Author Archives: nension

Any Way You Cut It, We’ve Got Big Economic Problems

by nension Posted on March 10, 2013

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The war between Paul Krugman and Jeffrey Sachs continues this weekend with a long column from Sachs contending that: the 2009 stimulus was useless; high debt levels are going to stangle us; and the only thing that matters is fixing our structural problems. Tyler Cowen says he agrees with Sachs “at least two-thirds,” but it’s not clear which third he disagrees with. Conversely, Mark Thoma delivers an epic beatdown, saying that Sachs “can believe whatever he wants, but the evidence is against him.”

I have mixed emotions. Thoma has much the better of the argument on the question of whether the 2009 stimulus was helpful. The bulk of the evidence suggests that, along with ordinary countercyclical spending, it did a lot of good. It might not have been structured ideally—Sachs is right about that—but it’s better than he gives it credit for, as Ryan Cooper points out. There’s not much question that we live in an imperfect world, but to say that the stimulus spending was literally useless, simply because it wasn’t as good as it could have been, goes far beyond any reasonable read of the evidence.

Still, that leaves us with the question of what to do going forward. This is where I’m a little more wobbly. My rough take on the Great Recession is that it was about one-third structural and two-thirds cyclical. If you apply that ratio to unemployment, which went up from 5 percent to 10 percent, it means—again, roughly—that maybe 3.5 points of that were cyclical and 1.5 points were structural. If that’s close to true, we’ve got about 1 percentage point left to go before we’ve eliminated all the cyclical unemployment caused by the financial crash. The rest is accumulated structural problems.

Obviously these numbers are just guesses, and no, I have no grounding in economics to back them up. Still, I don’t think they’re way off the mark. And they suggest that, although some modest additional stimulus would be helpful—certainly more helpful than the idiotic anti-stimulus of the sequester—our biggest problem going forward is indeed structural.

Unfortunately, I have my doubts that we have any solutions for the structural problems that bedevil us. Sachs ofers up a fairly conventional liberal prescription—lots of investment in infrastructure and education, paid for by carbon taxes and various taxes on the rich—and I don’t have any problem with that. I don’t think Krugman does either. Unfortunately, I suspect that our bigger structural problems are twofold:

Oil. Economic growth causes oil prices to rise, which eventually produces a recession when demand exceeds production and causes a price spike. The recession reduces demand, which causes oil prices to drop and allows the economy to recover. Rinse and repeat.

Technology. As machines keep getting smarter, routine jobs are starting to disappear. This displacement is taking place very slowly at the moment, which makes it hard to notice. But it’s been happening since at least 2000, and it’s probably one of the reasons that the labor force participation rate has been declining for the past dozen years. What’s more, this trend is likely to accelerate in the future.1

I’m all for rebuilding our infrastructure, and a strong focus on renewable energy would certainly help reduce our vulnerability to oil shocks. But it will happen only slowly, and only if the entire rest of the world does the same thing. At the same time, improvements in technology will be good for productivity, but are going to put increasing numbers of people out of work for good. Better infrastructure won’t really help that.

I’m not sure what the answers are. A Manhattan Project level of commitment to renewable energy might help with the oil problem, but there’s no political will for that. Stronger programs of income redistribution would help with the technology problem, but there’s pretty obviously no political will for that either right now. So I guess we just keep plugging along until either (a) it turns out these problems aren’t as calamitous as I think they are, or (b) it becomes so obvious they are calamitous that everyone finally agrees they have to be addressed.

1I’m reluctant to call this a “problem,” since technology is obviously a huge driver of economic growth. But it’s certainly a big problem at a human level until we figure out what to do with workers who are permanently displaced from the job market by advancing technology.

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Any Way You Cut It, We’ve Got Big Economic Problems

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On Our Radar: Asian Dust and California Snow

by nension Posted on March 1, 2013

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On Our Radar: Asian Dust and California Snow

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Pipeline companies will get a $7 billion tax break through 2016

by nension Posted on February 22, 2013

Pipeline companies will get a $7 billion tax break through 2016

By Philip Bump

There are people in Washington, D.C., right now scratching their heads and writing memos and trying to figure out how on earth we might possibly avoid budgetary doomsday, the sequestration that will lop some $1.2 trillion out of the federal budget over the next decade. Again, this is only happening because Congress tried to threaten itself. It’s like you threatening to rob yourself by holding a gun to your head and then trying to figure out how to keep from being robbed.

But while all of this is happening, something else is going on in Our Nation’s Capital™: Pipeline companies are getting an even larger tax break than expected. From Bloomberg:

A tax break used by oil and gas pipeline companies such as Kinder Morgan Energy Partners LP (KMP) will cost the U.S. government $7 billion through 2016, about four times more than previously estimated, Congress’s tax scorekeepers said this month.

The nonpartisan Joint Committee on Taxation quadrupled its cost estimate for exempting the fast-growing “master limited partnerships” from corporate income tax in the year ended in September to $1.2 billion from $300 million. The annual cost will rise to $1.6 billion by fiscal 2016, the committee said.

$7 billion. $1.6 billion a year. Tack on the estimated $4 billion in tax breaks the oil industry receives each year, and pretty soon you’re talking about real money.

Some people, new to American politics, think this pipeline tax break will become a political target. If it does, it will only be a target for as long as it takes for the American Petroleum Institute to do some overwrought hand-wringing about job creation. Then it will be ignored once again.

After all, with sequestration threatening to devastate funding for education, public safety, public health, child care programs, worker training, and the military, D.C.’s best minds are already occupied with problem-solving. And they’ll get the job done, no need to worry. In short order, they’ll figure out how to avoid those cuts to the military. That thief won’t steal all their money.

Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.

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Pipeline companies will get a $7 billion tax break through 2016

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Transit advocates stop cuts using civil rights legislation

by nension Posted on February 21, 2013

Transit advocates stop cuts using civil rights legislation

By Susie Cagle

No justice, no ride to work! The vast majority of transit systems in the U.S. have cut service, raised fares, or both over the last two years, affecting those who rely on public transportation especially hard.

An article in the current issue of the Boston Review outlines the struggle for more justice and more buses:

For millions of American families, the commute to work is more than stressful: it can also be cripplingly costly. While the average family spends around 19 percent of its budget getting around, very low-income families (defined as families who make less than half of an area’s median income) can see as much as 55 percent of their earnings eaten up by transportation costs, according to a report by the Center for Transit-Oriented Development. …

Nationwide about 80 cents out of every federal transportation dollar goes toward highways—used disproportionately by more affluent drivers — and only 20 cents goes toward mass transit systems, which are heavily used by people of color and by lower-income workers. When it’s time to distribute that 20 percent, regional authorities often favor light-rail systems for suburban commuters over bus lines for city riders.

Some hope, though: A few cities have managed to wrest money away from the ‘burbs and back to the urbs by filing lawsuits claiming civil rights violations.

That tactic may not work for New Yorkers, though, who are about to see yet another fare hike, their fourth in five years — and it’s not because transit workers are getting a raise. Here, New Yorkers campaigning against fare hikes explain how debt service has increased train costs.

If there’s one thing the status quo has no answer for, it’s digging out of debt. Sorry, New York.

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The budget turmoil may mean no meat inspectors — and no meat

by nension Posted on February 11, 2013

The budget turmoil may mean no meat inspectors — and no meat

By Philip Bump

In every respect, the sequester is dumb. If you’re only vaguely familiar with the term as it’s being used this month: God bless you. But a little background is in order. The recently ended 112th Congress wasn’t mature enough to come up with a plan to reduce the deficit (even though it had declared that the deficit was a big priority), so it decided to build a time bomb. “If you don’t come up with a budget plan in the spring,” it said, “this thing’s gonna blow, slicing over a trillion dollars from the budget over the next decade.” The 112th Congress then laughed maniacally and did nothing for the rest of the year. Now the 113th Congress is standing around holding this big bomb, sweating nervously, mad at the previous Congress (which was almost entirely the same people).

Oh, you don’t care? Good, slash government, you say? Cool attitude. But also: Say goodbye to all of the meat you eat. From Reuters:

The Obama administration warned on Friday that across-the-board spending cuts set to take effect in March may result in furloughing every U.S. meat and poultry inspector for two weeks, causing the meat industry to shut down.

By law, meatpackers and processors are not allowed to ship beef, pork, lamb and poultry meat without the Agriculture Department’s inspection seal.

Remember before when you were like, “Who cares about budget cuts?” Now, you do. Ha ha.

Shutterstock

Can you even imagine going a day without delicacies like this?

Here is a spoiler: This is an obviously empty threat on which the president would never follow through. Obama is 51 years old. He’ll only be 54 when he leaves office. Do you think he wants to spend the rest of his life being known as the president who allowed the United States to go without meat for even an hour? When Lyndon Johnson signed the Civil Rights Act, he suggested that the move would lose the South for Democrats for a generation. If Obama let America run out of meat, he’d lose the entire United States for Democrats for about a century.

Reuters adds this bit of trivia:

Americans consume more than 200 pounds (91 kg) of meat apiece each year, an average of slightly more than one-half pound a day.

Gross.

But, it could be worse. We could be Europe.

Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.

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U.S. ends record streak of days without tornado fatalities

by nension Posted on January 31, 2013

U.S. ends record streak of days without tornado fatalities

By Philip Bump

Climate Central reports that a weather-related record ended yesterday morning: the longest the U.S. has gone without a tornado-related death, 220 days.

[A] large and powerful tornado struck Adairsville, Ga., killing at least one person in a mobile home park. That tornado, which may rank as an EF-4 — the second most powerful on the Enhanced Fujita Scale — overturned cars on I-75 and damaged numerous buildings in downtown Adairsville, which is about 60 miles northwest of Atlanta.

A local news broadcast included a helicopter flight over the area damaged by the twister.

One reason the no-fatality record stood so long was the unusually hot and dry weather of 2012.

During 2012, the same weather pattern associated with the record heat and drought also stifled tornado activity by keeping a very hot, dry, and stable air mass in place across Tornado Alley. The heart of Tornado Alley was where the drought was most intense. For example, Nebraska had its driest year on record last year, and extreme drought conditions were present in Oklahoma, Missouri, Iowa, and other states where spring and summer twisters are typical. While natural climate variability likely played a major role in initiating the drought, climate scientists said global warming may have made the drought worse by making conditions hotter, and therefore drier, than they otherwise might have been.

The man who died was named Anthony Raines. He was 51, and was killed when a tree crushed his mobile home while he slept.

Source

Deadly Georgia Tornado First in a Record 220 Days, Climate Central

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Hey evil coal boss: Is it also Obama’s fault if you’re hiring workers back?

by nension Posted on January 24, 2013

Hey evil coal boss: Is it also Obama’s fault if you’re hiring workers back?

By Philip Bump

Reuters / Danny Moloshok

This guy! We haven’t seen Robert Murray since around election time and, to be honest, we missed him. He’s the closest thing we’ve got in the 21st century to an evil 19th-century coal baron, hellbent on profit and laughing heartily at the misfortunes of the poor. He’s retro. That’s always fun.

Last time we heard from Murray was when he sent a prayer to his local West Virginia paper lamenting how the reelection of Barack Obama meant he had to fire a bunch of his staff. (Was it the staff that he docked a day’s pay to appear in a Romney ad? Was it the staff he forced to contribute to his political action fund? We may never know.) So, wiping away big fucking crocodile tears, Murray wrote these powerful words:

The American people have made their choice. They have decided that America must change its course, away from the principals of our Founders. And, away from the idea of individual freedom and individual responsibility. Away from capitalism, economic responsibility, and personal acceptance. …

Lord, please forgive me and anyone with me in Murray Energy Corp. for the decisions that we are now forced to make to preserve the very existence of any of the enterprises that you have helped us build.

Then: boom, pink slips, because Obama is killing coal and hates white people, probably. Boo-fucking-hoo, Robert Murray is so sad.

Anyway, here’s the update. From New Republic reporter Alec MacGillis:

I was surprised when I got reports from Ohio this week suggesting that operations at the Red Bird West mine, the one whose shutdown was announced with such fanfare last summer, are now picking up again. “It’s opened back up…they’re hiring people,” said Gary Parsons, a former superintendent at the mine who worked there for five years before being laid off with the announcement of the shutdown last summer. Parsons himself has not been called back, and is planning simply to retire early, but he said he had talked to several locals who were taking steps to get hired back on. He said he did not understand why, after the big headline-making closure last year, things were perking up at the mine. “I don’t know what’s going on,” he said. “They said they was going to close the mine down.”

Another former Murray employee confirmed that operations were picking back up at Red Bird West. “They’ve called back some hourly folks. They’re definitely starting it back up,” the former employee said. What explained the reversal? This former employee conjectured that presidential campaign politics may have played a role. After all, announcing the shutdown of the mine a few months before Election Day was not helpful to Obama, who dearly needed to win Ohio. “In my opinion, it was all for politics,” the former Murray employee said. “It was just a show of politics to try to scare people, to get votes for [Murray’s] candidate…I felt they were playing politics from day one, and they certainly didn’t waste any time starting back up again.”

If this is true — and it would take as much for me to believe it is as it would take to convince me that I exist on this planet Earth — it’s almost admirable in its sheer, egregious shittiness. For all of the handwringing and wailing and moaning done by Obama opponents about how horrible he was making the economy and how doomed we would be if he won reelection (all while unemployment dropped and the Dow soared), it takes a special kind of scumbag to actually lay people off to prove your point. Much less to invoke the name of Jesus in doing so. Lord, please forgive Robert Murray for possibly closing a mine and firing people just so his massive investment in Mitt Romney might be substantiated.

When speaking to MacGillis, the company denied it was reopening the facility. However:

The only work going on at the mine, they said, was “reclamation” required as part of any shutdown. “We’re required to put things back together. We’re picking up some remnants of coal, some coal that was left over, as we clean up the place,” said Gary Broadbent, a senior attorney for the company. He said that there were 42 or 43 people at the mine doing this work, and while the work could go on for a few years, there would be no expansion at the mine, which at its peak employed more than 200 people. …

[T]he company’s current account would appear to be at variance with the announcement last summer, when Broadbent said that the mine would “gradually be closed through late September or early October,” with no mention of a possibly years-long reclamation project. After all, if the head count was really dropping from only 56 to 43, odds are the move would not have made the headlines it did.

Oh, and an addendum:

A former Murray employee in Utah informs me that people are being hired back at the Murray operations there, too, just a couple months after the big post-election layoffs. The former employee said about 25 had recently been hired back on. Murray officials demurred when asked about any uptick in activity at the Utah or Illinois mines where the post-election layoffs occurred. “I’m not intimately involved with the hiring or firing of employees,” said Broadbent.

Lord, when Robert Murray appears before you for his final judgment, feel free to use any and all information from Grist’s archive to make your decision. If you need me to appear as a witness, I will do so happily.

Sorry. Not when he appears before you. If.

Source

Is Obama’s Coal-Country Nemesis Hiring Again?, The New Republic

Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.

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Real Filibuster Reform Appears to Be Dead in the Senate

by nension Posted on January 24, 2013

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The fight to rewrite the filibuster, that pesky blocking maneuver used by senators to quietly kill a bill before it even arrives on the Senate floor, appears to be over. As the Huffington Post reports, Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) have cut a compromise deal that will make it easier for the Senate to begin debating new legislation, while also speeding up the process of voting to confirm the president’s judicial nominations. But the deal does not include the major reform liberals wanted: the so-called “talking filibuster,” which would force senators to remain speaking on the Senate floor for as long as they wanted to filibuster.

Here’s more from HuffPost:

Reid and McConnell also agreed that they will make some changes in how the Senate carries out filibusters under the existing rules, reminiscent of the handshake agreement last term, which quickly fell apart. First, senators who wish to object or threaten a filibuster must actually come to the floor to do so. And second, the two leaders will make sure that debate time post-cloture is actually used in debate. If senators seeking to slow down business simply put in quorum calls to delay action, the Senate will go live, force votes to produce a quorum, and otherwise work to make sure senators actually show up and debate.

The arrangement between Reid and McConnell means that the majority leader will not resort to his controversial threat, known as the “nuclear option,” to change the rules via 51 votes on the first day of the congressional session. Reid may have been able to get greater reforms that way, but several members of his own party were uncomfortable with the precedent it would have set. And Reid himself, an institutionalist, wanted a bipartisan deal for the longterm health of the institution. Reid presented McConnell with two offers—one bipartisan accord consisting of weaker reforms, and a stronger package Reid was willing to ram through on a partisan vote. McConnell chose the bipartisan route.

The Reid-McConnell deal is nothing to dismiss. It should accelerate the pace of bringing new bills to the floor and confirming nominations in the Senate. But it is a stinging defeat for progressive senators Jeff Merkley (D-Ore.) and Tom Udall (D-N.M.), who fought hardest for the talking filibuster.

Merkley and Udall’s proposal makes perfect sense when you stop and think about it. If you want to stymie a piece of legislation, or deny a vote on a judicial nominee of the president’s, then stand up and explain why and don’t stop until you’re done blocking whatever it is you don’t agree with. The way it works now, senators can filibuster in absentia, meaning they don’t need to be on the Senate floor—or even in Washington, DC!—to block a bill. Senators now filibuster more than ever, objecting to even the most routine bills and nominations. As Merkley recently noted, there was just one vote to try to break a filibuster during Lyndon Johnson’s time as Senate leader in the late 1950s; under Harry Reid, there are have been 391 such votes.

But even some Democrats in the Senate didn’t like the talking filibuster idea. They still believe the filibuster will be useful when, inevitably, they’re the minority party in the Senate, and they feel complelled to block the GOP’s agenda.

The Reid-McConnell compromise is also a blow to the Democracy Initiative, a coalition of labor unions, enviros, voting rights groups, and other progressive outfits that had embraced filibuster reform as its new cause célèbre. That coalition lobbied hard in the Senate this month and spent hundreds of thousands of dollars on ads to promote the talking filibuster. Now they’re left empty-handed. A related filibuster reform group, Fix the Senate, blasted out this statement Thursday morning: “If the agreement proceeds as expected, Senator Reid and the entire chamber will have missed an opportunity to restore accountability and deliberation to the Senate, while not raising the costs of obstruction.”

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Real Filibuster Reform Appears to Be Dead in the Senate

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TransCanada accidentally emails its internal media information to reporters

by nension Posted on January 23, 2013

TransCanada accidentally emails its internal media information to reporters

By Philip Bump

TransCanada, the company that would like to build a large pipeline carrying toxic oil from the Canadian border to Texas, got pretty excited yesterday when the governor of Nebraska removed a key obstacle to the project. Very excited. So excited that the public relations team forgot how to use email.

tarsandsblockade

Hopefully this pipeline worker is better at using a backhoe than TransCanada’s PR guy is at email.

Yesterday afternoon, TransCanada’s Shawn Howard inadvertently emailed a number of journalists an internal report on how the media had covered the news about Nebraska’s governor. The report notes the areas in which TransCanada feels it has been most effective, the questions it gets frequently, and the company’s go-to message points to be used when responding. Argus Leader reporter Cody Winchester posted the email on his blog. Excerpts:

Earlier today, Nebraska Governor Dave Heineman sent a letter to President Obama, indicating that the State had now approved the re-route of Keystone XL through the state. Shortly after the announcement, External Communications provided more than 55 reporters with quotes from [TransCanada CEO] Russ Girling on the announcement. Following that, TransCanada issued its own news release with more detailed information (based on content drafted prior to and after Christmas). …

The main range of topics included: eminent domain in Nebraska, if we expect President Obama to approve KXL (juxtaposed against his comments in his Inaguaral Speech on climate change), what steps come next in the process, how quickly we could begin construction if we receive a Presidential Permit and the importance of the route approval through Nebraska. …

As of now, there have been more than 440 media hits on this story and many have taken directly from our news release and background information on our website. …

Many of our supporters were active online in their support for today’s Nebraska announcement. Those tweets and social media postings will be re-tweeted by TransCanada tomorrow and included in our next Media Today report.

Howard outlined the company’s response to protests in Texas.

Work has been suspended on a small parcel of land in the overall 485-mile Gulf Coast Project in Angelina County, Texas, south of the city of Diboll.
TransCanada executed an easement agreement with the landowner, who subsequently sold a portion of the property to the county for purposes of construction of a weigh station. TransCanada inadvertently included the county property in its proposed route.
TransCanada is working with the county and other relevant agencies to resolve the issue. Resolution may include a slight route deviation. …
The project is employing about 4,000 workers in Texas and Oklahoma. Because of the nature of pipeline construction and the protestors’ choice of targets, the impact of all the various protests can be counted in hours, not days.
Still, if the protestors had their way, these thousands of American workers would be kept from their jobs, and an important part of President Obama’s “all-of-the-above” energy strategy would be thwarted.
TransCanada is gratified by the many showings of local support, and we do not believe these protestors represent an indigenous, grass-roots movement. It is a handful of individuals, and the vast majority of them are from out of state.

This last point is certainly questionable, given the high-profile opposition of local residents to the southern extension of the pipeline.

For those concerned about the Keystone XL pipeline, this small error with email will probably resonate. If a company can’t master email, they might wonder, how can we expect it to maintain a pipeline? Which is probably not a valid conclusion to draw. If you’re worried about TransCanada’s ability to manage a pipeline, you should probably focus on its pipeline errors instead.

Hat-tip: Climate Adaptation

Source

TransCanada flack accidentally emails reporters a report about the reporters’ reporting, City Notes

Philip Bump writes about the news for Gristmill. He also uses Twitter a whole lot.

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A One-Sentence Review of Arnold Schwarzenegger’s "The Last Stand"

by nension Posted on January 19, 2013

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If you do not go see the new Arnold Schwarzenegger movie now, you are failing your country, your family, and your own personal god.

The Last Stand gets a wide release on Friday, January 18. The film is rated R for strong bloody Ahnold throughout. Click here for local showtimes and tickets.

Click here for more movie and TV coverage from Mother Jones.

To read more of Asawin’s reviews, click here.

To listen to the weekly movie and pop-culture podcast that Asawin co-hosts with ThinkProgress critic Alyssa Rosenberg, click here.

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A One-Sentence Review of Arnold Schwarzenegger’s "The Last Stand"

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