LATimes: Dismal jobs report shows unemployment rising to 9.2%

[twa]

George H.W. Bush agrees with you.

It's the Economy Stupid

http://en.wikipedia.org/wiki/It's_the_economy,_stupid

And any one with any economic sense could see the fundamentals were strong for a recovery

Clinton can thank lies and "read my lips" for landing in a plum position.

I'm gonna enjoy paying some Dems back in spades

[mardi gras skin]

damn shame what happened to Bush I

Yep. Damn shame what Clinton did to him. But it is a pretty solid blueprint for Romney to throw at Obama, right?

[deejaydana]

Oh, come now.

We've been practicing Reganomics for 30 years, with really questionable and frequently negative results, and the response is to demand that we do it more.

----------

Nice dodge Larry.

[Larry]

I fully intend to lie my Philly off, and to justify it because it will help the partisans I'm cheering for

---------- Post added July-8th-2011 at 07:20 PM ----------

Nice dodge Larry.

Poor attempt to wave away facts you don't like, deejay.

Here's an article with some interesting numbers. (I assume that the article is slanted. But I haven't seen anybody dispute the figures.)

For three decades we have conducted a massive economic experiment, testing a theory known as supply-side economics. The theory goes like this: Lower tax rates will encourage more investment, which in turn will mean more jobs and greater prosperity—so much so that tax revenues will go up, despite lower rates. The late Milton Friedman, the libertarian economist who wanted to shut down public parks because he considered them socialism, promoted this strategy. Ronald Reagan embraced Friedman’s ideas and made them into policy when he was elected president in 1980.

For the past decade, we have doubled down on this theory of supply-side economics with the tax cuts sponsored by President George W. Bush in 2001 and 2003, which President Obama has agreed to continue for two years.

You would think that whether this grand experiment worked would be settled after three decades. You would think the practitioners of the dismal science of economics would look at their demand curves and the data on incomes and taxes and pronounce a verdict, the way Galileo and Copernicus did when they showed that geocentrism was a fantasy because Earth revolves around the sun (known as heliocentrism). But economics is not like that. It is not like physics with its laws and arithmetic with its absolute values.

[deejaydana]

Poor attempt to wave away facts you don't like, deejay.

So to follow your thinking Keynesian policies work? Why aren't they working now? Should we spend more? I think that article would work more if it didn't call out the dreaded rich (for me at least). So it took "30 years" for Reaganomics to fail and only 2 for Obamanomics? I'll take those #'s anyday !

[Larry]

So to follow your thinking Keynesian policies work? Why aren't they working now? Should we spend more?

1) I've added to my previous post.

2) Haven't read my posts, have you? The statement "they aren't working now" is an assumption.

I'll freely admit to massive ignorance on the subject, but my opinions:

The "massive spending to reverse a depression" was tried once in history, and (IMO) it's a sign of how far political partisanship has gone, that people are actually attempting to revise history to dispute the glaringly obvious fact that they were a resounding success. The comparisons of "before FDR" and "after FDR" cannot possibly be any clearer.

Now, it could be argued that they were tried a second time. The second attempt was done before the crash had actually done it's damage. And they were tried on a much smaller scale, and in often different ways.

I don't think it's possible to be certain of what the effects were, the second time. In the case of FDR, we have three years of actual data before FDR, and three years data after he began his programs. It's possible to compare a "before" and an "after". So it's possible to compare real-world data against real-world data.

In the case of Obama's attempts, there is no "before", to compare it against. All you can do is to compare an "after the crash" reality, against an "after the crash" hypothetical.

So it's not surprising that there are differing opinions.

OTOH, I also think it's fair to observe that the reason why it took FDR's policies so long to undo the damage, was because we spent three years doing the damage.

Analogy: If a patient loses three pints of blood, then it's going to take a while to get him back to full strength. If the Doctor then works on a second patient, and he gets to the second patient before there's been three pints of blood loss, isn't it reasonable to expect a faster recovery?

I could see that argument. I certainly think it's fair to observe that after FDR took over, GDP grew by 10% the next year. And the next, and the next.

Obama's "doctoring" certainly hasn't produced that kind of result. I don't think it's fair to say that the depression should have been over in six months. But yeah, I do think it's fair to say gee, it's been a few years, now.

----------

That said, though, as to the question you actually asked?

Even if you assume that Obama's actions haven't made things better, as quickly as promised. (It's an assumption, but let's say it's true). Even then, what you would have is a theory of managing the economy which has cured the worst economy in our nation's history half of the times it's been tried.

I know a lot of people who would be really, really, happy, if CPR worked half the time.

My point stands:

Obamanomics (if you want to call it that) has been in place for 3 years, and it's debatable whether it did nothing, or whether it prevented catastrophy.

Reaganomics has been in place for 30 years, and it has been a dismal failure for 99% of Americans.

Which economic theory, is it time to retire?

[deejaydana]

^^^^ I must be in the 1% then because the Reagan years certainly didn't make my life worse, nor any of my friends. In fact it made it immeasurably better, and I would never qualify myself as anything other than middle class. We just hold different views on what works and what doesn't.

[mardi gras skin]

Reaganomics has been in place for 30 years, and it has been a dismal failure for 99% of Americans.

Not sure what you're getting at here. I don't think most people would agree with you that 99% of Americans are worse off now than they were under Carter.

[December90]

I hope the Republicans pick a good candidate.

Amen to that.

Without a solid candidate the Republicans could be left watching from the sidelines for 4 more years of the same as the last 3 years. That looks downright disastrous (as have the last 3 years)

[Larry]

From the article I linked to. First chart on the page.

In the 30 years prior to Reagan, the income of the bottom 99% of taxpayers, went up by 76%. In the 30 years after Reagan, they went up by 4.5%. (Total gains in 30 years, not per year, and after adjusting for inflation.)

In the 30 years prior to Reagan, the income of the top 1% of taxpayers went up by 35%. 30 years after Reagan, they went up by 87%.

Or to show the numbers grouped differently, if we show "% growth by bottom 99% - top 1%", then it becomes:

Before Reagan: 76% - 35%

After Reagan: 4.5% - 87%

----------

Now, that's not measuring individuals. No doubt that during the 30 years after Reagan, lots of people in the bottom 99% got raises.

Lots of them retired, or got fired, or died, too. Lots of people finished high school, got married, got a job, had a kid.

But the society as a whole? Well, their income was going up by 76% in 30 years. And that's been replaced by "keeping up with inflation".

----------

Heck, let's leave the income brackets out of the equation, entirely, and just look at the income levels of everybody in the country. The "bottom 100%"

30 years before Reagan: The income of all Americans went up by 78.7%

30 years after Reagan: 5.6%

Now, is that a success? 6% (let's round up) increase in income in 30 years?

----------

Now, disclaimer: IMO, the biggest thing about that comparrison is that it assumes that everything that has changed in the US economy in the last 30 years, is because of Reagan. Obviously, Reagan is/was not 100% in charge of the entire US economy.

OTOH, I do think it's fair to say that US Government policy, for the last 30 years, has followed the broad strokes of the Reagan economic philosophy pretty closely, through all kinds of government changes.

The government isn't the only thing that influences the US economy. But insofar as the government has had an impact, it's been impacting in the direction of the Reagan model.

In my opinion.

[deejaydana]

^^^^^^ no mention of how much the welfare state has ballooned during that time, heck, during all the years since LBJ?

[twa]

^^^^^^ no mention of how much the welfare state has ballooned during that time, heck, during all the years since LBJ?

Interesting....it do coincide fairly well.

or you could go with the simple expansion of federal spending....the more they control,the less Americans earn.

[Larry]

If you're saying it's happened all the years since LBJ, then before Reagan and after Reagan would be the same, wouldn't they?

I'll also observe that it's a bit backwards to blame the people on welfare for the economy. They're on welfare because of the economy, not the other way around.

Want to cut the people on welfare? Start pushing for policies that increase wages, instead of trying to decrease them. (Oh, but wait. We can't do that. The biggest problem the US economy has, is that US workers don't work as cheap as Chinese.)

[twa]

What's the numbers if ya start from Carter instead?

[Larry]

Interesting....it do coincide fairly well.

or you could go with the simple expansion of federal spending....the more they control,the less Americans earn.

So your (completely unsupported) claim is that the US economy (as measured by the income of it's citizens) stopped growing when Reagan took over, and hasn't grown for 30 years since, is because of Reagan's massive growth of federal spending and welfare?

Edit:

Let's investigate that theory.

30 years before Reagan:

30 years after Reagan:

Both charts from US Government spending. Both charts show total government spending (fed, state, and local). Both charts inflation adjusted to 2005 dollars.

Yeah, Reagan really increased government spending, which hadn't been increasing at all when wages were blossoming.

[twa]

Actually that would be your claim....I did however note the timing of increased federal spending(which Reagan certainly did)

http://www.heritage.org/budgetchartbook/federal-spending

Hmmm, Federal Revenues Have More Than Tripled Since 1965,,,,meanwhile what did you say Americans income did?

[mardi gras skin]

http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States

According to economist Janet Yellen "the growth [in real income] was heavily concentrated at the very tip of the top, that is, the top 1 percent." A 2006 analysis of IRS income data by economists Emmanuel Saez at the University of California, Berkeley and Thomas Piketty at the Paris School of Economics showed that the share of income held by the top 1% was as large in 2005 as in 1928. The data revealed that reported income increased by 9% in 2005, with the mean for the top 1% increasing by 14% and that for the bottom 90% dropping slightly by 0.6%.

However, a study by University of Texas economists James K. Galbraith and Travis Hale found that most of the gains enjoyed by the top 1% came from a small number of counties, rather than a national trend. Almost all of the richest 1%'s gains occurred in the economic hotbeds of Silicon Valley and New York City. If the top four counties in those regions are removed, there is almost no trend towards income inequality in the US in recent decades. On this basis, the researchers ascribe the recent growth in income inequality to the growth of information technology.

Between 1979 and 2005, the mean after-tax income for the top 1% increased by 176%, compared to an increase of 69% for the top quintile overall, 20% for the fourth quintile, 21% for the middle quintile, 17% for the second quintile and 6% for the bottom quintile.

So, it sounds like income inequality has only been a problem in New York and California.

[Larry]

Actually that would be your claim....I did however note the timing of increased federal spending(which Reagan certainly did)

http://www.heritage.org/budgetchartbook/federal-spending

Looks to me like a pretty much straight line, both before and after.

Granted, your line doesn't show the full 30 years before Reagan. (But I've added charts to my post, which do.)

Sorry, but if you're going to try to claim that the economy stagnated when Reagan took office, because Reagan increased spending, then neither the data I've provided, nor the data you've provided, appear to support it.

What your chart (and mine) show is "spending went up before Reagan, and it went up after Reagan."

What we've got, here is:

Before Reagan, spending went up, and the economy prospered.

After Reagan, spending went up, and the economy stagnated.

I see a heck of a correlation between "economy" and "Reagan", and no correlation between "spending" and "economy". (Or between "spending" and "Reagan".)

[NoCalMike]

30 years of Reaganomics has crippled this economy with bubble economies. The economy will recover eventually regardless if we have a Democrat or Republican in office, the question is whether the polices moving forward are merely to re-inflate the bubble that has burst on us a couple times, or if it is to really change things.

It is hard to "defend" Obama perse, the numbers are what they are, but I will say that the mess he walked into in 2008 was really the culmination of an economic policy that had been in effect for 30 years, and even to this day 50% of the elected officials want to keep doing the same thing, if not double-down on the policy, so it is pretty impossible to really implement any type of radically different type of policy.

So lets say Obama, who for the most part hasn't really been that "liberal" in economic policies for the most part, loses re-election bid. So we get a Republican, say Mitt Romney. Romney is going to keep the tax breaks for the wealthy that have been shown already to be a failure. What is next, get rid of safety in the work place regulations, child labor, overtime pay, 40 hour work week etc etc?

What more needs to be done to appease the corporate masters who's wages and salaries have rebounded just fine.

I think what needs to be stressed is that the profits and salaries and bonues of those at the top HAVE REBOUNDED. The numbers are showing this. The problem is that it is not reflecting in new jobs for the rest of us. When the companies laid everyone off a couple years ago, they just demanded that every other worker take on bigger work loads for the same pay, and now that things have rebounded for the TOP, have they in turn loosened the belt? Nope. This is the usual pattern, once the belt is tightened you are rarely going to see it loosened.

Also, people who think globalization and free trade and all that stuff is great, things such as exploiting the third world worker for cheap labor, just look in turn what it does for our own economy. Look at the trade off.

We are creating a wealth class and working poor class. Soon, you are either going to be wealthy or merely providing services for the wealthy in service industry jobs.

With that said, as a guy who falls on the more liberal end of things, I am torn on the whole Obama situation. He isn't nearly as liberal as I would like, I don't think he really fights for what HE BELIEVES IN, let alone the progressive wing of the party, however at the same time I have to remember, he has to step up to the plate with John Bohner and Eric Cantor. Politics is a very different ball game from the outside. It is easy for me to demand Obama just tell the other side to go to hell, but I don't have to be the one coming up with policy that has to be signed off on by people who disagree philosophically.

The system is what has made Obama the president he is today.

[twa]

Still waiting on the Carter numbers

When did I say anything about the economy stagnating?

Weren't we discussing individual income?

[Larry]

Still waiting on the Carter numbers

When did I say anything about the economy stagnating?

Weren't we discussing individual income?

I certainly have been. That's the measure of the economy I've been using.

Yes, I understand that you really, desperately want to try to cherry pick a starting time that will make 4% growth in income, over 30 years, look good.

(I'd point you at a source where you might be able to find your data, so you can more effectively cherry pick. But my preferred source for data like that, The Tax Foundation, starts their data in 1980.)

[NoCalMike]

http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States

So, it sounds like income inequality has only been a problem in New York and California.

Probably where most Fortune 500 companies are located, perhaps?

---------- Post added July-9th-2011 at 01:28 AM ----------

For more on all things economy, follow @BlackFrankLuntz if you have twitter.

[mardi gras skin]

The system is what has made Obama the president he is today.

Was that true of Bush, too?

[NoCalMike]

Was that true of Bush, too?

As far as what policies go? I don't think the system caused him to start a pre-emptive war. Also, I am pretty sure he believed in cutting taxes for the wealthy as a way to make the economy go. Unless you are suggesting in his heart he was even more conservative than he let the public know.

What I do know is Obama has been accused of being "most radical ever" and all that jazz, but if you look at his POLICIES, he doesn't hold a candle to what guys like FDR wanted to, and in some cases, did do. I personally think Obama's personal beliefs tend to fall a little more liberal than he can govern, given the system.

Give me some examples of Bush compromising on policies that were actually signed into law to build your case. If I remember, once Dems took control in 2006 of House & Senate, it was them rolling over continually.

We know for a fact Obama didn't want to extend tax cuts to wealthy, but did. Wanted to end wars a lot sooner, they are still going. Wanted more widespread health care policy, there isn't, bigger stimulus that could actually handle what needed to be done, didn't get it. So I already see a short list of major policies where Obama moved from his position in order to get something passed. That is what I mean by the system making Obama the president he is right now.

[mjah]

As to Texas.....we are on solid footing and don't do deficits,even if it means cutting till it bleeds and liberals faint.

Solid footing? I suggest Texans find a place to sit down, if they wish to remain conscious as the state bleeds like hell starting next year. Even the conservatives. (Especially the conservatives?)

care to compare how the other states(such as Cali) that also received recovery act money will fare?

Massive cash shortfalls, incredibly deep cuts, terrible impact. Or to put it differently: much the same way as Texas is set to fare. California won't be the only state whose "California moment" has arrived. Just the biggest.

I guess you can blame Perry for the 8 billion or so sitting in our rainy day fund too.:pfft:

Well, if not for the colossal government handout Rick Perry hungrily snapped up and dumped into the Texas budget hole, that rainy day fund would contain less than $2 billion. Either that or Texas' own California moment already would have arrived. So you're right: I certainly don't give Rick Perry responsibility for keeping the state's emergency piggy bank un-smashed for 12 more months. You can thank the Federal government for that one.

Relative to that "rainy day" fund, 2012 and beyond will be monsoon season. I'd say Texas should have built up a "rainy year" fund instead -- but given Texas' biennial deficit projections, even that wouldn't be nearly enough.

I've seen a lot of Texas and enjoy the people. I don't relish what their state is going to have to do in order to make ends meet down there.