Relevant and even prescient commentary on news, politics and the economy.

Sluggish Job Creation

The new unemployment report is out. The estimate is that 112,000 jobs were created in January. That’s more job creation than we’ve seen in a couple of years, but still below expectations. The unemployment rate fell to 5.6%, thanks to a continuation of the surprisingly low labor force participation rate. All in all, this report suggests that, while there’s some hope of improvement on the horizon, the sluggish job market continues…


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Meet the Press

In a sign of desparation, optimism, or perhaps possession of very incriminating photos of Tim Russert doing things that Rick Santorum can only dream of, President Bush will be on Meet the Press this Sunday.

Most expect Russert to lob softballs at the president, but even so, it’s not Bush’s best forum. Russert once had a reputation as a very tough interviewer, though liberals question that now, with a fair amount of justification. In any event, Brad DeLong has some great ideas for questions Tim could ask, if he wants to be tough.

Note: “Meet the Press” is regularly seen from 9-10 a.m. ET, except in Washington, D.C. and New York City where the broadcast is seen from 10:30-11:30 a.m. ET. Set your TiVos and VCRS.


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I put part of this year’s Roth IRA money(*) into Costco. In part, it was because they have industry leading productivity and revenue per-square foot. In larger part, it’s because they pay their workers more and because they offer benefits (CEO Sinegal said back in the early 1990s, “We pay $1 more an hour than Sam’s or Price … We start our people at $8 an hour and boost them in three years to $14 an hour. It works for us. If you pay good wages, you get better productivity.”) Now I find that there’s yet another reason to support Costco:

Costco Wholesale Corp. Chairman Jeffrey Brotman and CEO James Sinegal gave $95,000 each in December to a political fund that aims to defeat President Bush in the November election, records filed with the Internal Revenue Service show.

Via Pandagon.


(*) Speaking of Roth’s, it’s that time of year where you should really, really, scrape up some money for either your Roth or traditional IRA. As a rule of thumb, if you have $3,000 available, then you probably make enough so that the Roth is better for you (with a Roth, you get no tax savings now, but the disbursements are tax free). If you don’t have $3,000 lying around, then you should probably put as much as you can into a traditional IRA (the contribution will come off your AGI, increasing your refund). If you’re confused about what stocks to buy, broad-based Exchange-Traded Funds (ETFs) (like the ones described here; you may have seen commercials for “Spiders” (SPDR) and “Cubes” (QQQ), both of which are ETFs) are a pretty good idea. Even if you don’t have much money, most online brokers have low or no minimum balances for a no fee IRA account.

Here’s a proposal I’d like to see analyzed: means-tested matches on a sliding scale to Roth and Traditional IRA contributions, with EITC recipients getting some amount match-free. Of course, that would take some money, which the federal government is about 1 trillion dollars short on in the current and upcoming fiscal years.

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Dick and Tony: Conflict of Interest

Dwight Meredith explains it:

So while a case about whether or not Dick Cheney must turn over documents that some think will show undue influence by energy companies, the defendant and one of the judges take a hunting trip together hosted by the head of an energy company. Wait, it gets worse.


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Those Wacky Liberals at The Economist (and they’re anonymous!)

On Bush’s budget: “George Bush presented Congress with a $2.4 trillion budget for the next. Think of it as a campaign brochure, complete with glossy pictures of the president bringing relief to the elderly, restoring the environment and exhorting the young.”

The Economist writers also appear more skilled at crafting sentences than their peers at the NYT (though they spell “defence” in that funny, European, way): “For the armed forces and homeland defence come big proposed increases in spending, up by 7% and 10% respectively.” (The NYT said that the homeland would be 10% more secure, rather than correctly stating that we’d be spending 10% more on homeland security.)

There’s also more substantive content in the Economist piece:

If this [cutting the deficit in half over the next five years] all looks too good to be true, it is. For once, the administration has not fiddled the books by relying on unrealistically high growth rates in the coming years; but it has relied on other fibs. For a start, the budget does not factor in the future costs of keeping soldiers in Iraq and Afghanistan: even Mr Bush’s own budget director says costs could be as much as $50 billion for Iraq alone in 2005. Then the usual implausible savings are found from “waste, fraud and abuse”. Third, all the president’s cuts are to fall on the one-fifth of the total budget that counts as domestic discretionary spending—hardly likely to happen in an election year.

Mr Bush’s most culpable failing lies in his refusal to think beyond the 2009 horizon. Take, first, the tax cuts of 2001 and 2003, which Mr Bush wants to make permanent at a ten-year cost, when other new proposals for tax-free savings schemes are added in, of $1.25 trillion. The cuts may well have provided a welcome economic stimulus at a time when confidence was knocked by recession and terrorist attack. But after 2009, these cuts will equal three-quarters of the total deficit, even by the administration’s own numbers. [more …]

Get it? If Bush excludes war costs, and makes unrealistic assumptions, and defines the time window just right, then maybe, just maybe, the deficit will be cut in half. Of course, cutting it in half will still mean a deficit over 1/4 billion dollars, or a bit more thant 2.2% of GDP — which is about the size of Clinton’s last surplus, but of course, in the opposite direction. Under the most optimistic of scenarios, the current budget proposes to run deficits the size of Clinton’s surpluses.


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Georgia Decides Not to Mandate Ignorance

College biology teachers in Georgia (or anywhere that admits students from Georgia) can breath a sigh of relief that they won’t have to start out teaching at the 8th grade level:

Georgia’s school superintendent Thursday dropped plans to remove the word “evolution” from the state’s high school science curriculum.

“I will recommend to the teacher teams that the word ‘evolution’ be put back in the curriculum,” Kathy Cox said in a statement.

Cox said she originally wanted to replace “evolution” with the phrase “biological changes over time” to avoid controversy.


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Why Can’t We Have a Better Press Corps?

USA Today has a column by Roy Blunt (R-MO) titled, “Bush Pushes Fiscal Discipline.” Not surprisingly, the argument is rather typical and not particularly interesting or convincing.

The odd part comes at the end, where the USA Today makes this note:

Rep. Roy Blunt, R-Mo., is the deputy majority leader of the U.S. House of Representatives. The Office of Management and Budget declined an offer to write the Opposing (sic) view.

Ok, USA Today editors, let’s visit the OMB web page, where this graphic is featured prominently at the top:

Now that’s fairness and balance! The President’s Budget Office — the office that freakin’ wrote the budget — declined an offer to oppose the view that “Bush pushes fiscal discipline.” As long as all sides of the issue had a chance to weigh in on the subject.


P.S. What would Atrios do? Probably post this URL: USA Today Feedback. Or this one: USA Today Letter to the Editor.

P.P.S. I stole the title to this post from Brad DeLong.

UPDATE/CORRECTION: Commenter Steve offers a plausible explanation. Online, all you see is Blunt’s column, followed by the “opposing view” statement. But apparently there’s also a USA Today editorial saying that the budget is irresponsible. USA Today offered to let OMB write the opposing view to USA Today’s editorial, OMB declined, and so USA Today got Blunt to do it. That explains why “Opposing” is capitalized above. Though if this is the case, the article being opposed really should be linked or somehow identified.

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Good News in the President’s Budget!

No, it’s not that this year’s budget contains glossy ads. Nor is it that the 1/2 trillion dollar in the red federal government will be paying a Republican ad agency (the makers of RATSTM brand Democrats) $9.5 million to tout the benefits of the $400b $535b Medicare package.

Instead, the good news from the NYT is that, based on Bush’s budget, domestic security will be 10% higher than it otherwise would be:

Mr. Bush would increase military spending by 7 percent and domestic security by 10 percent but would limit growth in discretionary domestic programs to just one-half of 1 percent.


P.S. Yes, it’s just a carelessly crafted sentence, but I thought it was a funny phrasing nonetheless.

UPDATE: More substantively, the same NYT article contains this nugget:

On Tuesday, barely 24 hours after Mr. Bush unveiled his $2.4 trillion budget for next year, the administration threatened to veto a $311 billion transportation bill that the Republican-controlled Senate passed on Monday. The Senate bill would authorize $55 billion more for highways and mass transit over the next six years than Mr. Bush has proposed, and a bill in the Republican-controlled House would authorize nearly $100 billion more.

Why the big concern in the Congress over transportation? It’s pork. Highway and transit money gets spent directly in supporters’ home districts, or states. I’m generally in favor of infrastructure spending, but this is more not-taxing and spending. If the programs are worthwhile and not pure pork, then politicians should be able to garner support for taxes, fees, and bond issues to fund those programs.

This is a great example of how the concentrations of costs and benefits affect decision-making. If passed, this highway money comes from all taxpayers — even at $100b, the cost to the average taxpayer is under $100. But, particularly for House members, the political benefits are very concentrated — a new road project in a moderately sized district is a big deal. As a result, even if a given project is not worth it from a society-wide view, it’s worth it to any given district precisely because all the benefits accrue to that district while the costs are spread over all tax payers.

The same is true, to a lesser extent, for Senators. For the president, however, the benefits are very diffuse, roughly as diffuse as the costs. Thus, the numbers in the above paragraph are ordered exactly as a cost-benefit analysis would predict: House members want the most ($150b), Senators want less ($55b), and the President wants $0.

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To Reiterate From Last Week

Last Thursday, I said this about Dean:

… Dean’s likely to finish third next Tuesday in most of the states, and fourth in some of the more populous ones (SC, OK, MO, AZ). After such a disastrous result, the financial spigots shut completely and it’s over.

Dean took 3rd in AZ, MO, NM, and ND; 4th in DE; and 5th in OK and SC. So I was right that he wouldn’t do better than 3rd in any state, but wrong about which states he’d get 4th in. Still, I think it will be extremely difficult for Dean to raise money at this point, and his concession is visible in the distance — though surely not before Michigan votes on the 7th. After that, Virginia and Tenessee vote on the 10th, which could give a big boost to Edwards and/or Clark, but won’t help Dean by any stretch.

Still, anyone who can make it to March 2nd has a shot — as Digby sarcastically reminds us, “Bigtime Loser Clinton won just 3 of his first 14 contests.”


UPDATE: Jon Stewart sums it up better than I do. First he explained that the show is taped, so the primary results he just gave had a margin of error of “total”. Then, the summary:

But I really can confidently predict the following. Today, voters in seven states from North Dakota to New Mexico humored Joe Lieberman, ignored Dennis Kucinic, reminisced about Dean, and admired Clark’s hustle but still found him too creepy.

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