Think Progress

Pelosi warns of history repeating itself ‘if we pull our punch’ on job creation.

With the unemployment rate above 10 percent and states across the country facing budget shortfalls, Democrats in Congress are looking at various measures to spur job creation. At the same time, though, deficit-mania has infected the political world, including the White House, which is reportedly going to “focus extensively on cutting the federal deficit in 2010.” On a conference call today, House Speaker Nancy Pelosi (D-CA) explained how she plans to reconcile deficit complaints with the need to pass an adequate jobs bill:

We’re never going to decrease the deficit until we create jobs, bring revenue into the Treasury, stimulate the economy so we have growth. We have to shed any weakness that anybody may have about not wanting to be confrontational on this subject for fear that we’d be labeled not sensitive to the deficit. … The American people have an anger about the growth of the deficit because they’re not getting anything for it. … So if somebody has the idea that the percentage of GDP of what or national debt is will go up a bit, but they will now — and their neighbors and their children — will have jobs, I think they could absorb that. … If we pull our punch, as they did in the mid-30’s, we shouldn’t be surprised if history repeats itself.

Listen here:

During the Depression, President Roosevelt’s policies brought the unemployment rate down to 14 percent, from 24 percent, by 1937. But then, as Paul Krugman explained, Roosevelt “mistakenly heeded the advice of his own era’s deficit worriers. He sharply reduced government spending, among other things cutting the Works Progress Administration in half, and also raised taxes. The result was a severe recession, and a steep fall in private investment.” The Wonk Room has more.

Goldman Sachs CEO says he’s ‘doing God’s work,’ rejects the idea that Goldman profits from gov’t support.

Last quarter, Wall Street investment bank Goldman Sachs made a $3.19 billion profit, and according to some estimates, the firm will set aside $21.9 billion for compensation this year. In an interview with London’s Sunday Times, Goldman CEO Lloyd Blankfein said that the firm is serving an important “social purpose” by helping companies grow, and denied the idea that Goldman is only able to make record profits thanks to government support:

Blankfein dismisses any suggestion that Goldman needed to be bailed out, and, by extension, rejects any notion that the firm is now profiting from public support. Sure, he took $10 billion from Washington’s Troubled Asset Relief Program (Tarp). But the bank has since repaid the cash, with healthy interest — 23%. Goldman also benefited from the federal bail-out of the huge US insurance firm AIG. Goldman had bought $20 billion worth of insurance from AIG and received billions of dollars — perhaps as much as $13 billion — when Washington pumped $90 billion into the stricken giant. But Blankfein insists Goldman was “hedged” against any AIG losses, in the best possible way — with cash.

Of course, Goldman’s profits have been driven in large part by its access to cheap federal dollars, and the firm may have gone under were it not for its status as a “too big to fail” firm. But Blankfein told the Times that he is just a banker “doing God’s work.” And evidently God’s work — bonuses and all — cannot be questioned.

Cable news networks help spread Republicans’ ‘highly misleading’ stimulus math.

Back in January, the Republicans claimed that the economic stimulus package would cost $275,000 for every job created, which they calculated by taking the entire cost of the stimulus package and dividing it by the number of jobs created in just one year. At the time, Paul Krugman called the Republicans’ number a “bogus talking point.” With the White House’s announcement last week that the stimulus package has created 640,000 to 1 million jobs, the GOP is employing fuzzy math once again. Don Stewart, spokesman for Sen. Mitch McConnell (R-KY), told reporters on Friday to “get out your calculators” and divide the spending by the jobs, producing a figure of $230,769 per job. Media outlets Fox News, CNN, and CNBC have all repeated some variation of the number (using slightly different estimates) in the last few days. Watch a compilation:

The AP’s Calvin Woodward was not fooled, and today released a piece telling readers to “beware the math” coming from the Republicans and calling it “satisfyingly simple but highly misleading”:

First, the naysayers’ calculations ignore the value of the work produced. Any cost-per-job figure pays not just for the worker, but for material, supplies and that worker’s output — a portion of a road paved, patients treated in a health clinic, goods shipped from a factory floor, railroad tracks laid. Second, critics are counting the total cost of contracts that will fuel work for months or years and dividing that by the number of jobs produced only to date.

As Woodward wrote, “dividing apples by oranges won’t settle” whether or not the stimulus package has been a success.

Fox News adopts the GOP mantra: ‘Where are the jobs?’

Fox News has been pushing back on White House Communications Director Anita Dunn’s assertion that the network is “a wing of the Republican Party” by arguing that “its news hours — 9 a.m. to 4 p.m. and 6 to 8 p.m. on weekdays — are objective.” Fox Political Analyst Brit Hume added that “if Fox News really were a GOP mouthpiece, the White House would not be attacking it.” However, Fox’s “objective” news hosts have literally served as the GOP “communications arm” when discussing the economic stimulus package and job creation. In July, House Republicans took to the floor to repeat the mantra “where are the jobs?” And Fox’s anchors, led by America’s Newsroom co-host Bill Hemmer, have adopted the phrase as their own, repeating it over and over on their “news” shows. Watch a compilation:

Thus far, Fox contributor Juan Williams seems to be the only one acknowledging the truth, saying that Fox consists of “conservative audience-oriented programming. And I don’t think anybody is going to debate that.” The Wonk Room has more.

Krugman on reducing long-term deficits: It’s not hard economically, but ‘politically impossible right now.’

Yesterday, the Center for American Progress and the Center on Budget and Policy Priorities held a conference to discuss when and how to begin addressing the country’s long-term deficits. Nobel Prize-winning economist Paul Krugman explained, “This is a really bad time to engage in fiscal retrenchment; it’s a bad time on almost every dimension.” But eventually deficits will have to be brought down to a sustainable level, which, according to Krugman, is fairly easy to do economically. The problem, he said during an interview with The Wonk Room, is that we have a political system in which you can’t talk about tax increases “without it being political suicide”:

If we can do health care reform…that really does limit the growth in health care cost, then what’s left is a problem that we can deal with with fairly moderate policy. Things that would be politically impossible right now, but economically aren’t hard at all. [...]

You would end up still with the U.S. having lower taxes than almost all other OECD countries. And you’d end up with our social programs enhanced, not reduced, because we’d have universal health care coverage and some other improvements in the social safety net, and we would be good for the foreseeable future. All of this hinges on being able to actually talk about tax increases, even modest ones, without it being political suicide. It requires that you be able to talk about spending health dollars wisely and not have people start screaming about death panels.

Watch it:

The Wonk Room has more.

Anti-EFCA group targeting Sen. Bayh paid Karl Rove Co. $100K in consulting fees.

In the last few days, the Economic Freedom Alliance (EFA) has created a website and placed billboards in Indiana pressuring Sen. Evan Bayh (D-IN) to vote against the Employee Free Choice Act. On its website, EFA claims that the Employee Free Choice Act will “cost the U.S. economy 600,000 jobs in 2010,” which is a statistic taken from a discredited study by business sponsored scholar Anne Layne-Farrar. But EFA’s disclosure and expenditure form provides some insight into why it’s willing to employ falsehoods. After all, the EFA has paid $100,000 in consulting fees to Karl Rove and Co. in 2009.

This $20,000 fee was paid every month this year, February through June. The Wonk Room has more.

Corporate front group tweets approvingly about editorial equating Employee Free Choice Act with Nazism.

Today, the Workforce Fairness Institute (WFI) — which is a corporate front group, “founded by several longtime Republican operatives,” that is lobbying against the Employee Free Choice Act (EFCA) — tweeted approvingly about an editorial in the Arkansas Democrat Gazette that unequivocally equates EFCA with Nazism.

The editorial says that “American public opinion came to the defense of the secret ballot when it was about to be junked. It needs to stay vigilant against these sly little provisions intended to achieve the same end”:

Have you noticed? Political parties supposedly dedicated to the workers’ welfare have a way of undermining their rights. They may begin by bullying management but wind up dictating to labor, too. And everybody else. For a European example to beware, note the sad history of the grandly named National Socialist German Workers Party, aka Nazis.

WFI’s Mark McKinnon has previously warned that EFCA is equatable with “tyrannies and socialism.” The group will not identify its funders, but National Journal reported that is likely funded by big retailers such as Wal Mart and Home Depot. The Center for Union Facts, another anti-EFCA front group that is run by super-lobbyist Rick Berman, also linked approvingly to the editorial.

Executives receive one-third of all pay in the U.S.

According to a Wall Street Journal analysis of Social Security Administration data, more than one-third of all pay in the U.S. now goes to executives and other highly-paid employees:

Executives and other highly compensated employees now receive more than one-third of all pay in the U.S., according to a Wall Street Journal analysis of Social Security Administration data — without counting billions of dollars more in pay that remains off federal radar screens that measure wages and salaries. Highly paid employees received nearly $2.1 trillion of the $6.4 trillion in total U.S. pay in 2007, the latest figures available. The compensation numbers don’t include incentive stock options, unexercised stock options, unvested restricted stock units and certain benefits.

Between 1979 and 2006, the inflation-adjusted after-tax income of the richest 1 percent of households increased by 256 percent, compared to 21 percent for families in the middle income quintile. Despite these numbers, Democratic leaders, “bowing to unease among lawmakers and governors in their own party,” are reconsidering the House Ways and Means committee’s proposal to implement a surtax on the richest one percent of Americans as a way of financing a portion of health care reform. The Wonk Room has more.

Blue Dogs threatening to quash health bill over surtax voted for Bush tax cuts.

Rep. Mike Ross (D-AR) — along with six other members of the Blue Dog coalition on the House Energy and Commerce Committee — are threatening to vote down the House’s health care legislation in committee. Ross reportedly objects to the surtax included in the bill, saying “I don’t like the idea of raising taxes in the worst economic crisis since World War II.” However, the Blue Dogs concerned about the surtax voted for some of the budget busting Bush tax cuts in 2001 and 2003 that constituted a huge gift to the very wealthiest Americans. Of the seven Blue Dogs on from Energy and Commerce who are complaining, four were around to vote on Bush’s tax cuts. Here’s how they voted:

Over the ten year window from 2001-2010, the Bush tax cuts gave the richest one percent of Americans about $715 billion in tax breaks. This comes out to about $518,000 per household over ten years or about $51,800 per year. The proposed surtax, meanwhile, would raise $544 billion from households making more than $350,000 per year. The Wonk Room has more.

Fact-checking Steele’s ‘nonsense’ on the Recovery Act.

Today, Republican National Committee Chairman Michael Steele made an appearance in New Jersey to support GOP gubernatorial nominee Chris Christie. Noting that President Obama is going to be in the Garden State with incumbent governor Jon Corzine on Thursday, Steele launched into a criticism of the American Recovery and Reinvestment Act, asking those in the crowd how much stimulus money they’ve seen:

And where is the Governor on this? Does the governor like this bailout nonsense? Oh, I think he does. Does he like that stimulus check? How much of the stimulus check have you seen to create jobs in New Jersey?

According to Recovery.gov, New Jersey has been allocated $5,304,193,676 in recovery act money, which is already starting to work its way through the economy. The Newark Star Ledger reported that an “inordinate” amount of bids were made by construction companies seeking the $389 million in funding for roadway projects that the state has received, and work has begun on a $69 million project to upgrade I-95. A $6.7 million project to upgrade guardrails in Middlesex County has also been fastracked due to the stimulus. “We’ve just been shuffling out funds to do this work over a bunch of years,” Middlesex County Engineer John Reiser said.

Business lobby and some Democrats voice opposition to Obama’s crackdown on offshore tax havens.

Yesterday, the Obama administration announced “a major offensive against businesses and wealthy individuals who avoid U.S. taxes by parking cash overseas.” Predictably, the business lobby immediately cried foul over the changes, claiming that they will destroy businesses and “eliminate American jobs.” But Congressional roadblocks have also emerged:

Senate Finance Committee Chairman Max Baucus, a Montana Democrat, called for “further study” of Obama’s proposals within minutes of the president’s announcement yesterday. Representative Joseph Crowley, a Democrat on the tax-writing House Ways and Means Committee, said he’s wary because the tax changes would hurt Citigroup Inc., his New York district’s largest private-sector employer.

The Wonk Room provides some facts to help inform “wary” Democrats.