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Looking at the president’s negotiating stance, Charles Krauthammer says it is nothing but a power play.
Let’s understand President Obama’s strategy in the “fiscal cliff” negotiations. It has nothing to do with economics or real fiscal reform. This is entirely about politics. It’s Phase 2 of the 2012 campaign. The election returned him to office. The fiscal cliff negotiations are designed to break the Republican opposition and grant him political supremacy, something he thinks he earned with his landslide 2.8-point victory margin on Election Day.
This is why he sent Treasury Secretary Tim Geithner to the Republicans to convey not a negotiating offer but a demand for unconditional surrender. House Speaker John Boehner had made a peace offering of $800 billion in new revenue. Geithner pocketed Boehner’s $800 billion, doubled it to $1.6 trillion, offered risible cuts that in 2013 would actually be exceeded by new stimulus spending and then demanded that Congress turn over to the president all power over the debt ceiling.
Boehner was stunned. Mitch McConnell laughed out loud. In nobler days, they’d have offered Geithner a pistol and an early-morning appointment at Weehawken. Alas, Boehner gave again, coming back a week later with spending-cut suggestions — as demanded by Geithner — only to have them dismissed with a wave of the hand.
What’s going on here? Having taken Boehner’s sword, and then his shirt, Obama sent Geithner to demand Boehner’s trousers. Perhaps this is what Obama means by a balanced approach.
He pretends that Boehner’s offer to raise revenue by eliminating deductions rather than by raising rates is fiscally impossible.
But on July 22, 2011, Obama had said that “$1.2 trillion in additional revenues . . . could be accomplished without hiking tax rates, but could simply be accomplished by eliminating loopholes, eliminating some deductions and engaging in a tax reform process.” Which is exactly what the Republicans are offering today. …
And David Ignatius says the administration of naive fools has made Morsi our man in Cairo.
How did Washington become the best friend of the Muslim Brotherhood in Egypt, even as President Mohamed Morsi was asserting dictatorial powers and his followers were beating up secular liberals in the streets of Cairo? It’s a question many Arabs ask these days, and it deserves an answer.
Morsi and his Brotherhood followers are on a power trip after decades of isolation and persecution. You could see that newfound status when Morsi visited the United Nations in September and even more so during the diplomacy that led to last month’s cease-fire in Gaza, brokered by Morsi and Secretary of State Hillary Clinton. The Brotherhood leaders had gone from outcasts to superstars, and they were basking in the attention.
And let’s be honest: The Obama administration has been Morsi’s main enabler. U.S. officials have worked closely with him on economic development and regional diplomacy. Visiting Washington last week, Morsi’s top aides were touting their boss’s close contacts with President Obama and describing phone calls between the two leaders that led to the Gaza cease-fire. …
A post from Michael Barone points the way to a liberal NY Times columnist who understands a little of what the free market people know about the perverse incentives that government by A students inflict on our country. Barone also makes a great point about Romney’s 47% remark.
“This is painful for a liberal to admit,” writes liberal New York Times columnist Nicholas Kristof, “but conservatives have a point when they suggest that America’s safety net can sometimes entangle people in soul-crushing dependency.”
Kristof is writing from Breathitt County, Ky., deep in the Appalachian mountains, about mothers whose Supplemental Security Income benefits will decrease if their children learn to read. Kristof notes that 55% of children qualifying for SSI benefits do so because of “fuzzier intellectual disabilities short of mental retardation,” far more than four decades ago when SSI was just a new program.
Evidently SSI administrators decided to be more generous to parents of such children. But, as Kristof notes, giving parents an incentive to keep children from learning to read works against the children’s long-term interest.
Kristof’s column makes a point similar to that in my Dec. 2 Examiner column on the vast rise in people receiving Social Security Disability Insurance payments. As with SSI, one imagines that those responsible for extending benefits to those not previously eligible did so out of a sense of generosity. But as I noted, “there is also a human cost. Consider the plight of someone who at some level knows he can work but decides to collect disability payments instead. That person is not likely to ever seek work again, especially if the sluggish recovery turns out to be the new normal. He may be gleeful that he was able to game the system or just grimly determined to get what he can in a tough situation. But he will not be able to get the satisfaction of earned success from honest work that contributes something to society and the economy.” Generosity that produces “soul-crushing dependency” is not really generosity.
BreathittCounty, by the way, has long been a heavily Democratic county. Even in 1972 it voted 59% for Democrat George McGovern over Republican Richard Nixon. But it’s in coal country and it voted 53% for John McCain in 2008 and 66% for Mitt Romney in 2012. More proof that Romney’s 47% remark was not only hugely ill-advised but simply inaccurate.
And here is Kristof’s column from Sunday.
THIS is what poverty sometimes looks like in America: parents here in Appalachian hill country pulling their children out of literacy classes. Moms and dads fear that if kids learn to read, they are less likely to qualify for a monthly check for having an intellectual disability.
Many people in hillside mobile homes here are poor and desperate, and a $698 monthly check per child from the Supplemental Security Income program goes a long way — and those checks continue until the child turns 18.
“The kids get taken out of the program because the parents are going to lose the check,” said Billie Oaks, who runs a literacy program here in BreathittCounty, a poor part of Kentucky. “It’s heartbreaking.”
This is painful for a liberal to admit, but conservatives have a point when they suggest that America’s safety net can sometimes entangle people in a soul-crushing dependency. Our poverty programs do rescue many people, but other times they backfire.
Some young people here don’t join the military (a traditional escape route for poor, rural Americans) because it’s easier to rely on food stamps and disability payments.
Antipoverty programs also discourage marriage: In a means-tested program like S.S.I., a woman raising a child may receive a bigger check if she refrains from marrying that hard-working guy she likes. Yet marriage is one of the best forces to blunt poverty. In married couple households only one child in 10 grows up in poverty, while almost half do in single-mother households.
Most wrenching of all are the parents who think it’s best if a child stays illiterate, because then the family may be able to claim a disability check each month.
“One of the ways you get on this program is having problems in school,” notes Richard V. Burkhauser, a CornellUniversity economist who co-wrote a book last year about these disability programs. “If you do better in school, you threaten the income of the parents. It’s a terrible incentive.”
About four decades ago, most of the children S.S.I. covered had severe physical handicaps or mental retardation that made it difficult for parents to hold jobs — about 1 percent of all poor children. But now 55 percent of the disabilities it covers are fuzzier intellectual disabilities short of mental retardation, where the diagnosis is less clear-cut. More than 1.2 million children across America — a full 8 percent of all low-income children — are now enrolled in S.S.I. as disabled, at an annual cost of more than $9 billion.
That is a burden on taxpayers, of course, but it can be even worse for children whose families have a huge stake in their failing in school. Those kids may never recover: a 2009 study found that nearly two-thirds of these children make the transition at age 18 into S.S.I. for the adult disabled. They may never hold a job in their entire lives and are condemned to a life of poverty on the dole — and that’s the outcome of a program intended to fight poverty.
THERE’S no doubt that some families with seriously disabled children receive a lifeline from S.S.I. But the bottom line is that we shouldn’t try to fight poverty with a program that sometimes perpetuates it. …
Here and there a bright spot. Here’s one from John Steele Gordon.
Bills that would make Michigan the 24th state to adopt a right-to-work law have passed the Michigan Senate and House, both in Republican hands. If the bills are reconciled, as seems likely, the legislation will be signed by the Republican governor.
This is a remarkable event. Michigan is the fifth-most unionized state in the country, with 19.2 percent of the workforce. The United Auto Workers, born in Michigan, has been a major player in state politics for decades.
But the Michigan economy is doing very poorly, relative to the country as a whole, with unemployment at 9.1 percent. Only five states are doing worse. The state’s biggest city, Detroit, is a poster child for urban decay, on the brink of bankruptcy thanks to decades of spectacularly corrupt government and unaffordable pension agreements with its unionized workers.
Right-to-work states have been overwhelmingly concentrated in the South, the mountain West, and the northern plain states. But this year Indiana became the first state in the Midwest industrial heartland to adopt a right-to-work law. Should Michigan do so as well, it will be a powerful indication that union power is in serious and probably permanent decline. No longer obliged to belong to a union in order to work at a unionized company or government, many workers will simply stop paying the substantial dues unions charge. And since, as California’s Jesse Unruh explained decades ago, “money is the mother’s milk of politics,” that means union political power will diminish accordingly.
Powerline’s Paul Mirengoff on the latest jobs report from the no-growth obama economy.
Superficially, the November jobs report doesn’t look bad. Non-farm jobs increased by almost 150,000 and the unemployment rate dropped to a four year low of 7.7 percent.
Viewed with a little more sophistication, the report looks worse. 150,000 new jobs isn’t very impressive. And the drop in the unemployment rate stems from the large number of Americans who stopped looking for work.
In fact, the deeper one drills down, the grimmer the picture. James Pethokoukis has the details:
1. The two-tenths drop in the unemployment rate was because people gave up looking for work. The labor force participation rate fell to 63.6% from 63.8% in October. If it had just held steady since then, the unemployment rate would be back over 8%. Indeed, if the LFP rate was just where it was in November 2011, the unemployment rate would be 8.3%. Some 542,000 Americans left the labor force just last month.
2. If labor force participation was at its January 2009 level, the unemployment rate would be a whopping 10.7%. Now, some of the drop in the LFP is due to demographic reasons, primarily the aging of the US population. But even taking that into account would give you a much higher unemployment rate than 7.7%. If you go by the pre-recession CBO forecast of the 2012 LFP rate, the unemployment rate would be 10.4%. …
James Pethokoukis posts on the missing 15 million jobs.
Let’s keep it simple. For the past three decades, US private sector jobs have grown by about 1.8%-2.0% a year. But that’s not been happening since the Great Recession. Private sector jobs fell sharply in 2008 and 2009. And in 2010, for instance, the first full year of recovery, private sector jobs grew by just 1.2%. Last year growth was 1.9%, with 2012 looking about the same.
Not only do we need another 4 million private sector jobs to get back to the pre-Great Recession level, but we need a lot more to get private sector jobs back to the pre-Great Recession trend (as the above chart reflects).
A whole lot more. If the US economy had been generating jobs at its usual pace since 2007 until the present, the US would have roughly 15 million more private sector jobs right now. (Other folks calculate it a bit differently, but basically the range is between 13 million and 16 million.)
That’s the true jobs gap. And unless we get a period of above average economic growth and job creation, that gap will close only ever-so slowly. By one measure, not until after 2025.