• Employment Growth Has No Effect on Blue-Collar Wages

    A couple of days ago, Brad DeLong noted that when unemployment is low there should be pressure to increase wages. But that doesn’t seem to be happening today. So he linked to a piece by Nick Bunker, who suggests that we should look instead at the prime-age employment rate, which seems to correlate better with wage growth.

    I’m usually interested in blue-collar wages rather than overall wages—which includes the earnings of doctors and lawyers and computer programmers—and while reading this it occurred to me that growth in the prime-age employment rate ought to correlate with growth in blue-collar wages. So I looked into it. In the spirit of publishing null results, there appears to be no correlation at all:

    I would think that two years of employment growth—no matter where it’s starting from—would lead to at least some growth in blue-collar wages. But the correlation is actually slightly negative. This seems odd. What do you think the reason could be? Is prime-age employment completely disconnected from blue-collar employment? Or is it something else?

  • Ben Carson Lied About His Dining Room Set For No Reason

    Here is Ben Carson’s initial response when CNN reported on the purchase of a $31,000 dining room set for his office:

    “New tables, chairs, in that room whatsoever — zero awareness of this purchase being made,” the spokesman said. “Neither one of them knew this purchase was being made. The secretary knew that the table and chairs were old because somebody fell out of a chair once. That’s literally it. So they had nothing to do with the purchase, nothing to do with anything around that.”

    Today’s news:

    Emails show Carson and his wife selected the furniture themselves. An August email from a career administration staffer, with the subject line “Secretary’s dining room set needed,” to Carson’s assistant refers to “printouts of the furniture the Secretary and Mrs. Carson picked out.”…The career administration staffer sent the quote to Carson’s office, specifically Carson’s chief of staff and his executive assistant, casting further doubt on the agency’s assertion that the purchase was made entirely by career staff.

    But you know what makes this really bizarre? Carson didn’t especially want the dining room furniture in the first place:

    Why lie about this? The true story, it turns out, is that a Carson aide asked if the dining room chairs could be repaired. They were 30 years old and had become wobbly. Career staff eventually suggested a new dining room set, which Carson didn’t really want. He preferred using the budget money for portraits of previous HUD secretaries. However, that was prohibited by Congress, so the money went to the dining room set instead. Candy Carson was apparently so uninterested in the whole thing that Jacie Coressel was “still waiting” to hear from her a day after her initial email. Eventually, though, Carson and his wife had some input into which dining room set to buy, and three weeks later the quote came in—which a career staffer called “very reasonable.”

    There’s nothing really wrong with any of this. Why lie about it?

  • Conor Lamb’s Victory Is Not a 20-Point Swing

    I don’t want to throw cold water on Conor Lamb’s apparent victory tonight, but I do want to point out one little thing: when a congressional seat opens up and there’s no longer an incumbent, that can produce a 10-point swing all by itself. Back when Democrats still ran candidates in the Pennsylvania 18th district, Tim Murphy typically won with about 63 percent of the vote. This means that a non-incumbent Republican could probably expect about 55 percent of the vote—that is, a 10-point victory. A zero-point victory for Conor Lamb is, therefore, roughly a 10-point swing in favor of the Democrats.

    Everyone should probably ignore the “20-point swing” nonsense that cable news has been regurgitating endlessly. This is based on Donald Trump’s winning margin in the presidential election, but that’s apples-to-oranges. It’s congressional contests that matter. Besides, a 10-point swing is still pretty good, especially since Democrats got outspent 4-to-1, so there’s no need to exaggerate things. Let’s all stay reality-based here.

  • Are You Ready For a Recount?

    Brian Cahn via ZUMA

    Here’s where we are in the Pennsylvania 18th district special election: the Democrat, Conor Lamb, is ahead by about 1,000 votes with nearly all votes counted. However, there are still about 3,000 absentee ballots left to be counted in three red counties, and the Republican, Rick Saccone, is likely to win them by about 500 votes or so. So the betting money says that “Landslide Lamb” wins a 500-vote squeaker once all the ballots are counted.

    But that’s a winning margin of 500 votes out of 220,000, or 0.2 percent. I assume that means we’re in for a recount, and possibly a lengthy hand recount depending on how hard Republicans decide to fight.

    Either way, this is a huge turnaround for Democrats in a district they haven’t contested for years. And it’s a huge red siren for Republicans, who have seen their big lead in this district vanish. If Democrats do even half this well in November, it’s a death knell for Republicans.

    But even though the big picture will stay the same no matter how the last few votes go, it still matters who wins. In terms of emotional energy, the winning party gets a huge boost and some real momentum going into the rest of the year.

    1:30 AM EDT UPDATE: It’s still looking like Lamb will end up about 500 votes ahead when all the votes are counted on Wednesday. If that holds up, all that’s left is whether Saccone pushes for a recount.

  • Which Party Has Been Better for the White Working Class?

    While we wait for Pennsylvania election results…

    Over at Vox, Sean Illing interviews Robert Wuthnow, a Princeton sociologist who has talked to hundreds of people in small towns across the country and recently published The Left Behind: Decline and Rage in Rural America. Why, Illing asks, do small-town folks think that Washington is threatening their way of life? According to Wuthnow, it’s not because of economic stagnation:

    WUTHNOW: A lot of it is just scapegoating. And that’s why you see more xenophobia and racism in these communities. There’s a sense that things are going badly, and the impulse is to blame “others.”…They recognize that the federal government controls vast resources, and they feel threatened if they perceive Washington’s interest being directed more toward urban areas than rural areas, or toward immigrants more than non-immigrants, or toward minority populations instead of the traditional white Anglo population.

    ILLING: But that’s just racism and cultural resentment, and calling it a manifestation of some deeper anxiety doesn’t alter that fact.

    WUTHNOW: I don’t disagree with that. I’m just explaining what I heard from people on the ground in these communities. This is what they believe, what they say, not what I believe.

    This is a political problem for Democrats: if small-town residents were driven by economic concerns, there might be something they could do to help. Larry Summers, for example, argues for a sort of Marshall Plan for distressed areas of the country. The problem is that it’s unclear if it would do Democrats any good. Take a look at this chart of blue-collar earnings:

    The 1979-80 drop in blue-collar earnings was one of the reasons Ronald Reagan crushed Jimmy Carter in the 1980 election, but the Reagan Democrats who helped put him in office got nothing in return. Since then, two Democratic presidents have delivered good wage growth for blue-collar workers, while a Republican president delivered an enormous recession. And yet, many white—and only white—working-class voters continue to be loyal Republicans. Democrats have been pretty good for these folks, but it hasn’t translated into reliable votes.

    This suggests that Wuthnow is right. But if the real problem among the white working class is anxiety over blacks and immigrants and changing cultural mores, that’s no better. These are core principles that liberals just aren’t willing to compromise about.

    Either way, Democrats have a big problem if they need to win votes among these folks. I suppose that some of the answer might be purely rhetorical. But even after reading dozens of books and articles on this topic, I’m still not entirely sure how.

  • Alabama Sheriffs Are Living Large

    This is not Sheriff Entrekin's beach house. However, it is a house. And it's on the beach.Richard Graulich/The Palm Beach Post via ZUMA

    Let’s tear our gaze away from the swamp in Washington DC and check in on the swamp of Etowah County in Alabama. Todd Entrekin, the sheriff there, just bought a vacation home for $740,000, bringing his total real estate empire to $1.7 million. Where did the money come from?

    Ethics disclosure forms Entrekin filed with the state reveal that over the past three years he has received more than $750,000 worth of additional “compensation” from a source he identified as “Food Provisions.”

    Fascinating. Can you tell us more?

    Entrekin told AL.com last month that he has a personal account that he refers to as his “Food Provision” fund. And Etowah County resident Matthew Qualls said that in 2015 Entrekin paid him to mow his lawn via checks with the words “Sheriff Todd Entrekin Food Provision Account” printed in the upper-left corner. AL.com viewed a photograph of one such check.

    So the sheriff has a “Food Provision” fund that he uses to pay people to mow his lawn. And to buy expensive vacation homes. But how are these things related to food?

    The money in the account was allocated by federal, state and municipal governments to feed inmates in the Etowah County jail, but was not used for that purpose and was instead personally pocketed by Entrekin….Many Alabama sheriffs contend that the practice of keeping “excess” inmate-feeding funds for themselves is legal under a state law passed before World War II.

    Apparently the state of Alabama makes the sheriff personally responsible for everything related to food in the jails he operates. They give him a lump sum, and he gets to keep anything left over. You know, sort of a good ol’ boy slush fund that’s managed to survive all the way into the 21st century.

    But as much as I’d like to be outraged, this kind of penny-ante corruption is actually sort of soothing compared to what’s happening in DC. It just goes to show that when rural folks complain that “the America I know” is slipping away, they’re not seeing the whole picture. In Alabama, at least, it’s still going strong.

  • Tillerson Leaves State Department, Thanks Everyone Except Donald Trump

    We’ve now heard from Rex Tillerson. In a wavering voice, he held a press briefing in which he thanked everyone for their contributions over the past year. He thanked State Department workers. He thanked Defense Secretary James Mattis. He literally thanked all 300 million Americans.

    Except for Donald Trump. He didn’t thank Donald Trump.

    Anyway, it’s tough to know how to react to the Tillerson firing. On the one hand, he was completely incompetent and presided over a gutting of the foreign service corps. On the other hand, he at least tried to rein in Trump’s worst instincts. Mike Pompeo sure isn’t going to do that. And now Pompeo will be replaced at the CIA by a career officer who was in charge of torturing prisoners during the Bush administration.

    And while we’re on the subject, remember this from last October?

    “I have never considered leaving this post,” Tillerson said from the State Department’s lavish Treaty Room….The statement followed a report by NBC News that Tillerson openly mocked the president, calling him a “moron” following a July 20 meeting at the Pentagon with top Trump officials.

    ….One US official expressed confidence in Tillerson’s status due to a so-called “suicide pact” forged between Defense Secretary James Mattis, Treasury Secretary Steven Mnuchin, and Tillerson, whereby all three cabinet secretaries vow to leave in the event that the president makes moves against one of them.

    First off, Tillerson called Trump a “fucking moron.”¹ Let’s keep that straight. Second, I guess the suicide pact is no longer operative. Mnuchin and Mattis still seem to be around.

    Finally, in other news, Donald Trump’s personal aide John McEntee has also been fired. Why? According to CNN, it’s “because he is currently under investigation by the Department of Homeland Security for serious financial crimes.” He was immediately hired as a senior advisor for the Trump 2020 campaign. I guess they don’t care about serious financial crimes there. In fact, it’s probably a plus on your resume.

    Oh, and as I mentioned earlier, the #4 guy at the State Department has also been fired. His crime was telling the truth that Tillerson had no idea why he had been fired.

    This has been quite a day for firing people. Apparently H.R. McMaster is next, but perhaps Trump is planning to wait until next week.

    ¹Tillerson has never denied saying this, but he’s never admitted it either. Now that he’s been fired, I wonder if he’ll open up a bit about just how big a moron Trump is?

  • Republican Tax Cut Still Not Spurring Capital Investment

    Big businesses appear to be using their tax cut for share buybacks and mergers. So maybe it’s small businesses who will lead the charge of economic growth by using their tax cut to increase capital investment? Apparently not:

    This comes via Dean Baker, who comments:

    The Trump administration told us that the corporate tax cuts would lead to a massive boom in investment which would increase the capital stock by one third above the baseline projection. But for some reason the nation’s businesses haven’t gotten the message….There is no evidence here of any uptick in investment whatsoever and certainly not of the explosive increase promised by the Trump administration. Maybe if Trump did some more tweeting on the issue it would help.

    Patience, Dean. Those tax cuts will supercharge the economy any day now. Just you wait.

  • One More Person Fired at State Department

    Alex Edelman/CNP via ZUMA

    Remember this from, like, an hour ago?

    Steven Goldstein has now been fired. Apparently President Trump didn’t appreciate this sudden burst of telling the truth.