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Topic: Political Economics (Read 244791 times)
Address income inequality only on the spending side
Reply #1550 on:
October 15, 2014, 02:30:44 AM »
This is an important piece IMHO. Sorry I can't cut and paste well from my phone.
Last Edit: October 15, 2014, 12:03:43 PM by Crafty_Dog
Technology not working in productivity as advertised
Reply #1551 on:
October 22, 2014, 07:11:22 AM »
I really have to question if it has made health care any better since I am in that field. So far it is no more than a game of numbers and I honestly don't believe much of what I read anymore. Too many agendas.
This could go under technology but I thought this thread might be the most fitting place:
Re: Political Economics - What do we need jobs for?
Reply #1552 on:
November 10, 2014, 09:55:01 AM »
One more political economic lesson from the cartoon front:
Political Economics, Income Inequality Is Greatest In the Most Liberal States
Reply #1553 on:
December 07, 2014, 12:38:16 PM »
Famous people caught reading the forum? This has already been widely reported here. No one is saying which direction the cause and effect arrow is pointing...
Income Inequality Is Greatest In the Most Liberal States
Re: Political Economics, The economy is great under Obama?
Reply #1554 on:
December 10, 2014, 11:35:54 PM »
Refuting liberals is hard work - because their lips just keep moving.
Here is "Forward Progressives" pushing the idea that 5 charts demonstrate what a great economic success the Obama administration has been:
(Read progressives as always in quotes.)
Unsurprisingly, there are flies in their ointment.
1. Progressives compare minor upward results with the depths of the crash (that they caused), not with previously successful periods.
2. They judge job growth as positive even when most of it was below the level required to break even.
3. They call it unemployment falling when the real change is a rapidly declining workforce participation rate. There are more people not working now than ever before. Even with funny math, the stated unemployment rate is worse than when they took majority power in Washington.
4. Progressives claim stock gains with the blatant hypocrisy that they would most certainly be criticizing these gains if it was someone else's policies sent the financial gains only to the wealthiest among us. The rich and powerful gained while the middle declined. Startup under Obama were like a Neal Young song; they "start off real slow and then fizzle out altogether".
5. Progressives chart the highest debt added in history to look like a trend line down when in fact their own budgets and forecasts have it going right back up.
6. Lastly, how do you say Chutzpah? From the author of Audacity, they claim oil production in the US is way up under Obama! Yes it is! Is there one person smart enough to vote that doesn't know that Obama fought against oil production at every turn?
Take a close look at a liberal viewpoint and most often you will find a lie or deception in the first substantive point. And here is no exception.
Reply #1555 on:
December 20, 2014, 11:14:05 AM »
Friday, December 19, 2014
Jaguar Inflation -- A Layman's Explanation of Government Intervention
By Robert Prechter, CMT
I am tired of hearing people insist that the Fed can expand credit all it wants. Sometimes an analogy clarifies a subject, so let's try one.
It may sound crazy, but suppose the government were to decide that the health of the nation depends upon producing Jaguar automobiles and providing them to as many people as possible. To facilitate that goal, it begins operating Jaguar plants all over the country, subsidizing production with tax money. To everyon'’s delight, it offers these luxury cars for sale at 50 percent off the old price. People flock to the showrooms and buy. Later, sales slow down, so the government cuts the price in half again. More people rush in and buy.
Sales again slow, so it lowers the price to $900 each. People return to the stores to buy two or three, or half a dozen. Why not? Look how cheap they are! Buyers give Jaguars to their kids and park an extra one on the lawn.
Finally, the country is awash in Jaguars. Alas, sales slow again, and the government panics. It must move more Jaguars, or, according to its theory -- ironically now made fact -- the economy will recede. People are working three days a week just to pay their taxes so the government can keep producing more Jaguars. If Jaguars stop moving, the economy will stop. So the government begins giving Jaguars away. A few more cars move out of the showrooms, but then it ends. Nobody wants any more Jaguars. They don't care if they're free. They can't find a use for them. Production of Jaguars ceases. It takes years to work through the overhanging supply of Jaguars. Tax collections collapse, the factories close, and unemployment soars. The economy is wrecked. People can't afford to buy gasoline, so many of the Jaguars rust away to worthlessness. The number of Jaguars -- at best -- returns to the level it was before the program began.
The same thing can happen with credit.
It may sound crazy, but suppose the government were to decide that the health of the nation depends upon producing credit and providing it to as many people as possible. To facilitate that goal, it begins operating credit-production plants all over the country, called Federal Reserve Banks. To everyone's delight, these banks offer the credit for sale at below market rates. People flock to the banks and buy. Later, sales slow down, so the banks cut the price again. More people rush in and buy. Sales again slow, so they lower the price to one percent. People return to the banks to buy even more credit. Why not? Look how cheap it is! Borrowers use credit to buy houses, boats and an extra Jaguar to park out on the lawn. Finally, the country is awash in credit.
Alas, sales slow again, and the banks panic. They must move more credit, or, according to its theory -- ironically now made fact -- the economy will recede. People are working three days a week just to pay the interest on their debt to the banks so the banks can keep offering more credit. If credit stops moving, the economy will stop. So the banks begin giving credit away, at zero percent interest. A few more loans move through the tellers' windows, but then it ends. Nobody wants any more credit. They don't care if it's free. They can't find a use for it. Production of credit ceases. It takes years to work through the overhanging supply of credit. Interest payments collapse, banks close, and unemployment soars. The economy is wrecked. People can't afford to pay interest on their debts, so many bonds deteriorate to worthlessness. The value of credit -- at best -- returns to the level it was before the program began.
See how it works?
Is the analogy perfect? No. The idea of pushing credit on people is far more dangerous than the idea of pushing Jaguars on them. In the credit scenario, debtors and even most creditors lose everything in the end. In the Jaguar scenario, at least everyone ends up with a garage full of cars. Of course, the Jaguar scenario is impossible, because the government can't produce value. It can, however, reduce values. A government that imposes a central bank monopoly, for example, can reduce the incremental value of credit. A monopoly credit system also allows for fraud and theft on a far bigger scale. Instead of government appropriating citizens' labor openly by having them produce cars, a monopoly banking system does so clandestinely by stealing stored labor from citizens' bank accounts by inflating the supply of credit, thereby reducing the value of their savings.
I hate to challenge mainstream 20th century macroeconomic theory, but the idea that a growing economy needs easy credit is a false theory. Credit should be supplied by the free market, in which case it will almost always be offered intelligently, primarily to producers, not consumers. Would lower levels of credit availability mean that fewer people would own a house or a car? Quite the opposite. Only the timeline would be different.
Initially it would take a few years longer for the same number of people to own houses and cars -- actually own them, not rent them from banks. Because banks would not be appropriating so much of everyone's labor and wealth, the economy would grow much faster. Eventually, the extent of home and car ownership -- actualownership -- would eclipse that in an easy-credit society. Moreover, people would keep their homes and cars because banks would not be foreclosing on them. As a bonus, there would be no devastating across-the-board collapse of the banking system, which, as history has repeatedly demonstrated, is inevitable under a central bank's fiat-credit monopoly.
Political Economics: Real unemployment rate is 11%, Bernie Sanders
Reply #1556 on:
January 24, 2015, 09:29:42 AM »
Seattle's minimum wage claims
Reply #1557 on:
January 25, 2015, 05:49:47 AM »
Re: Seattle's minimum wage claims. Correction: "SeaTac" population 26k
Reply #1558 on:
January 25, 2015, 01:11:12 PM »
Quote from: Crafty_Dog on January 25, 2015, 05:49:47 AM
In Seattle, the adoption of a $15 per hour minimum wage begins April 1, 2015. The legislation will phase-in a $15 per hour minimum wage annually over 3 to 7 years, depending on employer size.
(You were duped, and so was I most of the way through writing a reply!)
The question on minimum wage is not how much to pay, but who should decide.
The journalism here is quite misleading. This policy is for a little municipality called SeaTac, population 26k located in the overpriced airport area of Seattle Tacoma. It affects a .007 proportion of the (3.6 million) Seattle metropolitan area. Airport areas are notoriously over-priced because of a captive audience. That means the nation should do this?? (Seattle itself is only 18% of the "Seattle" metro area.)
Alternatives to paying minimum wage workers include installing more labor saving innovations and setting up shop elsewhere. Neither happens instantly. From automated gas pumps to automated teller machines to automated french fry cookers, the effects are seen in the longer term.
Even if you believe in having our all-knowing government meddle in minimum wage law, the correct number for each industry and each location is different. Note that this experiment is in one city, not a metropolitan area, a whole state, much less a nation.
You've got to love the thought process of the liberal commentary: "They forgot the words of wisdom from President Franklin D. Roosevelt, in an address given in Cleveland, Ohio on October 16, 1936 "It is to the real advantage of every producer, every manufacturer and every merchant to cooperate in the improvement of working conditions, because the best customer of American industry is the well-paid worker."
That of course has absolutely NOTHING to do with the minimum wage situation around the airport. Maids don't rent rooms at The Ritz or buy many Boeing products! What they do is end up on public support when jobs disappear.
"The biggest sign that the higher wage did not impact Seatac however comes with the news that the Seatac airport will be undergoing a half-billion dollar renovation and expansion."
Huh? The public sector expanding means what?? Good grief! Are these liberal sources coming from Crafty's facebook friends? )
The minimum wage is entry pay for mostly unskilled work - the bottom wrung of the economic ladder. The worker is supposed to gain skills and experience and move up the ladder. But not if the government forces entry level work to be ever more lucrative, or if it causes the elimination of the first step on the ladder for more and more people.
What percent of American households live off of minimum wage with no other support? Almost none. The average
income of a minimum wage worker is $53,000.
False reporting of a false issue, IMHO.
Jobs boom thanks to ending unemployment benefits extension
Reply #1559 on:
January 26, 2015, 11:41:29 AM »
Jobs Boom Thanks to Ending Unemployment Benefits Extension
Jan. 26, 2015
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“After a breakthrough year for America, our economy is growing and creating jobs at the fastest pace since 1999,” Barack Obama boasted in his State of the Union address. Indeed, he mentioned “jobs” some 19 times. The trouble is, it’s not his policies that are growing the job market – it’s the end of his policies. Democrats have long claimed that paying people not to work creates jobs, but as Ronald Reagan once quipped, “Our liberal friends … know so much that isn’t so.” According to a new study from the National Bureau of Economic Research, roughly 60% of 2014’s job growth came because Democrats' lavish unemployment benefits were not extended again. The study is by no means the last word on the subject, as there are innumerable factors that go into something so complex as the job market. But as National Review’s Patrick Brennan summarizes: “The general economic consensus has always been that unemployment insurance slightly boosts the unemployment rate. … [W]e still have unemployment insurance, of course, because we want a safety net for people in the event of job loss. That just has to be balanced against the costs that the program imposes on the labor market.” More…
Oh, and by the way, look to Texas for all the jobs. According to American Enterprise Institute’s Mark J. Perry, “It’s a pretty impressive story of how job creation in just one state – Texas – is solely responsible for the 1.169 million net increase in total US employment (+1,444,290 Texas jobs minus the 275,290 non-Texas job loss) in the seven year period between the start of the Great Recession in December 2007 and December 2014. The other 49 states and the District of Columbia together employ about 275,000 fewer Americans than at the start of the recession seven years ago, while the Lone Star State has added more than 1.25 million payroll jobs and more than 190,000 non-payroll jobs (primarily self-employed and farm workers).”
POTH: The Shrinking Middle Class
Reply #1560 on:
January 26, 2015, 12:26:55 PM »
Mitch Daniels: Student Debt hurting economy
Reply #1561 on:
January 28, 2015, 10:39:44 AM »
How Student Debt Harms the Economy
In 2010-13, the percentage of younger people owning part of a new business dropped to 3.6% from 6.1%.
Mitchell E. Daniels
Jan. 27, 2015 6:34 p.m. ET
To the growing catalog of damage caused by the decades-long run-up in the cost of higher education, we may have to add another casualty. On top of the harm high tuition and other charges are inflicting on young people, and the way their struggles are holding back today’s economy, we must add the worry that tomorrow’s economy will suffer, too.
Ever-escalating tuitions, especially in the past dozen years, have produced an explosion of associated debt, as students and their families resorted to borrowing to cover college prices that are the only major expense item in the economy that is growing faster than health care. According to the Federal Reserve, educational debt has shot past every other category—credit cards, auto loans, refinancings—except home mortgages, reaching some $1.3 trillion this year. Analyses in The Wall Street Journal and by Experian in 2014 show that 40 million people, roughly 70% of recent graduates, are now borrowers. In the class of 2014, the average borrower left with an average load of $33,000.
Even though the debt balloon is a fairly young phenomenon, several damaging results are already evident. Research from the Pew Research Center and Rutgers shows that today’s 20- and 30-year-olds are delaying marriage and delaying childbearing, both unhelpful trends from an economic and social standpoint. Between 25% and 40% of borrowers report postponing homes, cars and other major purchases. Half say that their student loans are increasing their risk of defaulting on other bills. Strikingly, 45% of graduates age 24 and under are living back at home or with a family member of some kind.
Now comes evidence that it’s not just consumer spending that these debts are denting, but also economic dynamism. A variety of indicators suggest that the debt burden is weighing on the engine that has always characterized American economic leadership—and the factor that many have assumed will overcome many structural and self-imposed challenges: our propensity to innovate and to invent new vehicles of wealth creation.
For instance, the U.S., despite its proud protestations about how creative and risk-taking it is, has fallen in multiple world-wide measures of entrepreneurship. A drop in such activity by the young is playing a part. From 2010 to 2013, the Journal reported on Jan. 2, the percentage of younger people who reported owning a part of a new business dropped to 3.6% from 6.1%. Over the past 10 years, the percentage of businesses started by someone under 34 fell to 22.7% from 26.4%. Common sense says that the seven in 10 graduates who enter the working world owing money may be part of this shift.
New data strengthens this hypothesis. Working with the Gallup Research organization, Purdue scholars devised last year’s Gallup-Purdue Index, the largest survey ever of U.S. college graduates. Among its findings: 26% of those who left school debt-free have started at least one business. Among those with debt of $40,000 or more, only 16% had done so.
Controlling the cost of higher education, and expanding access to its undeniable benefits, is first of all a social and moral obligation of those in a position to affect it. Purdue is midway through what is so far a three-year tuition freeze. Coupled with reductions in the costs of room and board and textbooks, these actions have brought down our total cost of attendance for each of the last two years, for the first time on record.
Aggressive counseling of students about the dangers of too much borrowing, and the alternatives available to them, has also helped, as total Purdue student borrowings have dropped by 18% since 2012. That represents some $40 million these superbly talented young engineers, computer scientists and other new workers will have to spend, or perhaps invest in their own dreams of enterprise. At Purdue, where we give students the ownership of any intellectual property they create, and support their attempts to give birth to new products and companies, a significant number of such dreams are likely to become real.
Today’s young Americans have a very legitimate beef with previous generations. A pathetically weak recovery has left millions of them unemployed, underemployed and with falling incomes, not the rising ones their predecessors could expect. And, never forget, they are already saddled with a lifetime per capita debt of some $700,000 (to date) to pay not for debts they incurred, but for those run up in entitlement programs such as Social Security, Social Security Disability and Medicare, explicitly designed to tax the young to subsidize their elders.
For future generations to enjoy the higher living standards America has always promised, nothing matters more than that the U.S. remains a land where miracles of innovation and entrepreneurship happen consistently. As a matter of generational fairness, and as an essential element of national economic success, the burden of high tuitions and student debt must be alleviated, and soon.
Mr. Daniels, the former governor of Indiana (2005-13), is the president of Purdue University.
Number of full time employed is "lowest it has ever been"
Reply #1562 on:
February 05, 2015, 04:46:59 PM »
Not sure how they can say "has ever been" but the gist of this seems right to me.
ALAN REYNOLDS: The Mumbo-Jumbo of ‘Middle-Class Economics’
Reply #1563 on:
March 03, 2015, 09:50:54 AM »
"People often form strong opinions on the basis of weak statistics." Great followup here to our Elizabeth Warren discussion. (Did I mention a fact check was needed?) $20 trillion of income missed in just one category. The income measure Warren quotes (from Piketty) excludes 40% of income and then she is disturbed by the lack of income.
The Mumbo-Jumbo of ‘Middle-Class Economics’
The statistics used to claim that average incomes have stagnated since 1980 also show stagnation since 1968.
By ALAN REYNOLDS
March 2, 2015 7:01 p.m. ET
In the “Economic Report of the President” released on Feb. 19, the White House’s Council of Economic Advisers defines “middle class economics” primarily by the average income of the bottom 90%. “Average income for the bottom 90 percent of households,” according to the ERP, “functions as a decent proxy for the median household’s income growth.”
This is absurd: The average income for the bottom 90% is not a decent proxy for the median nor even a decent measure of household income. It is instead a roughly fabricated estimate of pretax “market income” reported on tax returns that falls below some threshold for the top 10% ($114,290 in 2013). But this dodgy number does serve as the basis for CEA Chairman Jason Furman ’s assertion a day later on the Vox blog that the U.S. has suffered a “40-year stagnation in incomes for the middle class and those working to get into the middle class.”
The measure has become popular on the left. Sen. Elizabeth Warren (D., Mass.) recently asked an AFL-CIO conference, “Since 1980, guess how much of the growth in income the [bottom] 90% got? Nothing. None. Zero.” NPR displayed the same bottom 90% data and stretched it even further, claiming that “after 1980, only the top 1% saw their incomes rise.”
The source cited in the ERP for the claims about stagnating average incomes is the World Top Incomes Database. The U.S. data come from economists Thomas Piketty and Emmanuel Saez, the same source cited by Sen. Warren and NPR.
Amazingly, these same statistics also show there has been no increase for the “bottom” 90% since 1968. Measured in 2013 dollars, average income of the bottom 90% was supposedly $32,730 in 1968, $32,887 in 1980, $35,326 in 2007 and $32,341 in 2013.
PHOTO: GETTY IMAGES
This is totally inconsistent with the data the Bureau of Economic Analysis uses to calculate GDP. For example, real personal consumption per person has tripled since 1968 and doubled since 1980, according to the BEA. Are all those shopping malls, big box stores, car dealers and restaurants catering to only the top 10%? The question answers itself.
Instead of the White House concoction, consider the Congressional Budget Office estimates of actual median household income. Measured in 2013 dollars, after-tax median income rose briskly from $46,998 in 1983 to $70,393 in 2008 but remained below that 2008 peak in 2011. The sizable increase before 2008 is partly because the average of all federal taxes paid by the middle fifth has almost been cut in half since 1981—from 19.2% that year to 17.7% in 1989, 16.5% in 2000, 13.6% in 2003 and 11.2% in 2011.
Census Bureau estimates of median “money income,” on the other hand, do not account for taxes, so they miss a major source of improved living standards. They also exclude realized capital gains, public and private health insurance, food stamps and other in-kind benefits. Even so, the Census Bureau’s flawed estimate of median income rose 13.7% from 1984 to 2007 before falling 8% from 2007 to 2013.
Both CBO and Census estimates show only six years of middle-class stagnation, not 40.
The Piketty and Saez data are crucially flawed. The total income reported on individual tax returns, which is the basis of their estimates, is substantially less than any official measure of total income, and the difference keeps getting wider. In their original 2003 study, Messrs. Piketty and Saez mentioned one rapidly expanding source of missing income—disappearing dividends in tax-return data. These were “due mostly to the growth of funded pension plans and retirement savings accounts through which individuals receive dividends that are never reported as dividends on income tax returns.”
The same is true of interest and capital gains accumulating inside such tax-free savings accounts. These have grown to nearly $20 trillion, according to a 2014 report by Tax Foundation economist Alan Cole.
Messrs. Piketty and Saez shrink the total income numbers further by subtracting all transfer payments, such as Social Security and unemployment benefits, and excluding all health and retirement benefits provided by private employers or government agencies. The result, as Brookings Institution’s Gary Burtless noted, is that, “The Piketty-Saez measure [of total income] excluded 24% of NIPA [National Income and Product Accounts] ‘personal income’ in 1970, but it excluded 37% of ‘personal income’ in 2008.” It excluded 40% of personal income by 2011.
Because of their increasingly understated estimates of total income, Messrs. Piketty and Saez estimate that in 2013 the “other 90 percent”—meaning all incomes smaller than $114,290—had an average income of only $32,341. That number is not remotely credible.
According to the CBO, that $32,341 would have been below the $34,000 needed to escape from the poorest fifth of two-person households in 2011, when half of all households earned more than $75,200 before taxes. Even using the Census Bureau’s narrow definition of money income, average income for the middle fifth was $72,641 in 2013, and half of us earned more than $51,939.
In short, the Piketty-Saez average of all incomes below the top 10% is far lower than any official estimate of incomes among the middle fifth of the income distribution. This means their comparisons of cyclical shares of income growth among the top 10% and bottom 90% during booms and busts are invalid. And so too are their estimates of the shares of mismeasured “total income” supposedly received by the top 1%-10%.
People often form strong opinions on the basis of weak statistics, but this “bottom 90%” fable may be the worst example yet. The Economic Report of the President’s description of “middle-class economics” rests on a far-fetched claim that middle incomes have stagnated for four decades rather than from 2008-13—most of these years during the Obama presidency.
Mr. Reynolds, a senior fellow with the Cato Institute, is author of a 2012 Cato paper, “The Misuse of Top 1 Percent Income Shares as a Measure of Inequality.”
POTH: Latino employment doing well
Reply #1564 on:
March 09, 2015, 09:31:23 AM »
WASHINGTON — With the economy adding nearly 300,000 jobs in February, it’s clear that the labor market is on a roll. And, perhaps surprisingly, there is no group for whom that is truer than Hispanics.
Employment among Hispanics has increased 5 percent over the last 12 months, according to the Labor Department, compared with 3.8 percent for blacks and 1.4 percent for whites. (The last figure partly reflects the rising number of retirements among the aging white population.)
Of all the country’s major racial and ethnic groups, only Hispanics, as of late last year, had returned to their unemployment levels before the recession, according to the recent Economic Report of the President.
Given that roughly half of Hispanic workers are foreign born, that development might seem destined to aggravate nativist tensions in Congress, where Republicans have tried to roll back the president’s executive action on undocumented immigrants.
But, on closer inspection, the trends driving the improving job market for Hispanics are trends most skeptics of immigration would cheer.
The first is a rebound in the construction industry, which is good news for the American economy as a whole, because construction jobs pay above-average wages to low-skill workers.
Just before the recession, about 14 percent of Hispanics, or nearly three million people, were employed in construction. That group then lost about 700,000 jobs, of which only a trickle had returned through 2013.
But 2014 was a bonanza compared with recent years. The construction industry as a whole gained over half a million jobs, about 20 percent of all the jobs created in the United States economy. Of those, 315,000 went to Hispanics. Not surprisingly, the new construction jobs are concentrated in four states — California, Florida, Illinois and Texas — where the Latino population is among the highest in the country.
“Construction was pretty down two, three years ago, but last year was a lot better,” said Oscar Mondragon, the director of the Malibu Community Labor Exchange, which connects laborers with employers throughout the Los Angeles area. “People are feeling better. It’s a more positive mood.”
More broadly, the surge in Hispanic employment reflects an increasingly robust recovery. Economists generally say that the job prospects of lower-skill workers are more sensitive to the economy’s tidal movements than those with better skills, and Hispanics, as a group, tend to be less educated than blacks and whites.
In 2012, according to the Pew Research Center, 49 percent of foreign-born Hispanics age 25 and older, and 19.6 percent of Hispanics in that age group who were born in the United States, lacked a high school diploma. The corresponding number for blacks was 16.6 percent, and 8.5 percent for whites. If Hispanic employment is surging, it’s a decent indication that the recovery has taken hold.
The second reason behind lower Hispanic unemployment is a sharp decline in illegal immigration in recent years, which has reduced the number of workers who might otherwise have turned up in government unemployment statistics.
Continue reading the main story Continue reading the main story
Continue reading the main story
At the recent peak in the mid-2000s, federal agents were apprehending just over one million undocumented migrants a year along the southern border. That number fell by roughly half during the recession, then dribbled to 340,000 in 2011. The collapse in apprehensions of immigrants from Mexico, by far the largest source of undocumented labor, was even sharper.
The reason for the drop was twofold, said Madeline Zavodny, an economist at Agnes Scott College in Decatur, Ga. First, economic conditions in Mexico were improving even as growth in the United States remained sluggish, reducing a crucial incentive to emigrate.
On top of that was a development that should warm the hearts of Tea Party supporters: enforcement. Thanks to the rapid militarization of the border — the number of border patrol agents has increased by two-thirds since 2006 — crossing into the United States is now a far more daunting proposition than before the recession.
“It’s more costly in terms of what you have to pay a coyote, how remote you have to go,” Ms. Zavodny said.
The more aggressive enforcement of immigration laws extends far beyond the border. More than half a million employers now use E-Verify, an Internet-based government service that determines in seconds whether a recent hire is eligible for work in this country. That has effectively reduced the universe of jobs available to undocumented immigrants.
“When a company makes it clear they’re using E-Verify, the whole work force knows,” said Pia Orrenius, an economist who studies immigration at the Federal Reserve Bank of Dallas. “That news spreads like you would not believe.”
Meanwhile, the Secure Communities program that began in 2008 made it easier for the Homeland Security Department to identify and remove undocumented workers, whose fingerprints it received whenever local authorities took an immigrant into custody. The federal government deported hundreds of thousands of people through the program before the Obama administration halted it in late 2014.
Taken together, the story of the last 10 years looks something like the following: A construction boom from 2004 to 2007 led to a corresponding boom in Hispanic employment, with immigrants gaining 1.6 million jobs and native-born Hispanics gaining 800,000, according to Pew. Unemployment then spiked for both groups during the recession, and contributed to a drop in illegal immigration. And because immigration has never really recovered, the recent rebound in construction is primarily benefiting American-born workers.
Sooner or later, of course, the recovery will begin attracting more workers from Latin America, notwithstanding the beefed-up enforcement. Although illegal immigration is still far below its peak, it has begun to tick up again. Excluding unaccompanied minors, apprehensions at the southern border are up 25 percent since they bottomed out in 2011.
But even this is not necessarily a bad thing for American workers, at least not in the long run. Recent research suggests that, over time, an influx of low-skill immigrants allows many native-born workers to perform more sophisticated tasks for better pay. “More construction workers generates the need for more supervisors, more managers to coordinate them, more contractors to give them work,” said Giovanni Peri, an economics professor at the University of California, Davis.
Showdowns between Congress and the president may be zero-sum, in which one side wins only at the other’s expense. But immigration, it turns out, is not.
Krugman's fatal conceit, 'Austerity' didn't stop (plowhorse) growth
Reply #1565 on:
March 19, 2015, 09:34:32 AM »
Also file under cognitive dissonance of the left. Somehow, cutting deficit spending from over a trillion every year to mere hundreds of billions per year is defined as "austerity" in this argument, but liberal economic icon Paul Krugman was wrong nonetheless. Two charts make his point. (Ramesh Ponnuru, National Review) Please read the rest at the link:
Big Government Economy: Evidence suggests that Entrepreneurship is in Decline
Reply #1566 on:
April 13, 2015, 09:32:29 AM »
Evidence suggests that entrepreneurship is in decline and that U.S. firms are becoming older, more entrenched and less dynamic.
In several studies, economists Robert Litan and Ian Hathaway of the Brookings Institution found that start-ups (firms less than a year old) had fallen from 15 percent of all businesses in 1978 to 8 percent in 2011. Meanwhile, older firms (16 years or more) had jumped from 23 percent of businesses in 1992 to 34 percent in 2011. Their share of jobs was even higher, almost three-quarters of all workers.
What emerges is a portrait of business that, though strikingly at odds with conventional wisdom, is consistent with poor productivity growth. American capitalism is middle-aged. Older firms, conditioned by success, are more rigid. They’re invested, financially and psychologically, in existing markets and production patterns.
We don’t know what explains their slide, though the sheer mass of government regulations is one candidate. Older firms have the lawyers and administrators to cope with the red-tape deluge; many small new firms drown. ... If the economy discriminates against young firms, we will all be paying the price for many years.
Political Economics: Support for redistribution policies is Falling
Reply #1567 on:
April 20, 2015, 02:40:22 PM »
In a separate matter, Mayor deBlahzio (sp) from the city with the greatest inequality, NYC,traveled to Iowa, the state with the least inequality, to lecture them on what
need to do about this problem, lol.
It is not what other people make that matters. It is what YOU make, relative to the cost of the things you buy, that matters.
Skewing inequality is the fact that the millions and millions of people entering the country tend to be at the low end of the income spectrum. That brings down the median even if no one else took a cut in pay or left the workforce.
Re: Political Economics - Income Inequality
Reply #1568 on:
April 23, 2015, 09:07:55 PM »
We were addressing this phony issue here, income inequality, long before Hillary announced she is pretending to make it the centerpiece for her non-existent campaign.
Income inequality is the economic ladder, it is the freedom to climb, it is the existence of the American economic dream. A workable ladder requires a first rung, a second, third rung and so on, all in working order and all rungs going up placed within a reasonable and accessible reach from the one beneath it. All leftist economic policies, one way or another, weaken or remove steps from the ladder. Their stated goal is to destroy it altogether, and make us all equally poor.
Income inequality in a dynamic economy is a fact, not an issue. The political question is how badly do we want to hurt the people at the top in order to also hurt the people further down, wanting to climb up.
When you chop off the top of the ladder and knock people down, you also knock out economic activity (GDP and GDP growth) and make it harder for everyone else to rise up.
When you raise minimum wage law, you are sawing off or weakening the bottom rung of the ladder. Some will jump and make it up anyway, but many won't and get stuck at the bottom. Note the sudden spikes in SNAP and SSI, proof that leftist policies of making basic things free and/or subsidized do not help people to lift themselves up.
Imagine the opposite of the income inequality - income
. Everyone makes exactly the same whether they work hard, train, grow, gain experience or improve their skills. The batboy makes the same as the greatest home run hitter, in this Utopian world. The incentive to achieve, excel or improve is gone. What a sad existence that would be. Innovation ends, startups end, GDP growth ends. Entrenched powers with the best lobbyists and lawyers might still maneuver through the myriad of taxes and regulations and prosper, but everyone else suffers. Welcome to the path of Obama's America where the chosen successor promises to do more of the same.
Income inequality, the political issue, grew out of the fact that liberals and leftists could not find any other way to attack the rapid economic growth that came out of past tax
cuts. They came up with phony measures that completely ignore income mobility - the fact that people improve their job skills, experience and income throughout their working lives and then retire, work less and live off of savings. The politics of income inequality alarmism worked quite well around 2006 and the leftists took power in America. (Relly they won because of an unpopular war, but still they won running on this economic platform.) They took the House and the Senate, then the Presidency. Then they took a 60 seat control of the Senate. They ended tax rate cuts. They passed Obamacare and anything else that they wanted until the economic and political wheels fell off. They passed a stimulus, shovel ready government jobs, cash for clunkers, took over the auto companies, attacked energy, surrendered from wars and so on.
They ruled without a whisper of conservative constraint, and what happened?
Income inequality got worse! Income mobility got worse. Entrepreneurialism was stopped dead in its tracks. Workforce participation collapsed. Safety net program use exploded. And their answer to it all of this is to do more of the same! Go figure.
Last Edit: April 24, 2015, 07:46:24 PM by DougMacG
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