Legislative Blockades & Governing

So here we are, exactly one month since the Democrats got walloped in the election. Republicans have won the House and gained ground in the Senate, but of course that's not until next month which means obstructionism continues to abound.

On Wednesday Senate Republicans vowed, in a letter to Senate Majority Leader Harry Reid, to block any and all legislation until there is resolution on the continuation of the Bush era tax cuts. From The New York Times article, here are some of the things that won't get done until the tax cut issue is resolved:

- The repeal of Don't Ask, Don't Tell

- The continuation of jobless benefits for millions of still unemployed Americans, with benefits set to expire (wait for it) on Christmas day

- The ratification of the New START Treaty

- Passage of the DREAM Act, giving illegal immigrants brought here as children the opportunity to become U.S. citizens

- Passage of the previously passed (but parliamentary fumbled) food safety bill

Very seriously, 2 out of 5 of those might reflexively raise the ire of Republicans. They could even be considered part of a "liberal wishlist" but 3 out of 5 seem largely mundane. But of course, in the Republican economic policy, tax cuts are supreme. It would appear literally nothing else matters. Sen. Mitch McConnell seems to suggest the legislative work the Democrats are trying to accomplish runs counter to the outcome of the election. I think he misreads the situation.

You see, the Republicans don't actually take power until next month, but I think in the minds of many Americans the transfer of power happens on election night. Republicans are in a strengthened position and I believe those that voted for them, by and large, expected that they would govern, not obstruct. I think the failure to pass some of these things will fall at the feet of Republicans. I'm a poor prognosticator so take that prediction for what it's worth, but after the holidays, if millions of people no longer receive unemployment benefits, if all Americans see the tax cuts sunset, they will also see a Republican Speaker of the House and a strengthened Senate Minority Leader. Sure, President Obama will get some blame, but he doesn't cast a vote.

I think people will see this as the Republican party, extorting Democrats and throwing a tantrum like a child that wants two scoops of ice cream, but only got one. I wonder what Republicans will do in January. Is the Republican party capable, with its current membership, of governing at all?

Grading Government Intervention in the Great Recession

The New York Times reported on a new paper by two leading economists, Alan Blinder and Mark Zandi, that used econometric modeling to demonstrate how government intervention helped stem a second Great Depression and kept us at a Great Recession.

The paper notes, "that without the Wall Street bailout, the bank, the emergency lending and asset purchases by the Federal Reserve, and the Obama administration’s fiscal stimulus program, the nation’s gross domestic product would be about 6.5 percent lower this year. In addition, there would be about 8.5 million fewer jobs, on top of the more than 8 million already lost; and the economy would be experiencing deflation, instead of low inflation."

Immediately critics will point out that Blinder worked in the Clinton administration and Zandi is a registered Democrat. I would humbly suggest that party affiliation doesn't make someone's research automatically irrelevant.

And I'll note that i haven't read the whole paper, but will be in the next 24 hours to look at some of the assumptions and the models they used. I mean, I should use my bachelors degree for something, right?

Finally, I'll request that people looking to question the conclusions Blinder and Zandi reach base their criticism on the paper and its methodology, not just knee jerk rejection that a registered Democrat couldn't possible comment on the stimulus. Thanks.

The Economy - Let someone smarter explain it

This post on the Economist.com Democracy in America space pretty much sums up the current economic situation and the current impotent political situation in this country better then I ever could.

Bottom line, Republicans are disingenuous and Democrats are chicken shit.

GOP Continues to Castigate the Unemployed

Sunday, Tom DeLay (R-TX), former Majority Leader, claimed, “there is an argument to be made that these extensions of these unemployment benefits keeps people from going and finding jobs.”

Delay is not alone in pushing this nonsense. Last week, Jon Kyl (R-AZ) similarly accused the unemployed of being unemployed out of choice, “because [the unemployed] are being paid even though they’re not working.”

Delay and Kyl are conflating what would likely occur if the United States were at full employment and raised the generosity of benefits accorded to the unemployed. In this scenario, all those people that would like to find jobs are able to do so, but those whose jobs at the low end of the wage scale are easily substituted for by increased unemployment benefits. Those individuals then leave the work force. The theory is reasonable enough—when the unemployment rate is around 3% and benefits are increased not extended.

But we do not find ourselves in a situation with 3% unemployment, nor have unemployment benefits been increased. Unemployment benefits have merely been extended, making current unemployment benefits no more competitive with wages than they were 30 days ago, or 90 days before that. Instead, with real unemployment around 17%, it is ridiculous to suggest that, absent substantial employment benefit increases, the 12% of the work force that has lost its jobs due to the Great Recession have not done so voluntarily, in favor of the lavish insurance provided for the government.

Callousness and wrong economics aside, the most pernicious aspect of the Delay-Kyl line is that it suggests, not so gently, that the unemployed are to fault both for the individual failure to find new jobs and the larger economy’s failure to recover. Effectively, Delay and Kyl suggest that if Congress were to revoke unemployment benefits—if unemployment weren’t so comfortable—the suddenly uncomfortable, lazy jobless would be driven by economic pressure to create new jobs for themselves or fill the many jobs that are just waiting to be filled.

Of course, even if that were the case, even if there were hundreds of thousands of jobs waiting to be filled if only workers could be coaxed off the dole, wouldn’t that economic pressure simply drive wages up, making unemployment less attractive, filling those empty jobs? This is just simply not a phenomenon we are witnessing. The millions of Americans unemployed did not abandon their jobs in favor of unemployment insurance. They do not remain unemployed because they prefer visiting the unemployment office weekly. They will go back to work when there are jobs again. Taking away the unemployment safety net will simply drive people into poverty.