James Pethokoukis

Politics and policy from inside Washington

The New Underclass and Barack Obama

Mar 4, 2011 15:47 UTC

Drilling a bit deeper and moving beyond the 8.9 percent unemployment rate and 192,000 jobs created, here is what I found:

  1. The U.S. labor force remains as small as it has been in a generation
  2. More than 5 million Americans have disappeared from the job rolls
  3. If the labor force was currently at 2007 levels, the unemployment rate would be a whopping 12 percent – the worst since the Great Depression.

As it is, the broader unemployment rate, which includes those who are underemployed and discouraged workers, is still an agonizing 15.9 percent. What’s more, the Federal Reserve believes that the high number of people out of work for 27 weeks or longer is creating structural unemployment. (The longer you are out of work, the harder it is to get that next job.) No wonder the Fed now believes the economy’s natural rate of unemployment has increased from a bit under 5 percent to a bit more than 7 percent.

In short, you may have a much larger pool of the long-term unemployed than is historically typical in America, something more akin of what is seen in Old Europe.

This is why it is critical to deal comprehensively with the Axis of Economic Evil: Big deficits, high taxes and onerous regulation. America must get more competitive and productive. I find the below chart from McKinsey particularly scary since it shows how much job growth is happening in unproductive areas of the US economy.

product

COMMENT

What a load of crap…. The problem isnt the corp tax rate ninny. They dont pay as much as they do elsewhere. When the president agreed to lower the corp tax rate and eliminate the loopholes boy did you right wing nuts go silent. I guess you havent heard how well lowering the corp tax rate worked in Ireland. The fact is we have been not only allowing our manufacturing to be shipped overseas to slave labor countries without any regard for their own environment (go run a mile in bejing and breathe in heavy) we have provided tax breaks for them to do so. China doesn’t make products, our companies are making products in china. And now the latest blame on the right is with education as well.. Their answer? Cutbacks to education. How do these people sleep at night.

Posted by fromthecenter | Report as abusive

Hawks and doves on the Fed

Jan 10, 2011 20:02 UTC

A handy chart from JPMorgan:

fed

Beyond tax cuts

Nov 22, 2010 17:43 UTC

Nick Schulz says Republicans need a broader policy portfolio than lower taxes and less spending:

Too often discussions of growth are overly abstract or narrow.  They tend to focus on a few policy prescriptions such as tax cuts or trade or education. These are important. But the discussion about growth is strangely detached from the particular and unique characteristics of the United States. Any serious growth strategy should acknowledge and leverage America’s attributes and advantages.

Nick then goes on to praise Joel Kotkin and his “continental strategy” for growth, which — best I can tell — centers around more infrastructure spending. But what is the free market way of approaching this so it does not turn into a supersized version of Boston’s Big Dig — build and privatize?

COMMENT

Roll the tax rates back to what they were in 1999, end the wars in Iraq and Afghanistan and trim the defense budget and you have a balanced budget or even a surplus. Keep in mind that the economy created better than 20 million jobs when the tax rates were at these level.

Posted by Sapien | Report as abusive

The Obama base

Jan 27, 2010 19:46 UTC

As explained by Joel Kotkin:

Gentry liberalism combines four basic elements: faith in postindustrial “creative” financial capitalism, cultural liberalism, Gore-ite environmentalism and the backing of the nation’s arguably best-organized political force, public employee unions. Obama rose to power on the back of all these forces and, until now, has governed as their tribune.

Obama’s problems stem primarily from gentry liberalism’s class contradictions. Focused on ultra-affluent greens, the media, Wall Street and the public sector, gentry liberalism generally gives short shrift to upward mobility, the basic aspiration of the middle class.

Now that the ball is in his court, the president and his party must abandon their gentry-liberal game plan. The emphasis on bailing out Wall Street and public employees, supporting social welfare and manufacturing “green” jobs appealed to the core gentry coalition but left many voters, including lifelong Democrats, wondering what was in it for them and their families.

COMMENT

It’s not gentry liberalism. They are Marxist.

Refusing to say it doesn’t halp anybody.

Posted by proreason | Report as abusive

Tea Party fever! This can’t be good for the Republican brand …

Dec 7, 2009 13:52 UTC

From pollster Rasmussen:

Running under the Tea Party brand may be better in congressional races than being a Republican.

In a three-way Generic Ballot test, the latest Rasmussen Reports national telephone survey finds Democrats attracting 36% of the vote. The Tea Party candidate picks up 23%, and Republicans finish third at 18%. Another 22% are undecided.

Among voters not affiliated with either major party, the Tea Party comes out on top. Thirty-three percent (33%) prefer the Tea Party candidate, and 30% are undecided. Twenty-five percent (25%) would vote for a Democrat, and just 12% prefer the GOP.

Among Republican voters, 39% say they’d vote for the GOP candidate, but 33% favor the Tea Party option.

COMMENT

Mr Austria,
Re moneterism I was referring to Peth’s preferences which are heavily oriented towards supply side and Friedman worship,not yours. As for the Austrian school I was suggesting keeping its adherents as far way from actual power and contrained solely in blogs like say Mish Shedlock’s as possible. Austrian school stuff is not irrelevant but small doses preferable to the massive doses some ideologues would like.

Posted by Chi Democrat | Report as abusive

The aftermath of NY-23

Nov 4, 2009 21:43 UTC

Jon Henke applies his own analysis to the NY-23 race:

The story of NY-23 is not “conservatives beat moderates” or “conservative loses to Democrat”.

The story of NY-23 is “the Right starts dismantling the Republican establishment.” This is about how the Republican Party is defined and who defines it.

Right now, the movement wants the Republican Party to be defined by opposition to big government. Gradually, as new leaders arise, we will demand that the Republican Party be defined by its own solutions, as well, but rebuilding is an incremental process. We can hammer out the policy agenda and the boundaries of the coalition later.

For now, our job is to disrupt the establishment GOP.  If we beat Democrats while we’re at it, great. But the first priority is to fix the Drunk Party – the Living Dead establishment Republicans. They’re history. They just don’t know it yet.

NY-23 was the first shot in that war.  It was a direct hit.  Next year, we start storming the castle.

Me: Next up, Rubio vs. Crist and DeVore vs. Fiorina.

COMMENT

Republicans had to choose between a liberal Republican and a very conservative candidate – most moderate Republicans were unhappy with both choices. Perhaps that’s why the Democrat won this three-way race.

Posted by Camron Barth | Report as abusive
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