush has no chance of winning more tax cuts in a second term."

IIRC, Chait wrote the "I hate Bush" column. Bob Somersby at The Daily Howler had a good article at his website pointing out why this was tactically foolish.

Patrick, where do you dig this stuff up? Do you really think that your Gore quote suggests that he would have raised taxes as his immediate response to the deficit? Or do you just enjoy embarassing yourself?

Al Gore would have been advised by people like Robert Rubin and Brad Delong. These people are very clear about what you do in the face of a recession. It's not a hard guess to imagine what Gore would have done. Good grief.

As for wtf, kharris has largely responded (except that kharris should have been even sronger on the ridiculousness of wtf's remarks on state spending), and if bush really wanted to cut taxes for all tax payers, he could have offered a payroll tax holiday....

"if bush really wanted to cut taxes for all tax payers, he could have offered a payroll tax holiday...."

Bush did cut taxes for all TAX PAYERS. (I.E. those that pay income taxes) SSN and FICA withholdings are returned to taxpayers later in their lives and Gob forbid we cut the benefits provided by either one of those programs. The fact is that approx. 50% of the population pays no income taxes but still reaps the benefits the rest of us pay for.

If I am understanding what some people on this board are saying, they think the employment situation would have been better if either
1) the government spent more on job training or 2) the government raised taxes to limit the defecit because higher defecits put upward pressure on interest rates and hurt the economy as a result.

These proposals are both flawed because the problem wasn't that Americans were not educated enough or trained adequetly to get jobs, it was that there was a shortage of jobs. Why train more people to compete for jobs when what you really need are incentives for companies and business owners to hire?

Also, interest rates have never been lower and the government debt has never been higher, explain that one please.

Bush has turned the economy around as well as any president could have. The truth is that the President cannot force companies to hire more workers. All he can do is help create incentives to hire, which he has done by letting people keep more of what they earn giving them a reason to try to earn more and the ability to spend more.

Many states have had fiscal problems, not becuase of greatly increased spending, but because they made unsustainable tax cuts that depleted their rainy day funds. But whatever the reason, Mr Bush is ideologically opposed to Federal money going to the states, even though Federal unfunded mandates are quite onerous.

So even though giving money to the states would have stemmed some of the layoffs and boosted employment far more than tax cuts for the wealthy, Mr Bush and his ideological supporters preferred that people lose their jobs and be unemployed. You cannot have it both ways. If you support policies for ideological reasons that result in higher unemployment, then you must accept the consequences that the voters who are more worried about jobs than your ideology will turn against you and your ideology.

Workers are correct in blaming Mr. Bush for ideological policies that result in more short term unemployment.

As for Chait, one would think that he should have learned something about Bush recessions and clueless fiscal policy from his days in Ann Arbor.

"Many states have had fiscal problems, not becuase of greatly increased spending, but because they made unsustainable tax cuts that depleted their rainy day funds."

For example, which states? How about listing states that cut taxes too much and then also listing states that allowed spending to grow faster than inflation and population growth? I bet there are more of the later.

"So even though giving money to the states would have stemmed some of the layoffs and boosted employment far more than tax cuts for the wealthy, Mr Bush and his ideological supporters preferred that people lose their jobs and be unemployed."

Whose jobs would be saved by giving money to the states? Perhaps some unionized government workers but beyond that it would not have saved jobs. The Bush tax cuts were only for the wealthy if you consider the wealthy to be those who actually pay taxes. Has Bush said that he prefers people to lose their jobs? If not, where is this information from? Perhaps you should pull your head out of the sand bakho?

wtf, it takes some tortured reasoning to say that only certain "taxes" actually are "taxes." That said, no, you don't get your money back from paying social security taxes: sometimes you get all of it back, sometimes you get more back than you put in, sometimes you don't get any of it back (say you drop dead of a heart attack on the day of your 65th birthday).

Second, we'd take you more seriously if you weren't introducing a giant man of straw about raising taxes: what most people here, starting with our host, would say, is that you deal with short-term issues like recessions through short-term stimulative actions, not through long-term tax cuts that reintroduce the conditinos of structural deficit that required close to 20 years to solve on a bipartisan basis.

Third, as for state spending, i don't have the time to track it now, but the fact is, many aspects of state spending are driven by federal decisions, including federal decisions supported by George Bush. Because states, in fact, have to balance their budgets every year, there exist real checks and balances within the state system that don't exist on the federal level. As the person who claimed that "liberals" over-spent, wtf, it's up to you to prove your case, not to ask us to prove the contrary case.

Every recession is different, but when the recovery from the briefest recession in memory skews entirely to profits and top 1% income earners, and when job growth lags the recovery by a record amount of time, it's hard to take you seriously in your claim that Bush has done as well as he could have.

No, he hasn't, and a different policy mix would have produced more jobs sooner with less long-term cost to the economy. In addition, despite your desperate attempt to claim otherwise, the tax cuts skewed to the top: check the after-tax distribution of income post-bush tax cuts as compared to pre-bush tax cuts....

Here are some figures on state spending leading up to the recession. I would link to it but that doesn't seem to be working.

TOTAL STATE SPENDING

Fiscal Year/ Total Expenditure(millions)/Growth%
1998/929,952/4.09%
1999/998,365/7.36%
2000/1,084,097/8.59%
2001/1,184,146/9.23%

Source: Bureau of the Census, State Government Finances.

For comparison, inflation over this period averaged 2.2% and the population grew about 1% per year.

Here is another article that shows how bakho is completely wrong:

http://www.washtimes.com/national/20030713-114147-1769r.htm

Here are some figures on state spending leading up to the recession. I would link to it but that doesn't seem to be working.

TOTAL STATE SPENDING

Fiscal Year/ Total Expenditure(millions)/Growth%
1998/929,952/4.09%
1999/998,365/7.36%
2000/1,084,097/8.59%
2001/1,184,146/9.23%

Source: Bureau of the Census, State Government Finances.

For comparison, inflation over this period averaged 2.2% and the population grew about 1% per year.

Here is another article that shows how bakho is completely wrong:

http://www.washtimes.com/national/20030713-114147-1769r.htm

wtf, i had a few minutes to find the best, simplest source on state spending in the 1990s, which you can read here:

http://www.ncsl.org/programs/fiscal/stspend90s.htm

To sum up, as a percentage of gdp, state spending was essentially no higher in 2000 than it was in 1990, although this generic result masks an underlying reality: very slow spending growth in the early '90s with a great deal of spending deferred (about which more in a moment), followed, as revenues grew later in the '90s, with increased spending (which your table picks up, but of course, in a decontextualized way).

Now, what spending rose in the '90s at the state level: a.) medicaid (which is basically beyond state control); b.) prisons; c.) education (primarily the mainstreaming of special-needs students); d.) retirement trust funds, partly prompted by the push in the early '90s for early retirement.

Meanwhile, spending fell in all of these categories: a.) other health and welfare, exclusive of medicaid; b.) highways; c.) public safety; d.) natural resources and parks; and d.) government administrative costs.

There were also a variety of tax cuts in many states in the later '90s, as a booming economy (to which state revenues are, like federal revenues, strongly correlated) allowed some catch-up spending on deferred categories, the creation or replenishing of rainy day funds, and tax cuts to take place simultaneously.

In short, the record certainly doesn't show out-of-control state spending (the increased categories being driven by well-known factors), and it certainly doesn't show any special increase in state spending by "liberal" governors, as you claimed in the first place.

Post 2000, we might note, the Bush adminsitration has imposed considerable homeland security costs and No Child Left Behind costs on the states without any source of revenue, but i don't have the time to try and get those figures right now.

Meanwhile, the Washington Times article that you cite (putting aside the unreliability of the Washington Times as a source) - what is it that you think it proves?

Chait is right about one thing: Kerry needs to focus on Bush's "misplaced priorities", one of which was his priority to stoke the wealthy and not create jobs. Unfortunately, Kerry as a speechmakerfalls down on delivering this message.

howard, are you saying: "Gore lied!"?

Patrick, you might choose to differentiate between what Gore said and what the reporter said.

Gore said under different circumstances, different policies are appropriate. This commonplace would hardly matter if we didn't live in a time where people applaud the current occupant of the white house for his supposed firmness and criticize his challenger for his supposed "flip-flopping."

What Gore most assuredly did not say in any quote that you provide is: "if faced with a recession, my first action would be to raise taxes." Remember, Patrick, Gore, like Bush, was running on a major tax cut in 2000; Bradley was not.

Now, if you find a specific Gore quote that says what the reporter and not Gore said, you do let us know....

So, howard, when Gore's own words in December 1999 are that he won't raise taxes:

"under current circumstances, or anything remotely similar to current circumstances, so long as we have a surplus, so long as we have a
balanced budget, so long as we don't have a deep economic crisis of some kind that changes the circumstance."

That doesn't mean that he would consider raising taxes to deal with a "deep economic crisis"?

Patrick, first, as a matter of definition, a "recession" is not a "deep economic crisis."

Second, Gore is perfectly clear here: he is preserving the right to raise taxes should circumstances warrant. (An example of circumstances warrant, for instance, being huge new budget-busting expenditures in response to terrorism.)

He is not saying, did not say, and would not say "as soon as i see a recession, i'm going to call for higher taxes as the best response."

Wtf,

You seem perfectly willing to insist that others back up their suppositions with facts, but you began all this with your own unsupported suppositions regarding states budgets. So, either you have no idea what you are talking about, or you have access to information regarding state spending and tax habits you can supply us? As regards “some unionized government workers” why should we discriminate against them? If the point is to funnel stimulus through households with high propensities to consume, how are unionized government workers disqualified? Whether Bush is politically suicidal enough to declare a desire to destroy jobs is not at issue – nice try though. What is at issue is whether his policy actions matched his deeds, whether he had a reasonable jobs program. He said he had a jobs program. There are many among us who think that there were far better ways of stimulating employment than were tried by Bush. Are you willing to address those ideas, as job creation programs, or do you just want to spout stuff you hear on talk radio?

What seems to be missing from the discussion is that most states are required by their constitutions to run balanced budgets. This makes them extremely vulnerable to swings in tax revenues, in both directions – something that has been known forever and part of the policy discussion since the Bush recession started. The clearest way to deal with this fiscal balance requirement is to run procyclical fiscal policies, which many states did. That is why the federal government could reasonably funnel part of its countercyclical efforts through the states. Laying off state workers in the midst of a decline in overall employment contraction seems a pretty bad idea if one can find a way around it.

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