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Uncertainty and the economy

Dan Crawford | July 8, 2011 11:36 am

Mark Thoma remembers that in the last Congressional elections, Republicans campaigned on how the Democrats were bringing uncertainty to the economy.

“Does anyone think that uncertainty has been reduced since Republicans gained a majority in the House of Representatives?”

Tags: Mark Thoma, US economy Comments (27) | Digg Facebook Twitter |
27 Comments
  • CoRev says:
    July 8, 2011 at 11:46 am

    No!  Uncertainty has not changed.  Obama has continued his attacks on business, class warfare, and adding regulation by Executive Order and administrative actions.  He can not get them passed legislatively.

    Perhaps you think otherwise?

  • Rdan says:
    July 8, 2011 at 11:48 am

    You are joking, right?

  • spencer says:
    July 8, 2011 at 11:58 am

    I would love to hear your definition of class warfare.

    Care to explain what you mean?

  • CoRev says:
    July 8, 2011 at 12:06 pm

    Nope!

  • CoRev says:
    July 8, 2011 at 12:27 pm

    Spencer, let me fall back on the Wiki definition of “Class Conflict” as its explains more than just the academic position.  Wiki: “Class conflict is the tension or antagonism which exists in society due to competing socioeconomic interests between people of different classes.”…
    and
    “
    Class conflict is a term used mostly by socialists, communists and anarchists, who define a class by its relationship to the means of production — such as factories, land and machinery. From this point of view, the social control of production and labour is a contest between classes, and the division of these resources necessarily involves conflict and inflicts harm.
    Marxists argue that class conflict plays a pivotal role in the history of class-based hierarchical systems such as capitalism and feudalism.[1] Marxists refer to its overt manifestations as class war, a struggle whose resolution in favor of the working class is viewed by them as inevitable under capitalism.”

    I included the second part of the quote to partially explain why conservatives think Obama (and many liberals) may very well believe in the concepts socialists, communists and anarchists. 

    Further, Obama’s latest class warfare foray is his proposed taxes on high end jets.  The last time this type of tax was tried on high end boats and cars, the slight gain in revenues were more than offset by the unemployment costs.

    If you really want more examples you can Google them yourself.  They are many.

  • save_the_rustbelt says:
    July 8, 2011 at 1:14 pm

    I wouldn’t call it class warfare, but if you look at ongoing actions by the EPA, the NLRB, DOL wage-and-hour, etc., etc. there is an effort to slap around business (pay back for the laid back attitude of the Bush years no doubt).

    In the center of the country electric bills are likely to increase 40% or so in the next four years due to EPA  rules on coal fired power plants. Good idea during a recession (?).

    Think I am wrong? Read the Federal Register.

  • Mike Kimel says:
    July 8, 2011 at 1:28 pm

    STR,

    I hesitate to say this, having recently been employed by an electric utility but…  doesn’t the issue of whether coal regulations make sense depend not just on the costs, but also on the potential benefits?  There is pollution associated with coal generation, and that has costs. 

    Now, an electric utility wants to minimize its costs, but those are its own private costs.  Unless the costs to third parties are added on by regulation, they won’t get accounted at all.  Government’s role, presumably, is to weigh competing interests.

    Note that not all externalities to power generation are negative.  While the cooling system of some plants located on bodies of water kill hundreds of thousands of fish larvae, sometimes that same cooling system also raises the water temperature in lakes and rivers which attracts mature fish to the delight of fishermen.  

  • cursed says:
    July 8, 2011 at 3:04 pm

    Bill Clinton by executive order created a national monument. The grand stair case escelante, By doing so prohibited the mining of the cleanest burning coal found on the north american continent.

    I doubt GW ever signed an executive order which CoRev would not support, but he is on the mark to critcize Obama and his use of executive orders. While the nation was fixated on Weinergate Obama snuck in Executive Order # 13575 which seeks to grab power in rural comunities. I read it like a Kulak reading an Bolshevik collectivization manuel. It’s not good.

  • Jack says:
    July 8, 2011 at 3:45 pm

    The conversation on some of these threads has raken on a surrealistic character of late.  Here we have CoRev, countering a revolution that never happened,  claiming that Obama has created a hostile environment for business over the past 2 1/2 years.  Surreal, fantastic or just inane?  What best describes such a view of the Obama, bought and paid for by Wall Street?  Obama the Great Consciliator who never saw a benefit to the rich that he didn’t like and wouldn’t trade the welfare of the poor to gain.  CoRev, you are either delusional, ignorant, plain stupid or, and this is the choice I believe to be true, a troll who simply parrots extreme right wing talking points for effect.  

    I’d subscribe to Greenwald’s analysis of Obama’s administration and the ratinale behind his metamorphis from progressive candidate to corporatist shill,  http://www.salon.com/news/opinion/glenn_greenwald/.  One might make the case for the existence of class struggle in the USofA, but warfare is way off the mark.  There have been no battles and the workers of this country never got out of the trenches nor crested the first hill.  I’d not blame the hapless immigrants who are beginniing to recognize that this country is just as hostile to labor as their former home countries.  They’re headed back home in increasingly large numbers and not making near the effort to come here in the first place.  No, its not the immigrant, legal or otherwise that is to blame.  Jobs were whipped out of this country in huge numbers over the last two decades of the 20th Century.  First to Mexico and Central America and then to the Asian rim and finally to China.  No manufacturing means not sufficient number of jobs to make the jobs that remain provide competitive levels of pay.  Obama hasn’t done anything to change this trend.   With less jobs at lower salaries there is less demand.  We’re into the cycle to the bottom.   Obama is just one of the many failures of our government.  Both sides of the aisle in the Congress share the blame.  The only persistently consistent theme is lower taxes for those with income to tax.  And in case you haven’t looked lately check out the markets for goods at the high end of the spectrum.  Money is being spent by the small numbers of people who still have disposable income.  When was the last time you thought of the term “disposable income?”  And they are spending prodigious amounts commencerate with the amount of income that they enjoy, but they are too few and they can’t spend what the have.  A healthy economy requires a wider distribution of income than is now characteristic of our own.  Our economy is not, therefore, healthy. 

    Our executive class has never had it so good.  CoRev and his cronies are either delsional or deceitful in their descriptions of Obama’s positions regarding the business community.  He is theirs whole heartedly.  His campaign rhetoric was little more than a diversion.  The silly talk about his origins, his religion and his socialist leanings was only a diversion form his DLC core principles.    

  • Mike S says:
    July 8, 2011 at 3:50 pm

    Is this supposed to in any way make the case that Obama is engaging in class warfare against business?  I see absolutely no evidence on offer. Should you manage to find anything beyond the marxist horror of ending tax breaks for corporate jets, you’ll need to balance that against all that ways that Obama has bent over backwards to be kind and gentle to the rich and corporations.  Bailing out the financial sector with basically no strings attached, bailing out the auto industry, reducing taxes on the rich, adopting right-wing talking points on the budget and the economy – all pure marxism in your mind?

  • CoRev says:
    July 8, 2011 at 4:02 pm

    MikeS, you added the modifier “business”, but, yes, it does.  Obama is the one calling them corporate jets.

    Remember, Dan’s question was about reduced uncertainty.  Nearly everything the administration has to regulate business has added more uncertainty.

    Mike, I hope you realize that: “ Bailing out the financial sector with basically no strings attached, bailing out the auto industry,…”   entailed federal ownership of significant portions othe companies in question, and that’s not “all pure marxism in your mind?”

  • sammy says:
    July 8, 2011 at 5:45 pm

    The Republican victory in the House GREATLY reduced uncertainty.  It effectively blocked any more crazy schemes, such as the Stimulus and Obamacare, that the Naif-in-Chief would try to foist upon us.

  • Joel says:
    July 8, 2011 at 6:01 pm

    “Does anyone think that uncertainty has been reduced since Republicans gained a majority in the House of Representatives?”  
     
    CoRev and sammy answer predictably by trolling the thread with standard GOP talking points. Please don’t feed the trolls.  
     
    The answer to the question is “no,” uncertainty hasn’t been reduced since the GOP became a majority in the house.  Indeed, by holding the government hostage to the debt ceiling vote, they are knowingly contributing to uncertainly.
     
    Of course, life is uncertain. People who actually understand business know that business is uncertain. The closest thing to certitude in business is that most new start-ups fail.  
     
    To pretend that one political party or the other causes economic uncertainty, or that one policy or another guarantees certainty is just another silly talking point.

  • sammy says:
    July 8, 2011 at 6:44 pm

    Joel,

    *Change* (as in “Hope & Change”) increases uncertainty.  As a big-time scientist you should know this.

  • save_the_rustbelt says:
    July 8, 2011 at 7:02 pm

    Sure there are benefits.

    But making one section of the country pay the tab very, very quickly to create benefits for the entire country has its problems, especially since much of the center of the country is really still in the 2000-2001 recession.

    The people who get the short term pain economic pain have already had a great deal of pain.

    E;ectric companies effectively have no costs, the rate structure passes all of that to consumers and businesses. The real cost is when the businesses decide to shut down or  move.

  • Joel says:
    July 8, 2011 at 7:22 pm

    Joel
    Ah, little sammy,  
     
    Change is a certainty in life, sammy. As a big time scientist, I know this.  
     
    Your hopeless addiction to dull-witted partisanship is a certainty on this blog, sammy. I don’t have to be a big-time scientist to know that.

    Oops. There I go, feeding a troll.

  • sammy says:
    July 8, 2011 at 8:50 pm

    Joel,  
     
    To pretend that one political party or the other causes economic uncertainty, or that one policy or another guarantees certainty is just another silly talking point.  
     
    Aren’t scientists supposed to support their pronouncements with data, or at least reasoning?  Or are we supposed to accept them as fact because they are from someone who identifies himself as a scientist, and therefore has a far superior intellect?

  • Mike S says:
    July 8, 2011 at 9:14 pm

    CoRev,  every administration proposes tax and regulatory changes, so by your definition every administration creates uncertainty and hurts business. Would you say Reagan and GWB were anti-business?  

    And if you can’t see the difference between a bailout and marxism I can’t help you.  When the government actually takes over an industry and wipes out the shareholders, transferring full ownership to the people, I’ll share your concern.

  • CoRev says:
    July 8, 2011 at 9:22 pm

    MikeS, GM’s bailout  included  the government actually takes over an industry (GM & Chrysler) and wipes out the shareholders( Yup did that and the bondholders too), transferring full ownership to the people (Yup, but only the unions and the administration), I’ll share your concern (better start getting concerned!)

  • Joel says:
    July 8, 2011 at 9:30 pm

    “Aren’t scientists supposed to support their pronouncements with data, or at least reasoning?  Or are we supposed to accept them as fact because they are from someone who identifies himself as a scientist, and therefore has a far superior intellect?”

    Uh, sammy–politics is not science, silly boy.

    Did you have a, you know, point?

  • PJR says:
    July 8, 2011 at 10:26 pm

    Jack looping back to Thoma’s question, my answer is that I’m now more certain about whether we’re in the “cycle to the bottom” that you mentioned. Yes, I’ve become pretty certain (confident?) that we’re stuck in it real good. I haven’t looked closely at related polling data, but I don’t think I’m alone.

  • sammy says:
    July 9, 2011 at 12:04 am

    Joel,    
       
    Uh, sammy–politics is not science, silly boy.    
       
    Political science is a social science concerned with the study of the state, government and politics;[1] it deals extensively with the theory and practice of politics, and the analysis of political systems and political behavior.  http://en.wikipedia.org/wiki/Political_science
       
       
    Did you have a, you know, point?    
       
    Yes.  The post asks “”Does anyone think that uncertainty has been reduced since Republicans gained a majority in the House of Representatives?”    
       
    I commented that it has, by blocking any more of Obama’s radical policies.  “Radical” = a : very different from the usual or traditional.
       
    You know, how Obama was going to “Transform America” with Obamacare, Cap and Trade, the Stimulus, international relations, etc.  People are uncomfortable, “uncertain” if you will, when a neophyte promises to “transform” anything, because they probably don’t know what they are doing and will screw everything up.  As Obama has.    
       
    Your comment, on the other hand, is a bunch of name calling and an unsupported pronouncement.  You evidently feel that your purported status as a “scientist” entitles you to make such feckless comments here on AB.  So I called you on it, again.

  • soonerhawkeye says:
    July 9, 2011 at 1:25 am

    Neophyte?

     There is no higher concentration of neophytes in government than in the T party house of reps.  If a (singular) neophyte makes for mass uncertainty, what is the effect of a multitude of neophytes on American confidence?

  • Anna Lee says:
    July 9, 2011 at 8:04 am

    “Does anyone think that uncertainty has been reduced since Republicans gained a majority in the House of Representatives?”

    From the responses it is hard to understand the intent of this question. The comments give me the impression that it is bifurcated. It seems to have little to do with the “uncertainty” index of individual groups (people wondering if their jobs are next or if their son will finally get that first job, seniors wondering if the trickle up will finally suck them dry, businesses wondering if they will need to layoff another person, etc.)  It seems to me that the unrest has just shifted to greater confident for some and extreme fear for others. So I personally think, based on living on the real ground, class warfare probably needs a bit more energy.

  • Beverly Mann says:
    July 9, 2011 at 2:16 pm

    I’ve been wondering when people were going to start pointing out that the economic recovery was starting to pick up steam until the Republicans gained control of the House and started dictating economic policy. 

    And, by “people, I don’t mean Obama, who, as Paul Krugman noted in his column yesterday, has effectively become one a Republican and who, I already had recognized a while ago, is never going to make the case against Republican economics mantras.  Instead, as Krugman points out, he himself mouths them pretty regularly.

    But maybe now, in light of yesterday’s jobs figures, Nancy Pelosi and others who can gain media attention will aggressively make the point that Republican control of the House has correlated with the significant downturn in employment growth.  

  • Jack says:
    July 10, 2011 at 10:16 am

    CoRev (countering what revolution?)
    You are too ready and willing to sacrifice the compensation and benefits of others.  What sacrifice are you willing to make in that regard?  What have you given up in support of your cherished concept of a reduced deficit?  Your servile attitude is all the more striking because you choose to focus on the sacrifices that can or should be made by others.  You deserve the scorn that you detect from others.  Step up and describe the sacrifice that you have made.   

  • ilsm says:
    July 11, 2011 at 12:22 pm

    Uncertainty is when one cannot put a probability or a narrow defintion of possible wreckage, as opposed to risk where you can do a range of losses and a probability.

    With the rethugs running the house we have the arsenists running the fire department.

    Uncertainty goes to zero when the arsenists are using gaslone instead of water on the blaze.

    The losses are complete.

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