Mystery Economic Theater 2010

[garo]

Originally Posted by ewmayer

Continuing a recent discussion sub-thread, today`s WSJ has a piece on the possible "negative incentivization" effects of continuing jobless benefits without attaching any real strings:

Long Recession Ignites Debate on Jobless Benefits

My Comment: It would appear that being offered $60K and holding out for $80K instead of leaping at the chance qualifies as "looking for work".

Typical right-wing bull-shit from WSJ based on anecdotal "evidence" and hearsay. There is some real research done on this issue and I present a link http://rortybomb.wordpress.com/2010/...sented-at-epi/
that effectively rubbishes the WSJ claim.

[ewmayer]

Originally Posted by garo

Typical right-wing bull-shit from WSJ based on anecdotal "evidence" and hearsay. There is some real research done on this issue and I present a link http://rortybomb.wordpress.com/2010/...sented-at-epi/
that effectively rubbishes the WSJ claim.

It's pretty common for news pieces to open with an anecdotal story before delving into the broader picture. Right-wing or not, the WSJ article cites multiple studies of the purported effect, and notes that a key question is to what extent they are relevant to the current recession, with its huge imbalance of number of job seekers versus number of openings. Did you bother to read past the 2nd paragraph?

Technical note: When I first used google to find an online version of the Sara Murray piece, the resulting page showed the full article. I duly copied the link (which has a trailed google meta-tag of some kind) above, but clicking it just now only shows me the first paragraph. To re-view in full I googled

"long recession" "sara murray"

and clicked the online.wsj.com link which was the first of the resulting hits.

[Fusion_power]

Cheesehead, which would you rather have? A sizzling hot juicy rib-eye steak? or a piece of half raw castrated bull meat? Would you believe that they are the same? This is the kind of tripe politicians have been feeding you all of your life. I do NOT believe that either Republicans or Democrats know how to manage the U.S. economy in a fiscally responsible way.

If you use strict accounting, there was no balanced budget. The overwhelming hole as Ewmayer mentioned is social security which effectively INCREASED the amount of govt borrowed money.

If you consider the money in to the govt vs money out and omit the SS, then you can say that the budget was balanced. My critique is that Clinton did NOT balance the budget. He did NOT reduce the overall debt increase as you so pointedly attempt to prove above. What he did is have a fortuitous set of circumstances where a huge economic bubble temporarily boosted tax revenue. This bubble revenue reduced the rate of increase in debt. It was NOT something Clinton did. It was NOT a result of Clinton policies unless you want to credit his support of Greenspan.

If you want to find someone to attribute the 'almost' balanced budgets you might consider Greenspan. After all, his monetary policies shaped the economy for all of the crucial years leading up to the timeframe involved. I would even agree with this but declaim "at what terrible long term price?".

My precise statement to you was

deliberate misattribution is not seemly

and was based on your totally blind belief that Clinton was somehow responsible for balancing the budget. I will state my own belief that we lived in a time of incredible prosperity during most of Clinton's terms. But I do NOT give Clinton credit for shaping that time in any significant way and most particularly that he was not the magical architect of a balanced budget.

If I spend more than I make, I will quickly be insolvent. When does our government become insolvent?

We are already overtaxed and based on current trends we are about to be taxed more heavily than at any time in history. Watch and see when the Bush tax reductions expire and look carefully at the way taxes begin to ratchet up. I am not exclusively talking about federal taxes. State and Local taxes are set for the largest rise in living memory. Have you looked at so called 'sin' taxes lately? Cigarettes anyone? Thankfully I have never smoked.


One of the purposes of this forum is to provide a place to state positions even when others disagree with them. This particular thread is intended to focus on the economic malaise we have been stuck in for about 3 years now. Please catch your breath, re-examine motives for posting here, and look closely at what is right with America. We still live in a nation with more freedoms than just about anywhere else on earth.


DarJones

[cheesehead]

At some point in my editing of post #418, the identifier "Table 1.1" mistakenly became "Table 13.1". (Perhaps it was some kind of hangover from post #416.) All mentions of "Table 13.1" in post #418 were intended to be "Table 1.1", as shown by strikeouts and underlines in the quotes below:

Originally Posted by cheesehead

When discussing figures from Table 13.1 1.1, which are figured according to the accounting methods usually assumed when deficits and surpluses are discussed in everyday conversation, and many online forums, they are all to be taken in the context of the accounting methods used for Table 13.1 1.1. But you failed to do that.

When I was quoting from the context of Table 13.1 1.1, you were criticizing me, as far as I can tell (because you haven't fully answered my questions), on the basis of assumed use of a different set of accounting methods.

[Fusion_power]

http://news.yahoo.com/s/mcclatchy/3561925

The federal government faces a historic fiscal crisis. The nonpartisan Congressional Budget Office projects that publicly held debt could reach 62 percent of the gross domestic product by the end of this year, the highest since the Korean War year of 1952. By 2020, the CBO warns, the debt could hit nearly 90 percent of the GDP. History shows that when a nation's debt gets that high, it can cripple the economy.

Last week the CBO issued a report suggesting that some adjustments must be made to Social Security's financing. It projected that under the current rules, the system won't be able to pay scheduled benefits starting in 2039.

However, the CBO also found that raising the full retirement age to 68 starting with workers born after 1966, or to 70 for workers born after 1978, and raising it gradually before that wouldn't significantly improve the system's financial outlook.

The CBO said that raising the age to 68 would reduce Social Security spending by only 3 percent, or 0.2 percent of the GDP, in 2040. A retirement age of 70 would save 6 percent, or 0.4 percent of the GDP.

The lawmakers stress that raising the full-retirement age should be only one of a series of Social Security changes.

Their views represent a subtle but important shift. Traditionally, Social Security was considered "the third rail" of politics — touch it and you die — because people cherished their benefits so much.

Read the entire article and you will have little doubt that taxes are about to increase.

DarJones

[cheesehead]

Originally Posted by Fusion_power

Read the entire article and you will have little doubt that taxes are about to increase.

... because, as I reported in this thread a few months ago, even some conservatives are admitting that they cut them too far in the past (for them to maintain the fiction of supposed conservative fiscal responsibility and not run up unsustainable debt, that is). "Starve the Beast" has failed.

Now, if Republicans had actually cut spending as much as they cut taxes during the past 30 years, then they could justly claim to have been fiscally responsible. But they didn't.

For one thing, they just couldn't kick their militarism habit, and Saddam Hussein's taunting was too much for them to resist childishly responding with (expensive) violence.

For another, they have failed to convince enough voters that they actually mean it when they say they want entitlement spending cut. When they had the presidency plus Congress for several years recently, did they cut Social Security? Not to my recollection. (Please, show me that I've forgotten an instance, if you can.)

[cheesehead]

Originally Posted by Fusion_power

Cheesehead, which would you rather have?

Apologies for your insult (both words, please) and for your campaign of introducing more and more purported explanations to attempt to avoid taking responsibility for your own words.

If you use strict accounting, there was no balanced budget.

Are you defining "strict accounting" as what was used for Table 7.1 in the PDF? If not, may we have a more detailed definition of what you mean by "strict accounting"?

If you consider the money in to the govt vs money out and omit the SS, then you can say that the budget was balanced.

... which is what I said, but you termed "deliberate misattribution".

Where are your apologies?

My critique is that Clinton did NOT balance the budget.

That sentence and your preceding sentence contradict each other.

He did NOT reduce the overall debt increase as you so pointedly attempt to prove above.

No, that is not what I did above.

That's another falsehood you've told about me.

If you actually have sound fiscal arguments, why don't you stick to the truth? Is the urge to twist my words just too strong for you to resist?

My precise statement to you was and was based on your totally blind belief that Clinton was somehow responsible for balancing the budget.

No, that is not my totally blind belief. I have already explained that in my past posting. Either you're incapable of comprehending my words (I'm assuming you actually read them) or else you have an uncontrollable urge to twist them around.

Why don't you restrict yourself to accurately quoting me instead of always substituting different phrases for what I actually said? Are you afraid you couldn't sustain your campaign of slander if you adopted that restriction?

(* sigh *)

Once again:

Table 1.1 in the PDF shows that fiscal years 1999 and 2000 had surpluses (whether or not Social Security is included).

The statement I made that you termed "deliberate misattribution" was always intended to be understood in the context of the accounting methods used for Table 1.1 -- it was factually correct.

But I do NOT give Clinton credit for shaping that time in any significant way and most particularly that he was not the magical architect of a balanced budget.

Goody for you. But my statement said nothing about either (a) "shaping that time" or (b) that Clinton was a magical architect of anything. I said he submitted budgets for those fiscal years to Congress, and that's a fact.

If I spend more than I make, I will quickly be insolvent. When does our government become insolvent?

I'll be happy to discuss that after you apologize for your insult (both words, please) and for your campaign of introducing more and more purported explanations to attempt to avoid taking responsibility for your own words.

One of the purposes of this forum is to provide a place to state positions even when others disagree with them. This particular thread is intended to focus on the economic malaise we have been stuck in for about 3 years now. Please catch your breath, re-examine motives for posting here, and look closely at what is right with America.

Please apologize for your insult (both words, please) and for your campaign of introducing more and more purported explanations to attempt to avoid taking responsibility for your own words.

[cheesehead]

Originally Posted by Fusion_power

If you consider the money in to the govt vs money out and omit the SS, then you can say that the budget was balanced.

As I pointed out earlier, that -- along with two earlier examples of your own words -- showed us that you have said the same thing I did (and did so since I said it), and therefore your insult is logically indefensible. But you persist anyway.

Perhaps the explanation for your behavior is that:

(a) you are so incredibly focused on your first interpretation of my use of "result" in post #383, and

(b) you are so determined to defend your mistaken interpretation (because it aligns so well with conservatives' "new fiscal hypocrisy")

that

(c) you simply cannot bring yourself to grant that my request to replace, for the purpose of interpretation, my original statement with this one:

"the only fiscal years, among the most recent 30, for which either (a) the budget submitted to Congress by the president had a surplus, or (b) the result at the end of the fiscal year was that it turned out to have a surplus, were fiscal years for which the president who submitted its budget to Congress was a Democrat and the administration that did the detail work of constructing the budget was Democratic."

was honest on my part.

Is that it? You won't grant that this "the only ... Democratic" revised statement is the correct way to interpret my original statement because you simply think I'm lying when I claim it's what I meant originally?

[jasonp]

Originally Posted by ewmayer

Technical note: When I first used google to find an online version of the Sara Murray piece, the resulting page showed the full article. I duly copied the link (which has a trailed google meta-tag of some kind) above, but clicking it just now only shows me the first paragraph. To re-view in full I googled

This is pretty common; news sites have to show you the same content as they show google's search spider, so they show you everything if your browser's referrer information says you came from google.

[garo]

Originally Posted by ewmayer

It's pretty common for news pieces to open with an anecdotal story before delving into the broader picture. Right-wing or not, the WSJ article cites multiple studies of the purported effect, and notes that a key question is to what extent they are relevant to the current recession, with its huge imbalance of number of job seekers versus number of openings. Did you bother to read past the 2nd paragraph?

Technical note: When I first used google to find an online version of the Sara Murray piece, the resulting page showed the full article. I duly copied the link (which has a trailed google meta-tag of some kind) above, but clicking it just now only shows me the first paragraph. To re-view in full I googled

"long recession" "sara murray"

and clicked the online.wsj.com link which was the first of the resulting hits.

Thanks. I had only read the bits that you quoted. While the article is clearly better researched than I first believed I still think that Chetty's work is an important rebuttal to the central thesis that long-term unemployment benefits add to total unemployment duration. That may be the case in a normal recession but not now when there are 6 people for every job opening. Moreover, just getting a job is not a good indicator. Did the guys from the 1980s find out what type of job the 29% got as soon as their benefits ended? Flipping burgers is not a great job for someone with a post-graduate degree! And in today's environment if you take a job flipping burgers, it is much harder to then take another job. So I'd say that if the duration of unemployment increases by a week or two, so be it. It is worth it.

[ewmayer]

Biggest Defaulters on Mortgages Are the Rich: LOS ALTOS, Calif. — No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars.

The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley.

Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population.

More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic.

By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent.

Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment.

“The rich are different: they are more ruthless,” said Sam Khater, CoreLogic’s senior economist.

Five properties here in Los Altos were scheduled for foreclosure auctions in a recent issue of The Los Altos Town Crier, the weekly newspaper where local legal notices are posted. Four have unpaid mortgage debt of more than $1 million, with the highest amount $2.8 million.

Not so long ago, said Chris Redden, the paper’s advertising services director, “it was a surprise if we had one foreclosure a month.”
...
Here in Los Altos, where the median home price of $1.5 million makes it one of the most exclusive towns in the country, several houses scheduled for auction were still occupied this week. The people who answered the door were reluctant to explain their circumstances in any detail.

At one house, where the lender was owed $1.3 million, there was a couch out front wrapped in plastic. A woman said she and her husband had lost their jobs and were moving in with relatives. At another house, the family said they were renters. A third family, whose mortgage is $1.6 million, said they would be moving this weekend.

At a vacant house with a pool, where the lender was seeking $1.27 million, a raft and a water gun lay abandoned on the entryway floor.

Lenders are fearful that many of the 11 million or so homeowners who owe more than their house is worth will walk away from them, especially if the real estate market begins to weaken again. The so-called strategic defaults have become a matter of intense debate in recent months.

My Comment: Note that in Los Altos - only a few miles from where I live - a million bucks buys you shockingly little house. My older sister and her ex lived there from the mid-90s until a few years ago, when they separated. While the breakup of their marriage was painful for all, the timing with respect to the housing market was fortunate, as they were able to sell for a full asking price (and book a hefty gain over their purchase price, which allowed them to pay of the balance on the mortgage and pocket a tidy "breakup bonus") in the Spring of 2008. Gobs of Silicon Valley money are propping up prices there still, but the years of double-digit-percentage annual price appreciation are over.