Tag Archives: Paul Krugman

A Whiter Shade of Fail


By CAP Action War Room

The House GOP’s Epic Miscalculation

“A whiter shade of fail,” is how Nobel Prize-winning economist and New York Times columnist Paul Krugman described the latest efforts to deny the numerical and political reality that the GOP is in “a demographic death spiral,” as Sen. Lindsey Graham (R-SC) put it, unless the party gets behind comprehensive immigration reform in order to help get right by Asian and Latino voters.

It’s clear that some House Republicans are looking for an excuse, any excuse really, to get out of passing immigration reform with a pathway to earned citizenship. Some say they don’t have many Latinos in their gerrymandered conservative districts, so there’s no personal political benefit to them but there is potential political risk in the form of a primary from the right. Others, however, have seized on a recent analysis that purported to show that the GOP doesn’t actually need to improve its standing among minority voters if it simply manages to magically find and turn out “missing white voters.” And voila, there’s an excuse for the GOP to continue the status quo of alienating nearly every demographic segment outside of its increasingly old, increasingly white base.

Unfortunately for the GOP, this analysis was all wrong. In a post entitled, “No, Republicans, ‘Missing’ White Voters Won’t Save You,” Alan Abramowitz and Ruy Teixeira run through the numbers explaining just how wrong this “missing white voter” theory is. You should read the whole thing, but here’s their conclusion:

So: GOP phone home! Your missing white voters have been found, and it turns out they weren’t really missing. They were simply sitting out a relatively low turnout election along with a large number of their minority counterparts. They may be back next time if it’s a higher turnout election — but then again so will a lot of minority voters. Bottom line: your demographic dilemma remains the same. The mix of voters is changing fast to your disadvantage and there is no cavalry of white voters waiting in the wings to rescue you.

The New Republic’s Nate Cohn offers additional analysis underscoring that there is no easy way out of the GOP’s demographic dilemma. Indeed, he writes that since the GOP’s gains among white voters have been concentrated in the South and Appalachia, not battleground states, current trends among white voters actually “would cement the Democratic edge in the Electoral College.” Cohn concludes, “the GOP has a tough road ahead.”

Finally, a new round of polls out today shows that voters want immigration to be addressed this year and that several House Republicans in swing districts could face a serious voter backlash if immigration reform fails.

BOTTOM LINE: There’s no easy way out for the GOP. If House Republicans decide to kill immigration reform with a pathway to earned citizenship, their chances of staying a national party with the possibility of winning the White House are likely to die along with it.

Evening Brief: Important Stories That You Might’ve Missed

No governing, only sabotage.

The GOP’s number on obstruction is about to be up.

Georgia is set to ignore the Constitution and execute an intellectually disabled man anyway.

State troopers forcibly remove Texas woman during epic testimony on anti-abortion bill.

Over 60 abortion rights activists arrested yesterday during North Carolina’s Moral Monday protest.

Company advertises bleeding shoot-a-gun-control-lobbyist target with photo of an actual gun massacre victim.

GOP governor: Pregnant women and breast cancer patients are free health care moochers.

Hedge funder writes op-ed accusing homeless shelter volunteers of being the real cause of homelessness.

The sequester is still hurting families and children across the country.

a message from Alan Grayson … unemployment


I recently happened to be at an event where billionaire George Soros was being interviewed. The right wing hates Soros because he is: (a) liberal, (b) rich, and (c) fearless. [I could also make a case that they hate Soros because he is (d) Jewish, but I leave that up to you.]

Soros said a lot of things, but he said two sentences that I wish that everyone could hear. This is what he said:

You can’t cut your way out of a recession. You have to grow your way out of a recession.”

The simple truth in those nineteen words seems to have eluded our policymakers, both Democratic and Republican, for the past four years. Here is a chart that proves it:

The chart has been featured regularly at Daily Kos, but it comes from the Calculated Risk Blog. It graphs job losses during and following each post-WWII recession, month by month, as a percentage of total employment.

As you can see, the job losses in America since 2008 are not only the worst in postwar history, but also feature the weakest “recovery.” In every single other recession, employment returned to peak levels in less than four years. (In fact, leaving aside the Bush Recession of 2001, employment returned to peak levels in less than three years.) Yet here we are, four years after the Great Recession started, still almost four percentage points under peak employment.

Which is five million jobs. Five million people who can’t find work. Five million people with no income.

So, as Soros and I might ask on Passover, “why is this recession different from all other recessions?” There is a simple answer: the austerity fetish. The bizarre notion that cutting is healing.

The Wall Street Journal recently confessed that without local government layoffs – police officers, firefighters, teachers and others – unemployment would be a full percentage point lower. I think that that’s an underestimate. If those police officers and firefighters and teachers still had jobs, we would be safer, and our children smarter. But beyond that, as those public employees spent their earnings, a lot of carpenters and waiters and real estate agents and cashiers would be able to get back to work.

And we have no one to blame but the cut-cut-cut policymakers, in whichever party. As Nobel Prize-winning economist Paul Krugman put it three weeks ago:

Consider, if you will, the current state of our nation. Despite hints of economic progress, we’re still in the midst of an immense disaster, in which unemployment and underemployment are devastating millions of American lives. And none of this need be happening! There has been no plague of locusts; we have not lost our technological know-how. Americans should be richer, not poorer, than they were five years ago. Yet economic policy across the board has become almost passive, has essentially accepted this disaster instead of trying to end it.

Soros and Krugman are right. It’s time to end this man-made economic disaster. It’s time to stop slashing our own economic wrists. It’s time for jobs.

Courage,

Alan Grayson

Paul Krugman … Charles Chamberlain, Democracy for America


Republicans are scared and angry. Scared that voters will know the truth about their plan to end Medicare. Angry that you and I are exposing it.

They aren’t just sitting back and complaining about it, they are threatening legal action and demanding TV stations take the ad off the air.

Comcast’s response: We’re not pulling it.

Our ad is working! Please contribute $5 right now so we can INCREASE our ad buy and keep Republicans on defense.

WATCH MSNBC’S RACHEL MADDOW COVER OUR AD AND CONTRIBUTE $5 TO STAY ON OFFENSE!

Here’s a snippet of the letter the National Republican Congressional Committee and Charlie Bass sent to TV stations running our new ad in New Hampshire:

The Advertisement states, in pertinent part, that “Charlie Bass voted to END Medicare.” This is completely false… a vote in favor of the [Paul Ryan] Budget Resolution was a vote to protect Medicare for future seniors.

We urge you not to ascent to this political ploy… broadcasting stations are not protected from legal liability for airing a false and misleading advertisement…

So is the ad true? Of course it is. Help keep it on the air. But don’t just take it from me or our partners at the Progressive Change Campaign Committee. Here’s the New York Times’ Paul Krugman on our ad:

What’s In A Name? A lot, or at least that’s what Republicans think. Greg Sargent reports that they’re demanding that a TV station stop running ads saying that the GOP wants to end Medicare; the claim is that this is a lie, because the new program the GOP wants to impose in place of Medicare is still Medicare.

As Greg says, this is important — because if they can get away with this, it will amount to a serious infringement of free speech, preventing people from running truthful ads.

Because the fact is that Republicans are trying to end Medicare. The program we now call Medicare is one in which the government acts as your insurer, paying your major medical bills; coverage is guaranteed to all seniors. The program Republicans want gives you vouchers and tells you to go buy your own insurance, if you can. That’s not at all the same thing.

…So you can call the new thing Medicare; you could also call an onion a rose. But a non-rose by the same name does not smell as sweet.

Paul Krugman is right and we must make sure every single voter knows what the Republicans are trying to do.

If we can raise $50,000 by Monday morning we can increase our ad buy to run all week.Contribute now to make it happen.

Thank you for everything you do.

-Charles

Charles Chamberlain, Political Director
Democracy for America

Economy:Bernanke Meets The Press


Federal Reserve Chairman Ben Bernanke held the first public press conference in the history of the Federal Reserve yesterday, in an attempt to bring more transparency to the central bank (which faced its first ever audit last year). “I’ve personally always been a believer in providing as much information as you can,” Bernanke told the gathered press. The conference wa s held just hours after the Federal Reserve Board announced that it will end its program of quantitative easing (QE2) — aimed at boosting the sluggish economy — on schedule in June, due to its assessment that “the economic recovery is proceeding at a moderate pace and overall conditions in the labor market are improving gradually.” However, at the same time, the Fed revised its projections for economic growth downward. Previously, the Fed had estimated that growth this year would be between 3.4 and 3.9 percent, but now it is only predicting growth at 3.1 to 3.3 percent, due to contractions in exports, construction spending and military spending. The Bureau of Economic Analysis announced today that first quarter growth registered at just 1.8 percent . And while most of the questions during the conference centered on Bernanke’s views on inflation, gas prices, and the nation’s deficit, little time was spent on arguably the most pressing problem facing the country: continued high unemployment.

‘VERY DEEP HOLE’: Bernanke acknowledged during the press conference that the nation faces a “very, very deep hole” when it comes to job creation, noting that we would have to create seven million jobs just to make up for those lost during the Great Recession. The unemployment rate currently stands at 8.8 percent, while the broader U-6 measure of underemployment is at 15.7 percent. The African-American unemployment rate is 15.5 percent, and the Hispanic unemployment rate is 11.3 percent. While the private sector has been slowly adding jobs, it would still take several years at the current pace in order to get back to full employment. In fact, at the rate of job growth that occurred in March, full employment would not be achieved until 2019. As The Wall Street Journal noted, “even adding 300,000 jobs a month would take almost five years to get back to full employment.” According to the Fed’s own estimates, the economy will not reach full employment for ano ther five years or six years, and the unemployment rate will still be between 6.8 and 7.2 percent in 2013. “The fact that we’re moving in the right direction, even though that’s encouraging, doesn’t mean that the labor market is in good shape. Obviously it’s not,” Bernanke said. To his credit, Bernanke also noted the problem with long-term unemployment, saying, “Long-term unemployment in the current economy is the worst, really the worst it’s been in the post-war period.” “We know the consequences of that can be very distressing, because people who are out of work for a long time, their skills tend to atrophy,” he added.

NO FURTHER ACTION: The Fed has a dual mandate to both ensure full employment and price stability (i.e. combat inflation). During the conference, The New York Times’ Binyamin Applebaum asked Bernanke, “Is it in the Fed’s power to reduce the rate of unemployment more quickly? How would you do that and why are you not doing it?” Bernanke replied, “While it is very, very important to help the economy create jobs and help to support the recovery, I think every central banker understands that keeping inflation low is absolutely essential to a successful economy.” Essentially, Bernanke’s response was that the Fed could do more but won’t due to worries about infla tion getting out of control. However, as many economists have noted, inflation at the moment is exceedingly low (the Fed isn’t meeting its own inflation targets, and its forecasts show inflation is contained for the foreseeable future ), while unemployment remains stubbornly high. In fact, as Nobel Prize-winning economist Paul Krugman noted, “there is no tradeoff: more expansionary monetary policy is good in terms of both unemployment and achieving the Fed’s inflation target.” And Bernanke, during his days in academia, actually chided Japan for failing to engage in more expansive monetary policy to get itself out out of its 1990’s slump. “The Bank of Japan could achieve a great deal if it were willing to abandon its excessive caution and its defensive response to criticism,” Bernanke wrote in 1999. So Krugman noted that “[Bernanke’s] own theories — and for that matter the doctrine endorsed by the Fed itself — says that the central bank should be doing much more quantitative easing, not stopping with the US still facing high unemployment.” As Center for American Progress Action Fund Fellow Matthew Yglesias wrote in the journal Democracy, “The idea that a time of unusually high unemployment and unusually low inflation would be a good moment for monetary policy-makers to start caring less about growth and more about price stability, especially when we already have price stability, is bizarre.” Bernanke did say, though, that if Congress enacts spending cuts in the short-term that will slow economic growth too much, the Fed will be forced to act, and the Fed Board also announced that it will be keeping interest rates at around zero for the time being.

POLITICAL GAMESMANSHIP: Thus far, the steps to boost the economy that the Fed has taken have been too small and have thus ushered in lackluster results. But as the New York Times noted this week, “a vocal group of critics…argues that the Fed has already done far too much.” These include several Republicans in Congress, who have been fearmongering about the effect of the Fed’s attempt to spur economic growth. Sen. Mark Kirk (R-IL) wrote in a letter to Bernanke that, “you should prepare the Board for an early end to quantitative easing, along with other monetary measures to protect Americans from rising inflation.” House Republicans spent two hearings e arlier this year peppering Bernanke with questions about the specter of inflation. Senate Republicans have also refused to confirm Nobel Prize-winning economist Peter Diamond, who President Obama has nominated to the Federal Reserve Board, saying that despite his stellar economic credentials, he is not qualified for the job; Diamond is known to be an inflation “dove.” Late last year, several Republicans also introduced legislation that would strip the Fed of its responsibility for promoting full employment, with Sen. Bob Corker (R-TN) calling the Fed’s full employment mandate “inappropriate.” By focusing more on inflation than full employment, even though inflation is low while unemployment is high, Bernanke and the Fed seem to be bowing to this Republican pressure.