J. Bradford DeLong's Blog, page 2104
February 4, 2011
Jonathan Cohn: Why Friends Don't Let Friends Support the Republican Party: Health Care Mandate Edition
JC:
Constitutional Critics Of The Affordable Care Act Aren't Telling You Something: Is there an honest constitutional argument against the individual mandate? Of course there is. The constitution is ambiguous and open to conflicting interpretations. But are the people making constitutional arguments against the mandate being honest? Count me as very skeptical.
As you probably know by now, many of the conservatives in high dudgeon about the individual mandate had no problem with it when it was a staple of Republican health care proposals.... Only after President Obama endorsed the mandate did they decide it was not just bad policy but an act of full-blown tyranny. Was this epiphany? Or political opportunism?...
I don't understand is how these people can, on the one hand, reject enactment of the Affordable Care Act and, on the other hand, accept the existence of a program like Medicare. That is precisely what many of them argue and what Judge Roger Vinson stated in his opinion this week. Both Medicare and the Affordable Care Act perform the same essential function: Providing access to affordable medical care in exchange for ongoing, fixed contributions based on income. The key difference is that Medicare historically required people to enroll in a government-run program while the Affordable Care Act will give people the option of enrolling in private insurance plans or, barring that, paying an income-related penalty to offset the eventual cost of their uncompensated care.... [S]urely the Affordable Care Act is the lesser intrusion on liberty....
Now, the mandate critics do see one other distinction between Medicare and the Affordable Care Act. Americans pay for the former via paryoll taxes and for the latter through either insurance premiums or the penalty. The former clearly falls within the constitution's taxing power but the latter, according to the critics, does not. I think that's a pretty shaky distinction.... As Ezra Klein wrote on Wednesday, "I don't believe our forefathers risked their lives to make sure the word 'penalty' was eschewed in favor of the word 'tax.'... [T]he strident critics of the Affordable Care Act's mandate--i.e., the ones invoking the tyranny of King George III--should be outraged by Medicare's payroll taxes, too.
And most of them probably are.... [ T]hese thinkers on the right know the public won't entertain moral objections to Medicare any more than the courts will entertain constitutional ones. It's settled law and, for the most part, settled policy. So they don't challenge Medicare, except to argue for privatizing it--which, as it happens, would turn Medicare into a program that looks almost precisely like the Affordable Care Act. Gee, do you think they'd argue that's unconstitutional too?
Conservative Opponents Of The Individual Mandate, Meet Conservative Proponents Of Social Security Privatization: The conservative legal brief against the Affordable Care Act rests heavily on a simple proposition. Government can’t make us obtain private insurance because, as the argument goes, that would be forcing us to buy a private product.... [Consider] Social Security privatization. You remember privatization, don’t you? The idea was to take Social Security, a mandatory public pension program, and turn it into a system of mandatory personal investment accounts. The schemes evolved over time, with different details, but the gist was always the same. During your working years, you’d make contributions into the accounts, just like you currently pay taxes that fill the Social Security Trust. Over time, you would invest the money in your private account—that is, you’d buy stocks, bonds, and so on—typically within certain guidelines set by the government. Once you hit retirement, you’d start to withdraw from the accounts or perhaps purchase an annuity, relying on subsequent payments for your financial security.
Conservatives presumably thought privatization was constitutional; otherwise, they would not have worked so feverishly to enact it. But if the principle holds for old-age insurance, it ought to hold for medical insurance, too....
The truth.... Some of the Affordable Care Act's critics are mere opportunists, while the rest are more extreme libertarians who oppose all mandatory schemes of social insurance. But even the hard-core libertarians understand political reality. Social Security is too sacrosanct to attack, politically and constitutionally, so they will make do with privatizing it. The same goes for Medicare, which they dare not challenge directly. But the Affordable Care Act is vulnerable, so they trying for full repeal, making whatever arguments necessary to achieve that goal.



Joshua Green: Sarah Palin's Personal Shopper Heads to RNC
Friends really don't let friends support the Republican Party...
JG:
Sarah Palin's Personal Shopper Heads to RNC: Yesterday, the RNC made a Minnesota political consultant named Jeff Larson chief of staff. I predict the staff of the RNC will suddenly become really sharp dressers. That's because Larson was--as I wrote two years ago in this post--the guy who bought Sarah Palin $150,000 worth of designer clothes. From the piece:
Move over Carson Kressley. A new celebrity shopper has emerged!
The attention from Jeanne Cummings's much-talked-about Politico story has naturally focused on the $150,000 in luxury clothing purchased for Sarah Palin at Neiman Marcus, Sak's Fifth Avenue, and Barney's. What hasn't yet gotten any attention is who bought it for her. But buried in the same FEC disclosure form that revealed Palin's taste for the fine life is the name of the man who appears to have been her personal shopper: Jeff Larson.



Still a Jobless Recovery?
Ryan Avent:
America's jobless recovery: So this is the new year?: LOOK almost anywhere in the recent economic data and the signs point to an accelerating recovery..... [But] the Bureau of Labour Statistics has dropped a puzzler of an employment report in our laps—one which points in many directions but not, decidedly, toward strong job growth. In the month of January, total nonfarm employment grew by a very disappointing 39,000 jobs.... The BLS included its annual revision of the previous year's data in this report, and while job growth over the year looks stronger than before, the level of employment looks worse. In March of last year, 411,000 fewer Americans were working than originally reported. And thanks to a weaker employment performance in April through October, 483,000 fewer Americans were on the job in December than was originally believed to be the case. For now, the economy remains 7.7m jobs short of its previous employment peak.
The labour market picture becomes foggier still when one turns to the household survey data. America's unemployment rate fell 0.4 percentage points in January for a second consecutive month, dropping the rate to 9.0%.... [T]he employment-population ratio actually rose for the month, thanks to a reported decline in the population of working adults.... [S]tripping out the annual [population] adjustment... the household survey... show[s] a slight rise in the labour force and a substantial gain in employment (of 589,000) nearly equal to the drop in unemployment (of 590,000)...



Why Oh Why Can't We Have a Better Press Corps?
Media Matters:
Attention Fox Nation:: Fox Nation that claims Obama "misquoted a familiar Bible verse" during his address yesterday:
President Obama misquoted a familiar Bible verse during a faith-based address at the National Prayer Breakfast.
"Those who wait on the Lord will soar on wings like eagles, and they will run and not be weary, and they will walk and not faint," the president said during a speech to several thousand people at the breakfast.
But the actual passage, from Isaiah 40:31, states: "But they that wait upon the Lord shall renew their strength; they shall mount up with wings as eagles; they shall run, and not be weary; and they shall walk, and not faint."...
Obama was quoting from the New International Version, while Fox Nation was pointing to the King James Version to "debunk" him.
This would be funny if it weren't so pathetic.
Most likely, they won't bother to correct their story, and their goal will be accomplished: the readers that trust them will remember the time Obama "misquoted" the Bible, some more people will question the authenticity of Obama's faith, and the smear machine will move on.



James Fallows Asks: Why Oh Why Can't We Have a Better Press Corps?
JF:
As I never tire of saying, China Daily is my favorite newspaper in the world.
But it's conceivable that not every visitor to the Washington Post's web site would know the reason for my fondness and loyalty. China Daily is the state-controlled English-language voice of the Chinese government to the outside world. Sometimes this makes it a useful source of intel about the line the government wants to push. For instance, its recent revelation that "most nations" opposed the choice of Liu Xiaobo as winner of the Nobel Peace Prize. Very often the hyper-earnestness of its approach makes it a delight. For example, here and here, or my favorite of all headlines, "Happiness abounds as country cheers."
Recently the Washington Post has started carrying China Daily's US edition as a physically separate advertising supplement to the printed paper, as described here. Fine: it's clearly labeled, and we've all gotta stay in business. But now the Post is doing the same thing on its website. Look at this part of the "Washington Post"'s site as it appears just now, and tell me how obvious it is that you're seeing a paid presentation of official Chinese government propaganda perspective...



Employment Report: Household and Establishment Surveys Pointing in Very Different Directions This Morning...
BLS:
Unemployment rate falls to 9.0% in January; payroll employment changes little (+36,000)
The unemployment rate fell by 0.4 percentage point to 9.0 percent in January, while nonfarm payroll employment changed little (+36,000). Employment rose in manufacturing and retail and declined in construction and transportation...



February 3, 2011
Weekly U.S. jobless claims drop 42,000
Marketwatch: Weekly U.S. jobless claims drop 42,000 http://www.marketwatch.com/story/weekly-us-jobless-claims-drop-42000-2011-02-03?siteid=bnbh



February 2, 2011
Daring Fireball: The Verizon iPhone 4
John Gruber:
Daring Fireball: The Verizon iPhone 4: It’s the same phone. The only difference is the network. And Verizon’s network is better. That’s it in a nut.
Here’s the whole story. I’ve been using a Verizon iPhone 4 since Friday morning. I was in San Francisco through Sunday morning, and I’ve been home in Philadelphia ever since.
First, it’s not really the same phone. For one thing, the Verizon iPhone currently runs an ever-so-slightly newer version of iOS. (More on this below.) For another, the Verizon iPhone 4 is, technically, different hardware. The existing iPhone 4 only supports GSM networks. The new Verizon iPhone only supports CDMA. Thus, the two phones have entirely different 3G networking components. The external antenna is also different. I find the CDMA iPhone 4’s antenna to be more aesthetically pleasing, because it’s symmetric, but it’s a very subtle change. In every other regard, the two phones are identical. They feel the same, they look the same. They perform the same. They have the same battery life.
In six days of use, I find call quality noticeably superior on the Verizon iPhone 4. This was more noticeable in San Francisco than it was here in Philadelphia, but it’s noticeable here, too...



Why Oh Why Can't We Have a Better Press Corps? (MIchael Fletcher of the Washington Post Edition)
Fresno, CA--along with much of the rest of the great Central Valley--has long had a structural unemployment problem. Back at the start of the 1990s when the unemployment rate in the country as a whole was 7.5%, the unemployment rate in Fresno was 15%. At the end of the 1990s when the unemployment rate in the country as a whole was 4%, the unemployment rate in Fresno was 10%. Now when the unemployment rate in the country as a whole is 9.5%, the unemployment rate in Fresno is 16%.
Fresno has--and has long had--a structural unemployment problem. It has long been difficult for employers to get well-trained and skilled workers to locate in Fresno. But the country as a whole does not have a structural unemployment problem.
The very disturbing thing is that Michael Fletcher of the Washington Post does not seem to have a clue that Fresno's structural unemployment problem today is no worse than it was in 1999 or indeed in 1992.
And Michael Fletcher of the Washington Post does not seem to have a clue that it has never been wise to generalize from the state of Fresno's labor market to the country as a whole.
Why oh why can't we have a better press corps?
The lead:
Why does Fresno have thousands of job openings - and high unemployment? Michael Fletcher: FRESNO - This city is grappling with one of the most troubling contradictions of the new economy: Even as it has one of the nation's highest unemployment rates, it has thousands of job openings. The dilemma is becoming more common across the country as employers report increasing numbers of job openings. But many of those jobs are not a good fit for those who are out of work. The reason, economists say, is that the recession accelerated the decline of some industries, such as housing construction, as others that require far different skills, including health care, emerged stronger. Some economists predict that this disconnect is likely to grow as the economy develops jobs that require more training....
Evidence of a skills mismatch became increasingly clear in Fresno after the housing bubble burst, causing joblessness to nearly triple. Unemployment hovers at 16.9 percent, but managers at the 7,000-employee Community Medical Centers say they cannot find enough qualified technicians, therapists, or even custodians willing and able to work with medical waste. The situation is much the same at Jain Irrigation, which cannot find all the workers it wants for $15-an-hour jobs running expensive machinery that spins out precision irrigation tubing at 600 feet a minute, 24 hours a day, seven days a week. "The job requires at least a high school education, and maybe some technical training, but we don't seem to be getting the right people applying," said Aric J. Olson, Jain's president.
Note the absence of names. Note the lack of numbers on the "increasing number of job openings" that Fletcher claims employers report. Note the lack of backing at all for the assertion that skills mismatch in Fresno today is any greater than it was back in 2000, or indeed in 1992.
And let's go hunting for Fletcher's sources. We find this: Stephen Rose of Georgetown University on how our problems are not structural but rather due to a shortfall of aggregate demand:
The puzzling gap between jobs and hiring has touched off a furious debate among economists, one that holds serious implications for how policymakers attack the problem. Some economists say the persistent lack of hiring is due mostly to weak demand caused by cutbacks in household consumption and business investment. They add that though the economy is improving, job openings remain scarce: There are 4.6 jobless Americans for each opening, according to the Labor Department."Economies are funny," said Stephen J. Rose, a senior economist at Georgetown University's Center on Education and the Workforce. "They seem to work so well, but when they get knocked off their moorings, it takes awhile to reorganize everything"...
OK. That's one side. Where's the other side?
Others say the problem is largely structural, meaning that a large share of jobless workers will have to acquire new skills before they can return to the workplace...
No names, no quotes.
Fletcher goes on:
Still others think both factors are at play. The steep economic drop from the housing and financial bubbles that preceded the recession only amplified structural changes that are always occurring in the job market, they say. "Should construction have been as large a part of the economy as it was?" said Jason Pride, director of investment strategy for Glenmede Investment and Wealth Management, a Philadelphia-based firm that manages $19 billion in assets. "Probably not. But it persisted for 10 years and drew a lot of people in. Now some of those people have to take a step back and find new skills. It doesn't matter that people may be fairly skilled in one industry. Their skills may not be applicable to other fields." Switching fields often isn't as simple as taking a class or two. In the coming years, the nation's workforce is going to need many more workers with college degrees and industry certifications, according to a report last year by Georgetown's workforce center.
On the one side, Stephen Rose the labor economist.
On the other side, nobody.
In the middle, Jason Pride the money manager. It is certainly true that switching occupations often is not simple. Does this mean that getting low-cost and high-quality labor is a big problem for American businesses today? No. Poor sales is a big problem. Labor cost and labor quality together are no bigger a problem than the cost and availability of insurance.
And at the end of the article there are paragraphs in which Fletcher appears to say that he knows damned well that his lead is simply wrong--that Fresno's structural unemployment problems have been around for decades and are not emerging right now because of accelerated structural change:
The city sits in the heart of the nation's most abundant agricultural region, which has been both a boon and a burden: The seasonal nature of production has saddled the region with unemployment rates that are typically far above the national average.... Fresno is home to 160 companies that make products such as irrigation components that provide exact water flows, allowing uniform crops with minimum water use. The region is also a center for filtering and other control systems for all types of liquids. However, those innovative companies often struggled to find employees.... [A] 2004 survey of Fresno area employers discovered thousands of job openings despite relatively high unemployment. "It was a total light bulb moment for me," [Mayor] Swearengin said. "The survey revealed a whole other problem. Certainly, a company needs demand for a product. But if they don't have people with the skills to fill jobs, it is hard to sustain growth."...
Claude C. Laval III is chairman of a company that makes filters.... Finding the people he needs - first-rate welders and workers comfortable running computer-controlled equipment - is a constant challenge, he said. "Getting well-qualified, smart people who want to work in an industrial environment is not easy," he said. Laval said the local workforce-training system, while rightfully focused on the impoverished and the unemployed, is almost always a step behind when it comes to meeting the evolving needs of employers.... "There is not an easy way for people to find out that the opportunity is there or, conversely, the qualified person is there to be hired," said Blake Konczal, executive director of the Fresno Regional Workforce Investment Board...



The Great British Austerity Experiment
Dean Baker:
The Great British austerity experiment: Three months ago, I noted that the United States might benefit from the pain being suffered by the citizens of the United Kingdom. The reason was the new coalition government's commitment to prosperity through austerity. As predicted, this looks very much like a path to pain and stagnation, not healthy growth. That's bad news for the citizens of the United Kingdom. They will be forced to suffer through years of unnecessarily high unemployment. They will also have to endure cutbacks in support for important public services like healthcare and education.
But the pain for the people in England could provide a useful example for the United States....
While the UK seems to be doing its part, the key question is whether anyone in the United States is prepared to take the lesson.... [T]he predictable result of austerity is slower growth and higher unemployment. The UK has volunteered to be our guinea pig and test this proposition. For now, it looks like things are going just as standard economic theory predicts: the economy is slowing and unemployment is likely to rise.
Hopefully, citizens of the UK will tire of the rhetoric of austerity as a way to make politicians feel good about tightening other peoples' belts. Maybe the Liberal Democrats will break away from the coalition and force new elections.
From this side of the pond, though, the goal is simply to encourage people to pay attention. The UK might be home to 60 million people, but from the standpoint of US economic policy, it is simply exhibit A: it is the country that did what our deficit hawks want to do in the US.
The takeaway lesson should be "austerity does not work; don't go there." Unfortunately, in the land of faith-based economics, evidence does not count for much. The UK may pursue a disastrous austerity path and those of us in the United States may still have to follow the same road anyhow. But we opponents of that course all appreciate the willingness of the UK to demonstrate the foolishness of this action.



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