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

Small businesses, tax cuts, and reporting

 I sometimes get the ‘eyes rolling’ reaction from people in my social sphere when I insist that at least linking to  original documents is important, and that someone needs to follow up on what an author says someone else says (as a way to gain traction and authority status for their own writing, such as saying the non-partisan Tax Policy Centers says).  I won’t go into the idea of spin, which involves figuring out intent.  Mine is a caution for readers:

The post is lifted from a note from Daniel Becker in response to a query I sent to him…Dan is a small businessman in the way most of us think of as small business.  (The IRS has a different criterion  of ownership that allows a company like Bechtal at $31 billion to be considered a small business).

Dan Becker’s note:

The Washington Post article is   Obama calls for small business tax breaks.   The article uses the  Tax Policy Center original under the title Temporary Tax Relief to Create Jobs  as the source for the reporting.

The WP article notes:

“The last time the country had a similar proposal to the tax subsidy was during the Carter administration, according to the Tax Policy Center. Research by the Labor Department found that few firms knew about the tax policy, but those that did increased employment notably.”

But from their source it actually notes:

“The last experience the United States had with a credit for incremental employment was with the new jobs credit enacted at the beginning of the Carter Administration in 1977. Evaluations of that credit and how it came about found that most firms were either unaware of the credit or did not respond to it. Research based on a Department of Labor survey found that only 6 percent of firms who knew about the credit said that it prompted them to hire more workers. Firms that were aware of the credit, however, increased employment about 3 percent more than other firms. ”   (bolding is Dan B.’s)

WP had another smoothing over (under the fold):
 

“An incremental jobs credit could be a cost-effective way of raising employment in the short run, the nonpartisan center said in a report this year. The effectiveness of any jobs subsidy depends . . . on how employers perceive its potential benefits when making hiring decisions.”

The actual statement:

In summary, the effect of this proposal on employment is very uncertain. In theory, an incremental jobs credit could be a cost-effective way of raising employment in the short run and some research suggests that the 1977 credit did increase jobs, although the evidence on that is far from conclusive.
The effectiveness of any jobs subsidy depends greatly on both the details of the proposal, still to be finalized, and on how employers perceive its potential benefits when making hiring decisions.

Dan B

(Editorial comment at end of note from Dan Becker….Man! They still want to believe that cutting taxes is actually the same as if the 99% were now getting that $1 trillion of income that is now with the 1%. Just like they believe cutting taxes will increase revenues (sure if you convince the dictator to stop taking a full 90% of all that his people produce, but that’s not US).

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Tom Toles is a Priceless National Treasure, Part XIV

Via the overworked Tom Bozzo, who I keep hoping will post here about Ford’s plan to triple their Electric Car output for next year, Tom Toles Explains It All to You:

Oh the transgression was bad, but we the proud and truth-loving American public just cannot abide the lies! We are TRUTH-SEEKERS around here, and we punish the lying liars where they are found!

Except Tim Pawlenty when he says that he will fix the budget with MORE, HUGER THAN EVER tax cuts! Just like Bush’s only BIGGER! But THIS TIME they will pay for themselves! This will not be punished as a crazed lie, no, this will be reported straight-faced as a POLICY POSITION. And Pawlenty is running as the GUY WHO WILL TELL US HARD TRUTHS!

Journalists apparently understand that calling an underwear model shot “a penis” will get more links, which is their sole purpose in life, but actually noticing a lie that would impact people who are supposed to make rational decisions will lose them a key source who then takes the opportunity to lie to them with impunity and anonymity.

Note: If I Were Brad DeLong, I would be calling this series (which reveals my innumeracy, unless Google just can’t find entries 11 and 12) “Why Oh Why Can’t We Just Have the Good Part of the Press Corps?” Sadly, I’m not that clever, so it would be something like “Reasons to Be Cheerful…” There’s a reason he’s a Syndicated Columnist and I’m a blogger.

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Forget Jumping the Shark? The WaPo is Doing the Tango with It

UPDATE: Jason Linkins at one of the non-Breast-Enhanced sites of the Huffington Post did a burlesque of which I can only dream on the same piece.

Via Chris Hayes’s Twitter feed (and he got it from David Sirota), the following is from “No more ‘me first’ mentality on entitlements“:

While it does not happen often, our political system is capable of making unpopular decisions that are in our collective best interest. In 2008, during the most severe financial crisis in 80 years, Republican and Democratic leaders in Washington came together to do something deeply unpopular: bail out the financial system via the Troubled Assets Relief Program. These leaders understood the consequence of inaction was economic devastation for Americans. Passing TARP was the right thing to do.

[B]ailing out the financial system went directly against our shared beliefs in free markets and fair play. While the vast majority of Americans did not cause the financial crisis, we all had to sacrifice to stop it. Such a cultural violation has angered people nationwide, which makes cutting entitlements more difficult because it will again betray our sense of fairness.

The challenge of entitlements is more difficult than the financial crisis: First, we must reach consensus to make cuts before the fiscal crisis is upon us….If we wait until the bond market shuns Treasurys, the economic consequences could be dire. Virtually overnight, we could have far less money to spend on priorities such as defense, education and research.

Cutting entitlement spending requires us to think beyond what is in our own immediate self-interest. But it also runs against our sense of fairness: We have, after all, paid for entitlements for earlier generations. Is it now fair to cut my benefits? No, it isn’t. But if we don’t focus on our collective good, all of us will suffer.

I’ve resequenced the above paragraphs a bit, but remained faithful to the argument as presented.

The author: Neel Kashkari, who is described as “a managing director of the investment management firm PIMCO, served as an assistant Treasury secretary during the George W. Bush administration. He led the Office of Financial Stability and ran the Troubled Assets Relief Program until May 2009.”

His sacrifices for the sake of TARP are well known; indeed, documented in the paragraph above. And, gosh, isn’t it nice that he pushes an argument that would make fixed-rate securities—you know, the thing PIMCO is famous for trading—more valuable?

It’s good to know that “Me First” needs to change, and nice to see the Post presenting a prime example of why.

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Ignani and the Ignavi

Robert Waldmann

AHIP The health insurance lobby just declared war on the Baucus plan. This is new, since they previously supported health care reform. It is not, however, surprising. AHIP made its condition clear, they would support health care reform provided that all were insured. Basically the individual mandate was the price for their support.

Displaying his usual inverted political genius, Baucus decided to water down the individual mandate so that some people are allowed to go without insurance. He was trying to compromise with Republicans, well in this case, with a Republican — Olympia Snowe. Thus he violated the terms of a very clear very public agreement with AHIP. It’s not as if I didn’t warn on September 2 that this is a terrible idea.

Now Baucus has lost AHIP and Snowe remains officially undecided. He dumped AHIP Prsident Karen Ignani in a bid for the Ignavi (I make that plural to refer to the Divine Comedy but pretend it is to include Nelson or Lieberman or someone).

Update: Maybe I was wrong. Maybe Baucus is an even more brilliant 11 dimensional chess player than Obama (a 12 dimensional chess player) and he knew that provoking AHIP was a brilliant strategy. The line from an anonymous “finance committee aide” is that AHIP’s attack is good for Baucus. The idea seems to be that Senators are angry with AHIP and don’t want to appear to take instructions from AHIP (doesn’t mean they don’t want to take the instructions, it just means that they don’t want it to be obvious as in changing their position the day before the big vote after a very public command).

Of course I assume that “a finance committee aide” would not make a totally bogus claim in support of the view that Sen Baucus is a genius and certainly wouldn’t demand anonymity if the claim were totally bogus. Nahhh that’s just not the way Washington works.

I’d guess that the bought and paid for insurance industry senators (definitely including Sen Baucus) aren’t even capable of being good fiduciaries of insurance company shareholders — that there obsession with compromising, watering down and settling for half a loaf (and above all pissing of the left wing of the party) lead them to water down the individual mandate which is much more critical to insurance company profits than is the avoidance of a public option.

update 2: Kevin Drum has the same theory as I do, but he writes much more goodly.

update 3: Yves Smith ways in
More comments after the jump.

Interestingly the AHIP broadside is not a press release. It is an A1 article by Ceci Conolly in The Washington Post. I thought the Washington Post was a subsidiary of the test prep industry not the health insurance industry (live and learn).

Dougj notes that The Washington Post publisher invited health industry players to pay for access to Ceci Conolly and writes “There’s a pretty strong prima facie case for pay-to-play here.”

Also AHIP didn’t just say the Baucus bill is a bad bill which will cause insurance premia to increase. They commissioned a study from PricewaterhouseCoopers to conduct an analysis (it must be an analysis there are lot’s of numbers in it) and a frightening possible price tag. PricewaterhouseCoopers clearly explains, in the text of their analysis, that they made extreme and implausible assumptions to make the calculated number as large as possible. AHIP and PwC assume that they know how journamalism works. Journalists don’t look at the assumptions or any non headline number so credibility can be bought (although I didn’t know that PwC had any left to sell). John Cohn read the fine print so you don’t have to.

I’m not sure if the old approach will work now that serious journalists have to worry about geeks who actually read the analysis that interest groups buy. OK I’m pretty sure it will still work.

update: looks the approach of anonymous sources praising their bosses still works.

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Brad DeLong is Correct

All right, I give up. I’ve reviewed for the Washington Post Book World, I consider some of their work interesting, and can almost forgive them for publishing Ruth Marcus, Charles Krauthammer, Anne Applebaum, and Richard Cohen as if they were sane.

But when your Ombudsman claims that your readers “typically demand coverage that is unfailingly neutral,” and cites as an example of “crossing the line” one of your reporters making a statement of fact:

“We can incur all sorts of federal deficits for wars and what not,” Raju Narisetti wrote on his Twitter feed. “But we have to promise not to increase it by $1 for healthcare reform? Sad.”

There is no purpose for your organization to even claim it publishes news.

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Four years is too long, Brad

Ms. mochi-tsuki discovers that the Washington Post has no copyeditors and cannot do math.

If this were another blog, I would be typing “Why, oh why, can’t we have a better press corps” here. Instead, let’s just leave it at: if you can’t extract data from the census correctly, what are you doing publishing a newspaper read by government officials?

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