Increasing Productivity Will Not Solve Wage Stagnation
Mitt Romney has recently been arguing that we can solve wage stagnation by making American workers more productive. If you set aside his implying that American workers are not sufficiently productive, it is a line of logic that makes sense in the abstract — if a worker makes 50 percent more widgets per hours it would make sense that he would be paid more.
However, this line of logical depends on the existence of a strong link between productivity and wages.
No such link has existed in over 30 years.
This argument put forth by Mitt Romney — increased productivity will result in increased wages — is representative of the implicit problem in the conservative approach to economics. They err on the side of embracing notional economic theories — I assume because they “feel” right — and pay little deference to historical evidence.
I am all for productivity gains, but increasing productivity will not improve the financial situations of the overwhelming majority of American wage earners.
Mitt Romney Admits That Budget Cutting Would Threaten Economic growth
In striking admission, Mitt Romney revealed that he knows full well that cutting the federal budget would pose a serious threat to economic growth:
This observation — that austerity is bad for economic growth — should come as no surprise to any person who has paid any attention to the recent events in the Euro-Zone.
However, this is a rather striking comment because Republicans (in spite of all evidence) have been arguing that austerity will resolve all of our economic woes.
Now that Romney has admitted that he is a Keynesian, he must now be willing to engage in the debate over the relative effectiveness of taxes as expansionary policy compared to every other possible option — i.e infrastructure spending, food aid for the poor, aid to states to prevent layoffs, and so on.
The budget needs to be balanced, but now is not the time. Now is the time to make government spending as effective and potent and possible, and part of that is redirecting funds from ineffective expansionary policies (like the Bush Tax Cuts) towards more worthwhile expansionary policies like everything mentioned in the above chart.
More Identify as Pro-Life, But Few Support Outlawing Abortions: New Gallup Poll
A new poll from Gallup today has shed further light on the relative worthlessness of how people classify themselves (i.e liberal/conservative, pro-life/pro-choice, etc.).
I imagine many abortion opponents will use the new Gallup data to fuel their campaign to make abortion illegal — citing that a majority of Americans identify as “Pro-Life”. And so long as identifying as “Pro-Life” and desiring a legal ban on abortions are the same, they would be right to do so.
However, there is little reason to think that most people who identify as “Pro-Life” actually harbor the sentiments commonly associated with the term — a belief that abortion should be illegal.
After asking people whether they were “Pro-Choice” or “Pro-Life”, Gallup asked if people thought abortion should be “legal under any circumstances, legal only under certain circumstances, or illegal in all circumstances”. When asked the second question, 77 percent of people said that abortion should legal in all or some circumstances. Only 20 percent actually said that abortion should be illegal.
This is a sign that people are not clear on what it is Pro-Choice and Pro-Life mean within their valuable political and policy related contexts. Pro-Choice does not mean that you think abortions should obtainable at any time under any circumstance. It simply means that you believe that women should have access to the legal medical procedure of an abortion. Pro-Life does mean that you think that abortion equates to taking a human life, and by that measure, should be illegal.
No one is pro-abortion. What people are (I think), is opposed to a reality where women are forced to choose between carrying an unwanted or possibly life threatening pregnancy to term or seeking out highly dangerous “back alley” abortions.
Before abortions became legal medical procedures — subject to medical codes and regulations, back alley abortions accounted for 50 percent of all maternal deaths in the first half of the 20th century in America. Abortions performed in clinics today on the other hand, account for .000006 percent of maternal deaths (as measured by the percentage of deaths per 100 live births). Put another way, the legalization of abortion reduced the mortality risk of an abortion by 833,333,300 percent.
I am not Pro-Choice because I think abortions are grand. I am Pro-Choice, because the alternative — a reality where abortions are illegal — is far worse. I am pretty sure that is where the overwhelming majority of people are at right now.
Why Fiscal Conservatives Should Vote For Democrats
(Just to be clear, Obama had the stimulus included in his number.)
I am not saying that it is good or bad, because how and for what federal dollars are spent matters a lot. I am just pointing out that over the past three decades, federal spending has increased at a slower pace under Democratic presidents than it has under Republican ones.
The reasons for this are numerous, but one big contributor are changes in defense spending.
Keep in mind that Romney wants to increase defense spending well beyond the projected base line.
Fox News Viewers Least Informed: New Study Confirms Earlier Findings
Last year, Fairleigh Dickinson University conducted a New Jersey centered poll to find out which news consumers were the most and least informed. After asking 612 New Jersey adults a battery of questions concerning domestic and international issues, the pollsters at FDU found that NPR listeners were the mots informed news consumers and Fox News viewers were the least informed.
It should come as no surprise that this upset a lot of people, many of whom questioned the veracity of the poll and suggested that poll was effectively a thinly veiled attempt at smearing Fox News.
Perhaps inspired by these accusations, the pollsters at FDU recently conducted another survey. This time, the poll was nationwide and included 1,185 respondents.
Well,the results are in, and it should come as no surprise that the results confirm the findings of the earlier poll.
When it came to both domestic and international issues, NPR listeners consistently knew the most (average scores being 1.51 and 1.97 respectively) and Fox News viewers knew the least (average scores being 1.04 and 1.08 respectively). Interestingly, people who regularly consume no news whatsoever, on average, knew more about domestic and international issues that Fox News viewers (average scores 1.22 and 1.28 respectively).
However, more interesting than the raw results are the results broken down by ideology — i.e Liberals who watch Fox News or Conservatives who Watch MSNBC.
Based ont the results of this poll (at least when the two news sources considered are MSNBC and FOX), consuming news-media from a source that possesses an explicitly different ideological bent correlates strongly with far less knowledge about both domestic and international issues. Conversely, consuming news-media from a source that shares your ideological bent is correlated with dramatically more knowledge about international and domestic issues (relative to the average consumer of news from that source).
(For clarification: “Talk Radio” and NPR are considered different news sources for the purposes of the poll)
I Love How The Morning Joe Crew Can Ignore Really Important Lessons When Joe Finds Them Inconvenient
Interesting interview on Morning Joe earlier today with Arthur Herman (who was discussing his new book). In the interview, Herman explains how a bottom-up free market approach facilitated the restructured and rebuilding of the American economy during the great depression.
I do not take issue with the historical accuracy of his account of what happened. To be sure, businesses stepped up their game because of their profit motive. However, conspicuously absent from the entire conversation was the fact that the primary incentive for the action taken by businesses was a massive increase in government demand for goods.
They flash a stat during the interview showing that manufacturers produced 286,000 warplanes, 86,000 tanks, nearly 9,000 naval vessels, 2.6 million machine guns, and 41 billion rounds of ammunition.
Businesses did not go about retooling factories, buying materials, and hiring people out of some charitable or patriotic instinct. They did it because their was a demand for these goods, and it was government that supplied the demand.
If there is any lesson to be had here, it is that government can help save a flailing economy by supplementing demand when consumer demand is weak.
A Useful Scott Walker Recall Talking Point: In Case You Are Having Trouble Thinking of One
So, I imagine many of you are having trouble articulating in concrete terms why it might be worth recalling Scott Walker.
As a rule, I am not a fan of talking points. But if you only have a brief moment to explain why it is you think it is worth recalling Scott Walker, and you are like me — i.e you prefer to talk policy and policy outcomes rather than ideology, then here is about as useful a talking point as you are liable to find:
Since December of 2010 (the month before Scott Walker took office), Wisconsin has had the slowest private sector jobs growth in the entire Midwest, and is one of only 5 states to experience a net increase in unemployment. And of those 5 states, Wisconsin has experienced the largest net increase in unemployment.
How Romney Says He Will Save the Economy
For those of you unfamiliar with the political science concerning political advertising, it is worth noting that the effectiveness of an ad has nothing to do with how positive or negative the ad is.
I know this sounds counter intuitive, because every campaign season, tons of oxygen is spent debating whether negative ads or positive ads work best. However, a lot of time and energy has been invested in figuring out what makes an ad effective, and one of the most consistent findings is this:
The most effective ads are the ones that reach voters who are undecided about, or otherwise unfamiliar with, a specific candidate, and manage to cement in these voters’ minds a specific image of that candidate.
This means that these first round of ads Mitt Romney runs about himself, are going to be among the most important ads that he runs this cycle. This also means that it is worth paying particularly close attention to these ads, because they not only reveal how Romney wants to be viewed but they are likely to shed light on his top policy priorities.
That said, here is one of Romney’s first major general-election “Hi, my name is Mitt Romney, and I am running for president” ads:
In the ad, Romney lays out the three big-ticket things he wants to achieve in his fist term: Approve the Keystone pipeline, cut taxes and regulations, and repeal and replace the Affordable Care Act.
I am going to bypass the pipeline item only because its construction is already forgone conclusion. The pipeline will be constructed, the only issue is the exact route it takes.
The line about repealing and “replacing” of the ACA is just a rhetorical flourish. Congressional Republicans have expressed no interest in replacing the ACA with anything that could feasibly end discrimination based on preexisting conditions or help tens of millions of currently uninsured Americans obtain health insurance.
In fact, the de facto leader of the Senate-wing of the Tea Party, South Carolina’s Jim DeMint, expressed no interest in doing anything comprehensive:
House Rep Phil Gingrey of Georgia expressed a similar sentiment when he said:
“I don’t believe we need to have another big omnibus bill that we’re going to roll out … I don’t think that we need to make the same mistakes that the Obama administration and the Democrat Congress made.”
This brings me to the middle piece of the ad, when Romney stakes out his plan to address America’s economic problems by cutting taxes and eliminating regulations. To be sure this sounds nice, but there is absolutely no reason to think that the underlying cause for persistently high unemployment are taxes and regulations.
Right not corporate tax revenues as a percentage of corporate profits in the U.S. are at their lowest point since WWII. Research has shown that decreasing corporate tax rates does little, if anything, to influence where it is businesses choose to invest (whether that means building a new factory in India as opposed to America, or Iowa as opposed to Wisconsin). Moreover, there is little reason to think that lowering corporate tax rates will influence business hiring.
Simply looking at changes in capital investments and tax rates on capital gains reveals little relationship between the two. Furthermore, analysis has shown that lowering capital gains taxes does not spur investments in new business ventures — in large part because most investments in new ventures are conducted by capital firms that are already exempt from paying capital gains taxes.
(Those big spikes are economic bubbles — e.g. the late 90′s dot-com bubble)
Lastly (on the tax side), there is absolutely no empirical rational for thinking that reducing taxes will result in a measurable decrease in unemployment (beyond whatever decrease results from the rather weal influence tax cuts have on consumer demand). The entire premiss that tax cuts influence the hiring habits of business owners pivots on the idea that reducing tax rates will reduce the tax wedge — i.e. the difference between the cost to an employer to hire a new worker and the compensation that new worker receives after taxes. However, even a brief exploration of the relationship between employment rates and tax wedges shows no meaningful relationship between the two.
The U.S. has an extremely low tax wedge, and half the countries with a higher tax wedge than the U.S. and half the countries with a lower one employ a larger percent of their respective working-age populations than the we do.
Shifting from taxes to regulations, there is also little evidence that regulations are having any meaningful effect on the U.S. economy. The kind of regulations that Romney would conceivably address, are the kind of regulations that influence investments in material capital. Here is an easy way to think of it:
If I owned a home, it is conceivable that local and state regulations would have a significant impact on whether or not I decide to extend my porch, but they are not likely to influence whether or not I hire people to tend my lawn.
Any way, the growth in business investments in the U.S. in recent years have been pretty strong.
Through this ad, Romney has revealed that his three highest priorities are approving the Keystone pipeline, repealing and replacing the ACA, and using tax cuts and deregulation to improve the economy.
But, the Keystone pipeline is likely to be approved regardless of whether Romney becomes president. Romney might sign into law a bill that repeals the ACA, but the chances of a Republican controlled congress passing any sort of replacement bill are effectively zero. Most importantly, cutting taxes and regulations might make Republicans happy, but there is no reason to think that either of these things will do much of anything to address America’s economic problems.
I take the message and the information conveyed in this ad seriously, because the people who run the Romney campaign know that this ad will be among the most important ads they will run. And I find it frightening that Romney is seriously staking out these policy initiatives, which are themselves so unserious and detached from reality, as being his highest priorities.
Fear of Nuclear Iran Solicits Majority International Support for Military Action
New polling from Pew shows that with few exceptions, most major international players express majority support for taking military action to prevent Iran from acquiring nuclear weapons.
In most cases, the majority in favor of taking military action is slim. However, opposition in many places is scarce. In countries like the Czech Republic and Brazil for example, 55 percent of the population supports using military force but only 31 percent said that they would accept a nuclear-armed Iran (i.e. not take military action).
Acceptance for a nuclear-armed Iran is slightly higher in countries like France, Germany and Britain with 40,48, and 41 percent respectively expressing a preference for acceptance over military action.
It is also worth noting that the U.S. registered the strongest support for taking military action, and China and Russia registered among the weakest supporters of the idea of taking military action.
What is most interesting however, is the party level support in the U.S. for taking military action. While it comes as no surprise that Republicans support taking military action over accepting nuclear-armed iran by a more than 5-1 margin, I think it quite surprising that support for military action is actually weaker among Independents than it is among Democrats (58 percent of Independents support military action and 61 percent of Democrats support military action).
Global Opinion on a Nuclear Iran: New Polling
Most every country in the world canvassed in a recent Pew poll registered overwhelming opposition to the idea of a nuclear-armed Iran. The strongest opposition was found in European nations, the U.S., Japan, Mexico, and Brazil.
Opposition was still strong in the Middle East. Although, the Shia population of Lebanon expressed strong support (73 to 26 in favor) and Tunisia appears split.
The strongest support for Iran acquiring nuclear weapons at the national level was in Pakistan, where 50 percent of the population said they favored the idea of nuclear Iran and only 11 percent opposed.
More interesting however, is the fact that the threat perception expressed by the respective population of the Middle East countries polled by Pew is notably lower than the opposition to the idea of a nuclear-armed Iran outright.
For example 54 percent of Turks oppose a nuclear Iran, but only 46 percent say they see a nuclear Iran is either a very/somewhat serious threat. The same trend can be seen in Jordan — 62 percent oppose but only 42 percent say a nuclear Iran poses a very/somewhat serious threat.
Regardless, there is little global support for a nuclear-armed Iran outside of a few enclaves.
