Kevin Drum

The Mind of America

| Tue Sep. 7, 2010 12:32 AM EDT

A new Washington Post poll is out. Selected questions are shown below. Summary: Americans trust Democrats more to handle the country's problems, they think Democrats represent their values better, they think Democrats are more concerned with the needs of people like them, and they think Democrats deserve to be reelected at a higher rate than Republicans. They also think (though I didn't show it below) that George Bush is substantially more to blame for our economic woes than Barack Obama.

And the result of all this? They say they plan to vote for Republicans by landslide numbers. It's the economy, stupid.

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Working the Refs

| Mon Sep. 6, 2010 11:09 AM EDT

Is the GOP paying for ad space on the Washington Post's front page these days? Check out this story today:

Small businesses feel squeezed by Obama policies

Last year, even as he struggled through the worst of the recession, Chris Upham said revenue at his District-based real estate and construction businesses doubled — allowing him to hire two agents.

But Upham said he hasn't increased his staff thus far in 2010 and he doesn't expect to for the remainder of the year. That's because his taxes rose sevenfold.

....The White House appears poised to respond to a growing backlash from businesspeople about the crush of higher taxes. Among the ideas being explored were a temporary payroll-tax holiday and permanent extension of the expired research-and-development tax credit, ways to offset the impending elapse of tax cuts for the top 2 percent of households.

Italics mine. There's nothing intrinsically wrong with running a story about higher taxes or new regulations, but only if there really are higher taxes or new regulations to complain about. However, the story has nothing — literally nothing — about any recent tax increases on businesses. I have no idea why Upham's taxes rose, but I can only guess that perhaps he paid virtually nothing last year and then paid seven times that much this year as his income went up. So maybe his taxes went from $100 to $700, or something like that. But who knows? Post reporter V. Dion Haynes just credulously quoted Upham and apparently didn't bother to ask anything further. So we have no idea where these illusory new taxes are coming from.

As for regulations, that's equally mysterious. Upham himself suggests that his hiring plans are due more to a real estate slowdown caused by the end of the homebuyer's tax credit than anything else. So what else is there? We're told that Obama's small business loan program has been "wildly popular." We're told that hiring mostly depends on boosting consumer spending. We're introduced to Luc Brami, who was delighted with the $9,000 payroll tax break he got from an Obama program to spur hiring of the unemployed. We're told that, "In all, the administration has implemented about a dozen small-business programs, including a health-care tax credit; more opportunities for women business owners to receive government contracts; and cuts in capital gains taxes."

So where's the actual problem? Well, there's a quote from a flack for the right-wing National Federation of Independent Business complaining about future provisions from healthcare reform. There's another quote from a flack complaining about a new regulation regarding 1099 reporting requirements. And there's a guy from a government contracting firm who doesn't plan to take advantage of the payroll tax break because it doesn't offset the entire salary of a new employee.

That's it. The 1099 thing is probably legit, but aside from that there are no new taxes documented in the piece and no evidence of burdensome new regulations. None. So what's going on? Surely if things were as bad as the flacks say they are, it would have been pretty easy to find plenty of good examples? Especially since I'm sure it was the flacks who produced the business owners quoted in the story in the first place.

Ladies and gentlemen, modern American journalism.

Obama's Teeny Tiny Stimulus

| Mon Sep. 6, 2010 10:27 AM EDT

Barack Obama celebrates Labor Day:

President Obama on Monday is to call for as much as $50 billion in government spending to start up a long-term public works plan emphasizing transportation projects — roads, rail and airport runways — over the next six years.

....While Mr. Obama’s plan would call for investment over six years, the White House says it would be front-loaded with an initial investment of $50 billion in taxpayer money, to help create jobs in the shorter term. The administration says it would work with Congress to find ways to pay for the plan, so that it would not add to the nation’s rising deficit. One possibility would be to cut existing subsidies for oil and gas exploration and production.

This is all perfectly sensible. At the same time, if it's offset by other items in the budget it probably won't have any net stimulative effect. Essentially, we've given in to the deficit hawk brigade without even a fight.

Not that it matters, I suppose. It's too small to be more than a pinprick, and Republicans will probably filibuster to the death the right of our nation's oil and gas companies to their federal subsidies anyway. But I'm sure it will give Fox News something to roar about for the next month. Obama is socializing roadbuilding! He's endangering our supplies of oil and gas! It just shows his contempt for ordinary Americans!

Should be loads of fun.

Comics Bleg

| Sat Sep. 4, 2010 6:38 PM EDT

UPDATE: Thanks, everyone. I've found good homes for everything now. All help was much appreciated.

I feel a little guilty using the blog for purely personal business, but....what the hell. It's a long holiday weekend. Why not?

Here's the deal. I've got about two thousand old comic books that I need to dispose of. I'm reliably told that they're basically of no value. I checked with my local comics shop, and they didn't want them even for free. The local boys club wasn't interested. Our local library sells used books but didn't want seven boxes of comics. What to do?

I kinda hate to just toss them out. Surely someone must have an interest? But I don't know who. Thus this blog post. These are all 80s-90s DC books, mostly Superman, Batman, Justice League, that kind of stuff. All unbagged but in good shape. They aren't worth shipping anywhere, but if anyone in the Southern California area wants them and is willing to drop by my house and haul them off, you're welcome to them. Alternatively, if you know of a worthy cause who might want them, let me know. It just has to be local to Orange County. Email me at calpundit@cox.net if you're interested.

Friday Cat Blogging - 3 September 2010

| Fri Sep. 3, 2010 1:58 PM EDT

Today is Provide-Your-Own-Caption day. On the left, Domino is in a paper sack, every cat's favorite hiding place. On the right, Inkblot is obviously trying to tell me something. But what?

Need more cats? Check out Colleen Stratton's Psycho Kitties. It's probably not what you think. But her ten-years-in-the-making documentary needs your help. And there's a free preview!

And speaking of help, friend-of-the-blog Blue Girl is doing her annual fundraiser right now. If you have a few spare shekels lying around, head over and put them to good use.

UPDATE: Ha ha. Fooled you all. They're actually both saying the same thing. Answer below.

Private Sector vs. Public Sector

| Fri Sep. 3, 2010 1:47 PM EDT

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.

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A Payroll Tax Holiday

| Fri Sep. 3, 2010 11:45 AM EDT

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

| Fri Sep. 3, 2010 11:12 AM EDT

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?

| Fri Sep. 3, 2010 5:00 AM EDT

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 is....zero. 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

| Thu Sep. 2, 2010 8:59 PM EDT

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.