“The Mutilated Economy”: Anyone Who Talks About How We’re Borrowing From Our Children Just Hasn’t Done The Math
Five years and eleven months have now passed since the U.S. economy entered recession. Officially, that recession ended in the middle of 2009, but nobody would argue that we’ve had anything like a full recovery. Official unemployment remains high, and it would be much higher if so many people hadn’t dropped out of the labor force. Long-term unemployment — the number of people who have been out of work for six months or more — is four times what it was before the recession.
These dry numbers translate into millions of human tragedies — homes lost, careers destroyed, young people who can’t get their lives started. And many people have pleaded all along for policies that put job creation front and center. Their pleas have, however, been drowned out by the voices of conventional prudence. We can’t spend more money on jobs, say these voices, because that would mean more debt. We can’t even hire unemployed workers and put idle savings to work building roads, tunnels, schools. Never mind the short run, we have to think about the future!
The bitter irony, then, is that it turns out that by failing to address unemployment, we have, in fact, been sacrificing the future, too. What passes these days for sound policy is in fact a form of economic self-mutilation, which will cripple America for many years to come. Or so say researchers from the Federal Reserve, and I’m sorry to say that I believe them.
I’m actually writing this from the big research conference held each year by the International Monetary Fund. The theme of this year’s shindig is the causes and consequences of economic crises, and the presentations range in subject from the good (Latin America’s surprising stability in recent years) to the bad (the ongoing crisis in Europe). It’s pretty clear, however, that the blockbuster paper of the conference will be one that focuses on the truly ugly: the evidence that by tolerating high unemployment we have inflicted huge damage on our long-run prospects.
How so? According to the paper (with the unassuming title “Aggregate Supply in the United States: Recent Developments and Implications for the Conduct of Monetary Policy”), our seemingly endless slump has done long-term damage through multiple channels. The long-term unemployed eventually come to be seen as unemployable; business investment lags thanks to weak sales; new businesses don’t get started; and existing businesses skimp on research and development.
What’s more, the authors — one of whom is the Federal Reserve Board’s director of research and statistics, so we’re not talking about obscure academics — put a number to these effects, and it’s terrifying. They suggest that economic weakness has already reduced America’s economic potential by around 7 percent, which means that it makes us poorer to the tune of more than $1 trillion a year. And we’re not talking about just one year’s losses, we’re talking about long-term damage: $1 trillion a year for multiple years.
That estimate is the end product of some complex data-crunching, and you can quibble with the details. Hey, maybe we’re only losing $800 billion a year. But the evidence is overwhelming that by failing to respond effectively to mass unemployment — by not even making unemployment a major policy priority — we’ve done ourselves immense long-term damage.
And it is, as I said, a bitter irony, because one main reason we’ve done so little about unemployment is the preaching of deficit scolds, who have wrapped themselves in the mantle of long-run responsibility — which they have managed to get identified in the public mind almost entirely with holding down government debt.
This never made sense even in its own terms. As some of us have tried to explain, debt, while it can pose problems, doesn’t make the nation poorer, because it’s money we owe to ourselves. Anyone who talks about how we’re borrowing from our children just hasn’t done the math.
True, debt can indirectly make us poorer if deficits drive up interest rates and thereby discourage productive investment. But that hasn’t been happening. Instead, investment is low because of the economy’s weakness. And one of the main things keeping the economy weak is the depressing effect of cutbacks in public spending — especially, by the way, cuts in public investment — all justified in the name of protecting the future from the wildly exaggerated threat of excessive debt.
Is there any chance of reversing this damage? The Fed researchers are pessimistic, and, once again, I fear that they’re probably right. America will probably spend decades paying for the mistaken priorities of the past few years.
It’s really a terrible story: a tale of self-inflicted harm, made all the worse because it was done in the name of responsibility. And the damage continues as we speak.
By: Paul Krugman, Op-Ed Columnist, The New York Times, November 7, 2013
“End Times For Obama?”: Just Another Round Of The Media’s Trumped-Up Crises That Turn Out To Be Wrong And Overheated
It’s damn near end times for Barack Obama, to hear some tell it.
There’s a new Pew poll that has him at 41 percent approval, 53 disapproval, which Pew notes ominously is only five percentage points better than George W. Bush’s at this point in his term. (Hurricane Katrina had happened in August of Bush’s fifth year.) Conservative columnists are chuckling and clucking and tweeting to beat the band. Centrist journalist Mark Halperin, on MSNBC yesterday, declared that Obama had lost the media, which was now cheering against the success of the Affordable Care Act and just wants to see… well, people go without insurance, I guess. If everything—everything!—isn’t fixed by Nov. 30, we’re looking at a presidency that is going to collapse into utter disaster.
It’s obvious enough why conservatives would be saying this. They’ve wanted Obama to fail from the start, and they’ve certainly wanted the health-care bill to fail from the moment of its passage. Journalists like Halperin say these things not for ideological reasons, but temperamental ones: In this Halperinesque/Politico-esque world view, politics is less about people’s lives than it is about who is displaying mastery of the game and who is being mastered at any given moment (of course, seeing politics so insistently through that lens is a kind of ideology of its own, but we’ll let that pass). To that group of mainstream journalists, how Obama handles the current crisis will determine whether the administration will survive or whether he might as well just resign now.
I don’t deny that the current situation is a crisis, and one of the administration’s own making. Obama misled people. It’s a small percentage of people. They’re at the mercy of the most horrible end of the private-insurance market, and the vast majority of them are going to be better off after everything shakes out and they see that their new plans are largely better than their old ones were. But even so, they’re people, and they’re getting termination notices, and he misled them. Combine it with the website chaos, and it’s bad, there’s no sense in denying it.
What I do deny, vigorously, is that this is a make-or-break moment. Yes, I know that Obamacare is his signature initiative and all that. And I know that if problems persist after Nov. 30, pressure will mount on Harry Reid to let some kind of tinkering legislation be debated. This is a very important three weeks for the administration, and the 30th is an extremely important deadline.
But there’s a certain type of political journalism that so exists in the moment that numerous such moments have been declared to be disasters for Obama, going back to Jeremiah Wright. This kind of hyperventilating approach always turns out to be wrong and overheated. It turned out that all those things were pretty bad, but it also turned out that Obama survived them. And he’ll survive this, too.
What will happen in all likelihood is what usually happens in life and politics—that is, nothing all that dramatic. Nov. 30 will come, and the website will be more or less (though not entirely) fixed up, and life, and Obamacare, will go on. There will be more horror stories, natch, but there will be more success stories too, and sometime between now and next March 31, when the enrollment period ends, the media are going to get a little bored with the whole thing, and it will just go on irresolutely for a while, but eventually it will start becoming clear to the American people that the reform is working pretty well in the states that tried and pretty poorly in the states that didn’t, and people will start to get the point about Republican sabotage.
And then, provided health care survives that initial stage without being altered for the worse by Congress, it’s going to start to work. Well. Resistant insurance companies and even some resistant governors and state legislatures are going to see that it appears to be here to stay, and they will accommodate themselves to that reality.
Obamacare will never be a raging success. This is another error much of journalism is prone to make—looking for it to be an overwhelming success. That won’t happen because at the end of the day we’re still talking about private health insurance, and private health insurance was a pain in the tuchus before Obamacare and will remain one after it. People will always complain about their coverage. But by early 2016, I have little doubt, there will be millions more Americans who’ll be doing the complaining, and they’ll be happy to have the opportunity to do so.
Conservatives are desperate for health care to be Obama’s Katrina. Certain centrist journalists want to see it just for entertainment’s sake or as a test of Obama’s presidential “character.” I won’t say there’s zero chance of it happening. If Nov. 30 comes and the website is an unmitigated disaster, then maybe that’ll be the case. But I will say that I think the chances of it are very slim indeed. The unfortunate thing is the Republicans have just enough power to gum up the works so that even if the administration does fix up everything on its end, the GOP can keep hauling Kathleen Sebelius up to the Hill and taking other steps to make sure things look worse than they are. But Obama will survive, and more importantly, Obamacare will too.
By: Michael Tomasky, The Daily Beast, November 8, 2013
“Obamacare Expansion In The Offing?”: Republicans Crying About People Losing Junk Insurance Should Expand The ACA
Every few days, a new poster child for the horror of Obamacare comes along, the person who just loves their insurance plan but has been told it’s being cancelled. Pretty much every time, their story turns out to be full of holes—the plan they’re on is junk insurance, they’d be able to get better and cheaper coverage through the exchanges, and so on (here’s the latest). But without a doubt, this small group of people (and not, say, the millions who are getting free or low-cost coverage for the first time) have become the momentary face of the Affordable Care Act, at least in the mainstream news media’s eyes.
So now the administration is scrambling to deal with this political problem, and here’s the latest twist:
The most popular idea for a fix on the Hill is legislation that would entitle someone who purchases health insurance coverage through the end of this year to keep that coverage. Other legislative responses may include extending the health exchange enrollment deadline or or delaying the penalty for not purchasing coverage.
Obama is also considering a different approach.
According to the administration source, the White House is “looking at an administrative fix for the population of people in the individual market who may have an increase in premiums, but don’t get subsidies.”
Such a fix would address the issue of “sticker shock” that has been popping up across the country, as individuals are losing their coverage and finding only higher-cost alternatives. Under the ACA, there are tax subsidies to help individuals and families with income between 133 percent and 400 percent above the poverty level purchase insurance. Those with incomes higher than 400 percent above poverty get no such assistance. The proposed administrative fix would address this group.
Allowing the junk insurance plans to continue is a terrible idea, no less terrible because it’s being pushed by some Democrats. But giving more subsidies? That’s got some promise. As a big-government liberal, I’m all for the government helping as many people as possible afford coverage. I’m also very skeptical that the administration can just take this move administratively without an act of Congress, but let’s talk about it. Since for the first time in history Republicans are suddenly so very concerned about people not being able to afford health insurance, perhaps they can be pressured into signing on with something that puts their money where their mouths are.
Fat chance, I know. But as long as we’re going to start proposing fixes, how about we let everyone who got a threatening letter from an insurance company buy in to Medicare? If Republicans are going to take the opportunity to demagogue the issue, why not take the opportunity to expand our extremely popular socialized medicine program?
By: Paul Waldman, Contributing Editor, The American Prospect, November 8, 2013
“The Vets We Reject And Ignore”: Leave No Fallen Comrade Behind Applies At Home And To All Veterans, Regardless Of “Bad Paper”
Today, we honor the nation’s 22 million veterans, including more than 2.5 million who served in Iraq, Afghanistan and other fronts in the war against Al Qaeda. But we are turning our backs on hundreds of thousands of veterans who were discharged “under conditions other than honorable” and so do not qualify as veterans under federal law.
Their discharges, which include overly broad categories encompassing everything from administrative discharges for minor misconduct to dishonorable discharges following a court-martial, nevertheless make them ineligible for the health care, employment, housing and education benefits offered by the Department of Veterans Affairs.
Because of the “bad paper” they carry in the form of their discharge certificates, many of these veterans struggle upon leaving the military. And when they falter, the burden for supporting them falls heavily on their local communities because federal agencies cannot, by law, help them.
No federal agency publishes the numbers of bad paper discharges. But historical studies suggest that at least several hundred thousand veterans fall into this category. Approximately 260,000 of the 8.7 million Vietnam-era veterans were pushed out of the service with bad paper. More recently, according to documents separately obtained by the Colorado Springs Gazette, the Army discharged 76,165 soldiers between 2006 and 2012 with bad paper. Of these recent Army discharges, only one in seven were kicked out following a criminal conviction for a serious offense. The rest were discharged for smaller breaches of military discipline like missing duty or abusing alcohol or drugs. For many of them, their misconduct was likely related to the stresses of war.
Instead of showing compassion for these troops who were carrying the invisible wounds of war, their commanders kicked them out. These troops’ getting pushed out under such circumstances would be enough of a blow, but these commanders compounded the injury by giving them bad paper, instead of merely administratively separating them from the service.
While assessing the needs of veterans in the Western United States, my research team met with community leaders and nonprofit agency staff members in seven cities with the largest populations of veterans, and interviewed others in outlying cities and rural areas as well. Across these communities, veterans with bad paper were believed to be significantly overrepresented in the at-risk veterans populations. All too frequently these veterans become part of the nation’s chronically homeless or incarcerated populations.
When they end up in distress or on the streets, their communities must bear this burden alone.
We have a moral obligation to those who serve, especially those who serve us in combat. At times, the military must discharge those who can’t perform or conform. However, commanders should exercise far greater discretion and compassion in trimming the ranks. Bad discharges indelibly mark veterans as damaged goods and cost society a great deal too.
Congress should also allow the V.A. to more broadly provide mental health care, homelessness support and other forms of crisis intervention to veterans with bad paper. The V.A. has case-by-case authority to do so now, but that does not help veterans with bad paper who have acute needs. A more compassionate policy would not diminish the military’s ability to maintain discipline, nor would it cheapen the valor of those who have served honorably.
The military has a process to fix bad paper, but that process takes too much time, and veterans often need legal help to prevail in an incredibly bureaucratic and difficult process.
The story of John Shepherd Jr., who earned a Bronze Star for valor in Vietnam but was kicked out after disobeying an order to return to combat after developing severe post-traumatic stress disorder, shows how difficult these cases can be. Mr. Shepherd went without V.A. support for 40 years until a team of students and lawyers at Yale Law School helped him correct his record this month.
Excellent programs exist to help veterans in such cases, but they deserve more resources. Small investments in pro bono legal services can help unlock a lifetime of access to the V.A. and help the neediest veterans with bad paper move on with their lives.
Finally, the veterans community should do more to lift up those veterans who have been discharged with bad paper, particularly in those cases where combat experience lies at the heart of the bad discharge. The American military ethos calls on all of us to leave no fallen comrade behind. That applies at home, too, and to all veterans, regardless of whether they carry bad paper.
By: Phillip Carter, Op-Ed Contributor, Opinion Pages, The New York Times, November 10, 2013
“When A Gun Advocate Dissents”: In The Gun World, Straying From The Party Line Leads To Vilification And Condemnation
It’s not as if Dick Metcalf was some kind of gun control fanatic.
On the contrary, he’s a gun guy through and through, such an unyielding defender of the Second Amendment that last year he led the charge to push through a law giving the residents of Pike County, Ill., where he lives, the right to carry concealed guns without a permit. He called the practice “constitutional carry” rather than “concealed carry.”
In the early 1980s, he and a handful of friends started a successful gun club, called the Pike Adams Sportsmen’s Alliance, which is located on Metcalf’s farm in Barry, Ill. A few years later, he played an important role in lobbying for the federal Firearm Owners Protection Act, which loosened many of the gun restrictions that had become law after the assassination of Robert Kennedy. A friend of his told me that Metcalf had even written some of the language in the bill.
Mostly, though, Metcalf, 67, was known as a writer for magazines owned by InterMedia Outdoors, a publisher of gun periodicals that include the industry bible, Guns & Ammo. He did videos on subjects like “Guns for Family Home Defense” and wrote articles with headlines like “Smith & Wesson’s 12 Most Important Guns.”
It is perfectly understandable, then, that the gun world might be a little taken aback by Metcalf’s opinion piece in the December issue of Guns & Ammo calling for some modest gun regulation. “I firmly believe that all U.S. citizens have a right to keep and bear arms,” he wrote, “but I do not believe that they have a right to use them irresponsibly.” The article went on to call for mandatory training for gun owners. That’s all. Such limited regulation, he argued, did not constitute an infringement on anyone’s constitutional rights.
When people like me read an article like that, it seems momentarily possible that gun advocates and gun control advocates might be able to find some common ground. Much in the way that many gun control activists have come to accept the legitimacy of the Second Amendment — something that hasn’t always been the case — here was a man on the other side of the divide saying that some sensible regulation didn’t necessarily lead down a “slippery slope” to confiscation. If we are ever to have a sane gun policy, we desperately need people from both camps to meet somewhere in the middle.
But when people like me see the reaction from gun advocates to Metcalf’s tame proposal, it all seems hopeless again. Robert Farago, who maintains a blog called The Truth About Guns, started the ball rolling by linking to — and denouncing — Metcalf’s “diatribe.” He went on to describe the article as a “bone-headed, uninformed, patently obvious misinterpretation of the Second Amendment.” Other bloggers piled on. On the Guns & Ammo Facebook page, subscribers demanded Metcalf’s head, even as they canceled their subscriptions.
Finally, according to a blog post Metcalf wrote, two major gun manufacturers told InterMedia Outdoors that they would pull all their advertising if something wasn’t done. That’s all it took. Within 24 hours, Metcalf was permanently banned from the company’s publications. And the longtime editor of Guns & Ammo, Jim Bequette, who was planning to retire at the end of the year, was pushed out as well.
Before departing, however, Bequette wrote a groveling apology, which ran on the magazine’s website. He described his decision to publish Metcalf’s article as “a mistake” and took pains to remind readers that Guns & Ammo had always been the hardest of hard-liners. “It is no accident that when others in the gun culture counseled compromise in the past, hard-core thinkers…found a place and a voice in these pages,” he wrote. With that, capitulation was complete.
If you want to understand why so few gun owners are willing to stand up to the National Rifle Association, even though the majority disagree with the N.R.A.’s most extreme positions, here was a vivid example. Straying from the party line leads to vilification and condemnation that would give anybody pause.
My guess is that Dick Metcalf always knew what he was in for — all the more reason writing his article took guts. In the aftermath, he was the only one who could still hold his head up high. On a blog called The Outdoor Wire, he wrote a lengthy response to his critics. He didn’t back down one iota. Describing himself as “disappointed” at the reaction to his article, he added, “If a respected editor can be forced to resign and a controversial writer’s voice be shut down by a one-sided social-media and Internet outcry, virtually overnight, simply because they dared to open a discussion or ask questions about a politically sensitive issue…then I fear for the future of our industry, and for our Cause.”
Maybe there’s hope yet.
By: Joe Nocera, Op-Ed Columnist, The New York Times, November 8, 2013
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