Presidential jobs address, 9-8-2011

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Presidential jobs address, 9-8-2011

Postby Qaanol » Fri Sep 09, 2011 12:26 am UTC

A transcript is here, I don’t see an official transcript on Whitehouse.gov yet.

Obama spoke to congress tonight about his job-creation plan, using words like “You should pass this jobs plan right way”, and “A plan that you should pass right now”, over and over. He gave an overview of what it will do, but not many details. A lot of infrastructure investment—roads, rails, airports, and broadband internet. Some things about manufacturing and education, plus taxing the wealthy.

One part that really stood out to me was when Obama said his plan will be paid for, “And here’s how:” followed by, essentially, passing the buck and telling congress they have to figure out how to pay for it.
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Re: Presidential jobs address, 9-8-2011

Postby The Reaper » Fri Sep 09, 2011 12:32 am UTC

Gary Johnson's take:
http://www.garyjohnson2012.com/gary-joh ... s-to-death
Spoiler:
Former New Mexico Governor Gary Johnson released the following statement regarding the President’s jobs speech:

“I suspect I am not the only American asking, if a trillion dollars’ worth of stimulus didn’t work, why will another $450 billion do the trick? Whether it be jobs created with borrowed and newly-printed dollars, temporary extensions of tax cuts, or sending money to the states to postpone layoffs, none of the President’s proposals will remove the real obstacles to job creation. Government cannot create jobs. Businesses, entrepreneurs and investors can create jobs, and right now, they are simply afraid to do so. And they should be. They are looking at a national debt that is consuming the private economy, more deficit spending with no end in sight, and a regulatory environment that promises only new and costly surprises every day.

“Instead of nibbling around the edges of a job-killing tax code, we need to throw it out. Eliminate income, business and payroll taxes altogether, and replace them with a FAIR tax (FairTax.org) that will result in millions of jobs. Instead of spending more, balance the budget now. Get the burden of government spending and borrowing off the economy, and it will flourish. And as the government’s chief executive, the President needs to get federal agencies out of the business of managing the economy, and into the business of establishing regulatory certainty. Do those things, and the U.S. will become the job magnet of the world.

“Government is absolutely a big part of the jobs problem, but it is not the solution — other than by getting out of the way. Congress and the Administration have almost helped us to death. What we heard tonight is that they are going to help us some more. Please, please, just stop.”

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Re: Presidential jobs address, 9-8-2011

Postby Thesh » Fri Sep 09, 2011 1:04 am UTC

The Reaper wrote:“Instead of nibbling around the edges of a job-killing tax code, we need to throw it out. Eliminate income, business and payroll taxes altogether, and replace them with a FAIR tax (FairTax.org) that will result in millions of jobs.


2001: Reduce taxes on the rich, that will fix the economy.
2003: Maybe if we reduce taxes on the rich, that will fix the economy.
Now: I know how to fix the economy! We reduce taxes on the rich!

I'm all for less taxes, but only when we bring down our debt, and reduce our budget significantly (e.g. end the war on drugs, significantly cut back the military and end our wars, end farm subsidies, stop piggy backing bills on other bills, stop bribing congressman to vote by giving extra money to their state for no other reason than to pass the bill etc.). Even then, it should be a progressive tax, not a regressive tax like the so-called fair tax.
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Re: Presidential jobs address, 9-8-2011

Postby Negated » Fri Sep 09, 2011 1:05 am UTC

This is a sensible short term solution to the weak job growth. It is no secret that infrastructure in US is deteriorating. If well-planned and carried out, this can turn out to be money well-spent. And at a time when economists are pondering whether we will head to a double-dip recession, this boost can be the difference of whether it happens or not.

On the other hand, I am quite sceptical about his plan, or the lack of such, to pay for it. He basically throws it at the committee to come up with something in the future.

p.s. Gary Johnson's take is rubbish.

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Re: Presidential jobs address, 9-8-2011

Postby Thesh » Fri Sep 09, 2011 1:27 am UTC

It's definitely a start. I would like to see subsidies for new businesses. New businesses tend to increase rapidly in the number of employees they have. The effects won't be huge immediately, but more over a 3-5 year term.

Also, one thing that makes it difficult for companies is the cost of hiring employees. I think removing these expenses, social security, health insurance, medicare, unemployment insurance, etc. from the burden of the company, in fact removing all taxes against the company and implementing a government ran health care system payed entirely through income tax would result in a huge reduction in unemployment rates. Many companies are moving to hiring employees on a temporary contract basis instead of full time, just to mitigate those expenses.

Getting rid of those costs could also be the difference between being profitable and not being profitable, which can mean the difference between layoffs or no layoffs, or even laying off 1000 employees vs 5000 employees.
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Re: Presidential jobs address, 9-8-2011

Postby sourmìlk » Fri Sep 09, 2011 2:23 am UTC

Gary Johnson wrote:I suspect I am not the only American asking, 'if a trillion dollars worth of stimulus didn't work, why will another $450 billion do the trick?'

Who said that the stimulus package didn't work?
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Re: Presidential jobs address, 9-8-2011

Postby Thesh » Fri Sep 09, 2011 3:34 am UTC

Depends on how you look at it. If you expected it to limit the damage, it worked. If you expected it to quickly undo the damage, it failed. Politicians love things like this, because the latter case is the only one you can easily explain to your average joe.
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Re: Presidential jobs address, 9-8-2011

Postby LaserGuy » Fri Sep 09, 2011 3:38 am UTC

Thesh wrote:It's definitely a start. I would like to see subsidies for new businesses. New businesses tend to increase rapidly in the number of employees they have. The effects won't be huge immediately, but more over a 3-5 year term.

Also, one thing that makes it difficult for companies is the cost of hiring employees. I think removing these expenses, social security, health insurance, medicare, unemployment insurance, etc. from the burden of the company, in fact removing all taxes against the company and implementing a government ran health care system payed entirely through income tax would result in a huge reduction in unemployment rates. Many companies are moving to hiring employees on a temporary contract basis instead of full time, just to mitigate those expenses.

Getting rid of those costs could also be the difference between being profitable and not being profitable, which can mean the difference between layoffs or no layoffs, or even laying off 1000 employees vs 5000 employees.


Two problems. First, if you want to eliminate payroll tax and corporate tax, you are going to need to massively increase income tax (or consumption taxes) to break even. And by break even, I mean break even on current levels of taxation, not eliminate the deficit. I do agree that a well-designed single-payer healthcare system (ie. one that doesn't sell out like crazy to corporations) would probably actually produce significant savings because of the elimination of redundancy. It also would eliminate this whole tying employment to health insurance thing, which may be one of the stupidest policies ever. It would still probably require an awful lot of money though--single payer isn't that much cheaper.

Second problem is that there is nothing that your suggested policy can do to stop the problem of corporations simply moving their manufacturing, etc. to areas with much cheaper foreign labour, and just dumping the tax break into their profit margins--the same thing they've been doing for pretty much the last twenty years. The effect of corporate tax cuts on job creation isn't actually that strong, TBH. Infrastructure improvements like what Obama is suggesting is probably a much better method of addressing the problem (it also has long-term benefits). The government more or less already does this by spending massive amounts of money on military hardware; this is pretty much the same thing except for civilian infrastructure, which is, for a variety of reasons, a much better use of government funds.

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Re: Presidential jobs address, 9-8-2011

Postby Vaniver » Fri Sep 09, 2011 3:56 am UTC

sourmìlk wrote:Who said that the stimulus package didn't work?
Hasn't Krugman argued that it was a failure? (He thought it should have been bigger, and a too-small stimulus wouldn't work and would make it more difficult to do a stimulus large enough to work.)
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Re: Presidential jobs address, 9-8-2011

Postby Telchar » Fri Sep 09, 2011 4:09 am UTC

It seems like jumpstarting this economy would require increasing demand. Lowering taxes on corporations won't increase demand because most business are reporting large stockpiles of capital. While tax breaks on small business probably have a place in order to make hiring more affordable a business isn't going to hire anyone if they don't have increased demand.
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Re: Presidential jobs address, 9-8-2011

Postby Thesh » Fri Sep 09, 2011 4:22 am UTC

LaserGuy wrote:Two problems. First, if you want to eliminate payroll tax and corporate tax, you are going to need to massively increase income tax (or consumption taxes) to break even


Corporate tax revenues are (kind of) small compared to income tax, 191 billion for corporate vs 898 for income. So yes, it's an increase, but not that large of an increase. With social security, the employer pays on 6.2% of the pay, up to $108,000. If you rolled it into income tax, it would only be a 6.2% increase to the employee. However that's not really the case because you can remove that $108,000 limit and reduce the burden to middle and lower class workers significantly. Medicare would only be a 1.45% increase to the employees. Fixing the tax code to close loopholes (which is technically a tax increase, I know) and treat all income the same would actually cover a lot of that cost on its own. But yes, either way I agree a tax increase is necessary.

The corporate tax, which is only on profits, wouldn't have that big of an effect on unemployment like the pre-profit taxes would. It doesn't hurt for companies to see larger net profits only for the investors to keep less of it. Especially if some of those profits can be reinvested to grow the company.

LaserGuy wrote:It would still probably require an awful lot of money though--single payer isn't that much cheaper.


Well, health care in the US tends to cost (over?) twice as much as in Canada or the UK. I think modeling our health care after either of those models should result in it being cheaper overall than it is now.

LaserGuy wrote:Second problem is that there is nothing that your suggested policy can do to stop the problem of corporations simply moving their manufacturing, etc. to areas with much cheaper foreign labour, and just dumping the tax break into their profit margins--the same thing they've been doing for pretty much the last twenty years.


Well, reducing US labor costs doesn't hurt. No, you can't stop them no matter what you do unless you make it cheaper to hire US employees. However, just because labor is cheaper in foreign countries doesn't mean that it is cheaper overall. There are a lot of additional costs to moving factories to other countries. It's an expensive thing to do initially, and with cheaper labor in the US it would take longer to see the ROI on that move. That could be enough to prevent a lot of companies from outsourcing.

Either way, I don't think outsourcing/moving to foreign countries is the main source of our unemployment problem right now.
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Re: Presidential jobs address, 9-8-2011

Postby Negated » Fri Sep 09, 2011 4:28 am UTC

Vaniver wrote:
sourmìlk wrote:Who said that the stimulus package didn't work?
Hasn't Krugman argued that it was a failure? (He thought it should have been bigger, and a too-small stimulus wouldn't work and would make it more difficult to do a stimulus large enough to work.)

Whether the stimulus worked depends on what you think the expectation of it should be. It prevented US to fall into another Great Depression. It rescued some banks and car manufacturers so many jobs are saved by it. But it failed to turn things around and return US on the path of generating employment and growth.

Personally I think stimulus did its job alright, but more changes need to be done to go with it. The US economy is not going to improve much if nothing is done to tackle the structural problems.

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Re: Presidential jobs address, 9-8-2011

Postby Velict » Fri Sep 09, 2011 4:31 am UTC

sourmìlk wrote:
Gary Johnson wrote:I suspect I am not the only American asking, 'if a trillion dollars worth of stimulus didn't work, why will another $450 billion do the trick?'

Who said that the stimulus package didn't work?

It worked to an extent. Some think that extent was pretty miserable. If you like reading:

http://marginalrevolution.com/marginalr ... -jobs.html
http://marginalrevolution.com/marginalr ... eally.html

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Re: Presidential jobs address, 9-8-2011

Postby Steroid » Fri Sep 09, 2011 9:52 am UTC

Negated wrote:Whether the stimulus worked depends on what you think the expectation of it should be. It prevented US to fall into another Great Depression. It rescued some banks and car manufacturers so many jobs are saved by it. But it failed to turn things around and return US on the path of generating employment and growth.

Right now we're in a mildly bad situation. We had a stimulus. That means that either:

-We were in a terribly bad situation, and the stimulus worked to improve us to mildly bad.
-We were in a mildly bad situation, and the stimulus failed to work to improve us at all.

Or, for that matter, that we were in a half-way decent situation and the stimulus made things worse. I tend to lean to the second explanation. I don't see why the first is the assumption.

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Re: Presidential jobs address, 9-8-2011

Postby Obby » Fri Sep 09, 2011 11:06 am UTC

Steroid wrote:
Negated wrote:Whether the stimulus worked depends on what you think the expectation of it should be. It prevented US to fall into another Great Depression. It rescued some banks and car manufacturers so many jobs are saved by it. But it failed to turn things around and return US on the path of generating employment and growth.

Right now we're in a mildly bad situation. We had a stimulus. That means that either:

-We were in a terribly bad situation, and the stimulus worked to improve us to mildly bad.
-We were in a mildly bad situation, and the stimulus failed to work to improve us at all.

Or, for that matter, that we were in a half-way decent situation and the stimulus made things worse. I tend to lean to the second explanation. I don't see why the first is the assumption.


Well, IANAnEconomist, so grains of salt and all that, but I'm pretty sure it has something to do with what Negated said:

Negated wrote:Whether the stimulus worked depends on what you think the expectation of it should be. It prevented US to fall into another Great Depression. It rescued some banks and car manufacturers so many jobs are saved by it. But it failed to turn things around and return US on the path of generating employment and growth.


My understanding is that the stimulus did stave off the end of several large corporations that employ dozens or hundreds of thousands of employees. Certainly people keeping their jobs is more desirable than them losing their jobs?
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Re: Presidential jobs address, 9-8-2011

Postby kiklion » Fri Sep 09, 2011 11:58 am UTC

Obby wrote:
Steroid wrote:
Negated wrote:Whether the stimulus worked depends on what you think the expectation of it should be. It prevented US to fall into another Great Depression. It rescued some banks and car manufacturers so many jobs are saved by it. But it failed to turn things around and return US on the path of generating employment and growth.

Right now we're in a mildly bad situation. We had a stimulus. That means that either:

-We were in a terribly bad situation, and the stimulus worked to improve us to mildly bad.
-We were in a mildly bad situation, and the stimulus failed to work to improve us at all.

Or, for that matter, that we were in a half-way decent situation and the stimulus made things worse. I tend to lean to the second explanation. I don't see why the first is the assumption.


Well, IANAnEconomist, so grains of salt and all that, but I'm pretty sure it has something to do with what Negated said:

Negated wrote:Whether the stimulus worked depends on what you think the expectation of it should be. It prevented US to fall into another Great Depression. It rescued some banks and car manufacturers so many jobs are saved by it. But it failed to turn things around and return US on the path of generating employment and growth.


My understanding is that the stimulus did stave off the end of several large corporations that employ dozens or hundreds of thousands of employees. Certainly people keeping their jobs is more desirable than them losing their jobs?


Not 'certainly'. If those jobs were for poorly ran companies that refused to adapt to a changing landscape within their field, so they continued to lose money making poor decisions while they continued to pay large amounts of money to the people making these poor decisions, then it would have been better for these jobs to go.

The above should not be taken as a slight against the bail-outs, while they do bother me as it is not the governments job to determine what businesses profit and which fail, the bail-outs that brought businesses through rough patches to profitability were definitely useful as the government was in a unique position to lend money as they do not have the same capital requirements as banks who would have lent the businesses money if they were not also in the dumps.

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Re: Presidential jobs address, 9-8-2011

Postby Steax » Fri Sep 09, 2011 12:18 pm UTC

I don't get the thing about "if 1 trillion didn't work, what could 500 billion do?" I'm not (well, no longer) an American, so I don't get the context, but it sounds extremely wrong. It's like a guy gets lost in a forest, they send out two search teams to no avail, and then a third team comes up and someone else says "but two teams didn't work, what could a third team possibly do?"

I mean, recovery isn't a yes/no kind of thing.
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Re: Presidential jobs address, 9-8-2011

Postby JudeMorrigan » Fri Sep 09, 2011 1:16 pm UTC

Vaniver wrote:
sourmìlk wrote:Who said that the stimulus package didn't work?
Hasn't Krugman argued that it was a failure? (He thought it should have been bigger, and a too-small stimulus wouldn't work and would make it more difficult to do a stimulus large enough to work.)

Well, like others have said, I think it depends on how you define "failure". You're certainly right that he's been of the opinion that it was woefully inadequate and terrible politics, but he's also noted in places where the stimulus fading out helped slow the recovery (such as it was).

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Re: Presidential jobs address, 9-8-2011

Postby Malice » Fri Sep 09, 2011 2:33 pm UTC

Steax wrote:I don't get the thing about "if 1 trillion didn't work, what could 500 billion do?" I'm not (well, no longer) an American, so I don't get the context, but it sounds extremely wrong. It's like a guy gets lost in a forest, they send out two search teams to no avail, and then a third team comes up and someone else says "but two teams didn't work, what could a third team possibly do?"

I mean, recovery isn't a yes/no kind of thing.


Actually, that is sensible. The thing is that the government can't afford to directly stimulate the economy enough to get it going again; what it can do is hope to pick a number large enough (and a spending method successful enough) to alter corporate and consumer confidence. The economy is made of voodoo in that it goes well when most people agree it's going well; so the stimulus is more psychological than anything else. The argument is that 500 billion might not be enough to convince businesses that demand will increase (so they'll hire) or to convince consumers that hiring will increase (so they'll consume).

To use your analogy, after two search teams fail to find guy, his friends and family might not get their hopes up again just for a third search party. Throw in some helicopters and maybe they'll feel better.
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Re: Presidential jobs address, 9-8-2011

Postby Jessica » Fri Sep 09, 2011 4:12 pm UTC

But, it is arguable that the first stimulus did have a positive effect on the recession of 2008. It may not have been an excellent success, but there was growth again, and it is arguable that it would have been worse without it.

The reason you're facing a recession again (we might be too, but not necessarily) has more to do with the republicans being douchefucks and ruining investor and consumer confidence when it was already low, and the the actual European debt issue faced by a number of countries, making those investors and consumers less confident.

The statement "if 1 trillion didn't work, what could 500 billion do?" has some logic behind it, but it assumes that the 1 trillion didn't work, and that this is the same situation as before. Neither is true, so the if-than posed is false.
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Re: Presidential jobs address, 9-8-2011

Postby Negated » Fri Sep 09, 2011 5:12 pm UTC

Jessica wrote:But, it is arguable that the first stimulus did have a positive effect on the recession of 2008. It may not have been an excellent success, but there was growth again, and it is arguable that it would have been worse without it.

The reason you're facing a recession again (we might be too, but not necessarily) has more to do with the republicans being douchefucks and ruining investor and consumer confidence when it was already low, and the the actual European debt issue faced by a number of countries, making those investors and consumers less confident.

The statement "if 1 trillion didn't work, what could 500 billion do?" has some logic behind it, but it assumes that the 1 trillion didn't work, and that this is the same situation as before. Neither is true, so the if-than posed is false.

This is only partly true. Growth has been very sluggish since recession officially ended. Employment rate has been remarkably slow to climb down and is now looking set to be stuck at around 9%. All these preceded Republican's return to power in Congress. Well, actually, they were the reason Republicans returned to power. But the fanatics on the right made matters worse since and created a sovereign debt crisis out of nowhere.

I think the main reason for the lack of growth is due to corporations too eager to pay down their debt and keep a healthy amount of cash at hand. The profits are not being used to hire. The result was a jobless growth which relied on better productivity to create growth rather than expanding the workforce. And, well, a jobless growth can only grow so much. You cannot ask a person to do 3 people's work. As long as the outlook is grim, investment will remain low and few jobs will be created, but that in turn contributes to the grim outlook. This is why I don't think more tax cuts for corporations will help much, as it does not really tackle the heart of the problem.

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Re: Presidential jobs address, 9-8-2011

Postby Garm » Fri Sep 09, 2011 5:37 pm UTC

General consensus among people who know such things is that the stimulus worked, just not really well cuz it wasn't nearly big enough (I think that's Krugman's complaint. He totally called it while the package was being created).

Here's some good analysis: http://www.washingtonpost.com/blogs/ezra-klein/post/did-the-stimulus-work-a-review-of-the-nine-best-studies-on-the-subject/2011/08/16/gIQAThbibJ_blog.html
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Re: Presidential jobs address, 9-8-2011

Postby Thesh » Fri Sep 09, 2011 6:40 pm UTC

Garm wrote:General consensus among people who know such things is that the stimulus worked, just not really well cuz it wasn't nearly big enough (I think that's Krugman's complaint. He totally called it while the package was being created).


My problem with the stimulus is that the entire plan was "Let's throw a ton of money around, and hope some lands in the right place." There should have been two part: prevent a massive depression, which is what the stimulus currently did, and targeted spending to increase jobs which we have mostly ignored. What the president is talking about now is essentially the latter part, but there was also a bill earlier that provided tax incentives for job creation in 2009 or 2010.

The hiring incentives themselves don't really help that much, especially at the amounts that they are talking about. I would have personally at least doubled the incentives offered plus extra large bonuses for every ten, hundred, and thousand employees hired (compounding, say $10,000, $100,000 and $500,000 respectively on top of the percentage per employee). All the other job creation programs that we are talking about now we should have started working on in 2008.

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There are other things the government can do as well, some of which I mentioned in my previous post. Other than that, ending prohibition of drugs, legalizing prostitution, and legalizing gambling would have a major positive effect on our economy. However, it's unrealistic to expect the government to actually do any of these things (including switching to an income tax based system, and providing a single payer health care system). Changing the criminal laws also requires state cooperation, which is even less realistic.
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Re: Presidential jobs address, 9-8-2011

Postby TheGrammarBolshevik » Fri Sep 09, 2011 7:16 pm UTC

Steroid wrote:Right now we're in a mildly bad situation. We had a stimulus. That means that either:

-We were in a terribly bad situation, and the stimulus worked to improve us to mildly bad.
-We were in a mildly bad situation, and the stimulus failed to work to improve us at all.

The success of the stimulus isn't a matter of where we were, but of where we would be now without it. So, it could also be that we were in a mildly bad situation that was about to take a turn for the worse, but the stimulus managed to keep things steady, or that things were about to get better but the stimulus fucked it up.
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Re: Presidential jobs address, 9-8-2011

Postby Garm » Fri Sep 09, 2011 8:02 pm UTC

TheGrammarBolshevik wrote:
Steroid wrote:Right now we're in a mildly bad situation. We had a stimulus. That means that either:

-We were in a terribly bad situation, and the stimulus worked to improve us to mildly bad.
-We were in a mildly bad situation, and the stimulus failed to work to improve us at all.

The success of the stimulus isn't a matter of where we were, but of where we would be now without it. So, it could also be that we were in a mildly bad situation that was about to take a turn for the worse, but the stimulus managed to keep things steady, or that things were about to get better but the stimulus fucked it up.


Also, too: we can discount the second point since more data has come out in recent months that shows that we were way worse off than we even knew.
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Re: Presidential jobs address, 9-8-2011

Postby Steroid » Fri Sep 09, 2011 8:25 pm UTC

Garm wrote:
TheGrammarBolshevik wrote:
Steroid wrote:Right now we're in a mildly bad situation. We had a stimulus. That means that either:

-We were in a terribly bad situation, and the stimulus worked to improve us to mildly bad.
-We were in a mildly bad situation, and the stimulus failed to work to improve us at all.

The success of the stimulus isn't a matter of where we were, but of where we would be now without it. So, it could also be that we were in a mildly bad situation that was about to take a turn for the worse, but the stimulus managed to keep things steady, or that things were about to get better but the stimulus fucked it up.


Also, too: we can discount the second point since more data has come out in recent months that shows that we were way worse off than we even knew.

I accept TGB's clarification, though again I think the second is more likely. Could someone summarize the data that says how bad we were?

Jessica wrote:The reason you're facing a recession again (we might be too, but not necessarily) has more to do with the republicans being douchefucks and ruining investor and consumer confidence when it was already low, and the the actual European debt issue faced by a number of countries, making those investors and consumers less confident.

If the situation is that the policies in place will stave off a recession if there's sufficient confidence that the economy is growing but will allow a recession if there's enough confidence that the economy is stalling, then the policies are, in my opinion, insufficient. They must be able to work against consumer and investor skepticism. Part of the reason is that it's like the fake psychic medium who, when disproved by experimentation, claims that his powers only work with those who believe in him. That sort of thing actually makes me more skeptical. Unlike clairvoyance and such, I acknowledge that there is something of a self-fulfilling-prophecy effect in economics, though we still want to be sure that it's actual growth we're seeing and not just us being Polyannas. But given the effect of confidence, that means that if the aim is to reverse from recession to growth, then either the policies must be geared to work even if there is poor confidence, or it must include a means by which confidence is increased.

If the Democrats in Congress and President Obama believed that either their Republican opposition would stand mum on this, or that the people who compose the economy wouldn't accept their message, then they were naive to a fault. A good portion of this country doesn't believe that Keynesian stimulation works (or that it isn't even Keynesian), and don't believe that they should be confident because of "shovel-ready projects," "green jobs," and the general progressive agenda. They believe instead that the economy will grow when people with access to capital and the desire to make more money are given the incentive to do so freely by satisfying the desires of their consumers, irrespective of whether it's involved in rebuilding infrastructure, improving the environment, or other good-feelings concepts. A job isn't created when some granola-chewing hipster plans to build a covered bridge in New England, it's made when a rich executive who wants to get richer figures out how to market some new entertainment to the public.

If that attitude is the critical factor in this economy, then it's probably not going to change until the election, unless things get so bad that Obama starts acting like a lame duck before the election.

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Re: Presidential jobs address, 9-8-2011

Postby Heisenberg » Fri Sep 09, 2011 8:44 pm UTC

TheGrammarBolshevik wrote:So, it could also be that we were in a mildly bad situation that was about to take a turn for the worse, but the stimulus managed to keep things steady, or that things were about to get better but the stimulus fucked it up.

No, the rational hypothesis would be that the stimulus had no effect. A positive or negative effect should be borne out by evidence.

I, for one, have not seen evidence that the stimulus either helped or hurt the economy as a whole. I have seen the projections that Obama's Keynesians made saying that the stimulus would surely keep unemployment below 8%, and that if we did nothing, it would exceed 10%. So... according to them, we'd be in exactly the same place without the 1st or 2nd stimulus plans.

I realize that in economics, it's hard to nail down concrete numbers, but I have a hard time believing that a pile of bailouts created 3 million jobs when we were simultaneously bleeding jobs in the millions. "We might've lost 3 million more" they say, "or maybe we lost like 20 million more and the stimulus created like 20 million jobs." That's a bunch of crap, and certainly isn't any sort of reliable measure.

How many times do we have to flush hundreds of billions of dollars down the drain to no effect? 5 times? We're almost there now. 10 times? 100 times? I'm convinced that the only reason people buy into this 'economic stimulus' narrative is because the reality, that politicians can do little to nothing to affect the economy, is too frightening (and not a good campaign clip).

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Re: Presidential jobs address, 9-8-2011

Postby Garm » Fri Sep 09, 2011 8:46 pm UTC

Steroid wrote:I accept TGB's clarification, though again I think the second is more likely. Could someone summarize the data that says how bad we were?


The GDP shrunk more than we thought: http://money.cnn.com/2011/07/29/news/economy/recession_gdp/index.htm
Also, more jobs were lost than we thought but my 30 seconds of googling didn't find anything.

Steroid wrote:If the Democrats in Congress and President Obama believed that either their Republican opposition would stand mum on this, or that the people who compose the economy wouldn't accept their message, then they were naive to a fault. A good portion of this country doesn't believe that Keynesian stimulation works (or that it isn't even Keynesian), and don't believe that they should be confident because of "shovel-ready projects," "green jobs," and the general progressive agenda. They believe instead that the economy will grow when people with access to capital and the desire to make more money are given the incentive to do so freely by satisfying the desires of their consumers, irrespective of whether it's involved in rebuilding infrastructure, improving the environment, or other good-feelings concepts. A job isn't created when some granola-chewing hipster plans to build a covered bridge in New England, it's made when a rich executive who wants to get richer figures out how to market some new entertainment to the public.

If that attitude is the critical factor in this economy, then it's probably not going to change until the election, unless things get so bad that Obama starts acting like a lame duck before the election.


So what you're saying is that we need to find John Galt?

Big companies don't really make that many jobs. New companies, on the other hand, do. All the big companies are sitting on bags and bags of cash while they wait for the GOP's austerity measures to shake out. We were jobs neutral last month, as many people lost their jobs as gained jobs. The vast majority of gains were in the private sector while the vast majority of losses were in the public. Giving more money to corporations won't really help things so why keep beating the dead horse? We've been trying this shit since 1979. You talk about attitude among consumers, but fact o' the matter is that the buying power of the main segment of consumers has stagnated (and/or gone down) since Reagan took office so attitude doesn't really mean shit anymore. Look at the infographic attached to Robert Reich's opinion piece.
http://www.nytimes.com/2011/09/04/opinion/sunday/jobs-will-follow-a-strengthening-of-the-middle-class.html

Gratuitous Carlin link (strong language):
http://www.youtube.com/watch?v=Dpcd0woY2KY&feature=player_embedded

If you'd like to point to the "Texas Miracle" as evidence that lower taxes and more lassaiz-faire economic regulations works, keep in mind two things. First, most of the jobs were paid for by federal money and are public sector jobs like teachers and such. Second, a lot of the private sector jobs created are total crap. Texas is tied with Mississippi (I think) for have the highest percentage of minimum wage jobs.
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Re: Presidential jobs address, 9-8-2011

Postby Zamfir » Fri Sep 09, 2011 9:02 pm UTC

Steroid wrote: A job isn't created when some granola-chewing hipster plans to build a covered bridge in New England, it's made when a rich executive who wants to get richer figures out how to market some new entertainment to the public.

Is there something specific about granola that makes it impossible to create jobs? Does it offend the gods of the economy or something?

And if a granola-chewing rich executive decides to get richer by building a covered bridge, does that create half a job? What if it's not in New England, can hippies create jobs in other parts of the world? Or what if a poor executive decide to to market a new entertainment? Is that possible, or can only rich people grow the economy?

If a granola-chewing hippie steals money from a rich person, and gives his granola to the rich person, is the hippie now a job creator, or does is the now poor executive still rich on the inside and therefore a job creator?

If so, is it possible that I am also rich on the inside, except it hasn't come out yet? Can I already try to create jobs, or should I wait until I've fully hatched?

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Re: Presidential jobs address, 9-8-2011

Postby Steroid » Fri Sep 09, 2011 9:11 pm UTC

Again, I'm talking about the perception by the people who listen to the Republicans who Jessica was putting the blame for the recession on, and how that affects confidence. That's less of a continuum and more binary. People in the economy don't think the right things are being done to aid it. Obama wants to do more of those things. Whatever the outcome, it's not going to aid confidence, and that's not economics, just simple logic. If Obama believes that the plan outlined in yesterday's speech will work even in despite of poor confidence, go ahead and say so, since it can't make anything worse. If he doesn't, then he hasn't addressed the confidence issue.

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Re: Presidential jobs address, 9-8-2011

Postby TheGrammarBolshevik » Fri Sep 09, 2011 9:40 pm UTC

Heisenberg wrote:
TheGrammarBolshevik wrote:So, it could also be that we were in a mildly bad situation that was about to take a turn for the worse, but the stimulus managed to keep things steady, or that things were about to get better but the stimulus fucked it up.

No, the rational hypothesis would be that the stimulus had no effect. A positive or negative effect should be borne out by evidence.

If the economy completely failed to grow for ten years in a row, would you assume that there was no negative constraint? Or, to take a converse case, would you suppose that we should never change economic policy so long as we're sustaining modest growth?

At any rate, I don't see why you'd assume that the stimulus had no effect, rather than not assuming that it had any effect. And my critique was not that all options were equally likely, but that there were in fact more than those two options.
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Re: Presidential jobs address, 9-8-2011

Postby aleflamedyud » Fri Sep 09, 2011 10:09 pm UTC

Thesh wrote:It's definitely a start. I would like to see subsidies for new businesses. New businesses tend to increase rapidly in the number of employees they have. The effects won't be huge immediately, but more over a 3-5 year term.

Also, one thing that makes it difficult for companies is the cost of hiring employees. I think removing these expenses, social security, health insurance, medicare, unemployment insurance, etc. from the burden of the company, in fact removing all taxes against the company and implementing a government ran health care system payed entirely through income tax would result in a huge reduction in unemployment rates. Many companies are moving to hiring employees on a temporary contract basis instead of full time, just to mitigate those expenses.

Getting rid of those costs could also be the difference between being profitable and not being profitable, which can mean the difference between layoffs or no layoffs, or even laying off 1000 employees vs 5000 employees.

Fuck all this shit. Disregard jobs; acquire basic income guarantee. I can put together a long essay on the matter from my Reddit comments later, but basically, our economy has shifted to a structurally low demand for labor. We need to make life livable with the jobs people can get.
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Re: Presidential jobs address, 9-8-2011

Postby Negated » Fri Sep 09, 2011 10:22 pm UTC

aleflamedyud wrote:Fuck all this shit. Disregard jobs; acquire basic income guarantee. I can put together a long essay on the matter from my Reddit comments later, but basically, our economy has shifted to a structurally low demand for labor. We need to make life livable with the jobs people can get.

Have a read of what is happening in Spain, then come back and try to type that again.

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Re: Presidential jobs address, 9-8-2011

Postby Thesh » Fri Sep 09, 2011 10:30 pm UTC

aleflamedyud wrote:Fuck all this shit. Disregard jobs; acquire basic income guarantee. I can put together a long essay on the matter from my Reddit comments later, but basically, our economy has shifted to a structurally low demand for labor. We need to make life livable with the jobs people can get.

Welfare/income guarantee are not alternatives to reducing unemployment/growing the economy. An ongoing goal for the nation should be to reduce the need for welfare and income guarantee.
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Re: Presidential jobs address, 9-8-2011

Postby aleflamedyud » Fri Sep 09, 2011 10:40 pm UTC

Negated wrote:
aleflamedyud wrote:Fuck all this shit. Disregard jobs; acquire basic income guarantee. I can put together a long essay on the matter from my Reddit comments later, but basically, our economy has shifted to a structurally low demand for labor. We need to make life livable with the jobs people can get.

Have a read of what is happening in Spain, then come back and try to type that again.

Spain doesn't have a basic income guarantee. It suffers from a rather different problem than what's seen in the USA: Spain has ultra-low productivity across its whole economy, the United States has fairly high productivity with extreme inequality and insecurity for ordinary people, cascading up into low consumer demand and a bubble/bust economy.

The guaranteed standard-of-living would, ideally, be set high enough to be livable but at the same time low enough to get people working. The idea isn't to supply everyone with everything. The idea is that our economy has (semi-?)permanently shifted to structurally low demand for labor: lower salaries, fewer hours. A basic-income guarantee acknowledges that and compensates for it, allowing acceptable standards of living to be available with the jobs that are available now rather than the jobs people remember from 30 years ago.

The tremendous, long-term benefit? Labor gets to meet capital on equal terms. Workers would only need to work as necessary for the boost they want above the guaranteed standard-of-living rather than for survival.

Working 20 hours/week or at a low salary (in another post on Reddit I listed out the various socially-valuable skilled professions that don't pay good salaries anymore) would become a doable way of making a living. Working 6 months/year or every-other-year at well-paid jobs would become just another lifestyle choice. To stop highly-valued workers from taking that lifestyle choice, employers would have to offer much more leisure time than they currently do. Saving or investing the gains from work would become easier for average people. Starting one's own business or another independent project would also become dramatically easier, since nobody would have to use their business capital to eat.

And as noted by several libertarian-school economists, all this even happens without negatively distorting free markets. On this issue, most of the honest members of the Left and the Right can agree. Who will oppose us? Just the corporatists, oligarchs, and neo-feudalists.
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Re: Presidential jobs address, 9-8-2011

Postby sourmìlk » Fri Sep 09, 2011 10:45 pm UTC

Is it really moral of the government to use taxpayer dollars to buy people necessities when those people can buy them themselves?
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Re: Presidential jobs address, 9-8-2011

Postby Thesh » Fri Sep 09, 2011 10:51 pm UTC

sourmìlk wrote:Is it really moral of the government to use taxpayer dollars to buy people necessities when those people can buy them themselves?

I'm not sure you understand what guaranteed basic income is.
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Re: Presidential jobs address, 9-8-2011

Postby sourmìlk » Fri Sep 09, 2011 10:54 pm UTC

Thesh wrote:
sourmìlk wrote:Is it really moral of the government to use taxpayer dollars to buy people necessities when those people can buy them themselves?

I'm not sure you understand what guaranteed basic income is.

Perhaps, but judging by the way AlefLamedYud explained it, it seems that you get income regardless of whether or not you have the means to make it for yourself. Which I don't like.
Terry Pratchett wrote:The trouble with having an open mind, of course, is that people will insist on coming along and trying to put things in it.

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Re: Presidential jobs address, 9-8-2011

Postby Angua » Fri Sep 09, 2011 10:58 pm UTC

Yes, people out of work in this economy could really just find jobs and buy the necessities themselves. It's so easy!!!
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Re: Presidential jobs address, 9-8-2011

Postby sourmìlk » Fri Sep 09, 2011 11:05 pm UTC

Angua wrote:Yes, people out of work in this economy could really just find jobs and buy the necessities themselves. It's so easy!!!

Notice I said "regardless of whether or not you have the means to make it for yourself." Obviously people who are disadvantaged should be supported.
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