Private Sector vs. Public Sector

Here is Steve Benen's chart showing private sector job gains and losses over the past few years:

Why look only at private sector jobs? Matt Yglesias suggests three tightly constrained reasons: it's good spin for the White House, it controls for one-time census gains and losses, and then there's a third thing about a conservative argument that I don't understand.

But the fact is that both total jobs and private sector jobs are important to look at. If you simply want to know how the actual, lived economy is doing, then you want to look at all jobs. After all, a job's a job, and if people are employed and getting a paycheck, that's a good thing. But that's not the only thing we should be interested in. In the medium term, government jobs can't support the economy forever. Sustained growth depends on the private sector, so it's critical to know how the private sector is doing. If it's improving, that means we can look forward to the economy starting to recover by itself without a lot of further federal intervention. But if the private sector is stalling, we can't.

That's important to know. And based on these figures, it sure looks as if, after a year of recovery, the private sector has stalled for the past three quarters. Who knows? Maybe things will magically turn around shortly. But that sure doesn't look like the right way to bet right now. More stimulus, please.

A Payroll Tax Holiday

Atrios on reports that the Obama administration is considering a temporary cut in payroll taxes to help stimulate the economy:

I think a full payroll tax holiday would be fine as long as it wasn't yet another excuse to try to destroy Social Security, but an employer only one would be truly awful on substance, impact, and message. More help for the overlords, no help for you!

This is based on a Washington Post story that says Obama "is seriously weighing a package of business tax breaks — potentially worth hundreds of billions of dollars — to spur hiring and combat Republican charges that Democratic tax policies hurt small businesses." Last night, when I read this story, I too thought it implied that the White House was considering a reduction solely in the employer half of the payroll tax, not the half that you and I have deducted from our paycheck. That seemed insane. The current version of the story, however, is fuzzier and doesn't give an impression one way or another about how the tax holiday would be structured. But it does emphasize over and over that this is a business tax cut, which is a very peculiar emphasis if the payroll tax holiday would apply to both employer and employee contributions.

Anyway, my guess is that this is just a combination of fuzziness from sources and fuzziness in writing. No president ever elected would be moronic enough to propose a cut in the business half of payroll taxes without an equal cut in the worker half. So I assume a full tax holiday for everyone is what Obama actually has in mind here.

Raw Data: A Lost Decade for Workers

Here's a chart showing how much health insurance cost in 2000 vs. 2010:

To summarize: for singles, the employer share of health insurance has gone up from about $2,000 to about $4,000. That's a $2,000 increase. For family policies, the employer share has gone up from about $5,000 to $10,000. That's a $5,000 increase.

If you figure that policies are split about 60-40 in favor of family policies, that's an average increase per worker of around $4,000. Adjusted for inflation, that's about $3,000 in extra benefits that we're getting in our pay packets.

Data for cash income is only available through 2008, but it's certainly gone down since then, which means that average real cash earnings during the past decade have probably gone down from $39,000 to about $37,000 or so. Add back in the value of the healthcare premiums we get, and average income has gone up from $39,000 to $40,000. This is all back-of-the-envelope stuff, but it's close enough to get a pretty good idea of how much average income has gone up over the past decade. Answer: a whopping 0.2% per year.

I won't bore you with a comparison to the increase for the super rich. You'd just get depressed.

UPDATE: Aaron Carroll says things are even worse than I suggest here. If you look at trends in benefit levels, copays, deductibles, and premium costs, the non-healthcare portion of worker income may have actually declined over the past decade. Are we all getting better healthcare for all this extra money? Maybe. But it's no surprise that families are feeling squeezed by this.

One Dollar, One Vote?

Nobody wants to repeal George Bush's tax cuts for the middle class. Especially in a bad economy, this is a no-brainer, both politically and economically. But what about tax cuts for high earners? This should be an easy question to answer too. On the political side, a CBS poll earlier this week found that repeal is supported by 56% and opposed by only 36%. Economically, repeal would cut $700 billion off the federal deficit over the next decade and, because consumption by the wealthy doesn't depend very much on small changes in income, it wouldn't noticeably affect consumer spending either. Allowing tax rates on the rich to rise back to their pre-Bush levels, therefore, should also be a no-brainer, both politically and economically.

So how do you explain this?

A small but growing number of moderate Democrats are balking at boosting taxes on the rich. Many face electorates that recoil at the mention of any tax increase. Some represent areas that are loaded with wealthier taxpayers. Further, some incumbent senators who don't face voters this fall are reluctant to increase taxes on anyone while the economy remains sluggish. Without their support, the push to raise rates on the rich probably will fail.

....Rep. Gerald Connolly, D-Va., represents the northern Virginia suburbs of Washington, one of the nation's wealthiest districts. Median family income there in 2008 was $117,892, well above the national average of $63,211. He said that repealing the top rates would have political consequences. "Sometimes we forget how we became the majority. We did it by winning some affluent districts," he said.

That's a strikingly candid assessment from Connolly. But it's also wrong. As research from Princeton political scientist Larry Bartels demonstrated several years ago, American politicians are powerfully affected by the views of the rich, and this has nothing to do with any recent electoral trends.

Rather, as the chart on the right shows, things have been this way for a long time. Using data from voting records in the early 90s, it shows that the responsiveness of senators to the views of the poor and working class Or maybe even negative. And that's true for both parties. The middle class does better — again, with both parties — and high earners do better still. In fact, they do spectacularly better among Republican senators. And this disparity has almost certainly gotten even worse over the past two decades.

This is the shape of American politics. If your income is low — and probably a fair number of the 56% who want Bush's tax cuts for the rich repealed are low-income voters — politicians simply don't care. If you're middle class they care a little more. But if you're rich, then they really, really care. And it's safe to say that most high earners are opposed to repealing tax cuts on high earners. That goes for all Republicans and a growing number of Democrats too. So what seems like a no-brainer isn't as simple as it looks. Economically it makes sense to repeal Bush's tax cuts for the rich, and a majority of American citizens are in favor of it. Unfortunately for them, they belong to the wrong majority. They're not rich themselves, and increasingly in America, that means their votes just don't count.

Obama's Unpopularity

Michael Scherer has a piece in Time today headlined "How Barack Obama Became Mr. Unpopular." Now, as it happens, Obama isn't actually any more unpopular than most presidents after 18 months in office, and in any case he's still more popular than practically anyone or anything else in Washington DC. But fine. His popularity is down. Mostly, of course, this is because the economy sucks, but that makes for boring journalism. So we get a bunch of other explanations:

"He's trying to Europeanize us, and the Europeans are going the other way," [says Fred Ferlic], a former Democratic campaign donor who plans to vote Republican this year. "The entire American spirit is being broken."

....[In 2008] trust in the federal government was at a historic low, dropping to around 25%, where it still remains. Yet Obama has offered government as the primary solution to most of the nation's woes....Meanwhile, the resulting spike in deficits, which has been greatly magnified by tax revenue lost to the economic downturn, has spooked a broad sweep of the country.

....This past June, Peter Brodnitz of the Benenson Strategy Group, a firm that also polls for the White House, asked voters which they preferred: "new government investments" or "cutting taxes for business" as the better approach to jump-start job creation. Even among those who voted for Obama, nearly 38% preferred tax cuts.

....For someone who so carefully read the political mood as a candidate, Obama has been unexpectedly passive at moments as President. Whereas other Democrats had hoped to spend the late summer talking about two things — jobs and the unpopularity of many Republican policies — the White House has been distracted by a string of unrelated issues, from immigration reform to a mishandled dismissal of a longtime USDA official to the furor over the proposed Islamic cultural center and mosque near Ground Zero.

This style of reporting bugs me. This is practically a press release version of Republican talking points, but without any actual mention of the Republicans who are behind them. You'd think that broad swathes of the country just spontaneously decided that Obama was trying to Europeanize the economy, that deficits were spooky, that tax cuts are the cure for what ails you, and that the Ground Zero mosque is a massive middle finger to American dignity. I don't think there's actually much evidence that any of this stuff has hurt Obama seriously, but if that's your thesis, shouldn't you at least mention the fact that this is exactly the story conservatives have been selling since the day Obama took office? Hell, you could even do it admiringly if you were minded to. But one way or the other, you shouldn't pretend that this just happened to happen. You should attach some names to it.

Really, though, the entire piece should have been spiked and replaced with one that blamed Obama's slide entirely on the bad economy. Scherer himself provides the evidence at the end of his story:

During his early, heady days in office, the President decided to make Elkhart a personal cause. A once thriving manufacturing center of 50,000 on the Michigan-Indiana border, famous for its musical instruments and recreational vehicles, the Elkhart region saw the steepest jump in unemployment of any metropolitan area in the nation during the economic crisis.

....Since then, he has been back twice more, once to speak at Notre Dame and once to herald a new electric-vehicle plant that would be built with federal support. In the southern end of the district, thousands of jobs at parts plants were saved when Obama decided to bail out the auto companies.

....Yet all of Obama's personal and financial appeals have been swamped by the depth of the recession and have had little visible effect. Donnelly, who flies home every weekend to work in his district, felt obliged to run against Obama to save his job. And his Republican opponent, Jackie Walorski, says she is often approached by Obama voters who want to vent. "This has burned people," she says.

How much clearer can things be? Elkhart got hundreds of new jobs from the electric vehicle plant, probably hundreds more from the stimulus bill, and saved additional thousands thanks to the auto bailout. There's not a lot more that one small region could ask for. But it hasn't made any difference. Everyone there feels betrayed because unemployment remains high anyway. It's the economy, stupid.

The Neverending Sarah Saga

I didn't link to yesterday's big Vanity Fair piece on Sarah Palin because — oh, I don't know. I guess I'm a little tired of Sarah. A little tired of adding to the unbelievable tsunami of publicity she gets for her every utterance. A little tired of being tired of Sarah.

But via Chris Bodenner, here's the author of the piece chatting with Joe Scarborough this morning:

"The worst stuff isn't even in there," Michael Joseph Gross said on "Morning Joe" Thursday. "I couldn't believe these stories either when I first heard them, and I started this story with a prejudice in her favor. I have a lot in common with this woman. I'm a small-town person, I'm a Christian, I think that a lot of her criticisms of the media actually have something to them. And I think she got a bum ride, but everybody close to her tells the same story."...."This is a person for whom there is no topic too small to lie about," he said. "She lies about everything."

...."I started this with every good intention toward her," he said. "I was just shocked and appalled at every step at what I found. And I wrote this story sort of against my will. It wasn't what I wanted to write, it wasn't what I wanted to find. It was what was forced on me by the facts."

Holy cats. I would really like to hear about this from people who know Gross. Was he really sympathetic to Palin going into this? Because if he was, this is the most unbelievable volte face I've ever read. I mean, he literally describes an entire town — hell, practically an entire state — that is absolutely scared to death to talk about Palin because they're afraid of the vengeance she'll wreak on them for doing it. He describes a woman with a paranoid streak a mile wide, a temper like a hellcat, and a casual meanness toward ordinary people that defies belief. There were so many examples of people saying they were afraid to talk to him that it almost seemed like it had to be a joke. ("The people of Wasilla, in the main, are reflexively generous and open....When I ask about Palin, though, a palpable unease creeps in. Some people clam up. Others whisper invitations to call later—but on this number, not that one, and not before this hour or after that one. So many people answer “Off the record?” to my initial questions that it almost seems the whole town has had media training."1)

So go ahead and read it, I guess. I don't know if it's the real deal or just more liberal porn. All I can say is that if it's even close to the truth, Palin's fall from grace, when it comes, is going to be spectacular indeed.

1In fairness, by this time probably every resident of Wasilla has been interviewed at least half a dozen times about Palin. They're probably pretty press savvy by now.

The Wit and Wisdom of Fred Thompson

I'm not sure if anyone cares anymore what Fred Thompson says these days, but Sarah Palin thought this gem was worth retweeting:

Obama Econ Adviser: spend more stimulus money. Bet she repeatedly pushes the elevator button trying to make it come faster, too.

I guess that's that. The economy simply can't be stimulated, no how no way, and Christina Romer is just some birdbrain who doesn't understand how machinery works. Better get used to being unemployed, folks.

Of course, what Romer really wants to do is reopen one of the elevator banks that's been out of commission for a while and replace some of the broken magnets for the motors so they run a little closer to their normal speed, which would get more people to their destinations faster than before. Maybe she understands machinery a little better than Fred thinks?

The Kill List

Conor Friedersdorf on the Obama administration's creation of a "kill list" of individuals whom the US can kill anywhere, anytime:

I wish the right would do less scoffing at the ACLU. It's often unjustified. But I'll live with scoffing if it's followed by the dawning realization that the Obama Adminstration has imprudently asserted for itself an extraordinary extra-constitutional power, the potential abuse of which ought to terrify any citizen who is half paying attention.

Once that realization has sunk in, I'd encourage this followup thought: whereas the ACLU is standing against this radical expansion of federal power — an executive branch death panel, if you will — conservative instituitions like The Heritage Foundation aren't merely silent, they're hiring a senior staffer who believes that the ability to draw up a list of American citizens to be killed is inherent in the power of the presidency.

I don't write about this often enough. But it really is extraordinary. Right now this list is confined (we think) to suspected terrorists in places like Yemen and Pakistan, and I think that distracts us from what's going on. Even if, in principle, it seems wrong, killing jihadist wannabes in Karachi or Mogadishu just doesn't get our alarm bells going. Our instinctive reaction is that these are third-world hellholes where life is cheap anyway, so why not?

But it's the still the principle that matters. If you can do it in Karachi, you can do it in Paris. And if you can do it to a New Mexico-born cleric who preaches vengeance against the U.S. from a mosque every Friday, you can do it to an expat from Oregon who runs a grimy little anti-American newspaper from a basement in Berlin. We might not be doing that right now, but what's to stop us? The good will of whoever happens to be president at the moment?

For what should be obvious reasons, the U.S. government should not be allowed to execute U.S. citizens without trial regardless of whether they happen to be on U.S. soil. It's a little hard to believe that this is even a debatable notion.

Ample Free Parking

In Edge City, Joel Garreau offers up a semi-humorous glossary of developer terms. Here's one:

Ample Free Parking: The touchstone distinction between Edge City and the old downtown.

Of course, all that free parking isn't entirely a result of the free market. Much of it is the result of minimum parking regulations, which require both residential and commercial developers to provide a certain number of parking spaces for their buildings. Now, it's obvious why people with cars like these regulations (makes driving convenient, keeps overflow parking out of neighborhoods), but it's pretty clearly a government mandate and you'd think that a libertarian outfit like the Cato Institute would be opposed to them. But, as Matt Yglesias points out, apparently Cato's Randal O'Toole isn't:

The latest hot front in this can be found in Donald Shoup’s evisceration of O’Toole’s views on minimum parking regulations. I recommend that you read the whole thing. But a quick summary is that O’Toole seems to have somehow persuaded himself that regulatory parking mandates don’t lead to artificially cheap parking and that artificially cheap parking doesn’t lead to artificially high quantities of driving. And he’s supposed to be the libertarian in this argument!

I don't think there's much question that O'Toole is wrong here. You can argue about how big the problem is and what kind of impact it has, but there's not much question that minimum parking regulations make driving cheaper and therefore incentivize people to drive more than they otherwise would. The only part of this argument I'm a little fuzzy on, though, is why it's recently gotten so much attention. Sure, parking is part of the infrastructure that promotes the use of cars, but my first guess is that it's a smallish part. Maybe I'm wrong about that. But the scale of the infrastructure we've built over the last century to adapt to heavy use of automobiles is vast almost beyond comprehension, and parking at the margins seems like a small part of it. I guess every little bit helps, but aren't there way bigger ways we could encourage less driving than raising the price of parking meters in busy commercial districts or letting suburban malls build smaller parking lots? Why not focus more on those, instead of a modest reform that seems practically designed to be as conspicuously annoying to registered voters as possible?

UPDATE: Atrios responds: "I think the reason parking requirements and mandatory free parking are getting more attention now is because more and more people are understanding that this rather simple policy choice is what has led to pedestrian-friendly development being illegal in most of the country."

I think I get this, but this is actually a specifically urban issue, isn't it? And not even in all urban areas. If the argument is strictly about specific policies (curb cuts, street parking) that ruin potentially walkable urban areas, then I see the point. But that's different from minimum parking regulations more generally, isn't it?

Straight Talk on Mahogany Row

One of Tyler Cowen's readers asks:

Why does the corporate world use language so inefficiently? Why turn a simple thing like "talking to a client about their needs" into a five-step process (distinguished, no doubt, by an acronym)? Do companies think that they create net value when they brand a common thing like human conversation as a one-of-a-kind, complex process — even after the costs of being opaque, jargonistic, and long-winded are taken into account?

Tyler's answer:

My speculation: People disagree in corporations, often virulently, or they would disagree if enough real debates were allowed to reach the surface. The use of broad generalities, in rhetoric, masks such potential disagreements and helps maintain corporate order and authority. Since it is hard to oppose fluffy generalities in any very specific way, a common strategy is to stack everyone's opinion or points into an incoherent whole. Disagreement is then less likely to become a focal point within the corporation and warring coalitions are less likely to form.

This is an unanswerable question, but I think I'd offer a different kind of speculation. For starters, all professions develop their own jargon. Some of it sounds ridiculous and some of it doesn't, but it seems to be practically a human universal. So I wouldn't try to draw any special conclusions strictly from the existence of jargon itself.

More generally, though, why does an entire class that thinks of itself as so practical and results-oriented buy into so many of the fads that produce all this jargon? I don't think it's to reduce conflict. I would be very surprised if you found any correlation at all between faddish jargon and the amount of internal backstabbing in corporations. Instead, my guess is this: most businessmen aren't really all that smart. When things go wrong they don't know what to do. And when you don't know what to do, anything is better than nothing. So you go searching for someone with an answer, and like all professions, the business world has plenty of people willing to offer them. Needless to say, though, those answers have to seem as if they offer something new and different, and that means flowcharts and five-point plans and a special lingo. It's a truism that the easiest person to sell to is another salesman, and likewise, the easiest person to sell a new business process fad to is another businessman.

And for what it's worth, I don't think this is entirely bad. I know a lot of this stuff sounds ridiculous, but if you dig beneath the jargon a lot of business advice is actually fairly reasonable. What's more, in a lot of cases it almost doesn't matter what it is. What matters is that you have some corporate managers who are at sea and don't know what to do, and they just need someone to provide them with some structure for changing things and moving forward. Not every structure will work, but I think you might be surprised by how many different ones do. What really matters is simply deciding on something and then getting a move on. A charismatic and self-confident CEO is supposed to provide this kind of leadership, but lacking that a little bit of witch doctory business process consulting can often help the process along.