Kevin Drum - July 2010

Chart of the Day: The Recession's Effect

| Thu Jul. 1, 2010 10:40 AM PDT

We already know that unemployment, long-term unemployment, and underemployment have been sky high during this recession, but a new study from Pew has some additional startling news: even among the still employed, 74% have taken a pay cut of one kind or another,1 either directly or via forced time off — and it's probably even worse than this since Pew apparently didn't ask about cuts in benefits. I wonder: does this mean that wages among the currently employed aren't as sticky as we think? And is this new? My sense is that we haven't seen pay cuts of this breadth in previous recessions, even in 1981-82. But that's just a sense. I don't know if there's survey data to back that up.

Other bullet points from the Pew study:

  • More than six-in-ten Americans (62%) say they have cut back on their spending since the recession began in December 2007.
  • About half the public (48%) say they are in worse financial shape now than before the recession began....Government data show that average household wealth fell by about 20% from 2007 to 2009, principally because of declining house values and retirement accounts. This is the biggest meltdown in U.S. household wealth in the post-World War II era.
  • A third (32%) of adults now say they are not confident that they will have enough income and assets to finance their retirement, up from 25% who said that in February 2009.
  • Throughout most of the decade of the 2000s, Republicans were significantly more upbeat than Democrats about the state of the economy. That pattern is now reversed.

That last point, by the way, almost certainly explains the different levels of economic optimism among various demographic groups. In all cases, the more Democratic trending group is also the most optimistic.

In other related news, homes sales are down, GM is selling fewer cars, jobless claims spiked last week instead of falling, and thanks to Ben Nelson (D–LetEmRot) unemployment benefits still haven't been extended. Those benefits are only for losers in other states, after all. As long as Nebraska is doing OK, why should he be worried?

1A couple of commenters point out that the categories in the chart aren't mutually exclusive. A single person might fall into more than one of them, so you can't just add them up to get 74%. That's true. So the real number is lower than this. At a guess, though, it's still well over 50%.

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Question of the Day: Journalistic Ethics

| Thu Jul. 1, 2010 9:22 AM PDT

From Max Sawicky:

If it is forbidden for journalists to privately deride their subjects, why is it fine for them to publicly idolize them?

Well, um, because.....look! Halley's comet!

News Flash: John Bolton Still Clueless

| Thu Jul. 1, 2010 9:05 AM PDT

Uber-hawk John Bolton takes to the pages of the LA Times today to trash the Obama/Petraeus strategy in Afghanistan. Neither counterterrorism nor counterinsurgency will work, he says, to meet the twin goals of crushing the Taliban and keeping Pakistani nuclear weapons safe:

Instead, we require a sustained military presence in Afghanistan devoted to the grim, relentless crushing of the Taliban and Al Qaeda, coupled with substantially enhanced Pakistani military pressure there. This means protracted military action, not social services, which Team Obama is thoroughly unwilling to endorse. It turns out, entirely predictably, that Afghanistan was not "the good war" after all.

This is no surprise coming from Bolton, but still: don't even his neocon buddies ever get embarrassed by him? Maybe he should ask the Soviets how their "grim, relentless" campaign in Afghanistan did in the 80s? That is, if he can find any Soviets to ask. The Soviet Union outlasted the failure of their all-out war in Afghanistan by only a few years.

Bolton is probably right to think that both counterterrorism and counterinsurgency are unlikely to work. But we aren't pursuing them because Obama is too much of a pussy to wage a real man's war. We're pursuing them because just about everyone in the U.S. military understands what Bolton doesn't: all-out conventional war against insurgent foes like the Taliban and al-Qaeda is even more unlikely to work. What's more, the theory of counterinsurgency isn't based on the idea that economic progress will defang the insurgents themselves (Bolton: "Religious fanatics, and their grievances, do not arise from poverty or deprivation. Accordingly, their fanaticism is not susceptible to remedies based on economic determinism, whether of the crude Marxist variety or its community-organizer cousin. Their motives and hatreds will not disappear with prosperity or free elections."). It's based on the idea that it will reduce their support among the indigenous population, support that any insurgency needs to operate effectively. This is counterinsurgency 101, something that the military community hashed out years ago, but Bolton still doesn't seem to get it. For him, it's always the killing fields or nothing.