Paul Kane writes in the Washington Post today that both Ron Paul and Rick Perry, who have spoken out against energy subsidies, nonetheless lobbied for federal loan guarantees for a nuclear plant in Texas. Is this hypocrisy? Paul actually had a perfectly good answer: he opposes federal intervention in the energy market, but once funds have been allocated he'll do his best to make sure that his district gets its fair share.

And then there's Perry:

On Wednesday, Perry spokesman Mark Miner said he thinks loan guarantees are not the same as “subsidizing” corporations, because a well-managed company will not default and leave taxpayers liable for repayment. The governor said energy promotion will be a hallmark of his jobs creation plan during the presidential campaign.

Unlike Paul's answer, this one is nonsensical. Of course loan guarantees are a subsidy. What else would they be? And the whole point of a federal guarantee is that it's only necessary if the private sector isn't sure about whether the company will default. If the loan is a sure thing, Wall Street would be happy to finance it all on its own.

I may not agree with Ron Paul on much, but at least he has a functioning brain that knows how to think consistently. But Perry's just dim, and apparently so is his spokesman.

Every year the Social Security Administration releases data on the previous year's wage income. It comes from SSA's Medicare tax database, which processes W-2 forms and includes all wages, salaries, bonuses, independent contractor net income, and other compensation. In 2010, total wages and salaries amounted to $6 trillion.

David Cay Johnston has all the latest numbers and reports on what they tell us:

The median paycheck — half made more, half less — fell again in 2010, down 1.2 percent to $26,364. That works out to $507 a week, the lowest level, after adjusting for inflation, since 1999.

The number of Americans with any work fell again last year, down by more than a half million from 2009 to less than 150.4 million. More significantly, the number of people with any work has fallen by 5.2 million since 2007, when the worst recession since the Great Depression began, with a massive taxpayer bailout of Wall Street following in late 2008.

There's more at the link. The chart below summarizes the grim news.

Ryan Cooper has a fascinating item over at the Washington Monthly about Herman Cain's role in deep-sixing Bill Clinton's healthcare plan. It's worth a read before Cain's 15 minutes are up and we all forget he ever existed.

It's also fascinating because it includes a video clip of Cain debating Clinton at a town hall meeting in 1994. Go watch! Two comments:

  • It's just awesome what a storehouse of knowledge Clinton is. Off the top of his head he knew the average payroll cost of a food service business, he knew how much health insurance cost them, and he knew how much an increase in insurance costs would likely raise the final price of their product. Holy cow! And he reeled all this off without seeming even slightly professorial or highbrow.
  • Cain hasn't changed a bit in the past 20 years. Clinton's math in this clip sure sounds right to me, but Cain's answer was, basically, "You're wrong," followed by a blizzard of dodgy numbers. Sound familiar? He's still saying this anytime someone tells the truth about one of his plans. "You're wrong" appears to be his all-purpose answer to everything.

Apples and Oranges

Joe Klein scores last night's Republican debate and makes a couple of underappreciated points. First:

Romney v. Cain — This was a clean kill for Romney, and an impressive bit of debating. He led the in-over-his-head Cain into a dialogue about apples and oranges, Cain’s chosen metaphor, as if the Hermanator were a third-grader. The Nevada state sales tax was an apple. The 9-9-9 sales tax was an orange. The citizens of Nevada would be paying both. QED and Sayonara.

Yep, this was the slickest bit of technical forensics we've seen yet in the Republican debate marathon. Romney just filleted Cain in that exchange — something that obviously slipped my mind last night when I said that no one really drew blood against Cain. Romney sure did. And I continue to think that Romney didn't do badly in his testy exchange with Perry, either. The fact is that it's next to impossible to score a clean win against someone who just flatly won't shut up. But Romney did OK even so. There was the hand of dominance on Perry's shoulder, there was the bit about Perry being "understandably" testy because he'd had a rough start to his campaign, and there was the fact that, eventually, he did get Perry to shut up — and to make Perry look like a recalcitrant child in the process. (Did you see the look on Perry's face when he stopped talking? He looked only barely in control of himself. Definitely not presidential.)

And Klein also had this comment about the immigration exchanges:

It should also be noted that all this macho posturing about electrified fences, crocodiles etc. avoids the most basic fact about illegal immigration — it is down dramatically. The bad economy means there are fewer jobs to lure illegals. The efforts of the last several Presidents has significantly beefed up Border Patrol, fencing and high-tech surveillance. And the Obama Administration has been very tough on illegals — almost 400,000, a record, have been deported in the past year. [See here for more on this. –ed.]

Yep again. I don't really have a big problem with beefing up the border patrol, but the real answer to illegal immigration (in the short term, anyway) is to lower the cost of legal immigration by boosting quota levels and to raise the cost of illegal immigration by making it unprofitable for employers to hire undocumented workers. That means getting E-verify to work and then tightening up the enforcement and penalties on employers who cheat. It will be interesting to see if the American public actually supports this once they see the results (no more cheap gardeners, no more cheap vegetables, etc.), but the basic idea is hardly impossible to implement.

On the other hand, I call a foul on Jay Newton-Small for this:

For a man in trouble for once upon a time leasing a hunting camp with a racially-charged name, should Rick Perry be calling Herman Cain “brother”? Or offering to bump fists with him? Perry certainly didn’t call any of the other candidates “brother” last night. Just saying....

Oh come on. Andrea Mitchell was going on about this on her show this morning too, and it's ridiculous. "Brother" just sounds like a Southernism to me, and Perry said he'd "bump plans" with Cain, not bump fists. Let's leave this nonsense to the Twitterverse.

Jim Hamilton, an economist at UC San Diego who has done extensive work on the economics of oil spikes, has just published a summary of the current state of oil macroeconomics called "Oil Prices, Exhaustible Resources, and Economic Growth." His conclusion: "The historical record surely dictates that we take seriously the possibility that the world could soon reach a point from which a continuous decline in the annual flow rate of production could not be avoided."

Translation: peak oil might not be far away, and we should take it pretty seriously. And Hamilton's research suggests strongly that when peak oil does arrive, it's not going to be pretty:

Coping with a final peak in world oil production could look pretty similar to what we observed as the economy adapted to the production plateau encountered over 2005-2009. That experience appeared to have much in common with previous historical episodes that resulted from temporary geopolitical conflict, being associated with significant declines in employment and output. If the future decades look like the last 5 years, we are in for a rough time.

Most economists view the economic growth of the last century and a half as being fueled by ongoing technological progress. Without question, that progress has been most impressive. But there may also have been an important component of luck in terms of finding and exploiting a resource that was extremely valuable and useful but ultimately finite and exhaustible. It is not clear how easy it will be to adapt to the end of that era of good fortune.

"Pretty similar" to 2005-09 means a big spike in oil prices that causes a big recession. The chart on the right shows what he means. The green line shows expected economic growth. The dashed line shows the Great Recession. And the red line? That's his estimate of the effect of the huge spike in oil prices in 2007-08. If Hamilton is right, then the oil spike is responsible for about two-thirds of the Great Recession all by itself. The housing and credit bubbles are only responsible for a fairly small piece of it.

But even if Hamilton is wrong about the precise trajectory of the 2008 meltdown, the evidence is now clear that oil spikes have a very significant effect on the economy. And as the production of oil starts to plateau, oil prices are going to spike a lot. In fact, they're likely to spike every time the global economy starts to grow. As I said the last time I reported on Hamilton's work:

If this model is accurate—and if the ceiling on global oil production really is around 90 mbd and can be expanded only slowly—it means that every time the global economy starts to reach even moderate growth rates, demand for oil will quickly bump up against supply constraints, prices will spike, and we'll be thrown back into recession. Rinse and repeat.

Hamilton's language is cautious, but this is basically what he's saying. Oil controls our economic future more than we'd like to believe.

Via Stuart Staniford, who calls Hamilton's paper "thoroughly researched, superbly argued, and very clearly written."

There is nothing more important for a Republican presidential candidate than opposing everything that Barack Obama supports.1 In a way, this might actually be more important for Jon Huntsman than the others, since he spent some time working for Obama and is thus automatically suspected of consorting with the enemy. After reading Huntsman's incoherent op-ed about banking reform, Matt Yglesias thinks this has caused Huntsman to completely lose it:

This is, I think, part of the problem with conservative discourse being so dominated by jeremiads against mythical Obama administration initiatives. What Huntsman wants to do, in essence, is repeal a made up provision of Dodd-Frank in order to replace it with what Dodd-Frank already does, add on something the administration already proposed adding on, and then do an unrelated tax reform. But he insists that he thinks Dodd-Frank is a “tragically” inappropriate response to the financial crisis. So am I supposed to think he wants to modify it in a minor way on the tax side, or that he wants to drastically alter this misguided legislation? There’s no way to infer from this op-ed what it is Huntsman is saying he wants to do, which is especially problematic because contrary to myth politicians rarely lie about which initiatives they’ll pursue in office. Paying attention to policy proposals is normally a great way to figure out what’s happening. But the proposals need to be grounded in some kind of reality-tracking account of what the status quo is.

The entire Republican campaign so far has been like this. It's not enough to oppose the stuff that Obama has actually done, even though there's plenty of it. You also have to oppose things he hasn't done (apology tours, debasing the dollar), things you're sure he wants to do if you take your eyes off him for even a second (raising taxes, selling out Israel), and things that you've just made up out of nowhere (taking away your guns, instituting Sharia law). It really makes for an Alice-in-Wonderland campaign season.

1Except for cutting taxes on the rich, of course. But that goes without saying.

Suzy Khimm notes today that student loan delinquency rates are continuing to rise:

As USA Today notes, outstanding student loans have now hit a record high of more than $1 trillion, and “Americans now owe more on student loans than on credit cards,” according to the new data. Since the peak of the crisis in 2009, they’ve become increasingly able to pay off their credit cards and mortgages. But the student loan debt crisis has continued mostly unabated.

There's something a little odd here, though. The big spike in 2002 is almost certainly an artifact, possibly due to a change in the interest rate structure of student loans that was scheduled to take effect in 2003 but then repealed in 2002. So ignore that. But take a look at a couple of other things:

  • Even now, the 90-day delinquency rate is lower than it was during the boom years of the late 90s.
  • The other categories of loans all started showing suddenly higher delinquency rates starting in 2007-08, a sign of financial distress. But ever since the 2002-03 spike, student loan delinquency rates (as well as default rates) have been rising steadily. Whatever's happening, it's not really due to the recession. Just eyeballing the numbers, it doesn't look like the growth in delinquency rates changed at all after 2008. It just kept growing at its usual rate.

So what's going on? Well, credit card delinquencies are probably declining because banks have cut off a lot of credit. Mortgage delinquencies are probably falling because homes are being foreclosed. HELOCs and auto loan delinquencies haven't fallen at all, just like student loans.

I'd like to see the cost of college remain reasonable, especially the cost of public universities, and I think the growth in student loan debt is probably a bad thing overall. I want to motivate more kids to go to college, not put in place incentives not to. Still, the delinquency problem for student loans doesn't really appear any worse than for any other kind of loan, and compared to the 90s it's actually better. It's possible that the 2002-03 spike has misled us by artificially pushing delinquency rates temporarily below their natural level. If it weren't for that, student loan delinquency rates might have looked pretty flat over the past decade. More analysis, please.

Jonathan Bernstein suggests that the real loser of last night's debate wasn't Rick Perry or Herman Cain or Mitt Romney. It was CNN's Anderson Cooper:

There are plenty of fact-checkers around, and I don’t really consider it part of my job here to think about where candidates messed up, especially since a lot of their factually incorrect statements are just playing to their audience, and you sort of have to expect a lot of that. But Anderson Cooper, the CNN moderator, has no excuse: his claim that 47% of American pay no taxes was inexcusable. Just terrible. The correct stat is that 47% of US households don’t pay federal income taxes, which is very different. It’s bad when politicians get basic factual stuff wrong; it’s terrible when CNN does. To me at least, the debate had a clear loser, and it was Anderson Cooper and CNN for that question.

Repeat something often enough, and everyone ends up believing it. The tea party should feel proud of its handiwork, and Cooper should be ashamed for getting sucked in by it.

For the record: About 47% of Americans pay no federal income tax. This is generally because they're poor, elderly, or have low incomes and qualify for child tax credits. Details here. But even the poorest still pay plenty of taxes: about 13% of their incomes, according to the conservative Tax Foundation. This is because they pay excise taxes, payroll taxes, sales taxes, property taxes, and various other taxes. Details here.

Last night I briefly noted that among the Republican candidates at Tuesday's debate, "Nobody even pretended to have anything to say about housing." If you want to know what I was talking about, Dave Weigel rounds up the responses under the headline, "The GOP Candidates on Foreclosures: A Study in Mush." That's about right. And that's true for both fringe candidates and front runners alike. Tim Murphy has more on Mitt "Let It Hit Bottom" Romney here.

In fairness, President Obama hasn't exactly been a profile in courage on this issue either. But the Republican responses are a grim reminder of just how bad the politics of housing are. Voters may say they hate bailing out the banks — and they do! — but they hate bailing out the profligate next-door neighbors even more. No politician in America seriously wants to risk voter wrath by doing that.

Everyone took shots at Herman Cain's 9-9-9 plan tonight, but they mostly didn't draw much blood. Cain just out-blustered them, and he was helped by the fact that the rest of the field had a hard time really going after him hard. After all, how can a bunch of conservatives attack a plan that's basically conservative flat-taxism on steroids? It's especially hard when Cain is apparently willing to flatly lie about the fact that it would raise taxes on the poor and middle class by a lot.

(Cain kept claiming that a new report on his website showed that the poor and middle class wouldn't see their taxes go up. That apparently prompted enough excitement to crash his site. When it came back up, I found the report, which doesn't appear to include any kind of distributional analysis at all.)

In other news, Rick Perry was awake this week! Maybe a little too awake. His constant interruptions of Romney early in the debate didn't make him look good, and his obviously calculated resurrection of the 2007 foofaraw over Romney's gardening service employing illegal immigrants carried the stink of desperation to me. Perry didn't seem to have the audience on his side during these episodes, either.

Romney did fine, as usual, but looked a little more aloof than usual. But maybe I'm just imagining that.

Aside from that there wasn't much new. Perry wants to defund the UN. Everyone wants to slash foreign aid. Nobody even pretended to have anything to say about housing. The whole tone of the debate was testier than usual, something that will probably get even worse as we get closer to the primaries.

Those are just my initial reactions, of course, and as usual, I have no idea whether actual conservatives are likely to react the same way. Probably not.

UPDATE: Andrew Sprung's reaction:

There were so many lies, slanders, panderings, nostrums and nonsensical statements that it makes me weary to even think of itemizing them. I was happy, however, to note that this seven-headed monster spent a fair amount of energy biting itself — that is, several candidates accused each other of lying, flip-flopping, being unworthy of trust. Santorum accused Perry of being for TARP before he was against it — when in fact, it seems, Perry simply made good use in 2009 of his gutless equivocation in October 2008. Perry histrionically rehashed the 2007 debate charge that Romney hired illegal immigrants to mow his lawn and then lied about it, for which Romney's defense boiled down to "it's so hard to get good help these days" — and Perry, in a shoutfest, flat-out accused him of lying. Herman Cain did the job on himself without much help, claiming that he didn't say(or mean) three things that he's said quite recently — that the U.S. should put up an electrified border fence, that it should negotiate with al Qaeda if they took a U.S. hostage, and that the unemployed are to blame for their predicament. Michele Bachmann used every question as an occasion to demonize Obama and was duly ignored by everyone else.

Another edifying evening. I'd like to think that after a few more such victories Romney will be finished (for the general). Pretty to think so.

And David Corn:

The most interesting assaults of the night came from Mitt Romney—and they were aimed at Rick Perry. Again and again, he manhandled the Texas governor, who is in single-digits in recent voter surveys. Every time, Perry toke a poke at Romney—on jobs in Massachusetts, on using a gardening firm that hired undocumented immigrants, on whatever—Romney was ready for him and slammed him in response much more effectively.

....Romney is worried about a Perry comeback. I didn't clock it, but it sure felt as if Romney spent more time with Perry in his sights than Cain. This would suggest that Team Romney considers Cain still the flavor of the nanosecond who will eventually flame out....Perry, though down and out (and downer and outer after this debate), could still revive—if only because he has the bucks to rebuild. He does have the money to wage a monumental ad campaign against Romney.

I agree. It's still a Romney-Perry race, and Romney knows it.