Tweet
DFH Jared Bernstein (photo: fling93)
In a world supposedly governed by 11 dimensional chess, we find unusually straight forward advice directed at the Obama Administration on how to react to the dismal unemployment numbers.
From Joe Biden’s former economic adviser, Jared Bernstein:
Someone just asked me, “how does the White House pivot from targeting deficits to targeting jobs?”
How’s this? “Based on new information, we are now pivoting from targeting deficits to targeting jobs!”
I interpret that to mean: Either refocus the Biden dining table chats on jobs or send everyone home before they damage the economy even further.
The White House now faces the entirely predictable problem that a critique from Obama’s possible rival, the policy chameleon, Mitt Romney, is exactly correct: The Administration has failed to achieve its stated economic policy objectives. The only part Mitt left out is that the Administration failed because they pulled their punches; they feared and listened too much to charlatans like Mitt Romney and the nonsensical views of his fellow Tea-GOPs, not to mention the deficit hysterics in his own party.
If that’s how this White House wants to govern, the American people will know whom to blame in 2012. A rational choice in a Romney versus Obama matchup would be “no.”
More from Paul Krugman: The Mistake of 2010 [aka 1937]
And Krugman/DeLong show why it could get worse.
From Calculated Risks: The Graph everyone should be following.
48 Comments
I’ve been surprised to see over at HuffPost, that little treehouse in which the Obamabots and general Obama-apologists hang out, an increasing number of articles critical of him.
I thought this one by Robert Borosage was particularly good. Not as good as FDL, of course, but attempting to get there.
http://www.huffingtonpost.com/robert-l-borosage/it-takes-a-movement_b_870950.html
And this too, where Dems are seeing the link between the failed HAMP program to address the mortgage crisis and the stagnant econoomy.
http://www.huffingtonpost.com/2011/06/03/obama-failed-foreclosure-relief-plan-jobs-crisis_n_870928.html
Dean Baker and others have been pointing out this link for months.
I honestly don’t know why Tim Geithner has a job.
A rational choice in a Romney versus Obama matchup would be “no.”
No is the rational choice in a lot of previous presidential matchups, like Bush and Gore(of the year 2000, not the later version).
Based on new information? Give me a break. I don’t trust this guy.
I just got a fundraising note from Joe saying he & Barry want to “tackle big issues”. They campaigned on “hope” and “change we can believe in”. My greatest political “hope” now is, SOMEONE, anyone, primaries Barry, PLEASE!
Color me not surprised that historic tax breaks for the ‘job creators’ and lax regulation for reckless corporations hasn’t solved the economic crisis. Thanks for playing John Boner!
Well maybe the rest of the ‘Grand’ Old Party’s agenda will help … a party fixated on flag pins, birth certificates, man on dog sex, creationism, coupons for Grandma’s medical care and crushing unions. You can call that party a lot of things but ‘Grand’ aint one of them.
Join the War on Ignorance!
http://waronignorance.net/….
Ouch!
The Graph everyone should be staring at, by Calculated Risk
http://www.calculatedriskblog.com/2011/06/birthdeath-model-and-unemployment-by.html
Yeah, I keep getting this e-mail from the CREEP, one of which said that if I donated to the CREEP, the campaign director would match it. If I ask for my 2008 money back, what then?
Well, maybe today’s bad news will bring enough “experts” out of the shadows to make a difference.
jared bernstein left the white house and almost immediately took up the multi-year D message of “bad deficits are all the republican’s fault” with analysis from the CBPP (1). this was my comment:
i’m not going to suggest that progressives here stop paying attention to think tanks like EPI just because they’ve accepted $$$ from the peterson foundation to develop their budget analysis (always based on some variation of the proposition that deficits are bad) of that they never stray far from the D message line.
but would it be too much to ask that economists that are not tied to the party and are neither deficit terrorist nor deficit errorists get something like equal time?
i don’t know what the issue is or why they are so overlooked (are they not on the ‘correct’ blogger’s email lists?), but if there is ANYTHING i can do to help get the message out at fdl, i’d love to volunteer.
footnote:
(1) the president of CBPP, Robert Greenstein, posted this in march:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3435
I don’t think he’s saying this wasn’t predictable. What Jerod is addressing is how one explains you’re changing direction. And the simple answer is just say things are different. Just make it simple. I assume Bernstein had been making similar arguments to Biden on the inside before, but was being overruled, and one who might have been even slightly sympathetic is gone. It’s interesting to see the alumni now opening saying, “you’ve got the wrong policy,” rather than the usual loyalist silence. It suggests to me they’re really worried about how much worse this could get, or remain.
I’d be happy to have other economists show up here. Like the term, “errorists.”
i probably spent way too much time listening to the peterson fiscal summit this year.
clinton was REALLY bad (so bad that i made a transcript because there didn’t seem to be one publicly available). but none of the other D party associated representatives (cap, epi, ricn) even challenged the premise of the need for deficit reduction.
Has Jared Bernstein written anything that the Obama administration gurus don’t already know? Bernstein seems to be laboring under the delusion that the White House wants to do right by the middle class.
There is a very fine post here today by gar alperovitz .
He has some ideas. a lot of them.
Thanks for the response. You may be right. The guy is too slick for me. There’s always an ass-covering clause or two in all his stuff. He does NOT accept the arguments that many on FDL have been making since 2008.
But, great post, YMMV.
scarecrow, you totally rock (and i think you know i don’t mean just this comment).
do you mean posting a diary and hoping it gets some attention and questions?
p.s. “errorists” isn’t mine, i swiped it from one of the economists (and i should know who, but i’ve forgotten)!
agree 100% with both of your points (too slick and great post).
The guys who have done the most damage to the progressive cause IMHO are the so-called progressives like Ezra Klein, Matt Yglesias, and Kevin Drum. They have protected Obama — and continue to do so — every time he sold us out. I put Bernstein in the same class. I’m not at all sure he was giving good advice all along.
But I admit to having a VERY cynical view of Inside-the-Beltway types. I have gone through cases of K-Y getting fucked by these guys.
Yes, I’d like to see more of these others post diaries here, and I’d be happy to promote them as I see them. And your diaries, and Joe’s, have been helpful in calling stuff to my attention. I’ve about 10+ econ blogs on my list but don’t read everyone everyday, but also about 15 non-econ blogs and other stuff, so I rarely read as much as I should.
This stuff makes my brain hurt, or my straw tingle, or something . . .
Did you mean to include a link?
Is anyone going to confront the likes of “Ezra Klein, Matt Yglesias, and Kevin Drum” at Netroots Nation? Or are we all going to agree to get along and beat the lesser of two evils drum?
I should point out that Drum is not inside-the-beltway. He is smart and extremely well informed. But has a blind spot for Barry.
The $800 BILLION stimulus plan was an utter failure. Not only is unemployment higher that what the Oministration forecast when they sold us this plan, but over the last 2 years it is even GREATER than what they told us would happen if the stimulus wasn’t passed.
See attached link, page 5. You will have to draw your own line of the actual unemployment rate over the last years. FYI, the rate right now is topping 9.1%.
http://otrans.3cdn.net/ee40602f9a7d8172b8_ozm6bt5oi.pdf
And you want to spend even more money that we don’t have?
OT– “2011-06-03 The Militarization of Canada’s Universities” (WLCentral.Org)
i’ve just got an(other) idea… (fingers crossed).
the issue with diaries is that they don’t typically get much attention (i’ve done some cross posting, so i’ve seen it happen)… which actually makes sense because in multiple ways their approach is so different from the orthodoxy that one or a few hit or miss posts aren’t going to do it (paradigm changes are hard), it takes a serious effort through a series of posts on the part of both readers and writers (that’s one of the reason’s i’ve started this project — nowhere near ready for prime time). and if the readers aren’t going to be there, i don’t think it’s right to ask the writers….
but, like said above, i have an idea…. that just might work out… thanks scarecrow!
I swear. They MADE us take the money, and we didn’t know what strings were attached. We thought it was some sort of gift.
Really?
yeah, me too.
well, then, it’s kevin’s honest position. although not one i agree with.
my issue is that our range of economists (and voices in general) is too narrow if it only includes those who have a loyalty or association (for whatever reason) to the D party and/or it’s message machine.
People used to talk about how smart Obama is. Not so much of that anymore. We ought to consider how deluded he is, starting with Gerry Ferraro’s comments about bipartisanship. Geithner has a job because he plays to Obama’s conceits, his delusions: Geithner tells Obama what he wants to hear, and persisiting in the face of so much evidence to the contrary is deluded.
btw, in case they don’t quite make sense…. my comments here, especially re the peterson foundation summit are a follow on from my previous comment here:
http://my.firedoglake.com/scarecrow/2011/06/02/jane-hamsher-hits-tea-gop-and-white-house-for-ignoring-jobs/#comment-275005
Oh, please. The argument the stimulus made unemployment worse has been debunked dozens of times. The fact that unemployment was already seriously worse than the Admin assumed doesn’t negate that. The argument about spending money we don’t have is contrary to 300 years of how banks actually work.
sorry, I see his diary on the MyFDL list.
They might do you the favor of not asking again, altho I had to blast the McCaskill robos several times before they got the message. And I’ve noticed the DNC’s unsubscribe function doesn’t.
Considering that further along in that Bernstein blog post is the suggestion that the administration should go all in the Rivlin/Domenici suggestion for a full payroll tax holiday for both employers and employees. He even enthusiastically talks about its advantages. If he cannot see this is a sure way to set up disaster for Medicare within two years and Social Security within 5 he is either ignorant of both their importance and their challenges in a Peterson/Republican world or just doesn’t realize their importance to most of us. I wouldn’t trust him to be worried about the lower 98% or take his advice on a cold day in hell.
You see all those layoffs from states that are helping to bring those numbers down? Those didn’t happen last year or the year before because of the stimulus.
Many of them are happening this year because there is no more support for state and local budgets to help them weather this. Perhaps we shouldn’t have historically low tax rates especially for the wealthy and the multinational corporations at a point when our economy is so weak and we have two and a half wars. Nor should those rates have been so low ever, especially when we started two of those of wars.
Advice to Biden on the economy should be: 1)taxes raised to the responsible Clinton era level 2)get out of all of the unfunded and no-mission Pentagon and defense dividend wars 3)quit giving our tax dollars to developed nations in the form of aid (many of these funded developed nations have a lower student teacher ratio than the US) 4)The above revenue and savings to be spent putting public sector jobs back into place. Big time farces all around. Government is no longer for the people and by the people.
Remember, Paulson clomped up on stage SIX WEEKS after Obama was elected. Paulson then cried–seemed liked he threatened–that we as a nation were going to hell if we did not turn over all of our money to the banking institutins in NYC and others around the world. Obama was sunk before he started. Paulson and Bush need to be put on the stand with Wall Street. I saw the writing on the wall then. And Faux News says the Dems are “STILL” blaming Bush 3 years later. Well, yea. Emptying out our treasury with Paulson and the ‘emergency’ war funded wars did the trick… Only problem, Obama could correct the war thing now but he is caught in the headlights.
They moved to Democratic Underground, looking more and more like freeper republic.
Fuck it, taxes raised to pre Bush 1 .
High unemployment is good because it is less pressure on inflation, and inflation is the main thing the rich worry about. Inflation acts as a tax reducing the value of the income from the bonds and dividends in their investment funds.
Haven’t you ever noticed that when a big company does a layoff, the stock market goes us? Of course that doesn’t happen so much any more because they have laid off about all the people they can lay off.
Unemployment is only bad for the poor and working people, so who cares? Not our President, Vice-President, etc… As the President said the other day, he has to be careful about what he says because it can upset the markets. If you ask him about unemployment, he says that the first thing is to strengthen the economy by cutting the deficit.
I hope there’s a radical change of policy with respect to the recent disclosures of how Geithner raped the US treasury before and after his appointment. I’ve long wanted to see him and the rest of the Goldman Sach’s (etc.) DC/NY government officials (including Obama) prosecuted and convicted for their destruction of the US economy.
Will someone at FDL please write about the Geithner story this last week? Please!!
Blessings
Let’s start with a basic premise, shall we?
In a system that inevitably concentrates wealth, and power, into a narrower and narrower financial elite, jobs will be lost and unemployment will remain high. There are numerous reasons for this. Suffice it to say that labor is viewed by those in power as a “burden”. Reducing jobs, and pay rates, benefits the “investor class”. If your income is derived primarily from your investments, reducing labor costs by weakening unions, making employees more vulnerable during periods of high unemployment, exporting jobs and automating jobs, benefits you. If your income comes mostly from wages, you’re out of luck.
What, exactly, does anyone realistically expect from the Obama administration, Mr. Bernstein, or those entrenched in power? At best, you’ll see some “shovel ready” nonsense. It’s important to understand exactly what they’re shoveling!
You want jobs? You want a robust middle class? You want real change? The bad news is you can’t get there from here… at least not without revolutionary change. Do you think the Congress is just itching to do away with anti-labor free trade initiatives? You can’t be serious. Do you think Obama et all are going to promote pro-union legislation anytime soon? Or perhaps you’re holding out for a massive jobs program or maybe something like the jobs tax credit we saw in the 70′s? Don’t hold your breath.
Jobs in America need to be seen as part of “the commons”. They are a public good. Companies that export jobs should be dismantled for devastating “the commons”. Companies that automate jobs out of existence, especially during periods of high unemployment, should be nationalized or shut down. We also need to stop subsidizing immoral and inane military spending and invest those resources into a real system of national health care. This would go a long way toward making US labor more competitive with their international counterparts.
Today’s unemployment rate is little more than the scorecard on which the winners and losers of the class war can be measured. Until more of us see employment as a right to be guaranteed to all citizens, and until more of us are prepared to demand these rights, at any cost, nothing will change. All the voting and all the candidates and all the parties and all the national dialog do little more than walk us around in circles. When the unemployed, and the underemployed, and the middle class, and the poor, overcome their passivity and take to the streets to demand change, then, and only then, will discussions about employment policies be meaningful.
Yup; Bernstein has some bad stuff to his credit on economic policy.
It is hard for some to admit that tax cuts do near zero except screw up fiscal balance and provide incentives for one action over another.
A payroll tax cut is the best of a bad set of choices in tax based “stimulus” – and indeed removing the wage cap for both tax calculation and benefit calculation and the income flow increase from the cap removal matches the loss from a 2% drop in what the employee pays. Indeed include in income not just wage income but also investment income, and we are well on the way to funding single payer.
My hazy memory does not fit with what calculated risk is saying:
“The key point is that the Birth/Death model minimizes the primary sampling error due to employment growth generated by new business formations.
Each year, the CES survey realigns its sample-based estimates to incorporate universe counts of employment—a process known as benchmarking. Comprehensive counts of employment, or benchmarks, are derived primarily from unemployment insurance (UI) tax reports that nearly all employers are required to file with State Workforce Agencies.”
When birth death started in the late 1990′s its adjustment was tiny. Under Bush it was just about all of the million jobs Bush added in 8 years. Indeed under Bush the “realign” was no such thing – it was just a curve fitting to other curve fittings. I asked back then why no proof to the 2/28 tapes on 12/31 payroll withholding that everyone must submit – but instead I got back bull Sh_t about how UI tax was a better source – and there was no need to go to the one and only point of real data – those 2/28 tapes of 12/31 data – to prove the numbers
Indeed Cheney claimed a million more employed because birth death did not capture Ebay store activity. I do not know how to eliminate birth death from the numbers because once it becomes part of the data, curve fitting brings forward the error. But I do not like it.
No shit! The focus should be on jobs? (I’d say jobs-jobs-jobs, but I’ll settle for them focusing on jobs.)
Someone is willing to _put his neck out and say it publicly_? And they have to _think_ about this?
Are they completely and totally captive in DC?
When we see 14 million unemployed in the streets joined by 25 million underemployed, and all the seniors on Medicare in the streets, will they finally realize the deficit is not the problem? The problem is jobs.
I’ll take this opportunity to praise Friday night’s Charlie Rose Show for addressing the topic of this diary with more than one progressive guest – two on each side of the issue, though one of the deficit worriers was a bit on the fence. He had Paul Krugman and Jared Bernstein, very effectively advocating the obvious point (even us non-economists understand this) that if people don’t have jobs they are not going to buy the products. Sorry my aged brain doesn’t remember the names of the two on the other side, but it was a good back and forth.
It would seem that deficit fear folk think the recession will end with the US selling its products overseas, so it doesn’t matter whether folk at home buy them. But who then are our consumers? I can’t really see it happening in countries that seem to be overcoming the ‘path to peonage’ – they all have very strong protections in place. And what exactly are we making to sell them?
As the Middle East is demonstrating, the path to peonage has a pretty stark result for the ubermench class, even when much of the wealth trickles down through the fat fingers of the Important Family, which is all you get in the end. No doubt the deficit fearmongers can point to the path of peonage as Ireland and Greece and others are now forging ahead on that, as something we are really reluctant to enter, at least not until after the election.
Fear not, folk, we’re already well down that path. We consumers weren’t supposed to stop purchasing quite this soon, too many burning coals underfoot have been laid bare. What’s sauce for the goose is sauce for the gander, and why should this nation be exempt from the laws binding all the others?
One issue left out of the Charlie Rose conversation was what would provide the needed jobs, when nature has actually underlined that need and offered her solution. WPA is one, just planting trees across the country would be that. But the other is building windfarms and solar arrays – never mind doing it for the long term; do it low cost and effective and upgrade later. The results of even a five year plan would be so stunning it could walk on its own legs from then on.
This is the time for a national job program to replace fossil fuels and nuclear with renewables using the sun and wind. There should not any longer be any debate, just a policy put forward and the many idle shoulders to the wheel. As Paul Krugman pointed out, we are losing an entire generation with the policies of the past. I want to see Obama at a nascent (and not so nascent)wind or solar plant announcing this new Manhattan project.
Monday!
Raising the cap (SS), and adding investment (medicare) income would be a great plan to stabilize both systems. But it doesn’t matter if we do that if the monies are not collected. The Rivlin/Domenici plan stops ALL collection of payroll taxes, meaning that neither employer or employee is contributing to either system. The situation you are talking about is the ‘stimulus’ that has already been put in to place. And that is bad enough. The one Bernstein is talking about cuts all revenue from both Social Security and Medicare. Current benefits would all be paid out of the trust fund/really general revenue. Medicare would entirely be from general revenue. Now if we could count on this being a finite situation perhaps this could be counted as stimulus, but what does this congress cut in order to make up for the outlays (we can say they can’t count the revenue loss since tax cuts do not count, but the outlays sure as hell will). More importantly does anyone seriously expect these taxes to go back into collection once they are eliminated. Even if times are booming there will be a threatened unemployment crisis to make sure that never happens. Forget even waiting for the 55 year olds to retire the net would end if this is ever done. See my estimates above.