Jose Nocera of the New York Times is making the same argument about the economy that I just did. It's about a lack of cash in people's pockets which resulted in the housing meltdown. Having screwed up their job of lending money, banks have shut down and are not lending money. Without it, no new business, no new houses or buildings or highways or products. It's not about taxes, people, because businesses and individuals don't expand business or build new houses with their own money. It's always borrowed. Thus, cutting taxes will certainly gut the government and explode the debt and deficit. But it ain't gonna grow new jobs because it was never about that.
It's the lack of funds on the demand side - and that comes from the housing and banking crash.
Tuesday, September 20, 2011
False Answers to Recovery
The following post is a rehash of comments from the past - because it is relevant and timely. Concerning the argument over what will lead to economic recovery and growth and the return of job creation. The dispute is about taxes - though it's complicated by concerns over the debt and deficit and the need for more or less regulation. As I've noted before there is a correlation - and even a degree of causation - between lower taxes creating better conditions for growth. That is why in the early 1980s dropping marginal rates from 70% (or originally 89%) to low thirties or high twenties was significant. But fiddling around between 28 and 38 has no discernible impact - See Mankiw and Feldstein for clarification.
Additionally, naive Republicans like Palin and Bachmann like to call upon the Reagan growth as only about taxes - and they neglect the importance of Volcker breaking inflation and then dramatically dropping interest rates. That alone freed up tons of cash for economic growth. And with the expansion of credit card lending, the money infusion in the economy came on the demand - NOT supply side. Add to that the dramatic drop in oil prices following discoveries in the North Sea and Central America - which broke OPEC's hold - and lower gas prices also freed up tons of money on the DEMAND side. The economy is far more complex than simple tax rates - though lower is certainly better. And there is no reason not to broaden the base, flatten the rates, lower the corporate rate, and close the deductions - especially at the top level. Then, by means testing Social Security and Medicare and lifting the cap to at least $250K, the government and the economy will move toward solvency and fluidity.
Finally, you must keep in mind that the 2008 Crash and subsequent economic drag was not caused by tax issues. It simply wasn't. It was not caused by regulation. The current slump is not continuing because of a drag on tax issues - because there have been no changes - other than the cut taxes more. So, it's not about taxes - and anyone who thinks it is has been asleep for about the last decade - or perhaps a Hannity-induced coma. This economic problem is about cash on the demand side. Period. It was about lost wealth from a housing crash that imploded the lending industry. And that came from deregulation. This is not about taxes - it's about no cash. It's about loss of spending power from lost housing money and decreasing wages impacted by rising insurance rates.
Additionally, companies aren't hiring for one simple reason now - because they don't have to. Demand is not going up. They don't need workers - except for the skilled labor ones for which there are tens of thousands of vacancies. They are making money and increasing dividends and it's that simple. It didn't start with taxes (at lowest rates in 60 years) and it won't be solved by tax cuts - because they aren't the problem.
An overall review and reform of taxation is a great idea - and necessary. But blaming the current problems on taxes is simply foolish.
Additionally, naive Republicans like Palin and Bachmann like to call upon the Reagan growth as only about taxes - and they neglect the importance of Volcker breaking inflation and then dramatically dropping interest rates. That alone freed up tons of cash for economic growth. And with the expansion of credit card lending, the money infusion in the economy came on the demand - NOT supply side. Add to that the dramatic drop in oil prices following discoveries in the North Sea and Central America - which broke OPEC's hold - and lower gas prices also freed up tons of money on the DEMAND side. The economy is far more complex than simple tax rates - though lower is certainly better. And there is no reason not to broaden the base, flatten the rates, lower the corporate rate, and close the deductions - especially at the top level. Then, by means testing Social Security and Medicare and lifting the cap to at least $250K, the government and the economy will move toward solvency and fluidity.
Finally, you must keep in mind that the 2008 Crash and subsequent economic drag was not caused by tax issues. It simply wasn't. It was not caused by regulation. The current slump is not continuing because of a drag on tax issues - because there have been no changes - other than the cut taxes more. So, it's not about taxes - and anyone who thinks it is has been asleep for about the last decade - or perhaps a Hannity-induced coma. This economic problem is about cash on the demand side. Period. It was about lost wealth from a housing crash that imploded the lending industry. And that came from deregulation. This is not about taxes - it's about no cash. It's about loss of spending power from lost housing money and decreasing wages impacted by rising insurance rates.
Additionally, companies aren't hiring for one simple reason now - because they don't have to. Demand is not going up. They don't need workers - except for the skilled labor ones for which there are tens of thousands of vacancies. They are making money and increasing dividends and it's that simple. It didn't start with taxes (at lowest rates in 60 years) and it won't be solved by tax cuts - because they aren't the problem.
An overall review and reform of taxation is a great idea - and necessary. But blaming the current problems on taxes is simply foolish.
Friday, September 16, 2011
Obama's Recovery
David Brooks offers a pretty clear and critical analysis of the "recovery" that is being defended by Obama and criticized by the Republicans. Ultimately, the return of job growth after a recession always lags by years - and government policies rarely have the immediate impact of generating growth and returning economies to sound footing. Clearly, not all agree, as evidenced by Investore.Com in this analysis. As an independent voter, I'm not happy with Obama's leadership - especially on the economy as well as basic "politics."
However, this recession seems different. Obama didn't have an inflation problem that the Fed could just break, and there wasn't an oil shock that could be relieved. Downsizing of companies and increased productivity haven't existed like this before either, and Obama simply couldn't count on a tech boom or a housing bubble to grow the way out. That sums up the post-recession growth for the past several decades. So, I'll cut him some slack there.
Additionally, I'm of the mind that there's not a lot Presidents and DC can actually do to create jobs - other than infrastructure, public service, cash rebates, and tax credits for actual hires. That's why I won't give Perry too much credit for jobs in Texas, nor will I knock Romney for stagnant growth in Massachusetts. Thus, Obama has been pretty weak in terms of national leadership - that is no doubt. But Perry and Boehner are full of it on cutting taxes for "job creators" as a guarantee of creating jobs and generating economic growth.
So, we'll see. I think Brooks pretty much nailed it. And he may be the only one.
However, this recession seems different. Obama didn't have an inflation problem that the Fed could just break, and there wasn't an oil shock that could be relieved. Downsizing of companies and increased productivity haven't existed like this before either, and Obama simply couldn't count on a tech boom or a housing bubble to grow the way out. That sums up the post-recession growth for the past several decades. So, I'll cut him some slack there.
Additionally, I'm of the mind that there's not a lot Presidents and DC can actually do to create jobs - other than infrastructure, public service, cash rebates, and tax credits for actual hires. That's why I won't give Perry too much credit for jobs in Texas, nor will I knock Romney for stagnant growth in Massachusetts. Thus, Obama has been pretty weak in terms of national leadership - that is no doubt. But Perry and Boehner are full of it on cutting taxes for "job creators" as a guarantee of creating jobs and generating economic growth.
So, we'll see. I think Brooks pretty much nailed it. And he may be the only one.
Tuesday, September 13, 2011
Be Very Afraid of Dr. Watson
Here's food for (disturbing) thought:
WellPoint Insurance plans to use the IBM super-computer "Watson" to assist doctors in diagnosing illnesses. Watson, of course, is the computer known for beating the top Jeopardy! champions at the game of trivia. Now, a major insurance company is counting on the computer's vast resources and lightening speed to provide guidance to doctors as they seek diagnosis and treatment options.
The company spokesperson was quick to assure consumers that patients need not fear that WellPoint will deny care if in making a diagnosis of choosing a treatment option a doctor chooses to ignore the advice of the computer. In those cases, the insurer "will have a clinician review the case." A "clinician"? What the heck does that mean?
Is this an example of "trivializing" health care? Or is that just redundant at this point?
Be afraid people. Be very, very afraid.
WellPoint Insurance plans to use the IBM super-computer "Watson" to assist doctors in diagnosing illnesses. Watson, of course, is the computer known for beating the top Jeopardy! champions at the game of trivia. Now, a major insurance company is counting on the computer's vast resources and lightening speed to provide guidance to doctors as they seek diagnosis and treatment options.
The company spokesperson was quick to assure consumers that patients need not fear that WellPoint will deny care if in making a diagnosis of choosing a treatment option a doctor chooses to ignore the advice of the computer. In those cases, the insurer "will have a clinician review the case." A "clinician"? What the heck does that mean?
Is this an example of "trivializing" health care? Or is that just redundant at this point?
Be afraid people. Be very, very afraid.
Monday, September 12, 2011
Douthat on Obama's Do-Over
Ross Douthat offers one of the most clear and insightful breakdowns of the hopes and shortcomings of the Obama administration in his piece The President's Do-Over in the New York Times today. By focusing on a targeted stimulus without guaranteeing recovery, working on the deficit sooner rather than later by reforming entitlements, and focusing on the Recovery Act rather than attacking the health care issue by both horns, the President could have been that moderate voice of steady guidance in the storm of the 2008 recession's wake.
Sunday, September 4, 2011
Disney's Prom a Pleasant Surprise
It's not often that I have kind words for the company of Disney, but with the release of this summer's teen film Prom, the company that generally rubs me the wrong way has put out a surprisingly enjoyable and sweet teen film about the most mythical night of high school - Prom.
Prom, a Disney original from a screenplay by Katie Wech, examines the final big night of high school in all its promise of drama and magic. Nova (interesting name) the senior class president of Brookside High has planned the perfect prom to finish off the perfect senior year. All is going well with the decorations and the theme, and the night will be perfect if only fellow student and committee member Brandon asks her to the dance they've been planning.
The movie is fleshed out in standard ensemble cast with various couples and their prom story lines filling out the opening scenes of the movie. A clever play - with music - of the tradition of asking a person to prom sets up the first act with all going according to plan. Standard stock characters like the perfect king/queen couple, the couple who've been "together forever," the lovable loser without a date, the underclassmen desperate to be a part of the magic, and, of course, the teen rebel with an air of mystery who is too cool for prom fill out the cast.
Certainly, the perfectly planned night will be anything but, and it only makes sense that the heroine Nova will be inadvertently thrown together with the anti-prom loner. Many obstacles will challenge Nova to carry out her mission of providing the perfect night for her classmates, even as she tries to ignore the personal conflict she has over who she's going to spend the evening with. Director Joe Nussbaum cleverly strings his scenes together building the drama over prom night in an engaging way. Additionally, there are enough nods to 1980s teen cinema that it's clear Nussbaum was paying homage to the Golden Age of teen film.
I was particularly pleased by how pleasant - and not over the top - this teen film was. It was engaging and funny and insightful, and also really sweet. Wech and Nussbaum manage to capture all the significant drama of the genre and the night without resorting to anything sordid or gratuitous. In fact, it was refreshing to be engaged in a teen film for 90 minutes with no scenes of teen drinking and literally no mention of teen sex. The drama was real and honest - but it very effectively focused on the simple emotions of adolescence, rather than the standard mediums of sex and alcohol. This film simply didn't need to go there.
Overall, Prom is an enjoyable film, and definitely worth the rental if you enjoy the genre. It's certainly not the best teen film in recent years - that honor goes to Easy A. However, it's a nice take on a traditional genre, and it gives me a little hope for the ability of Disney to provide quality and wholesome entertainment.
The Sandwich King Has Moved?
Looking for information on the Food Network's Jeff Mauro and his show The Sandwich King? Check out my first entry after he won the Next Food Network Star.
Having enjoyed The Sandwich King Jeff Mauro's first two shows, I sat down at 10:30 Mountain time to check out Jeff's third show. It was probably a great one - Cod Sliders with fennel slaw and sweet potato fries - and I will certainly check for the recipes. Alas, I tuned in to a repeat episode of Chopped because Jeff's time slot was apparently 9:30 Mountain, not 10:30. While I am certainly OK with the time, as I am more likely to be home, I am disappointed to have missed the show. So, for sandwich afficianodos - and fans of the Sandwich King - Jeff's show is now on Sunday mornings at 11:30 Eastern, 10:30 Central, and 9:30 Mountain.
Check it out for more great ideas on how to "turn any meal into a sandwich and make any sandwich a great meal."
UPDATE: At this point, it appears Jeff's show has gone into a bit of a hiatus. Not much news on the website. So, we'll have to assume he is simply on a break and not cancelled.
Friday, September 2, 2011
GOP Offers Nothing After Jobs Report
The Affordable Care Act did not cause the 2008 Crash and recession.
Regulations on business permits did not cause the 2008 Crash and recession.
Regulations on the finance industry did not cause the 2008 Crash and recession.
Regulations on the energy industry did not cause the 2008 Crash and recession.
None of these caused the economic downturn, none these is preventing companies from hiring people, none of these is the key to dismal jobs report in August, none of these is the answer to the struggles of the economy.
So, why are these the only ideas the GOP offers?
Monday, August 29, 2011
So, About All Those Bad Teachers
The general - though misguided - consensus is that public education is a failure. And the general cause of this failure is assigned as "bad teachers." That seems to be the mantra of every education reformer from Michelle Rhee to Bill Gates. And, of course unions and tenure get a pretty good shot.
In response, teachers will often acknowledge the presence of bad teachers and the weaknesses of due process for "bad teachers" but assert that there are far more complex issues at stake - particularly the lack of accountability for students, parents, and administrators. Few people outside the field have ever experienced the challenge of trying to promote learning to resistant adolescents. And even fewer have knowledge of just how many bad teachers are out there or why they might be "bad teachers." It's worth noting, for example, that education does have a self-selecting system of attrition. In that, I mean 60% of new teachers leave the profession in the first three years. Thus, they quit - as opposed to sticking it out and keeping that "easy job for life."
And, then, every once in a while the curtain is pulled back for just a moment, and one honest soul provides some insight into the schools where all the bad teachers are blocking achievement from these children thirsty for education. Such is the case with the recent expose "Confessions of a Bad Teacher" from John Owens, an editor with a long career in the publishing industry who decided to step into the classroom to "make a difference."
He got quite the education.
Google and the Loss of Existing Knowledge
Researchers have long noted that the human brain compartmentalizes and categories all new information it encounters. This organizing stems from the reality that learning new material is rather arduous. That is why our learning curve is so steep - it takes us year or more to simply be able to make words ... but acquisition of new words from that point is exponential. Thus, we use old information to make sense of new information - and, so, the more we know the easier it is to learn.
This physiological reality is not lost on teachers of reading. The most important technique for any effective reader is to access existing knowledge to make sense of new information. Ultimately, I encourage my students to become "people on whom nothing is lost." They need to access a great deal of new information in short time periods - and it's easier if their brains already have some place to put it - something to which the new info can be connected. And from the time of Roman orators, we know the growth in rhetoric and literature and science was intrinsically linked to previous information. Roman students spent vast amounts of time memorizing the classics. Abraham Lincoln spent vasts amount of time copying the speeches of Cicero by hand. All told, their brains and their abilities to think critically grew exponentially.
Thus, I worry about this latest generation - the Google generation. Google and the internet are wonderful innovations that have made life infinitely more efficient. Yet, current students are the first group who have legitimate reason not to commit information to memory because they can simply look it up. Think about how they know many of their friends phone numbers simply as #4 on speed-dial - or even worse simply by the name in the directory where they can often voice activate "Call Steve."
This is a problem.
The less we commit to memory on a daily basis, the less are brains are enabled to form the categories and make the connections that lead to higher level critical thinking and, even, innovation. Thus, I would assert that it is still a good idea for students to memorize a speech or monologue or sonnet from Shakespeare. It's still a good idea for students to write in-class essays from memory with no access to the book or their notes. It's still a good idea for students to study spelling and memorize their times tables.
In fact, it might not just be a good idea. It might be an imperative.
This physiological reality is not lost on teachers of reading. The most important technique for any effective reader is to access existing knowledge to make sense of new information. Ultimately, I encourage my students to become "people on whom nothing is lost." They need to access a great deal of new information in short time periods - and it's easier if their brains already have some place to put it - something to which the new info can be connected. And from the time of Roman orators, we know the growth in rhetoric and literature and science was intrinsically linked to previous information. Roman students spent vast amounts of time memorizing the classics. Abraham Lincoln spent vasts amount of time copying the speeches of Cicero by hand. All told, their brains and their abilities to think critically grew exponentially.
Thus, I worry about this latest generation - the Google generation. Google and the internet are wonderful innovations that have made life infinitely more efficient. Yet, current students are the first group who have legitimate reason not to commit information to memory because they can simply look it up. Think about how they know many of their friends phone numbers simply as #4 on speed-dial - or even worse simply by the name in the directory where they can often voice activate "Call Steve."
This is a problem.
The less we commit to memory on a daily basis, the less are brains are enabled to form the categories and make the connections that lead to higher level critical thinking and, even, innovation. Thus, I would assert that it is still a good idea for students to memorize a speech or monologue or sonnet from Shakespeare. It's still a good idea for students to write in-class essays from memory with no access to the book or their notes. It's still a good idea for students to study spelling and memorize their times tables.
In fact, it might not just be a good idea. It might be an imperative.
Saturday, August 27, 2011
New Postings on GatherNews
I've got a new forum for some of my writing. At this point, they're featuring articles for me in the areas of news and politics. The platform is called GatherNews - it features news/commentary on trending topics. Currently, I have four pieces published, and you can find them here.
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