[PassedOut]

phil_20686, on 2011-June-15, 09:18, said:

In somewhat unrelated news, Britians Austerity package seems to be working ok

I get the idea that not everyone in the UK agrees with your "working ok" assessment: Public sector strike hits services and schools

Quote

Hundreds of thousands of public sector workers have gone on strike across the UK over planned pension changes.

Teachers from three unions have walked out and about 40% of state schools in England and Wales have been closed or partially shut.

The Public and Commercial Services union, which includes police support and border staff, are also on strike.

What happened to the stiff upper lip?

[helene_t]

The stiff upper lip doesn't apply to politics. British politics is surprisingly dirty, considering the otherwise polite attitude of the average Brit.

[phil_20686]

PassedOut, on 2011-June-30, 10:46, said:

I get the idea that not everyone in the UK agrees with your "working ok" assessment: Public sector strike hits services and schools


What happened to the stiff upper lip?

One thing that has gone unnoticed is that the UK actually has a large number of teaching unions and university lecturer unions. The NUT is well known to be rabidly left wing and to give vast amounts of money to the labour party. If also often campaigns on behalf of the labour party, hence Ed milibands silence in the face of strikes which he opposes. In total I think only about 25% of teachers are actually on strike, although it seems hard to get accurate numbers. In the uk the ALT is the other bid union for teachers and it did not strike. Despite claims to teh contrary the BBC news thinks 75% of civil servants turned up to work today. Besides, its after exam season. When the teachers unions are really serious the strike in exam season.

I have to admit, I have much more sympathy for the pensions issue than for any of the other cuts. I would personally shelve many of the pension cuts, although it is certainly right to get rid of final salary pensions which seems to have resulted almost entirely in people gaming the system by always promoting old people near retirement so they can retire on much bigger pensions. Also, I think cutting pensions is only storing up trouble for later. I am especially opposed to the brown changes in the tax regime which have removed almost all the incentives for having a private pension.

helene_t, on 2011-June-30, 10:51, said:

The stiff upper lip doesn't apply to politics. British politics is surprisingly dirty, considering the otherwise polite attitude of the average Brit.

DIrty, but fortunately not corrupt. The "expenses scandal" in the uk was charmingly quaint. The public getting out raged over bogus expenses claims totaling a few thousand pounds over years. In france it seems like their politicians spend that much on their mistresses before breakfast!

[y66]

Local budget battle story by Kevin Sack in today's paper.

Quote

Wilmington, N.C., is not Camden, N.J., which laid off half its police force this year. It is not Detroit, which is closing half of its public schools.

But like local governments across the country, the City of Wilmington has been demonstrably diminished by five years of unyielding economic despair. That a place like Wilmington, until recently a real estate boom town, would defer a purchase as essential as a fire truck for even one year, much less five, speaks to the withering toll.

In repeated visits over six months, Wilmington revealed itself to be typical of hundreds of American cities where the relentless drip-drip-drip of yearly contractions has gradually arrested civic momentum. As they wrangled over the 2012 budget, the city’s recession-weary mayor, Bill Saffo, and his fellow Council members faced a menu of increasingly distasteful options.
“We’re getting to a point,” the mayor said, “where I hear it on the street: ‘I’m stressed out because I don’t want to pay more taxes.’ We still don’t know what the state is going to do to us, and we’re in a hurricane zone here. If Mother Nature hits us and the state hits us, we’ll really have a double whammy.”

Later that day, the National Oceanic and Atmospheric Administration forecast a worse-than-normal hurricane season.

Quote

The mayor and the Council, who serve part-time, were still smarting from last year’s decision to raise property taxes to make debt payments on projects they had approved when coffers were flush. If a tax increase was out of the question, would they need to raid the city’s reserves? That, Mr. Saffo knew, could threaten Wilmington’s capacity to rebuild if a hurricane smacked the Carolina coast this summer.

“We’ve had to make some pretty tough choices,” Mr. Saffo said one afternoon in his City Hall office. “We actually do make decisions where people can feel it and see it and touch it, and if they don’t like it they let you know about it.”

He pinched his brow with his thumb and forefinger.

“How you play this tough hand will determine how your community is going to come out of this,” he said. “You can hunker down and not invest in anything and then have to play catch-up, or you can continue to invest and find ways to improve so we can catch that economic wave up.”

What makes Wilmington’s reversal so striking is that the city had so much going its way.

Until 2007, the general fund budget for this endearing port of cobblestone streets and moss-draped oaks had been expanding by about 7 percent a year. Fueled by in-migration and a series of annexations, the population surged 40 percent for the decade, to 106,000.

The growth helped pay for glittering capital projects all over town — a convention center on the Cape Fear River, a police headquarters with its own crime lab, a 20-mile bike and jogging trail, tennis courts and softball fields, a host of road and streetscape improvements. The mayor’s calendar was crowded with ribbon-cuttings.

But by the time Mr. Saffo and the Council took on this year’s $85 million budget, the collapse of the real estate market had so choked revenues that the finance department could no longer afford free coffee for its staff. Despite last year’s increase in property taxes, which account for nearly two-thirds of the general fund, the city’s revenues were still projected to be lower in 2012 than in 2008.

Wilmington’s experience is not uncommon. Nationwide, the decline in municipal revenues has accelerated in each of the last four years, draining billions from direct services like police protection and garbage pickup. Local governments have shed nearly half a million jobs, and are expected to lag well behind any recovery in other sectors.

[y66]

Via Krugman

Quote

Laura Tyson — who headed the National Economic Council under Clinton — has an excellent, clear, sober discussion of the economic problem at the FT. She calls for long-run fiscal restraint, but more, not less, spending right now, with the economy deeply depressed. Laura is anything but a radical; what she’s saying is basically macroeconomics 101.

Excerpt:

Quote

The US economy has just marked two years of recovery from its worst recession since the Great Depression. But few Americans are celebrating; indeed, most believe that the economy is still in recession. No wonder. Although gross domestic product has recovered to its pre-recession peak, employment has not.

The employment decline during the 2008 recession was more than twice as large as those of previous postwar recessions, according to the McKinsey Global Institute. Even if June’s employment report is much better than expected, 14m Americans will remain unemployed and more than 8m will be working part-time because they cannot find full-time jobs.

More than 2m discouraged workers will have stopped looking for work. The fraction of the population working is near a 25-year low. According to calculations by the Hamilton Project, the US will face a “jobs gap” of about 21m jobs – the number of jobs needed to return the economy to its pre-recession employment level and absorb the 125,000 people who enter the labour force each month. At the current growth rate, that gap will not be filled for another decade.

The jobless recovery is also a wageless recovery for most Americans. Corporate profits have soared, claiming an unprecedented share – more than 80 per cent – of the growth in national income since the recovery began. But real average weekly earnings for production and non-supervisory workers have increased by less than 1 per cent since the recovery started. Real median weekly earnings have fallen. Real median household income in 2009 was 4 per cent lower than its pre-recession high and about the same as it was in 1997.

...

It is not surprising that many Americans are pessimistic about their economic future. Nor is it surprising that they think jobs should be the top priority for policymakers. They are right. Unfortunately, many members of Congress are not listening. Urged on by Tea Party Republicans interested more in the size of government than the size of the government’s debt, the debate in Washington is focused on deficit reduction rather than on job creation.

It is true that the US faces a major fiscal challenge that must be addressed. But this is a long-run challenge that is primarily the result of rising healthcare costs, the ageing of the population and unwise fiscal choices made before the recession. The short-run challenge is inadequate demand – a gap between the amount of goods and services the economy can produce and the demand for them, caused mainly by the private-sector deleveraging. The long-run challenge calls for fiscal contraction. The short-run challenge calls for fiscal support.

There is a logical way out of this policy conundrum: pair temporary fiscal measures targeted at job creation during the next few years with a multiyear, multitrillion-dollar deficit reduction plan that would begin to take effect once the economy is closer to full employment. Pass both now as a package.

Current signals from Washington indicate that this way out will be not taken: instead, partisanship and politics will trump logic and premature fiscal contraction will undermine the already anaemic recovery. Even worse, a political stalemate over the debt limit could precipitate a financial crisis and necessitate immediate large cuts in government spending that would tip the economy back into recession, driving the unemployment rate into double digits.

But imagine for a moment that logic prevails. What should the federal government do to promote job creation? At the very least, it should introduce additional stimulus measures to offset the substantial fiscal drag – in excess of 2 per cent of GDP – that is slated to occur in this year and next when current stimulus measures introduced at the end of last year expire. On the spending side, it should invest more in infrastructure maintenance and replacement. Such investment raises demand, creates jobs and increases the growth potential of the economy.

Each $1bn of infrastructure investment creates between 11,000 and 30,000 jobs. On the revenue side, the government should extend some of the targeted tax measures enacted at the end of last year including the payroll tax cut for employees and the capital investment expense deduction. But it should also go further and cut payroll taxes for employers on all new hires, including hires by new businessses. This cut should be linked to the unemployment rate and should be maintained until it falls to the 5-6 per cent range.

History suggests that recovery from a debt-fueled asset bubble and the ensuing balance-sheet recession can be long and painful, with significantly lower GDP growth and significantly higher unemployment for at least a decade. Right now, it looks like the US is on such a course. For many Americans, the first decade of the 21st century was a lost decade for the economy. A second lost decade has already begun. No wonder they think the economy is still in recession – for them, it is.

The weird thing about current financial policy is how rare it is to see examples of leaders even acknowledging this logic, much less making a serious effort to strike a balance between the immediate, real problem of recovery and the long term, real problems of debt and inflation.

[luke warm]

y66, on 2011-July-08, 07:20, said:

The weird thing about current financial policy is how rare it is to see examples of leaders even acknowledging this logic, much less making a serious effort to strike a balance between the immediate, real problem of recovery and the long term, real problems of debt and inflation.

ideology trumps problem solving, even at the state level... it's just easier to see the more local it is

[awm]

I wonder if the increasing trend towards automation is taking its toll. There are more and more jobs which computers (or robots) can do instead of people, or can assist a person in to allow dramatic increases in productivity. We are reaching the point where a factory doesn't need to hire thousands of workers, and a law firm doesn't need to hire dozens of paralegals. This will inevitably decrease the supply of jobs.

Of course, in terms of overall "wealth" all of these things are advantageous. We can produce more and better goods with less human effort. The problem is that the idea that every adult who wants a job should be able to get one has changed, and it may not be changing back. The people who own the companies benefitting from this massive increase in productivity are making crazy money, but a rising percentage of the population is getting left behind. It seems like we will have to make a choice soon (or maybe we are making it now). The options would seem to be: (1) Eliminate laws protecting workers' pay and benefits, such that humans can "work cheaper" with a much lower standard of living to compete in price with the machines (2) Move towards a more socialist society where we tax the people at the top who have benefitted in order to provide a modest standard of living to everyone.

It seems like our political parties in the US are pushing towards different solutions, but it's not clear either is sustainable. The first solution might work for a time, but it will basically destroy the middle class in our country (leading to popular unrest) and in the long run the machines are going to be cheaper than any human can be. The second solution might work better, but it will be viewed as punitive by the people at the top who have massive political influence and are going to look for loopholes to avoid paying the tax. Both solutions also give rise to some moral objections.

[Winstonm]

Odd how the two lost decades 2000-2009 and the period we are now in 2010-2019 were both marked by great events that led to historical political opportunity that went wasted both times. Both Bush and Obama have squandered opportunities for reform as great as those instituted after the Great Depression - I expected as much from Bush as I thought he was too deeply mired in dogmatic, ideologic thinking to address reality, but Obama has been a massive disappointment as an architect for retaining the status quo.

It has been recently estimated that the War on Terror has so far cost the U.S. $4 trillion and yet all we can discuss politically as budget cuts is reduction in social programs that the old and infirmed depend upon - and then we yell halleleujah as a Christian nation.

Social Security and Medicare are not the problems and never have been.

June 29, 2011 | Contact: Deborah Baum | 401-863-2478

Quote

Costs of War
New estimates by the “Costs of War” project provide a comprehensive analysis of the total human, economic, social, and political cost of the U.S. War on Terror.

The cost of wars in Afghanistan, Iraq, and Pakistan are estimated at 225,000 lives and up to $4 trillion in U.S. spending, in a new report by scholars with the Eisenhower Research Project at Brown University’s Watson Institute for International Studies. The group’s “Costs of War” project has released new figures for a range of human and economic costs associated with the U.S. military response to the 9/11 attacks.

[PassedOut]

Despite the after-the-fact political posturing, everyone serious realizes that the financial bailout that began in late 2008 was essential. But I think it's fair to say that most of us -- me for sure -- thought that we taxpayers would foot a portion of the bill. Fortunately we will not: It was a low-down, no-good godawful bailout. But it paid.

Quote

The bailout, by the numbers, clearly did work. Not only did it forestall a worldwide financial meltdown, but a Fortune analysis shows that U.S. taxpayers are also coming out ahead on it — by at least $40 billion, and possibly by as much as $100 billion eventually. This is our count for the entire bailout, not just the 3 percent represented by the massively unpopular Troubled Assets Relief Program. Yes, that’s right — TARP is only 3 percent of the bailout, even though it gets 97 percent of the attention.

...

When our boss assigned us to find out how much the financial rescue cost, we expected to find a monumental loss because Fannie Mae and Freddie Mac seemed like a bottomless pit. Instead, we discovered that bailout profit payments from the Fed — which we hadn’t previously thought of as a profit center — are virtually certain to exceed taxpayer losses on Fannie and Freddie. We were surprised — and pleased — to discover taxpayers showing a profit on the bailout. We hope that you are, too.

Because of irresponsible tax cuts, an impulsive war, and unfunded entitlements, the US debt is once again huge problem, but at least we're not on the hook for bailing out the financial system. Always looking on the bright side.

[hrothgar]

luke warm, on 2011-July-08, 15:39, said:

ideology trumps problem solving, even at the state level... it's just easier to see the more local it is

I see how you'd believe this...

This sort of "thinking" is endemic to conservatives
http://fivethirtyeig...ise/#more-12913

[Winstonm]

I meant to post this chart with my above comment and forgot to do it. Better late than never:



As I pointed out above, Social Security and Medicare are not the problems.

[luke warm]

hrothgar, on 2011-July-10, 14:37, said:

I see how you'd believe this...

This sort of "thinking" is endemic to conservatives
http://fivethirtyeig...ise/#more-12913

obama believes it also, to an extent

"There is, frankly, resistance on my side to do anything on entitlements (ideology?). There is strong resistance on the Republican side to do anything on revenue," he said. But he warned: "If each side wants 100 percent of what its ideological predispositions are, then we can't get anything done."

he's right in that, which is what my post meant... both sides have ideological predispositions and both sides too often rely on that over problem solving

[PassedOut]

phil_20686, on 2011-June-30, 11:48, said:

Dirty, but fortunately not corrupt. The "expenses scandal" in the uk was charmingly quaint. The public getting out raged over bogus expenses claims totaling a few thousand pounds over years.

What is your take on the blagging scandal? Isn't it corrupt for Scotland Yard and public officials to suppress the investigation of crimes?

[hrothgar]

luke warm, on 2011-July-11, 15:52, said:

obama believes it also, to an extent

"There is, frankly, resistance on my side to do anything on entitlements (ideology?). There is strong resistance on the Republican side to do anything on revenue," he said. But he warned: "If each side wants 100 percent of what its ideological predispositions are, then we can't get anything done."

he's right in that, which is what my post meant... both sides have ideological predispositions and both sides too often rely on that over problem solving

I have always maintained that Obama is a centrist at heart.
Even if he isn't, its pretty normal for grown ups to be politic in their discourse when they are attempting to reach a compromise.

For example, contrast the President's statements will bullship like the following:

Quote

“As long as this president is in the Oval Office, a real solution is unattainable”

[kenberg]

Not so long ago, it was assumed that refusing to raise the debt limit was a tactic, that no one would really be so stupid as to carry out the threat. I worried at the time that tactics can harden, and I guess they have. I hope people can focus on a couple of basic points:

1. At the end of the Bush administration the economy was falling like a rock with no bottom in view.
2. It is the Republican leadership, not the President, who is insisting that everything has to be done exactly to their standards or they will bring down the whole house.

One can have all the abstract arguments one cares for, and no doubt someone will come up with more, but when the stuff hits the fan no one will be interested in discussing aerodynamics.

[PassedOut]

hrothgar, on 2011-July-12, 13:36, said:

I have always maintained that Obama is a centrist at heart. Even if he isn't, its pretty normal for grown ups to be politic in their discourse when they are attempting to reach a compromise.

No doubt about it: Obama campaigned as a centrist, won as a centrist, and has governed as a centrist. I watched his press conference yesterday as I'm getting quite concerned about that fast-approaching deadline.

The contast between Obama's very adult behavior yesterday and McConnell's childish petulance today was striking.

[Winstonm]

The Right Wing is blinded by dogma and have not accepted the fact that what we are facing is not the end of a normal business-cycle recession but the afteraffects of a mini-depression brought about by their own ideological beliefs in self-regulating markets and laissez-faire business models.

This crisis was a debt deflation, not a recession. It is absolutely the wrong time to be considering spending reduction at all else we will drive ourselves headlong into another lost decade of little or no economic growth.

We indeed have to address the debt in time - but now is not the time. Now, we need bucketfuls of money dumped into infrastructure building, which will create jobs. We must wind down our warring and utilize dialogue rather than armaments to promote our positions.

If we don't start these actions soon, the only thing exceptional about the U.S. will have been the exceptional waste of a what began as a pretty good idea about self-government.

[luke warm]

Winstonm, on 2011-July-12, 15:43, said:

Now, we need bucketfuls of money dumped into infrastructure building, which will create jobs.

i know he'd never get support for it, but if obama would propose a stimulus package that was 75% (or higher) infrastructure related, highways, railways, bridges, etc., i can see a lot of help in that... when i'm dictator that's one of the first things i'll do

[PassedOut]

luke warm, on 2011-July-12, 15:50, said:

i know he'd never get support for it, but if obama would propose a stimulus package that was 75% (or higher) infrastructure related, highways, railways, bridges, etc., i can see a lot of help in that...

Me too. Obama did say yesterday that he wants to do exactly that, but he said it is necessary first to reverse the explosion of federal debt. I suppose that with that done, he might have a better shot at getting people to work at fixing the infrastructure.

Obviously the politics are tough all around, but I'd like to see a big deal with tort reform to help suppress health care costs as well as some tax increases. Fat chance!

[blackshoe]

"Self-regulating markets and laissez faire business models" might or might not work, but since we've not had such in this country (certainly not in my lifetime, or my parents') it's hard to say.