“A Failure To Hold Congress Accountable”: Economic Policy Is Largely Being Driven By Obstructionism, Not Economic Advisers
President Obama is reportedly planning to nominate economist Jason Furman to replace Alan Krueger as the head of the Council of Economic Advisers. Like Krueger and, for that matter, Austan Goolsbee and Christina Romer who previously served this administration in the same capacity, Furman boasts an impressive resume, with a Harvard economics doctorate as well as stints at the Brooking Institution, the Center on Budget and Policy Priorities (CBPP), and the CEA under President Clinton, among others. If you’re still of the incorrect belief that tax cuts largely pay for themselves (looking at you, Senate Minority Leader Mitch McConnell), do yourself a favor and read his CBPP report explaining the mechanics and empirics of “dynamic scoring” (pdf) and why invoking it as a talisman doesn’t mean one can claim anything one finds politically expedient.
The Beltway coverage of this news is overly focused on the inside baseball politics between the CEA and the National Economic Council, where Furman has been serving as Deputy Director since January 2009. But it’s important to step back and remember that economic policy in recent years has been principally driven not by well-qualified economists with the CEA, NEC, or elsewhere in the executive branch, but instead by conservative congressional obstructionism. Jason Furman’s appointment to the CEA will not alter the troubling reality that the United States is on an autopilot course of premature, excessive austerity and intentionally poorly designed sequestration spending cuts. But even if the ghost of conservative saint Milton Friedman rose up and warned the GOP against such austerity, today’s conservatives in Congress would declare him an apostate and continue their destructive course.
Consequently, the U.S. economy will almost certainly continue muddling through an adverse equilibrium of anemic growth, severely depressed output, massive underemployment, large cyclical budget deficits, subdued price inflation, widespread real wage deflation and low interest rates. It’s really quite simple: a steep aggregate demand shortfall continues to keep the economy’s performance well below potential, and the Federal Reserve has been and will continue to be incapable of fully ameliorating this shortfall so long as contractionary fiscal policy is being pursued. (See this paper for a thorough treatment.)
In short, the intellectual debate over austerity vs. stimulus has been totally decoupled from the policy debate and, more importantly, policy outcomes in Washington—despite having been resolved in a virtual TKO by those opposed to foisting austerity on depressed economies. The United States doesn’t face, or, perhaps more accurately, no longer faces a deficit of economists capable of opening up an intermediate macroeconomics textbook and relearning liquidity trap/depression economics. But the U.S. Congress faces a depressing deficit of members who seem to care about empiricism or evidence-based policy, never mind their unemployed constituents.
My colleague Josh Bivens and I have chronicled the ways the GOP has routinely and frequently obstructed economic recovery since 2009—much of which should inform any debate this summer regarding much needed reform of the Senate’s filibuster rules, as well as the inevitable political fight over the debt ceiling. Conservatives, particularly the Tea Party caucus, are to blame for exploiting every piece of leverage available (including the nation’s credit worthiness) to extract premature spending cuts, filibustering just about anything that would boost aggregate demand, watering down the Recovery Act, hamstringing monetary policy and demanding counterproductive legislative ‘pay fors’—stipulated to never, ever include revenue increases. The frequently espoused pox-on-both houses punditry is not just off-base, but is also somewhat complicit in this sad state of affairs.
Does it matter who advises the president? Absolutely. But the distressing state of the U.S. economy is, at root, a failure of our representative democracy and institutions to hold Congress accountable for its decisions preventing economic recovery, not a failure of technical advice given to the president. Realistically, the Constitution and budgetary process outlook afford the administration scant leverage to force more deficit-financed government spending, the most effective policy lever for digging out of this Lesser Depression. Under this backdrop, the United States needs more than qualified economic advisers to the president—a majority of representatives and (barring meaningful filibuster reform) super-majority of senators who heed evidence, as well as a press corps holding them accountable, jump to mind.
By: Andrew Fieldhouse, Economic Policy Institute, May 29, 2013
“Blind To The Past And The Future”: Republicans Are Ignorant Of The Lessons Of History And Impervious To The Wisdom Of Experience
As a new effort at comprehensive immigration reform inches its way forward in the Senate, dissent from many conservatives is revealing their true contempt for, and fear of, the possibility that demographic groups who look different from their base will accrue power.
The questions are: Is providing a pathway to citizenship (or at least permanent residency) for the 11 million people in this country illegally an act of humanity and practicality? Or is it an electoral imperative to which opposition ultimately guarantees political suicide?
The answer probably is “yes” to both, although many Republicans seem to think the opposite.
President George W. Bush, a supporter of a pathway to citizenship, spoke to The Huffington Post about the current efforts for comprehensive immigration reform, saying, “I think the atmosphere, unlike when I tried it, is better, maybe for the wrong reason.”
Bush continued: “The right reason is it’s important to reform a broken system. I’m not sure a right reason is that in so doing we win votes. I mean when you do the right thing, I think you win votes, as opposed to doing something that’s the right thing to win votes. Maybe there’s no difference there. It seems like there is to me though.”
But that distinction — humanitarianism over opportunism — is as lost on as many of Bush’s fellow Republicans today as when he was in office. They don’t even accept the logic of long-term electoral viability over extinction.
The most outlandish example of conservative rhetoric in its truly offensive glory on this subject came in an interview last week with Phyllis Schlafly, a prominent conservative activist, on the news site PolicyMic. In it she said:
“I don’t see any evidence that Hispanics resonate with Republican values. They have no experience or knowledge of the whole idea of limited government and keeping government out of our private lives. They come from a country where the government has to decide everything. I don’t know where you get the idea that the Mexicans coming in resonate with Republican values. They’re running an illegitimacy rate that is extremely high. I think it’s the highest of any ethnic group. We welcome people who want to be Americans. And then you hear many of them talk about wanting Mexico to reclaim several of our Southwestern states, because they think Mexico should really own some of those states. Well, that’s unacceptable. We don’t want people like that.”
There are so many stereotypes and fallacies in that statement that it’s not even worth unpacking, but it is a great illustration of some deep-rooted conservative views.
The one thing I will take the time to contest is the notion that even if Republicans changed their rhetoric and tactics, they wouldn’t gain traction with Hispanics (not all of whom are Mexican, by the way, Ms. Schlafly).
According to exit poll data, from the early 1980s to the early 2000s, Republicans made significant headway in closing the gap between the number of Hispanics who voted for Democratic candidates to the House of Representatives and those who voted for Republicans, shrinking a 50-point Democratic advantage in 1982 to just 12 points in 2004.
But then came Bush’s attempt at comprehensive immigration reform and the enormous pushback it got from Congressional Republicans. Just before Christmas in 2005, the Republican-led House passed an enforcement-only immigration bill that sparked huge protests.
In the 2006 elections, the Democratic advantage among Hispanic voters for House races shot back up to 48 points. That year, Democrats recaptured the House and the Senate, and took control of a majority of governorships.
Republicans, seemingly ignorant of the lessons of history and impervious to the wisdom of experience, are hellbent on revisiting 2005. While the Democratic advantage among Hispanics in presidential races is large and growing, the Democratic advantage in House elections has slowly begun to shrink again. And Hispanics, seemingly excited by the movement on immigration reform and optimistic about its prospects, have developed sharply more favorable opinions of Congress. A full 56 percent of Hispanics hold Congress in high esteem, up from 35 percent in November 2011, according to an ABC News/Washington Post Poll.
So what do some Republican lawmakers want to do to the only segment of the population in which a majority now has a favorable opinion of Congress? Spurn them and dash their hopes.
Brilliant, if you want to cement Democratic preference among Hispanics in perpetuity.
By: Charles M. Blow, Op-Ed Columnist, The New York Times, June 1, 2013
“From The Mouths Of Babes”: The Ugly, Immoral, Destructive War Against Food Stamps
Like many observers, I usually read reports about political goings-on with a sort of weary cynicism. Every once in a while, however, politicians do something so wrong, substantively and morally, that cynicism just won’t cut it; it’s time to get really angry instead. So it is with the ugly, destructive war against food stamps.
The food stamp program — which these days actually uses debit cards, and is officially known as the Supplemental Nutrition Assistance Program — tries to provide modest but crucial aid to families in need. And the evidence is crystal clear both that the overwhelming majority of food stamp recipients really need the help, and that the program is highly successful at reducing “food insecurity,” in which families go hungry at least some of the time.
Food stamps have played an especially useful — indeed, almost heroic — role in recent years. In fact, they have done triple duty.
First, as millions of workers lost their jobs through no fault of their own, many families turned to food stamps to help them get by — and while food aid is no substitute for a good job, it did significantly mitigate their misery. Food stamps were especially helpful to children who would otherwise be living in extreme poverty, defined as an income less than half the official poverty line.
But there’s more. Why is our economy depressed? Because many players in the economy slashed spending at the same time, while relatively few players were willing to spend more. And because the economy is not like an individual household — your spending is my income, my spending is your income — the result was a general fall in incomes and plunge in employment. We desperately needed (and still need) public policies to promote higher spending on a temporary basis — and the expansion of food stamps, which helps families living on the edge and let them spend more on other necessities, is just such a policy.
Indeed, estimates from the consulting firm Moody’s Analytics suggest that each dollar spent on food stamps in a depressed economy raises G.D.P. by about $1.70 — which means, by the way, that much of the money laid out to help families in need actually comes right back to the government in the form of higher revenue.
Wait, we’re not done yet. Food stamps greatly reduce food insecurity among low-income children, which, in turn, greatly enhances their chances of doing well in school and growing up to be successful, productive adults. So food stamps are in a very real sense an investment in the nation’s future — an investment that in the long run almost surely reduces the budget deficit, because tomorrow’s adults will also be tomorrow’s taxpayers.
So what do Republicans want to do with this paragon of programs? First, shrink it; then, effectively kill it.
The shrinking part comes from the latest farm bill released by the House Agriculture Committee (for historical reasons, the food stamp program is administered by the Agriculture Department). That bill would push about two million people off the program. You should bear in mind, by the way, that one effect of the sequester has been to pose a serious threat to a different but related program that provides nutritional aid to millions of pregnant mothers, infants, and children. Ensuring that the next generation grows up nutritionally deprived — now that’s what I call forward thinking.
And why must food stamps be cut? We can’t afford it, say politicians like Representative Stephen Fincher, a Republican of Tennessee, who backed his position with biblical quotations — and who also, it turns out, has personally received millions in farm subsidies over the years.
These cuts are, however, just the beginning of the assault on food stamps. Remember, Representative Paul Ryan’s budget is still the official G.O.P. position on fiscal policy, and that budget calls for converting food stamps into a block grant program with sharply reduced spending. If this proposal had been in effect when the Great Recession struck, the food stamp program could not have expanded the way it did, which would have meant vastly more hardship, including a lot of outright hunger, for millions of Americans, and for children in particular.
Look, I understand the supposed rationale: We’re becoming a nation of takers, and doing stuff like feeding poor children and giving them adequate health care are just creating a culture of dependency — and that culture of dependency, not runaway bankers, somehow caused our economic crisis.
But I wonder whether even Republicans really believe that story — or at least are confident enough in their diagnosis to justify policies that more or less literally take food from the mouths of hungry children. As I said, there are times when cynicism just doesn’t cut it; this is a time to get really, really angry.
By: Paul Krugman, Op-Ed Columnist, The New York Times, May 30, 2013
“Circling The Media Wagons”: Journalists Are No Different Than Other Citizens In The Eyes Of The Law
When will journalists take responsibility for what they do without circling the wagons and shouting that the First Amendment is under attack?
I’m talking about the case of Fox News correspondent James Rosen.
The case should be described as a State Department contract worker who signed a non-disclosure agreement, yet is alleged to have leaked Top Secret/Special Compartmented Information (TS/SCI) in violation of criminal law. He also is alleged to have lied to the FBI.
Search for a story analyzing damage to intelligence collection caused by the leak and what will emerge are stories about the threat to the First Amendment and journalists.
Some background: On June 11, 2009, Rosen published a scoop on Fox News’s Web site that disclosed how North Korean officials planned to hold another nuclear test in response to an expected U.N. Security Council resolution condemning Pyongyang for recent tests of nuclear and ballistic missiles.
It wasn’t the substance of the leaked info that most deeply concerned the intelligence community. Rather it was that Rosen’s story alerted the North Koreans that the United States had penetrated their leadership circle. A second concern was how quickly someone with access to TS/SCI information — a limited, top-level security classification applied primarily to electronically intercepted messages — had leaked it.
As Rosen noted in his article, the CIA had “only learned of North Korea’s plans this week” and from “sources inside North Korea.” In short, the story warned Pyongyang’s counterintelligence specialists that the United States had probably obtained conversations or messages of top-level North Korean officials by electronic intercepts or through agents.
The U.S. leak probe quickly focused on 96 individuals who, before Rosen’s story or on publication day, had access to the relevant intelligence report. Five of those with access to the North Korean report had had contact with Rosen in the weeks or days leading up to his story’s publication.
As of May 28, 2010, 11 months after the probe began, only Stephen Jin-Woo Kim, a senior intelligence adviser in the State Department’s Bureau of Verification, Compliance and Implementation, had “accessed the intelligence report and . . . had contact with the reporter [Rosen] on the date of publication of the June 2009 article,” according to an affidavit by FBI Special Agent Reginald B. Reyes.
The probe showed that the report had been called up on Kim’s computer three times earlier on the day Rosen’s story appeared. Investigators also found records showing that about the same time the classified report was on Kim’s computer screen, “two telephone calls were placed from his desk phone to the reporter,” meaning Rosen, according to the Reyes affidavit.
Using State Department security-badge records that show comings and goings at State’s main building, investigators realized that an hour after those phone calls Kim and Rosen left the building within a minute of each other. Thirty minutes later they returned within four minutes of each other. Several hours later, Rosen’s story appeared on Fox’s Web site.
Recent articles have implied that the government was physically following Rosen, but investigators had simply used federal records to track him.
Further investigation of Kim showed seven calls between his desk phone and Rosen’s phones on the day of the article, and about 29 others between May and July 2009. In a Sept. 24, 2009, FBI interview, Kim denied being Rosen’s source and having any contact with Rosen after meeting him in March 2009.
On Nov. 9, 2009, investigators got a warrant and searched Kim’s e-mail accounts. They found that he and Rosen had set up aliases and that Rosen sought intelligence about North Korea.
All reporters covering national security, including myself, recognize we regularly seek classified information. We also know that sources can be accused of breaking the law if caught passing highly classified information to those not cleared to receive it, such as journalists.
While getting my degree at Georgetown Law School and later when I was subpoenaed in the probe of the leak of the identity of CIA covert officer Valerie Plame Wilson, it became clear that reporters could be labeled co-conspirators, aiders and abettors or accessories in criminal leak cases.
To be so named in an application for a search warrant when the government wants to get a journalist’s or any citizen’s e-mails or phone records does not mean prosecution. A journalist, however, is not very different from other citizens in the eyes of the law when it comes to the government seeking records from a third-party provider such as Google or a phone company.
Applying labels such as co-conspirator provides a probable cause for the judge to grant the warrant, as in the Rosen case. If Rosen offered money or some other reward, it might be a different case. I believe the First Amendment covers the right to publish information, but it does not grant blanket immunity for how that information is gathered.
When First Amendment advocates say Rosen was “falsely” characterized as a co-conspirator, they do not understand the law. When others claim this investigation is “intimidating a growing number of government sources,” they don’t understand history.
The person or persons who told the Associated Press about the CIA operation that infiltrated al-Qaeda in the Arabian Peninsula, and Kim — or someone else — who informed Rosen about North Korea, were not whistleblowers exposing government misdeeds. They harmed national security and broke the law.
The White House Correspondents’ Association board issued a statement May 21 saying, “Reporters should never be threatened with prosecution for the simple act of doing their jobs.” But it admitted, “We do not know all of the facts in these cases.” The board added: “Our country was founded on the principle of freedom of the press and nothing is more sacred to our profession.”
I worry that many other journalists think that last phrase should be “nothing is more sacred than our profession.”
By: Walter Pincus, The Washington Post, May 27, 2013
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