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Perry Claims Federal Stimulus ‘Didn’t Create Any Jobs,’ Ignoring The 50,000 It Created In Texas

ThinkProgress filed this report from Pembroke, New Hampshire

New GOP presidential contender Gov. Rick Perry (TX) continues to get a free pass from the press for his stimulus hypocrisy on the campaign trail. Last week the governor claimed that the Recovery Act signed by President Obama had “failed” — conveniently forgetting that he accepted more stimulus money than any other state besides California, and used the funds to close 97 percent of Texas’ massive budget deficit.

The Houston Chronicle reported that as of July 2010, federal stimulus funds created or saved 47,700 jobs in the Lone Star State. Yet today during a question-and-answer session in Pembroke, New Hampshire, Perry once again feigned ignorance of the indispenable benefits his state received from stimulus money. In fact, he claimed that the stimulus “didn’t create any jobs, as far as I can tell”:

QUESTION: If the stimulus plan didn’t work, then what do you think would help for unemployment?

PERRY: He asked, “If the stimulus didn’t work” – and the stimulus did not work, obviously all it did was create more debt in this country. It didn’t create any jobs, as far as I can tell, except for maybe those federal regulators that were increased.

Watch it:

So far, Texas has used $17.4 billion in federal stimulus money to keep schools open, ensure Medicaid coverage for children, and put more people to work on infrastructure projects. About half of that was spent on “shovel ready” projects — “things we would not have done with our own money,” says a senior budget analyst for the Center for Public Policy Priorities. Texas benefited disproportionately from the stimulus, using it to balance its budget two years in a row.

Ironically, Perry once aggressively pursued the federal aid he now denounces to pander to the far-right base. According to Time Magazine, in 2003, “lobbyists under Perry’s direction went to Capitol Hill to lobby the Republican Congress for more than a billion dollars” in stimulus-type funds. Over several years this lobbying campaign won funds for programs “Perry now says he opposes as fiscally irresponsible intrusions on state responsibilities.”

Texas received $4.3 billion in stimulus funds for Medicaid and $3.25 billion for public education. Without the generosity of the federal government Perry now decries, Texas would have had to lay off 565 caseworkers who investigate child abuse. Stimulus-funded child care and job training programs would also have ended. In short, Texans would have been much harder hit by the recession if the Recovery Act hadn’t been there to cushion the blow.

Yglesias

Inflation Expectations Falling, Will Narayana Kocherlakota Admit He Was Wrong?

When dissenting from the Federal Reserve Open Market Committee’s modest gesture in the direction of monetary stimulus, Minneapolis Fed President Narayana Kocherlakota did the world the favor of offering an actual explanation for his conduct, which is more than either of the other two dissenters did. He wrote that “Going forward, my votes on monetary policy will continue to be based on the evolution of the data on PCE inflation and its components, medium-term PCE inflation expectations, and unemployment.”

Well, today the Cleveland Fed released its monthly update of inflation expectations and guess what—they’re low and falling:

The hawks on the Fed appear to have decided that the unofficial target of 2 percent that the Fed used in the 1990s and 2000s was too high and that they want to push inflation down to maybe 1.5 percent. That wouldn’t be without precedent. After the 1982 recession, the Fed seems to have targeted 3.5-4 percent inflation for a while and then took advantage of the 1991 recession to disinflate down to 2 percent. In the current context, the price of opportunistic disinflation is prolonged mass unemployment. The benefit is unclear. This is, however, the indicator the hawks say they’re looking at.

The State Of Texas’ Children: Low Graduation Rates, High Poverty

In an interview with Bloomberg’s Al Hunt, Education Secretary Arne Duncan had some harsh words for Texas’ education system, in a clear shot at the policies of new presidential contender Gov. Rick Perry (R-TX). “Far too few of their high school graduates are actually prepared to go on to college,” Duncan said. “I feel very, very badly for the children there.”

Duncan went on to criticize the budget implemented by the Texas legislature that will force tens of thousands of teachers to be laid off. In fact, “a spokesman for the Texas State Teachers Association said as many as 50,000 out of 333,000 teacher jobs could be eliminated in the next two years.” And already, a recent study placed Texas “dead last in the percent of the population age 25 and older that graduated from high school.”

But a deteriorating education system is far from the only problem facing Texas’ children. This week, the Casey Foundation released its annual Kids Count report, which ranked Texas 35th in the nation in terms of child well-being. Here are some low-lights:

Nearly one-quarter of Texas children live in poverty, placing it 41st in the nation.

Texas has the third-highest teen birth rate in the country, with 63 births per 1,000 females aged 15-19. Only Mississippi and New Mexico have higher rates.

Only nine states in the nation have a higher percentage of teens not attending school (or not high school graduates) than Texas’ 7 percent.

According to the National Center for Education Statistics, nearly half of Texas schoolchildren are eligible for reduced price or free school lunches. And as the Washington Post’s Harold Meyerson noted, “in 2008, the state comptroller found that 12 percent of Texans lacked high school diplomas and that the level would rise to 30 percent by 2040 unless the state’s commitment to education was considerably increased.”

Far from turning this around, Texas will be cutting child services over the next budget cycle. So it seems that, at least at the rate Texas has been going, Duncan has every reason to “feel very, very badly for the children there.”

GOP Rep. Frank Guinta Refuses To Say Whether He Would Accept A 10:1 Spending Cuts To Revenue Deal

Rep. Frank Guinta (R-NH)

ThinkProgress filed this report from Greenland, NH.

At the Republican presidential debate in Ames, Iowa last week, the GOP presidential candidates were asked if they would have rejected a deal to raise the debt ceiling that contained a 10-to-1 ratio of spending cuts to new revenue. All eight candidates raised their hands in opposition to such a deal, further proof that the GOP is set on continuing the intransigence on taxes that played a major part in Standard & Poor’s downgrade of America’s credit rating.

Rep. Frank Guinta (R-NH) was asked about such a deal yesterday at a town hall in Greenland, NH. He dodged the question — admitting to the crowd “I don’t know if that answers your question” — and instead told attendees that he was not opposed to new revenue as long as it didn’t come from actually raising tax rates. Multiple attendees then challenged him, asking him why he wouldn’t support raising rates on corporations or the wealthiest Americans:

QUESTION: At the debate in Iowa last week, all eight candidates said they would reject a 10-to-1 deal that the new super committee comes out with. Would you reject a 10-to-1 deal? [...]

GUINTA: I don’t feel the need to raise rates, but I do think we can raise revenue. I don’t know if that answers your question, but –

ATTENDEES: Why not rates? What’s wrong with rates? How do you raise revenue? [...]

GUINTA: Well I think the way you raise revenue, my personal feeling is […] I don’t feel that raising taxes has to be the first option, there have to be many other options and alternatives before you raise tax rates. I feel like it can be regressive to raise rates on small businesses […]

WOMAN: Most small businesses are never even in the bracket of which we speak. They never reach that. And when they do it’s only the first dollar above the first $250,000 that is taxed at that higher rate. So it’s really very misleading when ‘Our small businesses need to be protected.’ They already are. Because 80, 90 percent of them never even have taxable income at the rate you’re talking about, so it’s really very misleading, and I’m really sick of hearing this misleading stuff.

Watch it:

The woman who challenged Guinta was absolutely correct: exceedingly few small businesses would be affected if taxes on the wealthiest Americans were raised. At another point in the town hall, Guinta was unable to answer why he has not supported allowing the Medicare program to negotiate with drug manufacturers, which would save billions of dollars every year.

Climate Progress

Bachmann Says She Can Get Gas Prices Below $2 a Gallon. Is She Planning Another Deep Recession?

In July, Republican presidential candidate Michele Bachmann failed economics 101 by claiming at a campaign rally in South Carolina: “A dollar in 2011 should be the same as a dollar in 1911. A dollar should be worth a dollar.”

Bachmann is still skipping classes.  At another rally in South Carolina, the Minnesota Congresswoman appeared oblivious to the laws of global supply and demand by claiming she will get gasoline below $2 a gallon, presumably by opening up the U.S. to more oil drilling.

“The day that the president became president gasoline was $1.79 a gallon. Look at what it is today. Under President Bachmann, you will see gasoline come down below $2 a gallon again. That will happen.”

Watch it:

I’ve heard this one before — during my fifth grade student council election: “If I’m elected, I promise to get the lunch lady to serve more french fries with every meal in the cafeteria.”

Her “Drill, Baby, Drill,” strategy can’t lower prices more than a few pennies in 2030, as discussed below.  But, there is another way, as Tom Kloza, chief oil analyst at the Oil Price Information Service, explained to the Chicago Tribune:

“We’re going to have to recognize the rest of the world has this increasing appetite for oil,“ he said. “If we go below $2 a gallon, it probably means there has been a lot of wealth loss and we are in a deflationary period.“

A lot of wealth loss and deflation –  that pretty much sums up what a Bachmann presidency would mean.  Here’s why.

Read more

GOP Rep. Agrees With Buffett, Says Tax Code Favors ‘The Ultra-Wealthy, [And] Ultra-Wealthy Corporations’

Rep. Jeff Fortenberry (R-NE)

On Sunday, billionaire investor Warren Buffett penned a New York Times op-ed calling for lawmakers to increase taxes on the wealthy, correcting for some of the current inequities that, for instance, allow Buffett to pay a lower tax rate than his secretary. “While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks,” he wrote. “My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.”

Several Republicans, when asked about Buffett’s critique of the tax code, have attacked the Oracle of Omaha himself. 2012 GOP presidential contender Mitt Romney said Buffett is simply wrong about his tax rate, while Rep. Michele Bachmann (R-MN) said, “I have a suggestion. Mr. Buffett, write a big check today.” Even Buffett’s own GOP congressman, Rep. Lee Terry (R-NE), blew him off, saying, “Mr. Buffett has my ultimate respect, but we disagree on taxes and takings.”

However, not all Republicans were so quick to dismiss Buffett’s point:

At a town hall meeting in West Point, Neb. later the same day, a woman asked [Rep. Jeff Fortenberry (R-NE)], “Did you hear what Warren Buffett said?”

“Yes, and I don’t necessarily disagree with him, either,” said Fortenberry, a Republican.

Fortenberry later told USA TODAY that he doesn’t want to see taxes raised on small businesses and entrepreneurs. But he said Buffett is right that loopholes in the tax code “skew in favor of the ultra-wealthy, ultra-wealthy corporations, and the overseas aristocracy.”

One tax loophole in particular that has earned Buffet’s ire is the carried interest loophole, which allows hedge fund managers to count the income they make from managing other people’s money as capital gains (and thus have it taxed at 15 percent) rather than standard income (which has a top tax rate of 35 percent). As Buffett put it, “Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as ‘carried interest,’ thereby getting a bargain 15 percent tax rate.”

If Fortenberry were to push for closing the hedge fund manager loophole, he would face stiff Republican opposition, but he wouldn’t necessarily face it alone. In a town hall meeting this week, Rep. Tom Petri (R-WI) also called for closing this particular loophole.

NEWS FLASH

Pope Strikes Progressive Economic Message, Calls For End To ‘Self-Regulation’ | Pope Pope Benedict XVI arrived in Spain today calling for a more equitable, fair, and regulated economy, saying, “[T]he economy cannot be measured only by maximization of profit but rather according to the common good.” As American conservatives call for ever more deregulation, the pontiff said the marketplace “cannot function as a self-regulated economy.” Benedict explained his economic views more fully in a 2009 treatise, which called for protections for “labour unions — which have always been encouraged and supported by the Church,” the elimination of world hunger through “wealth redistribution,” the protection of the “natural environment” — “God’s gift to everyone” — from unchecked economic expansion, and a strengthened “family of nations,” like the U.N. with “real teeth.”

The Real Vacation Outrage: The U.S. Is The Only Developed Country Where Citizens Aren’t Guaranteed Paid Vacation

For some Americans, vacations only happen in the movies.

Many political pundits and conservative politicians have seized the opportunity to criticize President Obama’s planned vacation in Martha’s Vineyard. Former Massachussetts Gov. Mitt Romney (R) said he wouldn’t be doing the same if he were president, and the political paper Politico even consulted a group of “political strategists” to compile a list of less politically sensitive locations Obama could vacation instead.

But the real outrage here isn’t the fact that Obama is taking paid vacation (at 1/3 the rate of his predecessor), but rather that working Americans aren’t guaranteed any paid vacation days at all.

In fact, the United States is alone among the developed world in not providing its citizens with guaranteed vacation days (paid or unpaid) as a right of employment, as the following chart of Organisation for Economic Co-operation and Development (OECD) countries compiled by the Center for Economic and Policy Research shows:

As you can see, the United States is virtually alone among rich nations in depriving citizens of these basic necessities. But unfortunately, it isn’t just the rest of the developed world that has the U.S. beat. If you live in Kazahkstan, for example, you are guaranteed 24 calendar days a year. The citizens of Uruguay get 20 working days off to start, and vacation days accrue with years worked.

Rather than focusing solely on the location or length of our presidents’ vacations, the political press should be asking our political leaders why average Americans are not guaranteed the same right to some time off.

With Rural Jobs Plan, Obama Aims To Shift Aid From Big Agribusiness To Family Farms

Our guest blogger is Sarah Jane Glynn, a policy analyst at the Center for American Progress Action Fund.

President Obama spoke at the White House Rural Economic Forum in Peosta, Iowa on Tuesday, and unveiled a new plan to aid rural America. The plan covers a variety of issues impacting rural Americans, and while it addresses everything from methamphetamine use, to infrastructure, to foreclosures, Obama’s closing speech focused on one of its key components: jobs.

The number of farms has fallen, and more than 90 percent of farming families now rely on off-farm income. Yet net farm income is anticipated to increase 20 percent from 2010, the second highest inflation-adjusted value in 35 years. How is this possible? While small family operations make up more than 90 percent of farms, they control only 27 percent of production. The largest 1.6 percent of farms (most of which are corporately owned) accounted for 50 percent of farm sales in 2002. Part of Obama’s rural jobs initiative would shift the power balance in order to benefit family farms.

Part of Obama’s plan includes encouraging young people to become farmers, as the average American farmer is 57 years old, and an influx of young people is necessary to prevent small farms from disappearing. Obama will create a new program to train and develop the next generation of farmers, offer tax breaks to landowners selling to new family farmers, and tax-credits to off-set the cost of starting small farms. As he said this week:

I saw some of these future farmers of America and their young president right over there, and when you hear the enthusiasm…and energy that these young people display, and the fact that if they can just get a little bit of a break when it comes to getting started on the front end, get a little bit of help with capital, that they are ready to take American agriculture to the next level — it gives you confidence, it gives you hope.

Organic farming is one of the fastest growing sectors of U.S. agriculture, and organic farms tend to be smaller and are more likely to be run by younger people. Obama will increase funds for the National Organic Certification Cost-Share Program, which provides financial assistance to help farmers comply with organic certification standards. The plan also calls for changes to the USDA’s crop insurance rate so that organic farmers are not penalized — organic produce is particularly susceptible to damage from disease and insects.

Finally, Obama has stated he will close loopholes that allow mega-farms to collect federal payments, by limiting eligibility to farmers who are actively working the land, or landlords who are renting to active farmers. In 2009, 62 percent of the $9.5 billion in government payouts to farms went to those grossing more than $250,000 per year, even though they make up only 12 percent of all farms.

While this is a far cry from the overhauls the Center for American Progress has proposed in the past, if we are all going to be focused on Iowa, at least we are talking about how to help family farms rather than who looks the best eating a corndog.

Econ 101: August 18, 2011

Welcome to ThinkProgress Economy’s morning link roundup. This is what we’re reading. Have you seen any interesting news? Let us know in the comments section. You can also follow ThinkProgress Economy on Twitter.

  • President Obama will deliver an economic speech after Labor Day, in an attempt to pressure the congressional super committee “to propose new measures to promote job creation as well as larger long-term deficit cuts than mandated.” [New York Times]
  • The administration is reportedly “thinking about proposing tax cuts for companies that hire workers, new spending for roads and construction, and other measures that would target the long-term unemployed,” while “some ideas, such as providing mortgage relief for struggling homeowners, could come through executive action.” [Washington Post]
  • The Justice Department is investigating whether the credit rating agency Standard & Poors “improperly rated dozens of mortgage securities in the years leading up to the financial crisis.” [New York Times]
  • In the last ten years, “child poverty surged in 38 states and erased many of the gains in child well-being made in the last 20 years.” [Huffington Post]
  • Federal and state banking regulators, “signaling their growing worry that Europe’s debt crisis could spill into the U.S. banking system, are intensifying their scrutiny of the U.S. arms of Europe’s biggest banks.” [Wall Street Journal]
  • Education Secretary Arne Duncan said yesterday that Texas’ school system “has really struggled” under Gov. Rick Perry (R). “Far too few of their high school graduates are actually prepared to go on to college,” Duncan said. “I feel very, very badly for the children there.” [Bloomberg]
  • According to a new survey, “since 2010, 71 percent of the nation’s large [public transit] systems have cut service, and half have raised fares.” [New York Times]
  • “Speculative demand from investors has pushed the gold market into a ‘bubble that is poised to burst’ after prices surged to a record this year,” analysts at Wells Fargo said. [Bloomberg]
  • The AFL-CIO said yesterday that “organized labor won’t sit out President Obama’s reelection campaign and let a Republican win the presidency.” [The Hill]
  • Sen. Tom Coburn (R-OK) “a leading proponent of ending tax expenditures, will join the Senate Finance Subcommittee on Taxation, IRS Oversight and Long Term Growth, signaling that GOP senators may be moving toward closing some tax loopholes.” [The Hill]
  • Ohio Gov. John Kasich (R) and Republican members of the state legislature said yesterday that “they want to negotiate with opponents of a law curbing public sector union rights to prevent the measure from going to a public referendum this fall.” [Reuters]

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