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Even After CBO Reports Stimulus Created Up To 1.6 Million Jobs, Conservatives Claim It ‘Failed’

AP090909054851Today, the White House is hosting a jobs forum, “to sound out ideas for accelerating job growth during the worst labor market in a generation,” as Democrats in both houses of Congress are attempting to craft jobs legislation. Yesterday, the administration for the first time expressed support for new legislation, so long as it has a “relatively small deficit impact.”

This effort comes in the wake of a Congressional Budget Office (CBO) report showing that the economic stimulus package is having its intended effect — creating or saving 600,000 to 1.6 million jobs — albeit in a weaker than anticipated economy.

Republicans, though, have said that additional jobs legislation “would meet resistance.” They’re justifying this position — aided by the conservative media — by claiming that the “failed economic stimulus” has not created jobs, despite the CBO reporting otherwise. Here’s a roundup of conservative statements that have occurred after the CBO released its report:

Rep. Eric Cantor (R-VA): The 800-billion dollar stimulus bill that Washington passed has failed to create – or save – the jobs it promised…There is now talk of a second — or is it a third – stimulus bill…More government spending, more bailouts for states, more transfer payments to individuals, expanded government agencies.

RNC Chairman Michael Steele: [Obama's] failed economic stimulus has considerably added to our national debt, skyrocketing it to a record-breaking $1.42 trillion in 2009…This time using a “jobs summit” to distract from the 10.2 percent national unemployment rate as well as President Obama’s and Congressional Democrats’ plans to unleash a second wave of stimulus spending on the American public, known as Stimulus II.

Rep. John Boehner (R-OH): Washington Democrats staked their credibility on a nearly trillion-dollar ‘stimulus’ that was supposed to be about putting people back to work…Given the last 11 months of outrageous ‘stimulus’ claims, the American people are right to wonder whether Washington Democrats can be trusted to create jobs and cut the deficit.

Wall Street Journal Editorial Board: [T]he stimulus has been a manifest bust, much as the critics who appeared on our pages predicted. As the recovery continues, sooner or later the economy will begin to create new jobs, thank heaven. But the stimulus won’t have much do with it, except insofar as the higher taxes to finance the runaway spending further retard private investment and hiring.

For their part, Republicans have organized an economic roundtable for today, chock full of former Bush administration and McCain campaign staffers who, among other things, are responsible for the Bush tax cuts and Medicare Part D. Cantor also released a jobs plan yesterday, which Andrew Leonard characterized as a “magic pony jobs plan.” “Cut regulations. Freeze spending. Cut taxes. No new taxes. That’s the plan,” Leonard wrote.

Cross-posted on The Wonk Room. Read more about confronting the jobs dilemma in today’s Progress Report.

Politics

After protests in Los Angeles, Salvation Army to stop checking Social Security numbers for toy drives.

On Tuesday, the Houston Chronicle reported that a few charities in Houston — including the Salvation Army — were checking the immigration status of needy families before giving out gifts in its annual toy drive. The organization then disputed the report, claiming that it requires at least one family member to present a Social Security number to deter fraud, not to “discriminate.” Yesterday, however, the charity reversed course. After a few dozen immigrants protested outside of a Los Angeles Salvation Army branch, the charity said that it was changing its policy and will no longer be checking Social Security numbers. Watch it:

Climate Progress

The Republican Definition Of ‘Fascism’: Defending Climate Science From Exxon-Mobil Corruption

The right-wing swiftboating campaign against climate scientists dubbed “Climategate” by its perpetrators is becoming frighteningly unhinged, accusing climate researchers of Hitlerian fascism for fighting against corruption of science by oil-funded ideologues. Yesterday, Rep. James Sensenbrenner (R-WI), the top Republican on the House global warming committee, claimed these scientists were engaging in “scientific fascism.” After Rep. Jay Inslee (D-WA) denounced his egregious attack, Sensenbrenner defined “scientific fascism” of “intimidation in the scientific community of people who wish to be contrary what the convention wisdom is”:

I’ll define what I mean by scientific fascism. These emails trash the scientific conclusions by those who have disputed Michael Mann’s hockey stick theory. There are information in the emails that the scientific publication Climate Research in which they were published ought to be boycotted because they weren’t doing the politically correct thing. And I understand that the editor of Climate Research ended up getting fired as a result. There is intimidation in the scientific community of people who wish to be contrary what the convention wisdom is.

Watch a compilation of the exchange:

The incident to which Sensenbrenner is alluding in fact involves an admirable event in scientific history, when the scientific community successfully resisted attempts by Exxon-Mobil and Republicans to politicize and corrupt climate research.

In 2003, the journal Climate Research published a paper by astrophysicists Sallie Baliunas and Willie Soon which argued that “the current global warming trend is not unique and that an even more dramatic episode occurred centuries ago, before widespread combustion of oil and coal.”

As illegally hacked emails from the University of East Anglia Climatic Research Unit indeed reveal, the publication of this paper shocked climate researchers, who discussed an array of responses in March, 2003, from a joint response explaining the paper’s flaws to asking colleagues to shun the journal or encouraging the journal to “get rid of the offending editor,” contrarian Chris de Freitas.

What Sensenbrenner and the other smear merchants fail to mention is that the researchers were correct in their concerns that the journal had been taken over by biased ideologues. Despite Sensenbrenner’s claim, no editors were fired because of the climate realists. Rather, the editor of Climate Research, Hans Von Storch, quit in July 2003 because he was suppressed by the journal’s publisher when he attempted to disown the paper’s “severe methodological flaws“:

A science journal editor who recently published an article questioning whether industrial emissions are driving up the earth’s temperature has resigned, saying he was not allowed to publish an editorial repudiating the article.

Five editors — half the editorial board of the journal — soon joined Von Storch in a mass resignation — while Sen. Jim Inhofe (R-OK) held a hearing to promote the blatantly flawed paper during the debate on the McCain-Lieberman climate bill.

The Soon-Baliunas paper turned out to be crass Big Oil propaganda, “underwritten by the American Petroleum Institute and promoted by nonprofit organizations that receive support from energy interests, primarily ExxonMobil Corp.” Journal publisher Otto Kinne eventually admitted in August, 2003, that the Soon-Baliunas claims “cannot be concluded convincingly from the evidence provided in the paper” — but only after the paper had served its political purpose.

We return to the present day, where mainstream environmental reporters have abetted this new, disgusting character assassination campaign. Reporters from the New York Times, Wall Street Journal, Reuters, and the Associated Press — among many others — have wrung their hands about the ethics of the scientific community while the Fox Business Network compares scientists to Hitler and Stalin and Andrew Breitbart’s BigGovernment.com compares them to Nazi eugenicists.

One wishes these reporters would at least read their own, earlier reporting on the Soon-Baliunas affair.

Transcript: Read more

Yglesias

Endgame

Another drama by the kitchen sink tonight:

— Minority obstructionism driven by far-right surge plays out quite differently in Australia, where they have different political institutions.

— Maybe we should send Fred Kagan to Kabul for the duration.

— Nobody seems very clear on what these extra troops will actually do.

Streetcar lobbying in DC.

Benford’s Law is really really weird; put this in the “don’t listen to ‘common sense’ file.”

— Sweden cutting aid to Uganda over appalling new Ugandan anti-gay law.

— Vodka advertising and defensive masculinity.

— A look ahead at the World Cup draw.

The Long Blondes, “Once and Never Again”.

Politics

Coburn Claims The U.S. Is ‘The Best Place To Get Sick’

Last night, Fox News’ Greta Van Susteren interviewed Sen. Tom Coburn (R-OK) and asked him about his recent claim that seniors “are going to die soon” if the Senate health care bill passes. “You’re going to see services eliminated. It’s going to lower the life expectancy of a lot of seniors!” Colburn complained.

Later, when asked what message he wanted to get “to the American people,” Coburn celebrated the current health care system in the U.S.:

VAN SUSTEREN: If you could get one message out to the American people tonight about this health care bill, what’s the bullet point message?

COBURN: We need to start over. We need to fix what’s really wrong in health care and we need to protect what’s really great. What’s really great is if you’re really sick anywhere in the world, this is the best place to be sick, it just costs too much.

Watch it:

Health care costing “too much” explains why the U.S. is not the best place to be when you’re sick. The U.S. has the most costly health care system in the world, spending just over 15.2 percent of GDP (the United Kingdom, which relies mainly on the single payer model, pays 8.3 percent).

A 2007 Commonwealth Fund study concluded that, “[c]ompared with five other nations — Australia, Canada, Germany, New Zealand, the United Kingdom — the U.S. health care system ranks last or next-to-last on five dimensions of a high performance health system: quality, access, efficiency, equity, and healthy lives.” In 2000, the World Health Organization ranked the U.S. health care system 37th, behind countries such as Costa Rica, the Dominican Republic, Colombia, the UK, Oman, and France.

In fact many retirees who don’t yet qualify for Medicare are choosing to get sick in Mexico. USA Today reported in September that tens of thousands of American retirees are moving south of the border because health care is too expensive in the U.S.:

It sounds almost too good to be true: a health care plan with no limits, no deductibles, free medicines, tests, X-rays, eyeglasses, even dental work — all for a flat fee of $250 or less a year. …It’s unclear how many Americans use IMSS, but with between 40,000 and 80,000 U.S. retirees living in Mexico, the number probably runs “well into the thousands,” said David Warner, a public policy professor at the University of Texas.

They take very good care of us,” said Jessica Moyal, 59, of Hollywood, Fla., who now lives in San Miguel de Allende, Mexico, a popular retirement enclave for Americans.

Mexico’s health care system “was one of the primary reasons I moved here,” said another retiree, adding, “I couldn’t afford health care in the United States.”

Health

Carper Explains ‘Plan B’ On Public Option, Appeals To Moderates

This afternoon, Sen. Tom Carper (D-DE) appeared on Fox News to discuss a proposal to replace the opt-out public option in the Senate health care bill with a ‘Plan B‘ — a self-sustaining entity established with public dollars in states where private plans don’t offer affordable coverage. Carper stressed that “we’re not sure whether or not we’re going to need a plan B,” and directly addressed the concerns of Sen. Blanche Lincoln (D-AR) and other moderate lawmakers, who are worried that taxpayers would be on the hook if a the public option “doesn’t go well”:

We’re not sure whether or not we’re going to need a Plan B. If we do, we want to have something that we can offer to more conservative folks in our party, more liberal people in our party and maybe one or two Republicans as well….A number of centrists in our party are not interested in government run, government funded after some initial start-up funding. And we want to make sure there is a level playing field so that is a public option available in some states where there is no affordability there is not much competition, affordability is bad. We want to make sure there is a level playing field that doesn’t disadvantage the private sector.

Watch it:

Carper is combining a non-government public option (most likely some kind of nonprofit board) with the trigger proposal and pitching the plan to Sens. Landrieu, Lincoln, Nelson, Lieberman, and Snowe. The plan would compete on an equal playing field with private insurers, receive a start-up loan from the government, would only be available in states that lack affordable coverage and would include “safeguards that make sure that the taxpayers don’t’ end up on the hook if the public option doesn’t go well.”

“We hope by gathering ideas from centrists, and liberals and people in between and some of our Republican friends as well, we hope to gather something that not only gets us to 60 votes but is good public policy and provides us with competition where it is needed,” Carper said.

Asked if the proposal would win the support of Snowe, Carper responded, “I think it’s real important that we have Republican support for the final bill that comes out of the Senate.” “In the end, if she could see her way clear to voting for the bill coming out of the Senate, that might give some of our other Republicans and our colleagues courage as well.”

Update

Live Pulse reports that Sen. Mary Landrieu (D-LA) is floating her own public option compromise:

A state-based nonprofit insurance competitor would kick into effect where coverage is not considered affordable. It would receive seed money from the government, but would be funded through premiums.

In contrast to Snowe’s proposal, Landrieu’s proposal would not be available on Day One. Landrieu refers to her idea as a “fallback.” She said the insurance market reforms should be given a chance to work.

“It’s like an insurance for people,” Landrieu told a small group of reporters Thursday. “Look, we think we can make the insurance market work better for you and we’re going to do everything we can to do that that’s a central component of this bill but if we fail you will have some kind of backup we’re not going to leave you stranded.”

“The idea of this competitive community option would be that it would kick in automatically not by an option of the state,” said Landrieu, an undecided moderate. “It kicks in automatically based on the reality on the ground, which is what Sen. Snowe has always said which is very important.”

Yglesias

Exchange Rate Policy as Monetary Policy

Normally we think of exchange rate policy through the lens of its impact on bilateral trade. If China makes its currency cheaper, that boosts Chinese exports to the U.S. and depresses Chinese consumption of goods. Scott Sumner says this is the wrong way to think about monetary policy during a severe recession:

A managed exchange rate is first and foremost a monetary policy. The Chinese decision to stabilize the yuan was an effective depreciation (given their high rate of productivity growth.) It led China out of its deflationary slump in the dark days of March, and China led Asia out of the recession. Given that US equity prices responded strongly to the Asian rebound in the spring, it is quite likely that the Chinese recovery removed the tail risk of a severe worldwide slump.

The mistake is to view exchange rates through a trade lens, as a zero sum game. During a deep slump an expansionary monetary policy will raise both domestic and world output. Holding other monetary policies constant, a more expansionary Chinese monetary policy means a more expansionary world monetary policy, and this boosts world aggregate demand. When the US devalued the dollar against gold in 1933 it helped the entire world recover from the Depression. When other countries devalued against gold, it further helped the world economy. This time around it was China that led the way.

This sounds plausible to me, but is going to have to go into my “I’d like to hear what other economists have to say” file.

Politics

Gohmert opposes estate tax extension because ‘Jesus never advocated the government go steal.’

Today, the House voted 225-200 to permanently extend the estate tax at its 2009 level, which is 45 percent for estates valued at more than $3.5 million ($7 million for a couple). Due to a Bush-era accounting gimmick, the estate tax was set to disappear in 2010, and come back in 2011 at a 55 percent rate on estates of $1 million. Rep. Louie Gohmert (R-TX), however, took to the floor to oppose the extension, complaining that his his great aunt once had to pay the 55 percent rate. Gohmert continued by arguing Jesus wouldn’t have wanted an estate tax:

Now, after someone dies and someone comes in and steals from them, we consider that in most society reprehensible. … But when the government comes in, because we have the power to pass laws and legalize theft that otherwise would be considered reprehensible, it’s okay. But it is not okay. … Jesus never advocated the government go steal. He said ‘you do it. Do it with your own money, don’t steal it from somebody else.’ And that is why this should not pass.

Watch it:

Apparently, Gohmert either doesn’t adhere to or hasn’t heard of Jesus’ admonition: “Blessed are the meek, for they shall inherit the earth.” An estate tax at the 2009 level exempts 99.8 percent of estates and affects about 100 small businesses and farms, almost all of which will be able to pay the tax without selling assets. The estate tax debate now moves to the Senate, where Sens. Blanche Lincoln (D-AR) and Jon Kyl (R-AZ) want to enact a cut that would cost $250 billion over ten years and overwhelmingly benefit wealthy families.

Economy

Bernanke Calls Unemployment Our ‘Most Difficult Problem’ — But Will He Do Anything About It?

AP091203024095Today, Federal Reserve Chairman Ben Bernanke went to Capitol Hill to face a confirmation hearing before the Senate Banking committee. Bernanke has been getting knocked around in the last few days, and while a bare majority of the committee seems to support his confirmation, he was still amply criticized during the hearing. Complicating matters, both Sen. Bernie Sanders (I-VT) and Sen. Jim Bunning (R-KY) have placed holds on Bernanke’s nomination, which, while unlikely to derail his confirmation, can slow it down quite a bit.

While the main point of consternation within Congress is the Fed’s lending actions during the economic crisis — which is the drive behind Reps. Ron Paul (R-TX) and Alan Grayson’s (D-FL) effort to audit the Fed — as Matt Yglesias has been pointing out, Bernanke should also have to answer for his “apparent contentedness with a monetary policy that is going to fall far short of the Fed’s legal mandate to maximize employment.”

Sen. Jack Reed (D-RI) actually asked Bernanke about unemployment during the hearing, and while Bernanke agreed that joblessness is “the most difficult problem that we face right now” — and conceded that the long-term costs of high unemployment are “severe” — he decided to not advocate more steps on the part of the Fed or to reassure Congress that he wouldn’t act to reel in fiscal expansion:

We have kept interest rates close to zero to try to stimulate growth and we have seen now positive growth in output which will translate into jobs, we’re hoping soon…I discussed earlier some of the steps we’re taking to try to unfreeze credit, including pushing banks to give credit-worthy borrowers access to loans, have banks raise capital, try to restart securitization markets and other steps. So the Fed has a program we’re employing, which is focused on getting jobs created. Now, on your side, on the fiscal side, obviously there are a whole number of different optionsObviously all of these issues will have fiscal consequences and again, Congress will have to make those tradeoffs.

Watch it:

Prior to the hearing Sen. Sheldon Whitehouse (D-RI) said that he wants to hear Bernanke say that the Fed is “willing to take their eyes off an exclusive gaze on the welfare of Wall Street and start giving a red hot damn about the American public.” I’m not sure that Bernanke’s response is very reassuring.

According to the latest economic forecast from Goldman Sachs, unemployment will peak at almost 11 percent in mid-2011, while inflation will remain close to zero at the same time. Therefore, there is no reason for the Fed to not take additional steps to encourage employment, and in fact, the Fed would be violating its legal mandate if it sits on its hands. And if Bernanke really feels that there is nothing more the Fed can do, then he should make sure that Congress knows that.

Minutes from the last Federal Reserve Board meeting show that some Fed leaders are freaking out about inflation, despite all the evidence that unemployment is the far greater problem. Bernanke had the opportunity to ease concerns that the Fed will allow the country to suffer high unemployment in the name of fighting inflation and seems to have let it pass.

Media

Justice: Now on YouTube!

Michael Sandel Photo 1 Final web copy

Back when I was in college, one of the weirder things facing a Harvard philosophy major was that by far the university’s most popular course on philosophy, “Justice,” was taught by a professor from the political science department rather than the philosophy department. The course wasn’t even cross-listed! Consequently, I didn’t take it even though it got great reviews. Fortunately, along comes the internet to the rescue, as WGBH and Harvard co-produced a TV series based on the course that now has all its episodes up online. So now I’ll finally get to know what he has to say about this.

Minor point here being that the actual Philosophy Department needs to step up its game or Sandel’s mind-share dominance edge will only grow larger and larger. Let’s put Phil 144 online—the Internet wants to hear about Tarski!

More broadly, during this general period of media gloom and doom, it is worth pointing out that in many ways the media landscape is getting way way better. Over the summer I listened to David Blight’s lectures on the civil war and have been following along with Brad DeLong’s lectures on economic history. Someday soon I’ll catch up on Sandel’s justice class. And over time more-and-more of this kind of material is going to be available to more-and-more people. It’s a huge win for human knowledge and quality of life that’s probably never going to be measured in the national output statistics. Fundamentally, though, this kind of thing is one of the reasons why I’m an optimist about the trajectory of human history. It’s just a small thing—a PBS show based on a college course available on the internet—but it’s part of a big positive change.

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