Economy

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The consequence of sexism

I’m writing this the morning after the Republicans in the Senate passed a massive tax reform bill that I doubt many of them, or their staff members, or maybe even leadership had read.  The bill wasn’t even printed but evidently photocopies with handwritten insertions and changes were passed out in the hours just before the vote.  There were no hearings.  And now we get to watch Paul Ryan and Mitch McConnell try to reconcile the House and Senate bills.  I wish them no success.

So how is this bill a consequence of sexism?  I hadn’t thought about it either until I read this piece by Jill Filipovic in the New York Times.  She writes

Many of the male journalists who stand accused of sexual harassment were on the forefront of covering the presidential race between Hillary Clinton and Donald Trump. Matt Lauer interviewed Mrs. Clinton and Mr. Trump in an official “commander-in-chief forum” for NBC. He notoriously peppered and interrupted Mrs. Clinton with cold, aggressive, condescending questions hyper-focused on her emails, only to pitch softballs at Mr. Trump and treat him with gentle collegiality a half-hour later. Mark Halperin and Charlie Rose set much of the televised political discourse on the race, interviewing other pundits, opining themselves and obsessing over the electoral play-by-play. Mr. Rose, after the election, took a tone similar to Mr. Lauer’s with Mrs. Clinton — talking down to her, interrupting her, portraying her as untrustworthy. Mr. Halperin was a harsh critic of Mrs. Clinton, painting her as ruthless and corrupt, while going surprisingly easy on Mr. Trump. The reporter Glenn Thrush, currently on leave from The New York Times because of sexual harassment allegations, covered Mrs. Clinton’s 2008 campaign when he was at Newsday and continued to write about her over the next eight years for Politico.

A pervasive theme of all of these men’s coverage of Mrs. Clinton was that she was dishonest and unlikable. These recent harassment allegations suggest that perhaps the problem wasn’t that Mrs. Clinton was untruthful or inherently hard to connect with, but that these particular men hold deep biases against women who seek power instead of sticking to acquiescent sex-object status.

What these journalists did when they interviewed Mrs. Clinton has the same roots as their sexual harassment.

For arguing that gender shaped the election narrative and its result, feminists have been pooh-poohed, simultaneously told that it was Clinton, not her gender, that was the problem and that her female supporters were voting with their vaginas instead of their brains.

The latest harassment and assault allegations complicate that account and suggest that perhaps many of the high-profile media men covering Mrs. Clinton and Mr. Trump were the ones leading with their genitals. Mr. Trump was notoriously accused of multiple acts of sexual harassment and assault, and was caught on tape bragging about his proclivity for grabbing women. That several of the men covering the race — shaping the way American voters understood the candidates and what was at stake — were apparently behaving in similarly appalling ways off-camera calls into question not just their objectivity but also their ability to cover the story with the seriousness and urgency it demanded.

Filipovic continues

This moment isn’t about a nation of confused men. It’s about a minority of men who choose to treat women alternately as walking sex objects or bothersome and potentially devious nags. It’s about a majority of Americans who give men a pass for all manner of bad behavior, because they assume men are entitled to behave badly but hold women to an entirely different standard.

That is why it’s so egregious that sexual harassers set the tone of much of the coverage of the woman who hoped to be the first female president.

There are at least two other well known men accused of sexual harassment:  Senator Al Franken and Garrison Keillor.  It is true that both supported Clinton.  Both are alleged to have committed an act or acts that, while harassment, are rather on a different scale than Matt Lauer’s or Charlie Rose’s multiple actions.  I taught my first workshops about sexual harassment in the late 1970s to managers in Virginia state government and my staff began investigating complaints.  The manager who put his hand down an employee’s blouse was suspended; the manager who patted an employee on the rear was reprimanded.  No act can be excused, but we need to maintain some perspective.

As Filipovic writes

The 2016 presidential race was so close that any of a half-dozen factors surely influenced the outcome: James Comey, racial politics, Clinton family baggage, the contentious Democratic primary, third-party spoilers, Russian interference, fake news. But when one of the best-qualified candidates for the presidency in American history and the first woman to get close to the Oval Office loses to an opponent who had not dedicated a nanosecond of his life to public service and ran a blatantly misogynist campaign, it’s hard to conclude that gender didn’t play a role.

 And what we get is a tax reform bill that will only help the rich, destruction of the environment, alienated allies, and potential nuclear war.  Thanks a lot, fellows.

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A few thoughts from Professor Krugman on unemployment and my own on the mid-term election

One of the issues in the mid-term elections is the failure of the economy to fully recover.  Having watched bits and pieces of the new Ken Burns series on the Roosevelts  I see some parallels between FDR and President Obama.  Both Presidents saw the economy begin to slow after showing good signs of recovery. In FDR’s case it actually fell back into recession.  The mistake in both cases is, at least in part, the failure to continue to fund government programs to create jobs,  to end the programs too quickly.  FDR came to understand this; Barack Obama always did.  But the current Congress doesn’t seem to get it.

Breadlines: long line of people waiting to be fed: New York City: in the absence of substantial government relief programs during 1932, free food was distributed with private funds in some urban centers to large numbers of the unemployed. (Circa February 1932)

Breadlines: long line of people waiting to be fed: New York City: in the absence of substantial government relief programs during 1932, free food was distributed with private funds in some urban centers to large numbers of the unemployed. (Circa February 1932)

At the end of my work life I got to administer some of the stimulus funding.  What I saw was not the direct creation of a huge number jobs with government  funding, but many jobs created as the result of the opening of a new business, new hotel, or new housing.  Those employed persons paid taxes which helped bolster the economy.  If the benefits of having people employed are obvious to an economic novice like me,  I don’t understand why the Republicans in Congress don’t want to fund infrastructure projects.  Road and bridge repairs, creating a grid that can tie in with alternative energy sources, construction of affordable housing:  these are just a few of the types of projects that can be government funded and that can create jobs.  While construction jobs may disappear, the infrastructure created will result in new opportunities.

Paul Krugman’s recent column helps me understand a little what may be going on.  He begins

Last week John Boehner, the speaker of the House, explained to an audience at the American Enterprise Institute what’s holding back employment in America: laziness. People, he said, have “this idea” that “I really don’t have to work. I don’t really want to do this. I think I’d rather just sit around.” Holy 47 percent, Batman!

People are just lazy.  Krugman continues

First things first: I don’t know how many people realize just how successful the campaign against any kind of relief for those who can’t find jobs has been. But it’s a striking picture. The job market has improved lately, but there are still almost three million Americans who have been out of work for more than six months, the usual maximum duration of unemployment insurance. That’s nearly three times the pre-recession total. Yet extended benefits for the long-term unemployed have been eliminated — and in some states the duration of benefits has been slashed even further.

The result is that most of the unemployed have been cut off. Only 26 percent of jobless Americans are receiving any kind of unemployment benefit, the lowest level in many decades. The total value of unemployment benefits is less than 0.25 percent of G.D.P., half what it was in 2003, when the unemployment rate was roughly the same as it is now. It’s not hyperbole to say that America has abandoned its out-of-work citizens.

If unemployment is too costly, then any kind of jobs program must cost way too much.

…My question for today is instead one of psychology and politics: Why is there so much animus against the unemployed, such a strong conviction that they’re getting away with something, at a time when they’re actually being treated with unprecedented harshness?

…

Is it race? That’s always a hypothesis worth considering in American politics. It’s true that most of the unemployed are white, and they make up an even larger share of those receiving unemployment benefits. But conservatives may not know this, treating the unemployed as part of a vaguely defined, dark-skinned crowd of “takers.”

My guess, however, is that it’s mainly about the closed information loop of the modern right. In a nation where the Republican base gets what it thinks are facts from Fox News and Rush Limbaugh, where the party’s elite gets what it imagines to be policy analysis from the American Enterprise Institute or the Heritage Foundation, the right lives in its own intellectual universe, aware of neither the reality of unemployment nor what life is like for the jobless. You might think that personal experience — almost everyone has acquaintances or relatives who can’t find work — would still break through, but apparently not.

The bottom line:  If you are still unemployed or if you are poor it is your own fault.  Besides, those people live in a world far from the world of Fox News.

I hope that people think about the state of the semi-recovered economy when they vote and that they vote for candidates who can learn from the lessons of the Depression, will vote some funding for jobs programs and not worry so much about the deficit which is shrinking.  They should instead worry about our infrastructure which is failing.  If they fix that, they may find people aren’t lazy, they just need jobs.

 Photograph:  Picture from the Franklin D. Roosevelt Library, courtesy of the National Archives and Records Administration

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Labor, management and Market Basket

If you don’t live in New England – you have probably never heard of the Market Basket grocery chain.  It has been known for customer service and low prices.  I confess that I’ve probably shopped there maybe twice in the last 20 years so I am clearly not a regular.  But I know people who swear by Market Basket and, for some, it is the only store in town.  Whether you have heard of MB and love it, or don’t know the first thing about the store, there are lessons to be learned for Labor Day.

For more years than I can count, there has been a feud between the two cousins, Arthur S. and Arthur T. who inherited the store.  It has involved an epic court battle, and if I remember correctly, disciplinary action against some of the attorneys.  There was also an actual fist fight as at one point between the Arthurs.  All the while, Arthur T. has been managing the stores and making money for everyone.  But, according to the employees and Arthur T., the board wanted to take a bigger share of the profits for themselves and the shareholders who are mainly family members. The board decided to fire Arthur T.  Shirley Leung writes in her Boston Globe column

For six weeks, we were mesmerized by the sight of thousands of grocery clerks, cashiers, and other workers protesting at stores, on Facebook, and on the front pages of this paper. They did so at great risk, without the protection of a union, not because they wanted higher wages, but merely the return of their beloved boss, Arthur T. Demoulas.

 

Who among us would do that? Not many, if any at all. We were riveted because we wanted to be them. These rebellious employees gave voice to the voiceless masses who just wanted to hold on to decent wages for a decent day’s work at a time when fat cats get $50 million paychecks for showing up, and the gap between the rich and the poor is as gaping as ever.

 

…

After the Market Basket board ousted Arthur T., these foot soldiers of capitalism kept the story alive when they made flyers protesting his removal and distributed them to customers. Then they reached out to the media and politicians to talk about their improbable demand. Soon workers walked off the job and refused to restock shelves. Customers boycotted in solidarity, putting the economic squeeze on new management to do something.

While it is tempting to portray Arthur T. as the Good Arthur and Arthur S. as the Bad Arthur, as Leung points out Arthur S. and his pals never carried out threats to fire everyone and hire new people.  There was an attempt to hold a job fair, but it was never clear how many people came or if anyone was hired.  I believe eight people were fired early on, but that example didn’t slow either the employee action or customer boycotts.  The governors of New Hampshire and Massachusetts got involved.  A settlement was announced finally and Arthur T. is buying out Arthur S. so as to become the majority shareholder.  He will now be running a severely damage company in deep debt and will be borrowing money to pay for his purchase.

Employees seem optimistic.  They returned to work as soon as the announcement was made.  Whether the stores can be stocked so there are things for people to buy, whether suppliers can return, and whether Arthur T. can keep to his promise to continue to treat and pay workers well are open questions.  If Market Basket can beat the odds and make a comeback to profitability, the story will be studied in business schools and by labor historians for many years.  Actually, it will probably be studied no matter what happens.

Market Basket employees celebrate the return of Arthur T.

Market Basket employees celebrate the return of Arthur T.

The Market Basket story is one for this Labor Day.  Non-union employees took collective action to save a boss and his practice of putting employees above shareholders. I’ll let Joan Vennochi have the last word.

Most notable is the power of narrative. Market Basket workers used social media as an organizing tool, but, at the same time, they skillfully used old and new media to tell their story before the other side knew what was happening.

And, unless you were Arthur S., it was a story that had something for everyone:

Workers standing up for, not against, management.

The desire to believe in one corporate leader putting the well-being of his workers

over shareholders, in an old-fashioned “It’s A Wonderful Life” way.

Employees of modest means willing to put paychecks for rent and mortgages on the line for principle.

“It speaks to a search and yearning for respect and fairness,” said Lew Finfer, a veteran community organizer who has worked for decades with unions to do just that by promoting better worker pay, conditions, and benefits.

There are lessons here for everyone.

Photograph:  JESSICA RINALDI/GLOBE STAFF

 

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About those bitcoins…

Toothfairy

Is this the future?  And what are bitcoins anyway?

According to an article in the Washington Post

Bitcoin is an online currency that allows people to make one-to-one transactions, buy goods and services and exchange money across borders without involving banks, credit card issuers or other third parties. As a result, this exotic new form of money has become popular with libertarians as well as tech enthusiasts, speculators — and criminals. Bitcoins are basically lines of computer code that are digitally signed each time they travel from one owner to the next.

One has only to look how money has changed over time: wampum, coins, precious metals, paper and electronic transactions to name of few of the forms, to realize that a bitcoin or something like it would be the next evolution.  The bitcoin has been hovering around the edges of my consciousness for a while, but then I read about Hiawatha Bray’s using the new bitcoin ATM at Boston’s South Station.

The ATM at Boston’s South Station snatched the money from my hand and didn’t even give me a receipt. But my smartphone’s green glow let me know I had just invested $5 in the world’s most controversial, questionable, and exciting new currency, the bitcoin.

The machine, which is the first of its kind in Boston, was officially plugged in Wednesday morning — right next to Pinkberry — and began spewing bitcoins, virtually.

“You can think of it as Internet cash,” said Chris Yim, cofounder of Liberty Teller, the Boston company that operates the new bitcoin ATM. “This is just a more secure way of buying things online.”

…

The five-year-old currency is not backed by any central government, but can be spent just like dollars in a small but increasing number of places, including some local restaurants and the popular online retailer Overstock.com.

Bitcoins are stored by users in so-called digital wallets, and each coin has a unique online address. Transactions are managed by thousands of computers linked in a worldwide network, helping to ensure their integrity.

There is also the benefit of privacy. While purchases are shared with the entire network, creating a permanent record, users don’t have to personally identify themselves — the same way someone handing over cash at a register doesn’t have to provide the clerk with a name. The hackers who stole millions of credit card numbers from Target during the holiday season would have a much tougher time cracking the bitcoin code.

OK.  Sounds interesting.  If you are worried about your credit card information being stolen at Target, while making an online purchase, or even buying fries at McDonalds you might want to switch to cash for face to face transactions.  But then you can get your pocketpicked, your purse stolen or left behind and you can’t cancel cash as you can a credit card.  Bitcoins may be the future answer.

Bitcoin’s promise of anonymity has proved attractive to criminals. It was the favorite currency of the now defunct outlaw website Silk Road, a global trading post for illegal drugs and worse. But now much of the bitcoin action comes from legitimate — and greedy — financial speculators. They have helped drive the value of a single bitcoin from a few dollars in 2011 to as high as $1,242 in November. Since then, it has plummeted, and as of Wednesday the price was about $630.

…

Unfortunately, your new currency may be worth less than you thought, thanks to the rapidly shifting value of bitcoin. Last week I spent $100  for 144 millibits. Ten minutes later it was worth only $97.61.

Kind of like stocks which fluctuate in value.  But since it is like cash, it would be difficult to know exactly how much money you have to spend.

And then this happened.  Mt. Gox, one of the big names in the bitcoin world collapsed and filed for bankruptcy.  The Washington Post explains

It’s not entirely clear what happened to the Tokyo-based exchange, which has sometimes been criticized for poor security. It suffered a crippling theft in 2011, and several experts have since accused the exchange of ignoring warnings about a software glitch which could enable hackers to silently drain the business of its bitcoins. The glitch was recently fixed, but not before Mt. Gox imposed a ban on bitcoin withdrawals, feeding speculation that the exchange was out of money.

Those fears appear to have been confirmed late Monday when bitcoin enthusiast Ryan Selkis posted an 11-page-long “Crisis Strategy Draft” allegedly leaked by a Mt. Gox insider. The draft appeared to show the exchange secretly trying to grapple with the loss of more than 740,000 bitcoins over several years — a titanic sum several times the value of its assets.

Some people are said to have lost all their money.  American prosecutors are looking into the bitcoin world.  According to the New York Times

…American prosecutors are stepping up their inquiries. Prosecutors in the United States have issued subpoenas to several other digital currency companies, including Mt. Gox and the Internet Credit Union, based in New Brunswick, N.J., and one in Japan, said several other people briefed on the matter.

Prosecutors hope to better understand how money is transferred in the digital realm and converted from dollars to Bitcoin. The people briefed on the matter said they would not be surprised if authorities subpoena other companies and institutions involved in money transfers.

It remains to be seen if all of this will mean the end to the bitcoin or if it is just a hiccup.  One thing is pretty certain however – eventually there will be an electronic currency.  Which bring us back to the little girl who got bitcoins from the toothfairy and Hiawatha Bray who are both still looking for someplace to spend them.

But most consumers aren’t ready for bitcoin. They’re frightened by a currency whose value can fluctuate wildly from hour to hour. Besides, what can they buy with it? Few retailers accept bitcoins, even though they could save a fortune on credit and debit card fees and offer customers greater security.

South Station’s ATM will certainly thrill passing geeks, but it’s the nearby merchants who will really decide the fate of virtual money. When I can spend my freshly purchased bitcoins at the yogurt stand next door, I’ll become a true believer.

Cartoon:  Dan Wasserman for the Boston Globe

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Spending and the deficit

There is a lot of information floating around out there, but I just got these charts from my Congressman, Mike Capuano, and I wanted to share them.

The Bottom Line
The statistics and chart below will prove two points despite any rhetoric to the contrary:
  1. Federal spending is headed towards the lowest share of GDP in memory;
  2. The federal government is making great progress towards reducing our annual deficit.
A Note about Federal Spending
If you listen only to a few talking heads you might think that the federal government is engaged in a spending frenzy.  That is actually not the case.  In fact, our government is currently spending LESS than it did in 1974 on discretionary spending programs, the year that detailed economic records were first compiled.
We all know that a dollar doesn’t go as far as it once did – so measuring any spending over a 40 year period demands adjustment.  One way to do this is to look at government spending as a percentage of the Gross Domestic Product (GDP). The chart below with data from the Congressional Budget Office (CBO) illustrates that in 1974, federal government spending under the Nixon Administration equaled 9.3% of ALL spending in the country (the GDP).  Discretionary spending peaked in 1983 under the Reagan Administration at 10% of GDP.  The most recent figures show that federal spending last year under President Obama fell to just 7.2% of GDP and is estimated to decline even further over the next several years.
Historically, the lowest level of discretionary government spending in the last 40 years occurred in 1999 under the Clinton Administration, and it rose steadily from 6.1% to 7.7% during the George W. Bush Administration.
The point I am trying to make is that it is important to keep federal spending in perspective.  Your federal government today is spending a much smaller share than President Reagan ever did and more spending cuts are coming.  Many of us think it is long past time to face reality and truly consider the future of our country. Do we want good roads? Do we want good schools?  If the answer is yes, then it’s time to start paying for them.
At this point in our nation’s history, we should be investing again in our future. Our economy is improving and the federal budget has stabilized. The notion that federal spending is out of control just isn’t accurate. Take a look at the chart (or click here for a larger version) and table below, which illustrate my argument:
Discretionary Outlays Since 1974
as % of Gross Domestic Product (GDP)

FY

Defense

Nondefense

Total

Nixon 1974

5.4

3.9

9.3

Ford 1975

5.4

4.4

9.8

Ford 1976

5.0

4.8

9.8

Carter 1977

4.8

4.9

9.7

Carter 1978

4.6

5.0

9.6

Carter 1979

4.5

4.8

9.3

Carter 1980

4.8

5.1

9.9

Reagan 1981

5.0

4.8

9.8

Reagan 1982

5.6

4.2

9.8

Reagan 1983

5.9

4.1

10.0

Reagan 1984

5.8

3.8

9.6

Reagan 1985

5.9

3.8

9.7

Reagan 1986

6.0

3.6

9.7

Reagan 1987

5.9

3.4

9.3

Reagan 1988

5.6

3.4

9.0

Bush 1989

5.5

3.3

8.8

Bush 1990

5.1

3.4

8.5

Bush 1991

5.2

3.5

8.7

Bush 1992

4.7

3.6

8.3

Clinton 1993

4.3

3.6

7.9

Clinton 1994

3.9

3.6

7.5

Clinton 1995

3.6

3.6

7.2

Clinton 1996

3.3

3.3

6.7

Clinton 1997

3.2

3.2

6.4

Clinton 1998

3.0

3.1

6.2

Clinton 1999

2.9

3.1

6.0

Clinton 2000

2.9

3.1

6.1

GW Bush 2001

2.9

3.2

6.1

GW Bush 2002

3.2

3.5

6.7

GW Bush 2003

3.6

3.7

7.3

GW Bush 2004

3.8

3.6

7.4

GW Bush 2005

3.8

3.7

7.5

GW Bush 2006

3.8

3.6

7.4

GW Bush 2007

3.8

3.4

7.3

GW Bush 2008

4.2

3.5

7.7

Obama 2009

4.6

4.0

8.6

Obama 2010

4.7

4.5

9.1

Obama 2011

4.5

4.2

8.8

Obama 2012

4.2

3.8

8.0

Obama 2013

3.8

3.5

7.2

Obama 2014 EST

3.5

3.4

6.9

Obama 2015 EST

3.3

3.2

6.6

Obama 2016 EST

3.2

3.0

6.2

2017 EST

3.1

2.9

6.0

2018 EST

3.0

2.8

5.8

2019 EST

2.9

2.7

5.7

2020 EST

2.9

2.7

5.6

2021 EST

2.8

2.6

5.4

2022 EST

2.8

2.6

5.4

2023 EST

2.7

2.5

5.3

2024 EST

2.7

2.5

5.2

Sources: Cong Budget Office; Office of Management and Budget

The Federal Deficit
We have heard a lot of talk about the federal deficit. The chart belowshows the amount of the annual deficit, or in some cases, surplus,generated by the federal government.  There are many ways to interpret these statistics and I would like to offer a few comments.
You can see there have been only four years since 1974 wherea surplus was generated– the last three years under PresidentClinton and the first year under PresidentGW Bush.  One could argue that the 2001 surplus should be credited to Clinton policies – butI will leave that aside.  However, it is clear that the federal governmentstarted regenerating deficits under Bush policies – most notably his first tax cut in 2001 (before the 9/11 attack).  Certainly, the terrorist attacks on September 11th and the country’s decision to engage in Afghanistan impacted the economy. However,the federal government made a conscious decision to turn away from fiscal discipline BEFORE September 11th.
One can quickly notice the impact of the 2008 economic crisis and our reaction to it.  Regardless of how you might feel about the stimulus and the bailouts – at least it was clearwhat the short term effect would be on the federal deficit.  I happen to think BOTH those actions were necessary and appropriate to save our economy from an even worse fate. Certainly the bailout should have had more teeth. Remember though it was passed under the Bush Administration so those of us calling for more teeth were drowned out.The only choice we faced was action or inaction, and we chose action. I also believe that the stimulus should have been more targeted on creating jobs.  Unfortunately, Congress never has a choice between perfect options – it is always a choice between imperfect plans.  I understand thatmost people have formed pretty strongopinionsabout the actions that the government took and I will let history decide whether those actions were appropriate.
Since the economic crisis in 2008, the federal government has been making significant and steady progress towards reducing our annual deficit.  The average deficit over the 43 years covered by this table equals 3.1% of the GDP. This chart doesn’t show it, but by the end of the Obama Administration it will be below that historic average. Remember, absolute numbers like these only tell a portion of the story.
My final note on this is historic.  This chart shows the deficits and surpluses under 20 years of Democratic Presidents and 22 years of Republican Presidents … good times and bad … war and peace.  I think the most important measure is the change from one year to the next. Maybe we cannot achieve our goals in one year, but are we making progress?  Based on this chart you can calculate that under Democratic Presidents, the deficit was REDUCED by an average of $22.3 billion each year … under Republican Presidents that Deficit has been INCREASED by an average of $44.5 billion each year.  I’ll let you decide which course is the better one.

Revenues

Revenues Change %

Outlays

Outlays Change %

Total Deficit / Surplus

Change $

Nixon 1974

263.2

269.4

-6.1

Ford 1975

279.1

6%

332.3

23%

-53.2

-47.1

Ford 1976

298.1

7%

371.8

12%

-73.7

-20.5

Carter 1977

355.6

19%

409.2

10%

-53.7

20.1

Carter 1978

399.6

12%

458.7

12%

-59.2

-5.5

Carter 1979

463.3

16%

504.0

10%

-40.7

18.5

Carter 1980

517.1

12%

590.9

17%

-73.8

-33.1

Reagan 1981

599.3

16%

678.2

15%

-79.0

-5.1

Reagan 1982

617.8

3%

745.7

10%

-128.0

-49.0

Reagan 1983

600.6

-3%

808.4

8%

-207.8

-79.8

Reagan 1984

666.4

11%

851.8

5%

-185.4

22.4

Reagan 1985

734.0

10%

946.3

11%

-212.3

-26.9

Reagan 1986

769.2

5%

990.4

5%

-221.2

-8.9

Reagan 1987

854.3

11%

1,004.0

1%

-149.7

71.5

Reagan 1988

909.2

6%

1,064.4

6%

-155.2

-5.4

Bush 1989

991.1

9%

1,143.7

7%

-152.6

2.5

Bush 1990

1,032.0

4%

1,253.0

10%

-221.0

-68.4

Bush 1991

1,055.0

2%

1,324.2

6%

-269.2

-48.2

Bush 1992

1,091.2

3%

1,381.5

4%

-290.3

-21.1

Clinton 1993

1,154.3

6%

1,409.4

2%

-255.1

35.3

Clinton 1994

1,258.6

9%

1,461.8

4%

-203.2

51.9

Clinton 1995

1,351.8

7%

1,515.7

4%

-164.0

39.2

Clinton 1996

1,453.1

7%

1,560.5

3%

-107.4

56.5

Clinton 1997

1,579.2

9%

1,601.1

3%

-21.9

85.5

Clinton 1998

1,721.7

9%

1,652.5

3%

69.3

91.2

Clinton 1999

1,827.5

6%

1,701.8

3%

125.6

56.3

Clinton 2000

2,025.2

11%

1,789.0

5%

236.2

110.6

GW Bush 2001

1,991.1

-2%

1,862.8

4%

128.2

-108.0

GW Bush 2002

1,853.1

-7%

2,010.9

8%

-157.8

-286.0

GW Bush 2003

1,782.3

-4%

2,159.9

7%

-377.6

-219.8

GW Bush 2004

1,880.1

5%

2,292.8

6%

-412.7

-35.1

GW Bush 2005

2,153.6

15%

2,472.0

8%

-318.3

94.4

GW Bush 2006

2,406.9

12%

2,655.1

7%

-248.2

70.2

GW Bush 2007

2,568.0

7%

2,728.7

3%

-160.7

87.5

GW Bush 2008

2,524.0

-2%

2,982.5

9%

-458.6

-297.9

Obama 2009

2,105.0

-17%

3,517.7

18%

-1,412.7

-954.1

Obama 2010

2,162.7

3%

3,457.1

-2%

-1,294.4

118.3

Obama 2011

2,303.5

7%

3,603.1

4%

-1,299.6

-5.2

Obama 2012

2,450.2

6%

3,537.1

-2%

-1,087.0

212.6

Obama 2013

2,774.0

13%

3,454.3

-2%

-680.3

406.7

Obama 2014 EST

-514.0

166.3

Obama 2015 EST

-478.0

36.0

Obama 2016 EST

-539.0

-61.0

 

 My bottom line? Let’s spend some money and create some jobs.

Post is cut and pasted from an email update from Congressman Michael Capuano. 7th CD, Massachusetts.

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Moving toward the cliff

Yesterday I had lunch with a friend, a federal employee, who is not working because of the shutdown.  She can’t check her work email or phone messages and fears the backlog of problems that awaits her when she does get back to work.  She said the only way she was fortunate was that she was not one of the essential employees who had to work anyway.  We speculated on how people will get to work if October moves to November and people’s monthly transit passes run out.  Will they be expected to shell out money they don’t have to get to a job they aren’t paid for?  All her friends can do is to buy her lunch.  Fast forward 24 hours and we still have no deal.  Even if the Senate comes up with a solution it is not clear if 1) the House will even vote on it and 2) if they do, if this is just another short term postponement.  All my friend hopes is that the next deadline is past the holidays and that there is back pay.

I was trying to find some humor in the whole situation, but find that I actually feel very sorry for John Boehner.  John Cassidy posted this for the New Yorker.

Give the Republicans on Capitol Hill one thing: they don’t leave a job half done. Evidently disturbed by polls showing Congress with a single-digit approval rating, they appear intent on driving it to zero.

What other explanation can there be for Tuesday’s farcical maneuvers, which saw the House Republican leadership try and fail to seize the initiative in the debt-ceiling standoff from the Senate, in the process humiliating Speaker Boehner yet again. By the end of the day, facing renewed opposition from some of his own members, Boehner had dropped his efforts to pass a bill that would have ended the shutdown and raised the debt ceiling until February, but one with more riders than an agreement that Mitch McConnell, the Republican leader in the Senate, and Harry Reid, the Democratic leader, have been working on.

From the point of view of the country, that’s good news. Overnight, officials representing McConnell and Reid were rushing to complete their negotiations, which were called off on Tuesday after Boehner’s unwise intervention. As it stands now, the Senate agreement would reportedly fund the government until January 15th and raise the debt ceiling until February 7th, with the only concession from the Democrats being an agreement to toughen up the policing of eligibility requirements for obtaining federal subsidies to buy health insurance under the Affordable Care Act.

Boehner is in a box.  He can’t control his own party caucus and can’t turn to Democratic votes because then he would lose his Speakership.  If the country goes into default, he will likely lose it anyway.

Once the Senate passes a bill and sends it to the House, the Speaker will face the unenviable choice of allowing it to pass with Democratic support or exercising the nuclear option of forcing a default. Having already ruled out this second option in public comments, there were reports on Tuesday night that Boehner was prepared to bring the Senate bill to the floor, which would probably insure its passage. That wouldn’t end the budget crisis—it’s never-ending—but it would put off the next showdown until the new year, whilst ensuring that the Republican ultras had gained almost precisely nothing for their willingness to shut down the government and raise the prospect of a debt default. (In another development on Tuesday, Fitch, one of the big ratings agencies, placed U.S. government debt on watch for a potential downgrade, saying that “the prolonged negotiations over raising the debt ceiling (following the episode in August 2011), risks undermining confidence in the role of the U.S. dollar as the preeminent global reserve currency by casting doubt over the full faith and credit of the U.S.”)

From the point of view of the Republican Party, things have been going from bad to worse. With the party divided, its poll ratings tanking fast, and its leadership unwilling to risk an actual default, it has been clear for some time that it was in a losing position. The discussions in the past few days have been about the terms of surrender, with the White House and Reid pressing for something close to an unconditional capitulation.

So here are a few cartoons to weep at as we proceed at a Senate’s slow pace, to the edge.

From Tony Auth

From Tony Auth

Tom Toles

Tom Toles

Signe Wilkerson

Signe Wilkerson

And Wilkerson, again.

Wilkinson2

Can we hope that there are still some adults who won’t drive us over the edge?

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Can we send David Ortiz to the budget negotiations?

It has been a discouraging last few days with the only real bright spot being Friday (and then we went back Saturday) at Symphony Hall with the Boston Symphony Orchestra. We wanted to hear Thomas Ades, Polaris a second time and Friday night the BSO did not do Franck’s Symphony in D Minor which my husband loves.   But we came home Saturday night to no budget/debt ceiling deal and the Red Sox striking out, also.  I often tune in to some of the Sunday news shows, but couldn’t stand to hear any more Republican Congresspersons who have no clue about what the debt ceiling is much less understand any thing about the economy.  One of my friends posted this on Facebook the other day

Despite their lofty status in managing American affairs, it appears to me that few Congresspersons have any meaningful understanding of how their chronic politicization of economic policies substantially degrades, perhaps permanently, the dollar’s status as the global reserve currency. Evidence of the dollar’s decline to a commodity status is increasingly apparent. In time, every American will feel a crippling pain that no amount of political negotiating can cure.

Given this state of things, I retreated to a game of Civilization V where I could control, more or less, my own universe until after Sunday dinner when the Red Sox could take over.  But, after watching strike out after strike out with Clay Buchholz pitching sooo very slowly while getting slammed around in the sixth, I retreated.  I woke up just before 6 am this morning having just had a dream that I woke up and the Sox had come back.  I turned on the radio, I found that is was true!

Peter Abraham explains

In what has been a season full of memorable late-inning victories at Fenway Park, the Red Sox saved the best for when they needed it the most in Game 2 of the American League Championship Series Sunday night.

Trailing by four runs against the Detroit Tigers, the Sox tied the game on a grand slam by David Ortiz in the eighth inning then won it, 6-5, when Jarrod Saltalamacchia singled to drive in Jonny Gomes in the ninth.

The remarkable victory had the players chasing Saltalamacchia across the outfield and the sellout crowd of 38,029 chanting “Let’s Go Red Sox!” as they left Fenway.

“When you back us into a wall, you either do two things: cave or fight. We’re gonna fight,” Dustin Pedroia said.

That wall was hard to get over. The Sox had scored one run through the 16 innings in the series, going 3 for 51 at the plate with 30 strikeouts. Detroit starter Max Scherzer allowed one run on two hits over seven innings and struck out 13.

And then.

Will Middlebrooks doubled to left field off Jose Veras to start the rally. Then Jacoby Ellsbury drew a walk off Drew Smyly.

Al Albuquerque was next out of the Detroit bullpen. He struck out Shane Victorino for the second out, but Pedroia singled to right. Third base coach Brian Butterfield held Middlebrooks, wanting to make sure Ortiz got his chance.

…

Ortiz swung at the first pitch, a changeup away, and was strong enough to pull it into the Red Sox bullpen in right field for his first career postseason grand slam and the fourth in Red Sox history.

Right fielder Torii Hunter tumbled over the wall trying to make a catch as Boston police officer Steve Horgan raised his arms in joy. Bullpen catcher Mani Martinez, who was warming up Koji Uehara, casually turned and caught the ball.

It was bedlam at Fenway and the crowd kept cheering until Ortiz emerged from the dugout and tipped his helmet to them.

“My idea wasn’t to go out and hit a grand slam,” Ortiz said. “If I was telling you about thinking about hitting a grand slam, I’d be lying to you now.”

A hero of postseasons past, David Ortiz rounds third base — as the Tigers’ Miguel Cabrera looks on — to a standing ovation after his grand slam in the eighth inning tied Game 2 at 5.

A hero of postseasons past, David Ortiz rounds third base — as the Tigers’ Miguel Cabrera looks on — to a standing ovation after his grand slam in the eighth inning tied Game 2 at 5.

Gotta love David.

There was still a game to win. After Uehara retired the Tigers in order, Gomes was again the catalyst.

He reached on an infield single off Rick Porcello and took second on a throwing error by shortstop Jose Iglesias, the former Sox player known for his defensive skills.

“No is not an option for this team,” Gomes said. “Once I got on second, I was going to do anything I could to score.”

Gomes advanced on a wild pitch and scored when Saltalamacchia singled to left field.

“I felt good,” Saltalamacchia said. “Trying to hit the ball up the middle and take your chance.”

It was the 12th walkoff win of the season for the Red Sox.

So now we have something to watch on the highlight reels other than strike out after strike out.  There is joy in Mudville after all.  The Red Sox head for Detroit to face Justin Verlander, still another one of the Tigers’ great pitchers.  Let’s end this with something to ponder.  My husband heard Verlander ask this question:  If a pitch grazes a Red Sox’s beard, did he get hit by the pitch?

Now if only someone would hit a grand slam on the budget and knock out Ted Cruz and his friends.

Photograph:  Jim Davis/Globe Staff

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The myth of small businesses and healthcare

One of the favorite talking points of the Republicans who oppose the Affordable Care Act (ACA) is that it will kill job growth and hurt small businesses.  Quite honestly, I think that their government shutdown which they admit is largely about defunding/delaying/repealing the ACA is doing a fine job of doing both.  Forget what they think “Obamacare” will do.  But in the current issue of the New Yorker, James Surowiecki takes on the myth, at that, according to him, is what it is, that the ACA will do horrible, terrible, no good things to the economy.

The G.O.P.’s case hinges on the employer mandate, which requires companies with fifty or more full-time employees to provide health insurance. It also regulates the kind of insurance that companies can offer: insurance has to cover at least sixty per cent of costs, and premiums can’t be more than 9.5 per cent of employees’ income. Companies that don’t offer insurance will pay a penalty. Republicans argue that this will hurt companies’ profits, forcing them to stop hiring and to cut workers’ hours, in order to stay below the fifty-employee threshold.

How much of this is true?

The story is guaranteed to feed the fears of small-business owners. But the overwhelming majority of American businesses—ninety-six per cent—have fewer than fifty employees. The employer mandate doesn’t touch them. And more than ninety per cent of the companies above that threshold already offer health insurance. Only three per cent are in the zone (between forty and seventy-five employees) where the threshold will be an issue. Even if these firms get more cautious about hiring—and there’s little evidence that they will—the impact on the economy would be small.

Meanwhile, the likely benefits of Obamacare for small businesses are enormous. To begin with, it’ll make it easier for people to start their own companies—which has always been a risky proposition in the U.S., because you couldn’t be sure of finding affordable health insurance. As John Arensmeyer, who heads the advocacy group Small Business Majority, and is himself a former small-business owner, told me, “In the U.S., we pride ourselves on our entrepreneurial spirit, but we’ve had this bizarre disincentive in the system that’s kept people from starting new businesses.” Purely for the sake of health insurance, people stay in jobs they aren’t suited to—a phenomenon that economists call “job lock.” “With the new law, job lock goes away,” Arensmeyer said. “Anyone who wants to start a business can do so independent of the health-care costs.” Studies show that people who are freed from job lock (for instance, when they start qualifying for Medicare) are more likely to undertake something entrepreneurial, and one recent study projects that Obamacare could enable 1.5 million people to become self-employed.

English: This is a diagram depicting the perce...

English: This is a diagram depicting the percentage in US who have no health insurance by age. (Photo credit: Wikipedia)

Remember that large employers get tax incentives to provide health insurance.  The ACA will actually do the same for small businesses.

Obamacare changes all this. It provides tax credits to smaller businesses that want to insure their employees. And it requires “community rating” for small businesses, just as it does for individuals, sharply restricting insurers’ ability to charge a company more because it has employees with higher health costs. And small-business exchanges will in effect allow companies to pool their risks to get better rates. “You’re really taking the benefits that big companies enjoy, and letting small businesses tap into that,” Arensmeyer said. This may lower costs, and it will insure that small businesses can hire the best person for a job rather than worry about health issues.

Surowiecki ends his short piece with this kicker.

The U.S. likes to think of itself as friendly to small businesses. But, as a 2009 study by the economists John Schmitt and Nathan Lane documented, our small-business sector is among the smallest in the developed world, and has one of the lowest rates of self-employment. One reason is that we’ve never had anything like national health insurance. In a saner world, changing this would be a reform that the “party of small business” would celebrate.

So it seems that implementation of the ACA with small business health insurance exchanges will actually help lead to more job growth.

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Boston’s men in the news

No, I am not talking about the mayoral candidates all but one of whom is a man.  And I’m not talking about Alex Rodriquez and the Yankee who beat the Sox last night. (Maybe we shouldn’t have taunted him so much?)  I’m speaking of James “Whitey” Bulger, recently convicted felon and Larry Summers who thinks he should run the Federal Reserve.  Here is a great take on the two from cartoonist Dan Wasserman.

wise guys

Maybe I’ll go for a walk at Castle Island this week in memory of Whitey.  While I’m walking, I can send negative thought waves to President Obama about Larry.

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The Next Fed Chair? Not Larry Summers.

Why would the President want to appoint someone who once opined that women were not good at science?  The man who was hired to end the economic crisis, but likely contributed to its making.  I’ve been thinking about how to approach this for a few days now and then I saw two pieces by Shirley Leung in the Boston Globe Business Section.  I think she says exactly what I wanted to say.  In the first, she discusses Larry Summers.

No need to hold back here: Larry Summers as the next Fed chairman?

Worst idea ever.

…

Summers, by all accounts, is a brilliant economist, one of the best of his generation. He is also someone who is confident, and, in times of crises, may be the adult in the room that he supposedly said the Obama administration didn’t have when the economy collapsed.

But he lacks one critical trait I like in my Fed chairmen: He’s not boring.

Summers is far from bland. He is arrogant and a lightning rod and would carry so much baggage he couldn’t fit it on the shuttle to Washington.

Do we need a Fed Chair that is all about Larry Summers?  I think not.

In his book “Confidence Men,” about the Obama White House’s handling of the economic crisis, former Wall Street Journal reporter Ron Suskind paints Summers as brilliant but overconfident and prone to unnecessary battles. “As he has aged, he has grown less troubled by being uninformed,” Suskind wrote.

That’s not what you want in a Fed chairman. The nation’s top central banker must manage the economy primarily by raising or lowering interest rates and must build consensus to do so. He must work with six other Fed governors and 12 regional Fed bank presidents. Imagine what would have happened if the Fed board was split over what to do with the economy in 2008? What would that have done to the markets?

“I know Larry very well. He is a smart guy,” said Allan Meltzer, a Carnegie Mellon professor who has written the definitive history on the Fed. “But the skills that are required for that job are not just brilliance, they are ability to manage compromise. He doesn’t do that well.”

This is to say nothing about how he ran Harvard.  When he left, they picked Drew Faust, a women who was his opposite in many important ways.

So, who should be the next Fed Chair?  How about a woman?  Senator Elizabeth Warren and Shirley Leung are backing Janet Yellen.

English: Official picture of Janet Yellen from...

English: Official picture of Janet Yellen from FRBSF web site. http://www.frbsf.org/federalreserve/people/officers/yellen.html (Photo credit: Wikipedia)

Just as forcefully as folks are coming out against Summers, there is a campaign mounting to promote Janet Yellen, Ben Bernanke’s number two.

Unlike Summers, Yellen has significant monetary policy experience. She has been the vice chair of the Fed board of governors since 2010, and prior to that she ran the San Francisco Federal Reserve bank for six years. She has been involved in the Fed’s quantitative easing strategy, hatched during the Great Recession to keep money flowing and the US economy alive.

And unlike Summers, she is sufficiently boring, a key trait we want in someone running our central bank.

…

If Yellen got the nod, she would break the glass ceiling at the Fed, becoming the first woman at the top. She already has some high profile endorsements from New York Times columnist Paul Krugman and former FDIC chair and UMass-Amherst professor Sheila Bair.

Bair, in a blog posted on Fortune earlier this week, argues that Yellen is the most qualified candidate, but the financial world’s old-boy network is trying to derail her candidacy:

“So why isn’t she a shoo-in? The ‘whispering’ campaign against her among industry types has been deafening. ‘Doesn’t understand markets.’ Translation: She may not bail us out if we get into trouble again. ‘Not assertive enough.’ Translation: She won’t stand up for us against the populists who want more regulation. ‘Lacks gravitas.’ Translation: She doesn’t show up very often in the financial media.”

I guess we haven’t come far enough for the Wall Street guys to be comfortable with a woman.

Bair also takes a whack at Summers. “Unlike Larry Summers, Tim Geithner, and other Bob Rubin minions frequently mentioned in the financial press as potential Bernanke successors, she was not part of the deregulatory cabal that got us into the 2008 financial crisis. In fact, she had a solid record as a bank regulator at the San Francisco Fed and was one of the few in the Fed system to sound the alarm on the risks of subprime mortgages in 2007.”

Others are also rallying behind Yellen. Senator Elizabeth Warren of Massachusetts on Friday confirmed that she has signed a letter Senate Democrats are circulating and plan to deliver to President Obama calling on him to nominate Yellen because “she is the best person for this job.” As early as Monday, activists, including women’s advocacy groups NOW and Ultraviolet plan to send a letter to Obama and Senate majority leader Harry Reid to support Yellen’s candidacy and oppose Summers’. When he ran Harvard, Summers set off a firestorm when he suggested women lacked the same “intrinsic aptitude” for science as men.

The President recently said he was not going to make a decision until fall, so we have time to make sure he appoints the best qualified person who, in this case is a woman.  Not Larry Summers.

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