Category: economic recovery

Disingenuous crap: Obama has no jobs plan

Disingenuous crap: Obama has no jobs plan

Posted on by Jack

I liked the phase “disingenuous crap” so much to describe Romney’s claim that Obama has no jobs plan that I stole it from Andrew Sullivan. This is the third in his series on the big lies of Mitt Romney. This one seemed most relevant to today’s post so I referenced it here. But all are worth reading.

But it is rather a big claim that Obama has a plan so here is a second reference from the Washington Post. It seems it would have been more accurate for Mr. Romney to claim that President Obama has no plan that Republicans support.

Obama has proposed a plan and it has been blocked by Republicans who don’t want him to succeed. But he is succeeding. It seems likely to me that the success would be much faster if the Republicans in Congress would do their job and govern.

The highest Republican party objective seems to be to deny Obama a second term. That is a rather short video with Mitch McConnell defending his now famous quote. But if you have the time you might enjoy an almost 9 minute video from Media Matters which includes several Republican quotes and a bit of context.

Despite opposition President Obama is succeeding in getting our economy to grow. Of course, growth would be faster if he had the support of Congress. Think about that when you vote.

But if you remember, we were losing about 800,000 jobs per month when President Obama took office. The job loss slowed and for the past few years we have actually been gaining jobs each month. (See Stimulus worked, more jobs needed.)

That post is about a year old, see Chart Book: The Legacy of the Great Recession which bring things up to date and adds quite a bit more on the recovery.

Too Big To Fail = Too Big To Exist

Too Big To Fail = Too Big To Exist

Posted on by Jack

Our financial policy is now that certain financial institutions are Too Big To Fail and so they must be tightly regulated and bailed-out by the taxpayers if they do fail, lest they topple the U.S. economy.

Over regulation is a potential problem. Bail-outs of hundred of billions and perhaps several trillion are also potential problems, especially when our government is running large deficits and is trillions of dollars in debt.

Too Big To Fail = Too Big To Exist is the simplest solution. Simply, do not let the institutions reach a size where they threaten the U.S. economy. Some institutions already exceed that size and need to be gradually broken-up or unwound to get under that number.

Jon Huntsman proposed such a plan during his bid for the Republican presidential nomination. I’m sure there are other plans out there.

Too Big To Fail = Too Big To Exist can be shortened to TBTF = TBTE or 2B2F = 2B2E for those who like things shorter. Thus financial institutions will be freer to experiment and take risks. The taxpayers need not regulate so closely and are not on the hook for a bail-out. It is a win-win as far as I can see.

Ryan’s fantasy

Ryan’s fantasy

Posted on by Jack

I usually disagree with David Brooks of the New York Times but do find his columns well-worth reading as he often makes good points. In a recent column Ryan’s Biggest Mistake he makes the point that in voting against the Simpson-Bowles proposal and so denying a vote for the proposal which offered both deficit reduction and tax reform, Paul Ryan helped shoot down a good proposal which he viewed as less than perfect.

They do say the perfect is the enemy of the good or something like that and this seems to be a good example. While I don’t think Paul Ryans’s ideas are perfect, I’m sure he has a high opinion of them. But as David Brooks points out, Paul Ryan was giving up real progress for a fantasy. Read the column. It is interesting (good but not perfect).

Political ads

Political ads

Posted on by Jack

I’m not sure if it is the Philadelphia market or that I’ve just been lucky because I haven’t watched that much TV lately. I was watching more in the spring and I did see a large number of ads on TV and most were negative. During the Republican primary season, they seemed to be mostly negative ads either for against Mitt Romney. Ane then they were about the Presdential race but either Romney against Obama or Obama against Romney and largely negative.

But last night there was an Obama ad on while I was watching the Olympics and it seemed very positive as compared to what I had been seeing. The President seemed to be drawing a sharp contrast between Mitt Romney’s economic ideas and his, and telling the voters they had an important choice to make. Of course, in 1 minute (or maybe it was less), you cannot go into too much depth. And you can’t really expect either side to be very positive about the opposition ideas. But still, it may be the start of a reasonable discussion.

Can we look forward to a serious discussion of the issues ?

Jon Huntsman and Too-Big-To-Fail Wall Street banks

Jon Huntsman and Too-Big-To-Fail Wall Street banks

Posted on by Jack

Jon Huntsman has shown he is a candidate with a real shot at the nomination with his strong showing in the New Hampshire primary. Maybe now he will get the attention he deserves.

Mr. Huntsman has again addressed the issue of Too-Big-To-Fail Wall Street banks. He seems to be one of the very few politicians who is willing to take on Wall Street banks which threaten our country’s economy. I had written about this last month (see my post – Jon Huntsman and Too Big to Fail.

It would seem that many in the Republican and business communities are opposed to the regulation of financial institutions passed by Congress (Dodd-Frank) But if the government is responsible for the debts of the big banks, does it not make sense to regulate? Certainly, it can be argued whether Dodd-Frank got it right. But if there are no too big to fail institutions, a lighter regulatory hand is appropriate.

Common Sense Regulation

Common Sense Regulation

Posted on by Jack

There was a very interesting article in today’s Wall Street Journal on Common Sense Regulation. I’m not sure we are ready for common sense but it is certainly an idea worth thinking about. Since not everyone gets the Wall Street Journal and they have been known to sometimes put interesting articles on their website behind a pay-wall, I thought it would be good here to cite an extended online version of that article.

In the financial sector, it certainly could be combined the Jon Huntsman’s ideas on Too Big to Fail and the repeal of Dodd-Frank which were recently highlighted here.

The idea to simplify regulations while still regulating is an interesting idea. The author gives several examples of over complex regulations and how they could be simplified. The discussion anticipates many objections. This is a good starting point for further discussions.

Jon Huntsman and Too Big to Fail

Jon Huntsman and Too Big to Fail

Posted on by Jack

I was very pleased to read Jon Huntsman’s plan on financial reform . Two aspects of it especially struck me.

First, it never made any sense to me to have financial institutions so large that they would be considered too big to fail. That is they are so large that if they were to fail the entire US economy would be in danger. Indeed, I had writen about this over 2 years ago.. Jon Huntsman presents a plan to eliminate this risk by the simplest means possible: not have too big to fail institutions.

Second, he proposes the repeal of Dodd-Frank. This was our government’s regulatory response to the 2008 crisis. I read quite a few newspapers (including both the NY Times and the Wall Street Journal) and I know this regulatory reform is opposed by many in the business community but it seems to me if the goverment is ultimately reponsible for the debts of the big banks, there is a need for extensive regulation. It is an arguable point whether Dodd-Frank got it right. But if there are no too big to fail institutions, a lighter regulatory hand is appropriate.

There are several other aspects to Jon Huntsman’s plan but I just wanted to highlight these. Although Jon Huntsman is way back in the pack seeking the GOP nomination for President, he may be the most qualified and thoughtful in the group.

Buy American Gifts and Support American Art

Buy American Gifts and Support American Art

Posted on by Jack

The past few nights on the TV news there have been a series of reports called Made in America. A major point of these reports is that if we spent just a part of what we spend on gifts this year on goods made in America, we would create thousands of jobs in America.

This got me to thinking about my brother and his family business. They sell made in America art online and works by a large number of artists. The business is Best American Arts and the website is http://www.bestamericanarts.com/. Items include jewelry, various items of home decor, ceramics, fiber,glass, leather, metal, and wood. All of these are handcrafted in America. And shipping is free within the United States.

So if you think you might be interested in giving some American art this year, check out http://www.bestamericanarts.com/. And I’ve saved even more good news for last. Because his brother Jack sent you, there is a discount. Just use the code JackReidy at checkout and the discount will be applied. (No spaces in the discount code.)

Let’s buy at least 1 American gift this year. The recepient will love the quality of the artwork and the United States economy will benefit. Support American art and this family business.

Stimulus worked, more jobs needed

Stimulus worked, more jobs needed

Posted on by Jack

The graph below shows the month to month change in private employment during the 45 months from January 2008 to September 2011. Thus months 1-12 are 2008 during the Bush admininstration. Months 14 -45 are the Obama administration. And month 13 is January 2009 which was split between the 2 administrations. The numbers on the right indicate thousands of jobs gained or lost each month.

All numbers are from the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor. The month to month change was calculated and graphed with Excel.

Jobs Chart BLS numbers

The graph clearly shows accelerating job loss in 2008 hitting over 800, 0000 jobs lost in January 2009, staying in that area for several months, followed by a decreasing job loss, and emerging into positive job growth in April 2010. The job growth is too small bring down our stubbornly high unemployment rate but it is moving in the right direction. We need to create more jobs to keep up with the constantly growing labor force. We have had 17 straight months of job gains in the private sector. (The August figures are often reported as zero but that was because the number of jobs in the public sector shrank.)

There are quite a few things that could influence the economy in this time. The slow-down in job decline in early 2009 seems to suggest that stimulus plan seems to have worked but is now slowing down. The TARP program passed in late 2008 may have helped this recovery. And one could argue that things would be better or worse if we had followed a different plan.

The present jobs bill being promoted by President Obama should also stimulate job creation the same way. And there is a focus on fixing infrastructure, things we need to do anyway. One could argue certain aspects of the plan could be improved but many critics think this plan is a waste of time and money since the first stimulus didn’t work. It looks to me like it probably worked but may not have been enough so it is well worth trying something similar.

The stimulus was working but is now slower

The stimulus was working but is now slower

Posted on by Jack

The economic stimulus plan of 2009 is widely criticized as not working but it seems that it did work but is now slowing down. They say it didn’t create jobs but that is not right.

They say the government can only create government jobs. While it is true that government creates government jobs directly, it also plays a large role in creating private-sector jobs, say by contacting with a construction company to build a road or repair a school. Also those government workers and private-sector workers paid to do the work that the government funds, spend their money and that will further stimulate the private sector.

Why do I say this? Let’s look at the data. To make my point I’ll just look at private employment. Government employment is useless according to the critics. I disagree but I’ll leave that point alone right now. But it complicates the picture and gets into an argument that just distracts from my point. So private-sector only.

Monthly job numbers from the Bureau of Labor Statistics of the U.S. Department of Labor from January 2008 to as close to present as we can get are plotted here.

Jobs Chart BLS numbers

I downloaded the numbers from BLS and ran the numbers myself and produced a similar graph. My graph did not look nearly as nice as this one so I went ahead and used the one already published on the internet.

There are quite a few things the would influence the ecomomy beside that change in Presdential administrations. And one could argue that things would be better or worse if we had followed a different plan. Or one could argue that the TARP program passed in late 2008 was a part of this recovery. But the slow-down in job decline in early 2009 seem to suggest that stimulus plan seems to have worked but is now slowing down. Jobs are being added but at a slow pace.

The present jobs bill being promoted by President Obama should also stimulate job creation the same way. And there is a focus on fixing infrastrucure, things we need to do anyway. Some critics think this plan is a waste of time and money since the first stimulus didn’t work. It look to me like it probably worked but may not have been enough so it is well worth trying something similar.

Huntsman Beats Obama

Huntsman Beats Obama

Posted on by Jack

Jon Huntsman beats Barack Obama in making public a jobs plan. President Obama’s plan should be out in a few days. Gov. Huntsman’s plan has already been available for several days. It covers many aspects of the economy as would be expected as jobs are not an isolated issue and they are but a part of the larger economy. Here is the whole plan as a PDF as well as a blog entry on the candidate’s website that summarizes.

Let us hope more of the candidates come out with plans like this so we can have a debate on some ideas. I was a bit disappointed that parts of Huntsman’s plan were vague but I’m sure these points will be more fully explained in the near future.

Stimulus efforts: Shovel ready or not. Please fix our infrastructure.

Stimulus efforts: Shovel ready or not. Please fix our infrastructure.

Posted on by Jack

The stimulus efforts have seemed to slow down for a variey of reasons but often cited is that there are very few truly shovel-ready projects. The infrastructure needs to be fixed. Our roads are certainly in need of improvement and not so long ago a bridge collaped with loss of life and many of our bridges were inspected and found to be sorely lacking. The power grid could use updating too. Remember the black-outs. It would be a long list if I tried to list all the needs and even then I’d surely miss some. Lots of infrastructure improvements are needed in this country.

A project does not need to be shovel-ready to be a stimulus to the economy. The planning stage requires much work (jobs!) and is followed by construction jobs. So we need to fix our infrastucture and stimulate our economy at the same time.

Too big to fail

Too big to fail

Posted on by Jack

One of the more curious thing about and the US economic recovery efforts in general is that certain institutions have been bailed-out with taxpayer money because they were too big to fail. That is, they were so large that their failure would bring down the US economy. So the solution that makes no sense is to merge them with another big corporation so that if they fail again it could be even more catastrophic.

Am I missing something? Wouldn’t it be better to rescue them (if need be) and then force a break-up into smaller entities that could fail without bringing down the entire economy?