27 Responses

  1. Hmmm. The importance of exact wording. 😉

    Doesn’t another recent poll show that people are more concerned about unemployment than the deficit?

    Maybe the Dems should push jobs legislation and not call it “stimulus”. 🙂

    1. it’s one or the other, depending on wording, as you say.

      but deficit issues are strong enough to block full employment initiatives, which are defended by the intellectually lame regarding their knowledge of monetary operations

  2. I think, in addition to public confusion, the deficit hawks are winning because the other side is not offering anything compelling.

    A trillion in stimulus and unemployment is still at 10%, with corporate profits primarily restored, and corporate profit margins as well as savings at record levels.

    What is popular?

    1. raising top marginal rates on those earning over 250,00K/year. This is overwhelmingly popular, and is even favored by a majority of those in the income bracket.
    2. bank levies are popular
    3. universal healthcare is popular
    4. Payroll tax cuts, I believe, would be popular

    What would be popular would be a national compact: middle class incomes are boosted and guaranteed to rise with productivity going forward in exchange for government ensuring that the business sector, in aggregate, will always have a steady supply of demand. Employment flexibility in exchange for a provision of basic healthcare and pension benefits to not have employment changes be so catastrophic.

    That is a type of compact to moderate the business cycle with deficit spending in return for assurances that this spending will be distributed evenly among the various income cohorts; that elites will not seize the proceeds of the spending to increase their own wealth disparity while everyone else is left behind. Tax policy and industrial relations policy can be the mechanisms to provide assurances.

    You need to make a case like the above, rather than an sectoral accounting based case that does not distinguish between corporate savings and household savings, or between middle third household savings and savings of the top 1%.

    A general call that “private sector” savings will be increased is not enough of a sweetener, since the private sector savings are already more than enough. They are just not distributed to the right people.

    Nothing about the deficit proposals out there would change the underlying distributional problems that got us into this mess.

    Unless the policy proposal directly addresses the most pressing concerns of middle class households — shortage of rewarding work, wage erosion, a decline in earnings opportunities, and an increase in financial risks — then you will not get popular support. Nor should you.

    1. I agree with RSJ. You need to put a version of your “7 Deadly Frauds” written so a 6th or 7th grade reader can comprehend it out where the average man can see it. Maybe full page ads in select local papers. And a program of reforms such as RSJ outlined. Get the average persons attention away from American Idol for a bit,and get them angry,then give them an action plan. You have the money to do such a thing,or you could get your wealthy friends to help.

      1. it’s pretty much written to that level. feel free to distribute, thanks!

        in fact, everything on this website is there to be distributed at will.

      1. If the Dems will push a real jobs bill this summer, the Reps will filibuster it, and then the Dems will have the chance to make the Reps own unemployment. That would then help the Dems in November.

  3. Hi Warren, There’s no link to the poll here. Any result can be gotten from a poll, if the questionnaire design favors a desired result. This is the first poll I’ve heard of that says that the deficit is more important than unemployment. So, I’m very skeptical about the result. The fact that it comes from the WSJ makes me even more skeptical. Please provide the link.

  4. Deficit terrorists? I think you mean “the market” – the majority of the population. The market knows well that without timely deficit reduction the US will lose reserve currency status, an outcome far, far worse than 9.5% unemployment. I wouldn’t be so quick to dismiss the wisdom of the market.

    1. And what is your candidate for another country willing to run the trade deficits neccessary for :”reserve currency status”?

      And if “the market” was so concerned, wouldn’t in 10 year rates be higher than 3.9%?

  5. Of course they’re winning, they’re the only ones playing!!

    Warren and Marshall get 2 minute blurbs on the occasional show once every two months while the terrorists are on every channel 24/7!

  6. Warren

    Next time you get a chance to get some TV face time I suggest the following;

    Before answering what ever question they pose to you ask if you can ask one question and then ask “Why do you only focus on one side of the balance sheet when discussing deficits? Theres another side that is positive which all the viewers here are benefitting from. Making an assessment of our situation only looking at deficits is as useless as evaluating a bank and only looking at liabilities.”

    I’d be interested in how they would respond.

  7. they would say that the other side is increasingly held by foreigners who are gaining influence as they hold us hostage to their funding

    better to respond to something they say than to try preempt those particular issues in a short time slot?

    1. Warren, this is not advice, but an observation. On shows like “Meet the Press”, politicians seldom answer the questions. Normally they use the question as a springboard to deliver some more or less related message.

      That bugs the hell out of me. However, if you have only a few minutes or seconds to talk, it may not be a bad strategy.

      1. Normally they use the question as a springboard to deliver some more or less related message.

        Absolutely. They have a list of talking points and just pick one that is most closely related, and then segue ASAP to the highest priority one. Most lead questions are dumb anyway, just as one would expect from the people that ask them.

  8. As I mentioned the other day, the linked Financial Times chart is great. It makes clear visually why the deficit hawks are silly to worry about the “national savings rate” (i.e. govt deficit and private savings added together). Funny how the sectors balance in all those other countries too!
    http://media.ft.com/cms/cf0ab07c-7a20-11df-9871-00144feabdc0.gif

    As I’ve also mentioned before, it’d really move the ball forward if Members of Congress were willing to boil down Warren’s proposals into legislative language and sponsor a bill. You can’t beat something with nothing, but once there’s a bill in the hopper its easier to lobby other Members to explain why they should vote for it. Where to begin? In the last Congress, CBC chair Barbara Lee and 20 other Democrats co-sponsored an updated 1946 full employment act (HR 1050). So those 21 Members should be fairly immune from deficit hysteria.
    http://www.opencongress.org/bill/110-h1050/show

    If Warren would prefer to start by working with a Republican Member, the sharpest GOP House member is San Diego congressman Darrell Issa. Perhaps because he’s wealthy enough to self-fund his races, he’s been pretty open-minded on economic issues. I admire him particularly for having the stones to crash a Michael Moore screening. :o)
    http://www.sdcitybeat.com/sandiego/article-7434-issa-on-the-prize.html

    The chamber briefly cooled with the unexpected arrival of Rep. Darrell Issa, a Republican who represents the area around San Diego. Chiding the Democrats for not inviting him, Issa called for universal healthcare coverage but stopped short of endorsing the state-run system spelled out by the bill…
    http://www.upi.com/Health_News/2007/06/20/Analysis-Sicko-gives-Congress-fever/UPI-83381182392646/

    1. In addition, the stim was immediately canceled by 1) the sharp increase of the price of petroleum from its low of ~40 to ~70, and 2) the shortfall in state budgets due to falling revenue, necessitating sharp cutbacks that are still increasing. The immediate problem is getting federal aid to states to prevent further cuts in employment, just as the ECB has stepped in to support the faltering EMU countries. If nothing is done, the estimated jobs loss this year from state cuts is 1.3 miilion jobs. That will be devastating.

      1. His response to you and Zanon shows he’s absolutely clueless–as if vault cash is what we’re talking about (yes, it’s technically part of “reserves,” but that’s not what the Fed’s paying interest on). I found out last year he’s not worth trying to debate.

      2. Obama is paying the price for being so agreeable and “above the fray” when he came into office last year. During his post-inauguration honeymoon, he could have asked for and received open-ended authority to spend (or cut taxes) as much as necessary to keep the economy moving. That ship has sailed.

        I left a message yesterday that got hung up in moderation (too many links I fear) that suggested that Warren find a Member of Congress willing to boil down his proposals into legislative language and introduce a bill. There is no business without a sale and there is no law without a bill. Once a MMT bill in in the hopper, we could then lobby our congressmen and senators Members to support it.

        There was an updated version of the Full Employment Act sponsored last Congress by 21 House Democrats (HR 1050 A Living Wage, Jobs for All Act). Clearly, those Members aren’t as susceptible to deficit hysteria than the rest of the mob. In terms of who to approach on the Republican side, the sharpest GOP Member is San Diego’s congressman, Darrell Issa. He’s wealthy enough to self-fund his races, so he can afford to be pretty open-minded on economic issues (you won’t see many other Republican politicians use words like “living wage”).
        http://www.sdcitybeat.com/sandiego/article-7434-issa-on-the-prize.html

  9. Warren,

    I cant see how we are going back into surplus mode at the present as I look into the monthly published deficits by the Treasury:

    http://www.fms.treas.gov/mts/index.html

    Seems like the automatic stabilizers you mentioned are still working and the deficit continues on pretty strong ( see Treasury statement).

    If this keeps up wont it be a gradual stimulus that will eventually cause higher employment and a stronger economy (because the money does not go away)?

    Thanks,
    Marcello

  10. I think that should boost the economy of the U.S. population and lower anti-terrorist policies and replace them with a cooperative government with other countries and not just military matters.

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