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Economy

NEWS FLASH

State, Local Governments Shed 200,000 Jobs in 2010 | State and local governments across the country cut more than 200,000 jobs in 2010, according to Census data released today. It was the second consecutive year that state and local governments have shed jobs, putting a further crunch on economic recovery efforts, and the trends are continuing into 2011, as analysts expect Friday’s jobs report to show another 30,000 public sector job losses in August (on top of about 100,000 jobs lost in the last three months). As one analyst told Reuters, “We are looking at the worst contraction of state and local government employment since 1981.”

Rick Perry’s Jobs Plan: ‘Free’ The ‘Wall Street Investor’

Texas Gov. Rick Perry (R) knows that Americans will refuse to go to work until the subjugation of Wall Street comes to an end, and he wants to be the one leading that march to freedom and economic prosperity. Speaking with conservative talker Sean Hannity this afternoon, Perry said “Americans will go to work tomorrow” if we only “free” the “Wall Street investor” and entrepreneurs:

PERRY: People are scared about the future of this country and and they want a leader that understand that all answers don’t come out of Washington, D.C. and a matter of fact that’s the problem right now of over-taxation, over-litigation, over-regulation, and they want to be freed from that. Our country — you free the entrepreneur, the small business man and woman, or for that matter the Wall Street investor, from the over-regulation and the over-taxation and Americans will go to work tomorrow. But they’re afraid right now.

Listen here:

Perhaps Perry has forgotten about the last time we “free[d]” Wall Street investors by removing regulations — they collapsed the world’s economy. Over-taxation is clearly not a scourge for Wall Street investors like hedge fund guru John Paulson, who makes more in an hour than most Americans make in their entire lifetimes yet pays a lower tax rate.

Perhaps Perry is simply trying to play catch-up with rival Mitt Romney, after Reuters reported last week that Perry’s brash style risks turning off the “Northeastern button-down country club Wall Street” donors critical to any run for the presidency. Romney, being a former Wall Street man himself, is ahead there, after touting his belief that “corporations are people” too.

Grassley, Who Is Pro-Privatization, Says He Knows Just ‘One Member Of Congress’ Who Wants To Privatize Social Security

ThinkProgress filed this report from a town hall in Carroll, Iowa.

During a town hall in Carroll, Iowa last night, Sen. Chuck Grassley (R-IA) fielded question after question from constituents who were furious at Republican efforts to weaken Social Security. Midway through the event, one Iowan stood and told Grassley his personal story about retiring in 2008 just as the stock market cratered, decimating his IRA and 401k retirement plans.

He implored Grassley not to privatize Social Security, asking if he should expect “to live on whatever the stock market leaves me?” After the crowd gave the constituent loud applause, Grassley responded that he only knows of “one member out of 535 who wants to privatize Social Security.”

CONSTITUENT: The idea of privatizing Social Security. I have a story about that, very brief. When I retired in 2008, I took my company pension and put it into an IRA and 401k plan and that was in April, I rolled it over. By October, that entire pension was gone because the stock market went south on me. And if that had been my Social Security, sir, I wouldn’t have that or not as much of it. I would be expected to live on whatever the stock market leaves me? I don’t think that’s quite right when someone like Warren Buffett could lose half of his income and still be better off than I am with my full income. I want to know what you’re going to do to strengthen Social Security to make it so that we don’t ever have to worry about whether or not the stock market is going to go south, the banks get bailed out, and I get nothing. [Applause]

GRASSLEY: First of all, I’ve already answered the first question. Everything’s on the table. Secondly, I only know of one member of Congress out of 535, and I won’t name him, but I only know of one member out of 535 who wants to privatize Social Security.

Watch it:

A quick Google search turns up one prominent Republican who favors privatizing Social Security: Iowa Sen. Chuck Grassley. In fact, as Senate Finance Committee chairman in 2005, Grassley led his party’s efforts to privatize the popular retirement program.

A ThinkProgress investigation also turned up 118 other Republicans currently in the House and Senate who are on record supporting Social Security privatization, including fellow Iowans Reps. Steve King (R-IA) and Tom Latham (R-IA). Either Grassley and his fellow Republicans have had a major change of heart on the merits of privatizing Social Security since their ill-fated attempt to do so in 2005, or he is telling his constituents an outright falsehood.

With assertions like these, it’s little surprise that Grassley’s constituents are showing up in droves to his town halls to tell the long-time senator, “We want to have Social Security!”

NEWS FLASH

CBO: Recovery Act Was Supporting Up To 2.9 Million Jobs In June | An analysis by the non-partisan Congressional Budget Office found that in June of 2011 alone, the 2009 American Recovery and Reinvestment Act (i.e. the stimulus) had “lowered the unemployment rate by between 0.5 percentage points and 1.6 percentage points,” and “increased the number of people employed by between 1.0 million and 2.9 million.” Yesterday, 2012 GOP presidential hopeful Rick Perry declared that “you won’t have stimulus programs under a Perry presidency.” (HT: Center on Budget and Policy Priorities)

Politics

California Superintendent Gives Up $830K In Wages To Help School Facing Budget Cuts

Fresno County, CA Superintendent Larry Powell

Tomorrow morning, a California school superintendent will retire from his job, only to be rehired later in the day. Why? Fresno County’s superintendent Larry Powell wants to be paid a much lower wage. Leaving behind a $288,241 annual salary, Powell will voluntarily work for $31,020 — $10,000 less than a first-year teacher’s salary — with no benefits. This, Powell says, ensures that the $830,000 he would have earned for the remainder of his term will go toward the county schools’ budget for the next three years.

Characterized as exceedingly humble, Powell — also a Baptist minister — said his motivation for the unconventional move was to do what he can to counter budget cuts to his beleaguered school system:

“My wife and I are very well compensated. We’ve been very blessed,” he told the television station.

“These are tight budget times in California for public schools,” the 63-year-old Fresno County school superintendent said, noting over the past three years, his area has lost $1,600 to $1,900 in funding per student. “My wife and I thought, what can we do that might help change the dynamic in my particular area.”

Watch Powell on ABC News:

“I don’t think of it as being a hero at all,” said Powell. Noting that Fresno county is “like a bar bell” with “extreme wealth and extreme poverty,” he said this “unique arrangement” presented “a perfect opportunity to do something where the public benefits, the taxpayer benefits…the taxpayer saves between $150,000 and $160,000 in reduced costs, the county receives $830,000.”

Because his salary comes out of the district’s discretionary budget, Powell will be able “to steer the money he is giving up where he wants: to programs for kindergarten and preschool, the arts and a pet project that steers B and C students into college by teaching them how to take notes and develop strategy skills.” As ABC’s David Wright notes, Powell’s $830,000 is enough to hire 20 new teachers, fund 16 pre-school classes, or pay for 11 art programs for the entire year.

U.S Secretary of Education Arne Duncan called Powell yesterday to thank him for his generosity. “Larry Powell’s leadership is an absolute inspiration,” he said in a statement.

GOP Rep. Calls For Offsetting Hurricane Aid In Order To Reassure ‘The Business Markets’

Rep. David Schweikert (R-AZ)

House Majority Leader Eric Cantor (R-VA) is sticking by his call that any disaster relief funding to areas affected by Hurricane Irene be offset by budget cuts elsewhere (with his preferred offsets including cuts to first responders). Disgraced Hurricane Katrina-era FEMA Administrator Mike “heckuva job” Brown agreed with Cantor today that deficit concerns should be placed over the needs of Americans affected by the hurricane.

During an interview with Bloomberg News, GOP Rep. David Schweikert (R-AZ) jumped on board this effort, saying that it’s necessary to offset disaster aid in order to “tell the world and the business markets that we’re trying to turn off the spigot of debt”:

SCHWEIKERT: Leader Cantor made it very clear. We will step up and help our brothers and sisters out there in need. In a three-plus trillion dollar federal budget, I promise you, we’ll find some offsets and we’ll find them fairly simply. The political culture of the left is let’s just borrow the money and, one day in the future, we’ll have an honest discussion about that borrowing. We’re trying to tell the world and the business markets that we’re trying to turn off the spigot of debt and this will be a good symbol. We’ll get the money to help our disaster victims, and yet, it will be, I actually believe, somewhat easy to find some offsets out there that hopefully we can all embrace.

Watch it:

Schweikert doesn’t only think that disaster aid needs to be offset in order to prove something to the “market.” He has also said Congress should pass the House Republicans’ Medicare-ending budget because “you don’t create jobs, you don’t have investment until the markets, and those that hold the capital to do those investments, have some sense that we’re going to bend this debt curve.” White House Press Secretary Jay Carney criticized the GOP’s position today, saying “I cant help but say that I wish that commitment to looking for offsets had been held…during the previous administration.”

House Republican Bill Cuts Hurricane Monitoring Funds That Help Save Millions Of Dollars

In the wake of Hurricane Irene, which caused billions of dollars in damages up and down the U.S.’s eastern seaboard, House Republicans are callously claiming that any aid to victims of the disaster needs to be offset by budget cuts elsewhere. The savings favored by House Majority Leader Eric Cantor (R-VA) would come from cuts to the Federal Emergency Management Agency and first responders.

However, if House Republicans get their way, not only will recovering from the effects of Hurricane Irene be more difficult, but so will monitoring incoming hurricanes in general. As the Associated Press noted, the House Appropriations Committee has approved cuts to funding for “hurricane hunters” — military planes that fly into hurricanes in order to measure and track them:

Hurricane hunters – which are flying into Irene’s eye to feed forecasters vital information about the storm – could face big funding cuts under a budget proposal moving through the U.S. House.

Rep. Kathy Castor, a Democrat from Florida, wrote House Speaker John Boehner on Friday asking for a reversal of proposed cuts to the program under a bill that passed the Appropriations Committee. She said if the cuts go through, it would amount to a 40 percent drop in funding for hurricane hunter flights out of MacDill Air Force Base in Tampa. [...]

Hurricane hunter planes fly directly into the storm to measure wind speed, barometric pressure and other data that the National Hurricane Center then uses to formulate its forecasts.

The cuts passed by the Appropriations Committee would take funding for these flights down from $29 million to $17 million, despite the fact that the flights help save a substantial amount of money.

Due to data from the hurricane monitoring flights, forecasts are 30 percent more accurate. Since it costs $1 million per coastal mile for evacuation and preparation when a storm approaches, every mile that is not evacuated yields substantial savings for taxpayers. Estimates put the savings due to monitoring flights at $100-$150 million per storm, far outstripping the $29 million budget dedicated to the hurricane hunters.

“[The] hurricane hunter program is worth its weight in gold,” said Sen. Bill Nelson (D-FL). “They have gotten such accuracy in prediction, not only the strength of a hurricane but exactly its track. You cut back on those kinds of expenses, and that is really cutting off your nose to spite your face.” “These are very significant cuts. It would be a harmful step backward, just when hurricane predictions are improving,” added Rep. Kathy Castor (D-FL), who has pledged to propose an amendment restoring the cut funds when the GOP’s appropriations bill comes to the House floor.

NEWS FLASH

Chicago Fed President Calls For More Central Bank Efforts To Boost The Economy | During an address in Jackson Hole, Wyoming last week, Federal Reserve Chairman Ben Bernanke made it clear that the central bank is not going to engage in further efforts to boost the economy. However, this is not a consensus opinion on the Federal Reserve Board, as Chicago Fed President Charles Evans told CNBC that “the Federal Reserve may need to be even more aggressive in its easing policies than it has been so far unless the economy shows significant improvement.” “Given the way the economy is growing and inflationary pressures are not nearly as strong as a lot of people think, I think that there’s room for accommodation,” Evans said.

Town Hall Constituents Tell Sen. Grassley To Raise The Payroll Tax Cap: ‘We Want To Have Social Security!’

ThinkProgress filed this report from Carroll, Iowa.

Constituents waved signs and gave boisterous applause when one Iowan after another stood up and urged Sen. Chuck Grassley (R-IA) to strengthen Social Security rather than cut the retirement program at a town hall in Carroll, Iowa on Monday.

One middle-aged woman, Rosie Partridge, pointedly asked Grassley, “Why can’t we raise the wage cap in order to ensure that Social Security can continue on as it is without talking about cutting it?” (The current payroll tax does not tax income above $106,800.) Partridge, a small business owner, went on to tell her senator that despite the fact her business “would pay more” in payroll taxes, “you know what? No complaints. We want to have Social Security!” Grassley, who helped lead his party’s efforts to privatize Social Security in 2005, backed down, saying, “You have to have everything on the table”:

PARTRIDGE: My husband and I have a business in Carroll County. [...] My question is, why can’t we raise the wage cap in order to ensure that Social Security can continue on as it is without talking about cutting it? [Applause] And if we, as a business, we would have some people that would be giving more to that, actually a family member that’s part ownership of the business. And the business would pay more, too. And you know what? No complaints. We want to have Social Security! [Applause]

GRASSLEY: I think when it comes to Social Security, if anybody’s going to bargain in good faith, you have to have everything on the table. But if your point of view is to solve the Social Security problem just by taking the cap off, that isn’t going to solve it, as the trustees looked at it and said five years.

Watch it:

In fact, lifting the payroll tax cap would keep Social Security solvent for the next 75 years. Last week, Sen. Bernie Sanders (I-VT) announced he would introduce legislation to this effect, because doing so would keep Social Security fully-funded without having to cut benefits.

Though it may be tempting to hear “everything [is] on the table” and believe that Grassley is open to Partridge’s proposal, this is a phrase he commonly employs in tough policy fights. Optimists may believe that Grassley genuinely considers all options; pessimists will point to the health care reform debate when he made similar musings, only to string Senate Democrats along for months before criticizing the bill for supposedly allowing government to “pull the plug on grandma.

Later in the town hall, another older woman chastised Grassley and his fellow Republicans for including Social Security in the recent debt ceiling standoff. “We have not caused the debt,” the woman said. “You owe Social Security recipients just like you owe China and anybody else that has treasury bonds.”

Econ 101: August 30, 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.

  • The Obama administration has not yet agreed on what ideas will be included in a jobs plan to be unveiled next week, “and it remained unclear whether the president was looking for narrower ideas with a realistic chance of passing the Republican-led House or more sweeping stimulus proposals that would excite his liberal base and draw contrasts with the GOP.” [Washington Post]
  • Multigenerational households, “defined as those with three or more generations living under one roof, grew to almost 5.1 million in 2010, a 30 percent increase from 3.9 million in 2000,” according to the latest Census Bureau data. [Bloomberg]
  • The Federal Deposit Insurance Corp. has “filed an objection to Bank of America’s proposed $8.5 billion mortgage-bond settlement with investors, joining investors and states that are challenging the agreement.” [Bloomberg]
  • Lenders are making more subprime auto loans, “reversing the cautious approach they adopted after the credit crisis,” according to a new report. “The portion of car loans made to subprime borrowers rose to 40.8 percent in the second quarter from 37.2 percent a year earlier.” [Reuters]
  • “People struggling to keep their homes due to job struggles will have more time to seek government assistance,” as a program originally scheduled to expire in July has been extended through Sept. 15. [The Hill]
  • Former GOP congressman Pete Hoekstra, “who is now running for the U.S. Senate in Michigan, called for the repeal of Wall Street reform legislation on Monday, arguing that ‘the heavy hand of the federal government’ is making it impossible for bankers to do their jobs.” [Huffington Post]
  • Kentucky has named a special prosecutor to examine potential campaign-finance law violationd by the for-profit college Sullivan University, “which urged employees at a gathering this month to defeat Democratic Attorney General Jack Conway.” [Lexington Herald-Leader]
  • Contract talks between the United Automobile Workers and the Detroit automakers are continuing — as the current contract between the two expires on Sept. 14 — with the union pressing for wage increases for entry-level workers as a critical part of a new national labor agreement.” [New York Times]

  • The New York State comptroller’s office “rejected a $27 million contract with a News Corporation subsidiary to build a data system for tracking student performance, as fallout widens against the international media conglomerate due to a phone hacking scandal in Britain.” [New York Times]

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