April 24, 2012

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Fred Barnes say Obama is clueless about job creation.

… Obama yearns for a hefty increase in hiring by state and local governments. If hiring were “on par to past recoveries, the unemployment rate would probably be about a point lower than it is right now.” Restoring “huge cuts in state and local government” is “part of the challenge we have in terms of growth.”

The lesson here is that Obama has learned no lesson from what Edward Lazear of the Hoover Institution has called the “worst economic recovery in history”—that is, the Obama recovery. The economy has grown at a rate of 2.4 percent since the recession ended in June 2009, a full percentage point below average long-term growth. But the president is sticking with his plan for a government-led economic boom. This is Obamanomics: If it doesn’t work, then double down.

Obama once told a group of investors that the private sector didn’t need incentives to invest because his administration’s massive subsidies of green technology would lead the way. Now the mention of “green jobs” has become a laugh line. The main news from the green sector is another company bankrolled by Obama going belly-up.

In The Escape Artists: How Obama’s Team Fumbled the Recovery, Noam Scheiber describes the president’s “obsession” with green jobs. Eco-nomic adviser Christina Romer “would march in with an estimate of the jobs all the investments in clean energy would produce; week after week, Obama would send her back to check the numbers. ‘I don’t get it,’ he’d say. ‘We make these large-scale investments in infrastructure. What do you mean there are no jobs?’ But the numbers rarely budged.” …


In order to correct the president’s economic ignorance, James Pethokoukis suggests some time travel.

President Obama disagrees with the past 30 years of U.S. economic policy. As he said during his Osawatomie, Kansas, speech last December:

“… there is a certain crowd in Washington who, for the last few decades, have said, let’s respond to this economic challenge with the same old tune. “The market will take care of everything,” they tell us. If we just cut more regulations and cut more taxes—especially for the wealthy—our economy will grow stronger. … But here’s the problem: It doesn’t work. It has never worked.”

As I was mulling over this issue, I ran across a great blog post by economist Scott Sumner:

“Suppose you had gotten a room full of economists together in 1980, and made the following predictions:

1. Over the next 28 years the US would grow as fast as Japan, and faster than Europe (in GDP per capita, PPP.)

2. Over the next 28 years Britain would overtake Germany and France in GDP per capita.

And you said you were making these predictions because you thought Thatcher and Reagan’s policies would be a success. Your predictions (and the rationale) would have been met with laughter. Indeed around that time most of the top British economists signed a petition asserting that Thatcher’s policies would fail.

For those of you not old enough to remember 1980, let me explain why. Labour rule of Britain had reduced their economy to a shambles. The government ran the big manufacturing corporations and labor unions were running wild. They had 83% [marginal tax rates, 98% on capital.] There was garbage piling up in the streets of London. Britain had been the sick man of Europe for decades, growing far more slowly than Germany, France and Italy.

The US wasn’t doing as badly, but certainly wasn’t doing that well either. We had also been growing much more slowly than Europe and Japan. Unlike Britain, we were still richer than most other developed countries, so this convergence was viewed as partly inevitable (the catch-up from WWII), and partly reflecting the superior economic model of the Germans and Japanese.”

And here’s what happened over the following decades, as expressed in a chart looking at per capita income in terms of purchasing power parity:…


Bill Kristol posts on what Reagan really said.

… Barack Obama’s appeal to Ronald Reagan is illuminating in a number of ways. It’s illuminating that today’s liberals need to appeal to the example of Reagan to sell their policies. That’s a posthumous victory for Reagan, and an important contemporary victory for Reaganism. Even more, it’s illuminating because it gives us reason to go back and read the Reagan speeches Obama cited and see how compelling they were and how thoroughly the president misrepresented them.

Did Reagan, as Obama claimed, “travel across the country pushing for the same concept” as Obama today? No. Reagan was pushing for comprehensive tax reform, at the center of which was an across-the-board tax rate reduction combined with elimination of tax shelters. The idea was to simplify the system, out of respect for citizens and for the health of the economy. Obama, by contrast, has never risked offering a serious big tax reform proposal. What he does want to do is raise marginal tax rates on many American families.

Obama cited two Reagan speeches from June 1985. Just before that, on May 28, 1985, Reagan had addressed the nation from the Oval Office, kicking off the effort that would produce the Tax Reform Act of 1986. The heart of his argument: “By lowering everyone’s tax rates all the way up the income scale, each of us will have a greater incentive to climb higher, to excel, to help America grow.”

Reagan followed up on June 6, speaking at Northside High School in Atlanta. He did note “the unproductive tax loopholes that have allowed some of the truly wealthy to avoid paying their fair share” and that “sometimes made it possible for millionaires to pay nothing, while a bus driver was paying 10 percent of his salary.” He called them “crazy.” That’s the part of his predecessor’s speech Obama chose to recall.

Here’s what else Reagan had to say: He ascribed the economic comeback of the previous few years, in which “hope has returned, and America’s working again,” to the fact that we “cut tax rates and trimmed federal spending.”

Why didn’t President Obama quote that? And what about Reagan’s explanation for why his administration had cut rates? 

“What’s really important is what inspired us to do these things. What’s really important is the philosophy that guided us. The whole thing could be boiled down to a few words?—?freedom, freedom, and more freedom. It’s a philosophy that isn’t limited to guiding government policy. It’s a philosophy you can live by; in fact, I hope you do.”

Somehow, Obama neglected to quote that. …


“Figures don’t lie, but liars figure.” That comes to mind when looking at stats from the Bureau of Labor Statistics. David Harsanyi takes them on.

Whenever a situation appears to be a conspiracy, the explanation is likely to be happenstance. But, looking at how often (and how much) BLS has revised its unemployment numbers, we have a rather strange trend that is certainly worth noting.

More Americans “than forecasted” filed applications for unemployment benefits this week — first we heard that the jobless claims fell by 2,000 but now the revised numbers show 6,000 above the initial forecast. As Ed Morrissey notes, “That number got revised this week, but the real story is in the 4-week rolling average.  Just three or four weeks ago, that number was in the 360K range.  Now it’s close to 375K, roughly the same level as last spring’s stagnant economic conditions.”

Without even taking into account the incredible shrinking job force, this portends bad economic news. Yet, the bad news always seems to be tempered by the Labor Department.

According to Bloomberg:

Revisions to previous data have been larger than normal and the government is trying to determine the cause, a Labor Department spokesman said as the figures were released to the press.

A lot more than normal, actually. According to Dow Jones, the Labor Department had revised its estimate of seasonally adjusted jobless claims upward in 56 of the past 57 weeks. That’s unprecedented.

Fact is, initial estimates draw the most reaction from media, while the revisions are treated less newsworthy, despite their relative significance. …


Blog post from Pope Center suggests the economic value of education is worth questioning. 

The latest data from the Bureau of Labor Statistics show that, for many people, increasing their level of education pays off in higher earnings and lower unemployment rates.

Looking at the chart (which appears on the BLS site) it seems obvious that the path to financial success is to get a college degree—and then an advanced degree. The more education you have, the better off you’ll be. High school graduates, for example, are almost twice as likely to be unemployed as college graduates, and they earn substantially less money per week.

Justin Wolfers, an associate professor of business and public policy at the Wharton School used the BLS data to tweet, “Hey kids, stay in school. What would happen if we put this poster in every classroom?”

Wolfers was reiterating the conventional wisdom, reinforced by the BLS data, that the longer an individual stays in school, the better off he’ll be.

Unfortunately, he missed a crucial detail. All of these statistics are the median—representing the person separating the higher half of a sample from the lower half. It’s a mistake to assume that the median tells us what most people in that group will experience.

Thinking of the median as “typical” masks a lot of important details about educational outcomes. …


LA Times article says meat eaters might have been doing the evolutionary heavy lifting.

If early humans had been vegans we might all still be living in caves, Swedish researchers suggested in an article Thursday.

When a mother eats meat, her breast-fed child’s brain grows faster and she is able to wean the child at an earlier age, allowing her to have more children faster, the article explains. That provided a distinct competitive advantage for early humans when limited resources and a small population made it difficult for them to thrive. “Eating meat enabled the breast-feeding periods and thereby the time between births to be shortened,” said psychologist Elia Psouni of Lund University in Sweden. “This must have had a crucial impact on human evolution.” …

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