Are Republicans opportunistic liars, or just stupid?

[_moksha]

By the way, my right-click spell checker suggests "proctological" as the replacement.

Thank you for getting to the bottom of this mystery.

[_Kevin Graham]

What is the flawed reasoning behind the “uncertainty” argument?

What is the logic behind the “uncertainty” argument for our poor job growth? Based on numerous media reports, we know that firms have substantial cash on hand to invest (Monga, Mattiloi, and Chasan 2011), but that they are not using it for new hires or investments. We also know that firms are making a third more profit than they did before the recession (Eisenbrey et al. 2011), so they are not being held back by current profitability or the ability to finance investments. There is no mention of any demand-side problems in the rhetoric coming from House leaders, so presumably they believe that businesses have ample customers.

Given all of this, the story must be—according to conservative policymakers—that employment growth is sluggish because firms are turning down, and will continue to turn down, opportunities to make goods and services that are profitable today (current sales are very profitable) because they fear regulations will not allow these sales opportunities to be as profitable in the future and they fear making the longer-term commitment of hiring permanent workers.

Actually, it’s not really “uncertainty” about these potential rules and regulations that is the complaint; the regulatory process is moving along, and the rules are becoming final and therefore certain. But the House Republicans and various business groups are actually trying to delay the rules, prolonging the sense of uncertainty. The bottom line is an old conservative story: that regulation will raise costs and make future business opportunities to sell goods and services insufficiently profitable. The new twist is that these fears are suppressing current investments and hiring, and are thus a major cause of our unemployment problem.

The underlying assumption that regulations inhibit job growth is questionable, of course. EPI’s Isaac Shapiro and John Irons have reviewed the available evidence on this and found that, taken in their entirety, neither studies on the economy as a whole or ones on particular sectors support the view that regulations cause substantial job losses. Following are excerpts from Shapiro and Irons (2011):

The most common general studies are of environmental regulations, and these have consistently failed to find significant negative employment effects. Moreover, studies suggesting that regulations have broad negative effects on the economy offer little persuasive evidence.

Some well-executed studies have found that certain regulations led to job losses in particular areas, but most studies of various industries suggest that regulations had either a close to neutral or small positive effect on employment levels.

It is worth mentioning that this “regulatory uncertainty” argument requires its proponents to have a particularly peculiar form of amnesia, given that the worldwide economic collapse we are now experiencing is due to a failure to sufficiently regulate financial markets.

What do economic trends and employer decisions indicate? The demand-side explanation

Instead of uncertainty about regulations, there is strong evidence that the absence of job creation reflects the continued unwinding of the financial collapse and the corresponding lack of demand. Firm investments and hiring are lower because they have ample capacity to produce the goods and services they are selling to a shrunken market, while firms are deleveraging at the same time. One can easily document (using National Income and Products Accounts (NIPA) Table 1.4.6 on GDP and mixing with population information from NIPA Table 2.1) that the final per person demand for domestically produced goods and service in the spring of 2011 (second quarter) was still 0.7 percent lower than it was before the recession, i.e., the last quarter of 2007 (U.S. Bureau of Economic Analysis 2011a and 2011b). Assuming that demand per person would have grown, absent the downturn, at a 1.5 percent rate for three-and-a-half years (a rate 20 percent lower than that of the 1979-2007 period), we find ourselves with demand 8.5 percent lower than we would expect.

The optimal response to shrunken demand when interest rates are as low as they can go and households and firms are still not spending is for government to step in to augment demand. The Obama administration’s recent jobs plan follows this logic, though it would be even better if it had more investment, fewer tax cuts—especially for businesses already overflowing with cash—and had set up a direct government hiring program. More on these actions can be found in proposals from Rep. Jan Schakowsky (2011) and William Darity (2010).

Investment and hiring trends inconsistent with “uncertainty” story

A simple review of investment and employment trends—what businesses are actually doing— reveals that employers are not behaving according to the narrative described in the uncertainty story: Employment and investment trends are what one would expect (or better) given the trends in the overall growth of the economy (i.e., the actual growth or shrinkage of gross domestic product).

Let us start by comparing investment, specifically investment in equipment and software, in the first two years (which is where we are now) of each of the last four recoveries. Figure A does so by examining the changes in the investment (equipment and software) share of GDP from the beginning of each recovery. The data show that investment has increased more in this recovery than in the prior two recoveries and roughly the same as that of the 1980s recovery. It is interesting to note that there was no growth in investments (as a share of GDP) in the George W. Bush recovery. That means that this recovery, with Obama regulations pending, is far more investment-led than the recovery under the deregulatory Bush administration. So, investment does not look like it is being held back, at least relative to other recoveries and the size of the market (i.e., GDP). To be transparent, this analysis leaves out investments in business “structures” because that type of investment is clearly faltering as a result of the bursting of the residential and commercial real estate bubble (and not because of regulatory uncertainty).



Private-sector job growth has also been better in this recovery than in the last recovery, as shown in Figure B, which looks at the growth over the first 25 months of the last four recoveries. The three recoveries since 1991, however, had very little job growth, at least at first, and all have been referred to as “jobless” recoveries. There was much faster employment growth in the 1980s recovery—mostly because the Federal Reserve had much more room to support this recovery through lower interest rates than it has had during the post-1980s recessions (and the 2000s recoveries in particular). There is certainly nothing special about job growth in the current recovery that stands out from the 1991 and 2001 recoveries to indicate a special regulatory-caused job problem.

The most unusual aspect of this recovery is that government jobs have declined by roughly 600,000 (2.6 percent), whereas government jobs grew in the prior recoveries. Obviously, the loss of government jobs is not the consequence of fears of regulation. Despite the loss of government jobs in this recovery but not the last one, there has been more job growth overall (public- and private-sector) in the first 25 months of this recovery (up 0.5 percent) than in the corresponding period in the 2001 recovery (when jobs fell 0.4 percent).



Perhaps a better test is to look at employment growth relative to growth of the economy, an analysis that corresponds to our treatment of investment. One way to do that is to examine whether the historic relationship between GDP growth and unemployment—referred to as Okun’s law—has changed in this downturn and recovery. It has not: Employment growth is what we would expect given the growth of the economy. For instance, the Goldman Sachs economics team recently wrote, “the link between the growth rate of real GDP and the change in the unemployment rate, known as Okun’s law, continues to be very tight” (Goldman Sachs 2011).

Other analysts, such as Jared Bernstein (2011) and Menzie Chinn (2011), also find that the unemployment/employment growth we are experiencing is very much in line with the GDP we have seen, and no new factor—such as fear of regulation—is present.

Trends in weekly hours inconsistent with “uncertainty” argument

Another set of data also calls into question the “regulatory uncertainty” argument. If firms were nervous about hiring new employees but had immediate profitable sales opportunities (say, before new regulations are established), then they could readily increase the weekly work hours of current employees to produce more goods and services. The Center for Economic and Policy Research’s Dean Baker (2011) and EPI’s Heidi Shierholz frequently point out that weekly hours are still far below their pre-recession level. Figure C depicts recent analysis by Shierholz (2011) of hours data through August 2011. It shows that weekly work hours for private-sector workers averaged 34.6 in 2007 but had fallen to 33.7 by June 2009 (the start of the recovery). Since then, weekly hours have recovered about half that loss and were at 34.2 in August. If employers restored working hours to their pre-recession level, that would be the equivalent of adding 1.2 million jobs, suggesting that a lot more staffing is readily available (without making permanent new hires) to produce output of goods and services if employers so desired. It is hard to believe that regulatory uncertainty is what is preventing employers from adding work hours to current employees to fulfill current profitable opportunities to sell goods or services. Something else must be going on: Customers and sales opportunities are simply not there.



If one looks at what employers are doing rather than what the trade associations and their allies on Capitol Hill are saying, then recent employment and investment behavior is easy to explain—investment and employment/unemployment are what we would expect in a severe downturn followed by a slow growing economy in the recovery. There is no shift from historic patterns, and there does not seem to be any evidence that fears of future regulation are shaping the slow growth and weak employment gains we have seen.

What do employers say in surveys?

What businesses (and business economists) say in private surveys also does not support the “regulatory uncertainty” mantra one hears from the D.C.-based business trade associations.

The National Federation of Independent Business (NFIB), which describes itself as “the leading small business association representing small and independent businesses,” does a regular survey of small businesses. One question that has been asked since 1973, is “what is the single most important problem your business faces?” The answer choices are inflation, taxes, government regulation, poor sales, quality of labor, interest costs, health insurance costs, the cost of labor, and other matters. Interestingly, the single largest response is “poor sales,” the choice of 30 percent of respondents since President Obama was sworn in (averaging the 10 quarters between early 2009 and spring 2011). In other words, slack demand appears to be the key concern of small businesses (Figure D).



Some conservative analysts acknowledge this fact but then point out that taxes and regulation were the next highest concerns identified in the NFIB surveys—evidence, they claim, that tax and regulatory uncertainty are also preeminent. In the Obama years, some 13.9 percent of small businesses identified government regulation and another 20.8 percent identified taxes as their primary problem, the leading answers after “poor sales.” Fortunately, one can obtain the NFIB’s entire historical series (back to the fourth quarter of 1973) on this survey question and put the question in historical perspective, constructing the averages for each presidential term (NFIB 2011).

It turns out that small businesses have always complained about regulation and taxes and not especially so under Obama. For instance, the share concerned about regulation under Obama (13.9 percent) is not substantially higher than under George W. Bush (9.9 percent and 11.0 percent) or Ronald Reagan’s second term (12.8 percent). There is also less concern about regulation under Obama than under Bill Clinton or George H. W. Bush. Recall also that there was rapid employment growth in the second Clinton term, so high concerns about regulation (which rose steadily from Reagan’s first term to their highest level in Clinton’s first term) are not necessarily associated with poor employment growth.

There is a similar story on taxes. Sure, there are 20.8 percent of respondents, on average, in the Obama years who see taxes as the primary problem facing their business. Yet, that intensity of concern about taxes is not all that different than under George W. Bush and is less than that reported during the first Reagan term through Clinton’s second term. It is hard to find a recent spike in concern about regulations or taxes that supports the story of escalating uncertainty or fears of regulations holding back the economy.

Besides the NFIB survey of small businesses, there are two recent surveys of economists that also indicate the “uncertainty” story is baseless. First, the Wall Street Journal’s recent survey of economists (Hollander 2011) showed that “U.S. companies are reluctant to hire—but not because of uncertainty over government policies…. A majority of the 53 economists surveyed (Izzo 2011) from July 8-13…say it is the lack of demand that is keeping hiring down.” EPI’s Isaac Shapiro wrote a blog post about the National Association for Business Economics’ recent survey of 250 of its members, who include both academic business economists and practicing business economists (i.e., those who use economics in the workplace). According to Shapiro (2011), the survey contains the following results:

The vast majority (80 percent) of those surveyed believe the current regulatory environment is good for American businesses and the overall economy.

The large majority of business economists believe concerns about economic uncertainty are a proxy for generalized concerns about the bad economy. (That is, the concerns do not reflect business worries about regulation.) Few believe economic uncertainty is a major concern that is holding back economic progress.

In conclusion, when looking at both what employers are doing in terms of hiring and investing and what they (and their economists) are saying in private surveys, it’s nearly impossible to make the argument that uncertainty about regulations is holding back the economy. A Bloomberg News (2011) editorial makes the point even more broadly:

“There is no doubt that certainty is generally preferable to uncertainty, in the economy as in most aspects of life….But there is no evidence that uncertainty has increased during the Obama presidency, or that, if it has, the president’s policies are responsible for it…The charge of ‘creating uncertainty’ is a way to blame Obama for the U.S.’s economic trials without having to explain the connection.”

[_Droopy]

And as expected, you provide a list of Right Wing blog entries from different people who simply regurgitate the same claims, but provide no evidence to back it up.

I on the other hand, can provide sound analysis refuting such fear mongering, from Economists in the know. Fair warning. What you are about to read (which you probably wont) is hazardous to your ignorance based assumptions.

http://www.epi.org/publication/regulato ... planation/

And, as expected, you project onto me (and the economics PhDs at the Von Mises Institute, Heritage, AEI, Hoover etc. from where I get my knowledge of economic matters, not to mention my massive personal library) your own longstanding, traditional confusion regarding the difference between serious, critical thought and ideological evangelism.

As is also traditionally your wont, you choose as exhibit 'A' of "economists in the know," not intellectually credible economic scholars but a deeply ideological left-wing activist site who's board of directors reads like a rogue's gallery of the contemporary anti-American, anti-capitalist Left.

Let's take a little look at the "economists in the know," shall we? Let's take a look at the Board of Directors of the Economic Policy Institute. We will easily be able, given your choice, to use the most comprehensive clearinghouse of historical and critical information on the Left on the Internet, David Horowitz' Discoverthenetworks for most of them.

We start, not with an economist, but a lawyer, the utterly corrupt union political warlord and radical leftist labor agitator Richard L. Trumka, head of the notorious and thuggish AFL-CIO.

http://www.discoverthenetworks.org/indi ... indid=1630

Our next economist "in the know" is Julianne Malveaux, Useful idiot and Fidelista, race, class, and gender ideologue, and multicultural racialist. Oh, and she's an economist too.

http://www.discoverthenetworks.org/indi ... indid=2515

Next, we have Ernesto J. Cortes, Jr. a key figure in one of the original anti-American, anti-capitalist revolutionary subversive groups of the modern era, Saul Alinsky's original Industrial Areas Foundation.

http://www.discoverthenetworks.org/prin ... grpid=7493

This is worth posting in its entirety, just so we may see, yet again, who Kevin thinks represents intellectually credible research and serious, critical thought:

INDUSTRIAL AREAS FOUNDATION (IAF)

Established in 1940 by Saul Alinsky

Trains community organizers in the tactics of revolutionary social change that its founder outlined

Favors the constant growth of federal welfare spending

Supports the advancement of a living-wage movement

Established in 1940 by Saul Alinsky, the Industrial Areas Foundation (IAF) is a Chicago-based community-organizing network consisting of 59 affiliate groups located in 21 U.S. states as well as Canada, the United Kingdom, and Germany.

IAFs mission is to build organizations whose primary purpose is power -- the ability to act -- and whose chief product is social change. Toward that end, an IAF training institute -- which Saul Alinsky himself launched in 1969 as a school for professional radicals -- trains community organizers in the tactics of revolutionary social change that its founder outlined. The institute has been headed by ex-seminarian Edward Chambers ever since Alinsky's death in 1972. Its leadership-training programs consist of intensive 10-day sessions that are held two to three times each year. IAF also offers a 90-day internship program for aspiring organizers.

IAF is not a grassroots network; its local affiliates are created as the result of careful planning by its national leadership. According to the Rev. Johnny Youngblood, a former leader of the New York IAF local known as East Brooklyn Churches: "We are not a grassroots organization. Grass roots are shallow roots. Grass roots are fragile roots. Our roots are deep roots."

IAF describes itself as non-ideological and strictly non-partisan, but proudly, publicly, and persistently political. As onetime IAF organizer Arnold Graf has stated:

"In places like San Antonio and Baltimore, we are as close to being a political party as anybody is. We go around organizing people, getting them to agree on an agenda, registering them to vote, interviewing candidates on whether they support our agenda. We're not a political party, but that's what political parties do.

Similarly, Arizona's IAF local -- known as the Pima County Interfaith Council -- is officially a Political Action Committee whose mission is the collection and exercise of political power and influence.

In its quest to bring about social change, IAF targets specific communities and seeks to buil[d] a political base within ... the sector of voluntary institutions that includes religious congregations, labor locals, homeowner groups, recovery groups, parents associations, settlement houses, immigrant societies, schools, seminaries, orders of men and women religious, and others. Once it has gained a foothold inside any of those entities, IAF sets out to identify, recruit, train, and develop leaders in every corner of every community where it has a presence.

IAF strives most aggressively to bring religious institutions into its fold, on the theory that church affiliations will help inject the network not only with access to large amounts of cash, but also with perceived moral credibility. As the IAF handbook states:

" [O]ne of the largest reservoirs of untapped power is the institution of the parish and congregation. Religious institutions form the center of the organization. They have the people, the values, and the money.

IAF endeavors to establish a series of new social realities that include:

the continued growth of its Nehemiah Housing program, which has helped thousands of low-income people purchase taxpayer-subsidized affordable housing units in Brooklyn, the South Bronx, Philadelphia, Baltimore, and Washington, DC;
the establishment of so-called "Alliance Schools" that are geared for teenage students (mostly in the southern and southwestern U.S.) who have previously experienced social or scholastic difficulties because of their sexuality, appearance, or beliefs;
the constant growth of federal welfare spending; and
the advancement of a living-wage movement demanding that every worker earn enough to allow him or her to have a share of earthly goods sufficient for oneself and one's family. (IAF claims credit for having conceived, designed, and implemented America's first living-wage bill, in Baltimore, in 1994. Other living-wage ordinances were subsequently promoted by IAF affiliates in New York, Texas, and Arizona.)

Moreover, IAF's "model for education reform" calls for America's school system to undergo a systemic change -- where parental control over a child's schooling is usurped by "the entire community" which "must be meaningfully involved in the public education system and held accountable for its results." One IAF paper on education crystalizes its premise that teachers and childcare workers (whose salaries are paid by taxpayers) should play an ever-larger role in the upbringing of youngsters:

"Schools must be prepared to teach parents how to play a supportive role. In some cases this might mean making provision for parenting education.... Increasingly, schools will find it important to employ social workers who can coordinate necessary services and to intervene on behalf of a child in need.... Schools will need to help working families make provision for after-school childcare, and day care for pre-schoolers."

IAF receives large amounts of funding from the Catholic Campaign for Human Development (CCHD). Fellow CCHD donees include the Gamaliel Foundation, People Improving Communities Through Organizing (PICO), the Midwest Academy, and the Direct Action and Research Training Center (DART). IAF has been an influential model for each of those organizations.

As to Saul Alinsky's (a key ideological mentor and role model to both Barack Obama and Hillary Clinton) agenda and beliefs:

http://www.discoverthenetworks.org/indi ... indid=2314

Phaedra Ellis-Lamkins is also a leftist union ideologue as well as eco-extremist. She appears to have no economics background. Green for all is a radical leftist environmental NGO who's main interest appears to be supporting the entire global green energy fraud.

Then there's Keith Ellison? Yup. The notorious Keith Ellison:

http://www.discoverthenetworks.org/indi ... indid=2158

Need I go on delineating any more "economists in the know?" EPI is also not unknown to those who keep a watchful eye on the Left:

http://activistcash.com/organization_ov ... -institute

Lawrence Mishel, the author of the piece Graham quotes, is a DSA (Democratic Socialists of America) co-founder and anti-capitalist, leftist labor researcher. He's also an economist. This may give you a working understanding of his credbility as an "economist in the know."

http://www.google.com/url?sa=t&rct=j&q= ... jQ&cad=rja

[_Kevin Graham]

Utterly unable to refute the empirical data provided by economist Lawrence Mishel, Droopy does his usual evasion by drawing our attention to one of his favorite Right Wing fanatical "hit piece" websites that categorizes every expert who disagrees with him as some evil communist. But the funny thing here is that nowhere does Droopy attack the credentials of the economist who wrote the article above. Instead, he attacked the institute because it has members that can be found on Horowitz's McCarthyistic website. Obviously they present an intellectual threat to these half-wits. Just look at how Droopy revs up teh rheotric in attacking these people, based on nothing more than Horowitz's say-so.

We start, not with an economist, but a lawyer, the utterly corrupt union political warlord and radical leftist labor agitator Richard L. Trumka

How exactly does attacking this person, whoever he is, in any way respond to the thorough refutation of droopy's idiotic "taxes and regulations" excuse for low employment? Lawrence Mishel is the economist who wrote this article, and he is a credentialed economist who received his degrees from:

Ph.D. Economics, University of Wisconsin
M.A. Economics, American University
B.S. Pennsylvania State University

That's three more degrees than Loran Blood and David Horowitz have combined. Given Horowitz's reputation as the arch nemesis to formal education, it should be little wonder Loran adores him so much.

And how does Droopy respond to his thorough refutation of this popular Right Wing lie? By randomly attacking other people who happen to belong to the organization. Only those who deserved a spot on David Horowitz's pathetic website of course.

Brilliant Droopy, just brilliant!

Take note that the Horowitz website has absolutely nothing negative to say about Mishel, teh man responsible for the article I posted. And of course since Droopy's thinking is limited to whatever he can google, I guess that means droopy can't say anything negative about him either. He sure as hell can't refute the information therein. This is why he is taking this tactic of diversion.

[_Kevin Graham]

Biography
Lawrence Mishel, a nationally-recognized economist, is President of the Economic Policy Institute, a role he assumed in 2002. Dr. Mishel first joined EPI in 1987 as Research Director. In the more than two decades he has been with EPI, Dr. Mishel has helped build it into the nation’s premier research organization focused on U.S. living standards and labor markets.

Dr. Mishel has co-authored 11 editions of The State of Working America, a book which former U.S. Labor Secretary Robert Reich says “remains unrivaled as the most-trusted source for a comprehensive understanding of how working Americans and their families are faring in today’s economy.” The State of Working America has been an invaluable resource in newsrooms, classrooms, and halls of power since 1988.

Dr. Mishel’s primary research interests include labor markets and education. He has written extensively on wage and job quality trends in the United States. He co-edited a research volume on emerging labor market institutions for the National Bureau of Economic Research. His 1988 research on manufacturing data led the U.S. Commerce Department to revise the way it measures U.S. manufacturing output. This new measure helped accurately document the long decline in U.S. manufacturing, a trend which is now widely understood.

Dr. Mishel leads EPI’s education research program. He has written extensively on charter schools, teacher pay and high school graduation rates. His research with Joydeep Roy has shown that high school graduation rates are significantly higher than the rates that are often cited by education analysts. This work has enabled policymakers to more accurately assess the state of public education in the United States.

Dr. Mishel has testified before Congress on the importance of promoting policies that reduce inequality, improve the lives of American workers and their families, and strengthen the middle class. He also serves frequently as a commentator in the print, broadcast, and online media.

Prior to joining EPI, Dr. Mishel held a number of research roles, including a fellowship at the U.S. Department of Labor. He also served as a faculty member at Cornell University’s School of Industrial and Labor Relations. Dr. Mishel holds a Ph.D. in economics from the University of Wisconsin at Madison. Originally from Philadelphia, he lives with his wife and two dogs in Washington, D.C.

[_MeDotOrg]

By the way, my right-click spell checker suggests "proctological" as the replacement.

Thank you for getting to the bottom of this mystery.

I found your pun to be wholly asinine.

[_Analytics]

Production only drives the economy to the extent that people want to buy things that are produced.

If they don't, then that which is produced will no longer be produced, and that which people do want to buy will continue to be produced. But it is production that creates demand...

What in the world are you talking about? Since Adam Smith, "demand" simply means what people want. It can be measured by utility functions or whatever, but it always goes back to what people want. Talk to any economist, and they'll say there is a demand for food because people want to eat--they are hungry and they want food.

Saying things like, "production creates demand" implies that nobody wants food until it is produced. Pure gibberish. Either you are extremely confused about economics, or you’ve hijacked the word “demand” to means something totally different than what economists mean by the term.

[_Kevin Graham]

Indeed. This notion that production creates demand is quite idiotic but it is a key element behind supply-side economic theory which, as recent history has shown, was a failure.

[_krose]

Employee wages, new stock, supplies, water, electric, phone, paper towels, plastic forks, window cleaner, or whatever else you need on an ongoing basis, are your operating costs...

You're [sic] personal income, out of which must come any new hiring or expansion beyond present operating costs, is your profit after business overhead and taxes are deducted.

Where do you get the notion that one must use after-tax, personal income to expand or hire new employees, while existing employees are paid as a deductible operating cost?

Please explain how Line 26: "Wages" on Form 1040, Schedule C, Part II: "Expenses" does not include new hires?

Bueller?





Bueller?



...

[_Drifting]

Stand on gay marriage:
DEMOCRAT -Support (some Democrats disagree)
REPUBLICAN - Oppose (some Republicans disagree)

Social and human ideas:
DEMOCRAT - Community and social responsibility based
REPUBLICAN - Individual rights and justice based

Now, here's what I can't get my head round.
How can you, as a Republican, be FOR individual rights yet AGAINST individual rights?